MAHENDRA SINGH MEWAR Vs. LAKE PALACE HOTELS AND MOTELS PVT LTD

JUDGEMENT

(1.) THIS is a petition under Sections 397 and 398 of the Companies Act, 1956 (hereinafter called "the Act"), filed on June 3, 1993, by Maharana Mahendra Singh Mewar against Lake Palace Hotels and Motels (P.) Ltd. (hereinafter called "the company"), respondent No. 1, Shri Arvind Singh, managing director, respondent No. 2, Lake Shore Palace Hotels (P.) Ltd. (hereinafter called "the other company"), respondent No. 3, Rani Yogeshwan Kumari, respondent No. 4. Shri Vikramaditya Singh, respondent 5, and A. Subramanian, financial controller of the company respondent No. 6. During the pendency of the proceedings, it was intimated that A. Subramanian had died and as such his name was deleted from the array of respondents. It should be noted that the petitioner is the elder brother of respondent No. 2 and respondent No. 4 and family disputes had started even before the demise of their father, viz., Maharana Bhagawat Singh, on November 3, 1984.

(2.) The company was incorporated on March 2, 1963, as a private company and has now become a public company under Section 43A(1A) of the Act. The paid-up capital of the company as per the petition consists of 3,140 equity shares of Rs. 1,000 each which were held as follows :

(3.) THE various allegations contained in the petition can be classified into the following ten major heads, namely ; (1) illegal and mala fide transfer and issuance of shares with a view to gain control ; (2) clandestine sale and dissipation of assets of the company ; (3) clandestine manipulation of accounts, fraudulent inflation of expenses and misappropriation of funds ; (4) illegal appointment of ad hoc directors with ulterior motive ; (5) misuse of the position of managing director and as other directors of the company for entering into agreement with the other company which is prejudicial and against the interest of the company ; (6) specific misappropriation of the company's funds ; (7) violation of the provisions of law and the articles of association ; (8) ousting the petitioner from management ; (9) holding meetings of the board of directors without the presence of the observer appointed by the court ; (10) other acts of mismanagement prejudicial to the interests of the company.