S AJIT SINGH Vs. DSS ENTERPRISES P LTD

JUDGEMENT

(1.) AJIT Singh (Petitioner No. 1) and his wife Praveen AJIT Singh (Petitioner No. 2) shareholders of DSS Enterprises (P.) Ltd. (the company) claiming to collectively hold 50 per cent shares in the company have jointly filed this petition under section 397/398 of the Companies Act, 1956 ('the Act') alleging acts of oppression and mismanagement against the respondents and have prayed for appropriate reliefs.

(2.) The case of the petitioners in brief is that DSS Enterprises (P.) Ltd. (first respondent) was incorporated on 5-9-1986 under the name Daljit Singh and Sons (India) (P.) Ltd. with an authorised capital of Rs. 5 lakhs. The two sons of S. Daljit Singh namely Ajit Singh (first petitioner) and Satwant Singh (second respondent) were the promoter directors holding 25 shares each. Daljit Singh was the Chairman of the Company. On 11-12-1986 Smt. Parveen Ajit Singh (second petitioner) and Smt. Reema Satwant Singh (third respondent) wives of first petitioner and second respondent respectively were inducted as directors and were subsequently allotted 25 shares each, while S. Daljit Singh was allotted one share. On 27-3-1989 further 900 shares were allotted by the first respondent-company which were equally divided amongst the two families of the brothers with 450 shares being allotted to second petitioner and balance 450 to the second respondent. Thus on that point of time the total shareholding of the company was 1001 shares of Rs. 100 each, 500 each owned by the two families of the brothers aforesaid and one being held by the father S. Daljit Singh. On 28-3-1989 the authorised capital of the company was increased from Rs. 5 lakhs to 10 lakhs and subsequently on 25-5-1989 the name of the company was formally changed and the certificate issued in the name of DSS Enterprises (P.) Ltd. (D.S.S. in short).

(3.) HOWEVER, according to the petitioners the conspiracy to wrest control over the company by the respondents 2 and 3 gained momentum in May 1996 when the First Petitioner had gone abroad in connection with the business of the respondent-company and taking advantage of the same the Second Respondent removed the statutory books and other relevant records from the Head Office and kept them in his personal custody on the pretext of maintaining secrecy.