SERGEY IVANOV Vs. ARTLIBORI RESORTS PVT LTD

JUDGEMENT

(1.) IN this order I am considering Company Petition No. 11 of 2007 filed by Sh. Sergey Ivanov under Sections 397 and 398 of the Companies Act, 1956 (hereinafter referred to as the "Act") against Artlibori Resorts Pvt. Ltd (R-1) and Ors. alleging illegal increase in the share capital; illegal allotment of shares; fabrication of resignation letters of the Petitioner and manipulation and fabrication of other documents and records of the Respondent No. 1 company resulting in mismanagement of the affairs of the company and causing oppression to the petitioner.

(2.) The undisputed facts of the case are: M/s Artlibori Resorts Pvt. Ltd. (R-1) was incorporated on 17.3.2005 having its registered office at House No. 467, Temmar Vaddo, Assagao, Bardez, Goa-403507. The authorized share capital of the company was Rs. 1,00,000/- divided into 1000 equity shares of Rs. 100 each. The objects of the company was to construct or to acquire/purchase, lease or otherwise for the purpose of business of the company, any immovable or movable property and any right or privilege, which the company may think necessary or convenient for the purpose of its business and in particular any land, building, warehouses, godowns, easements, right to way, licenses, concessions, privileges and stock in trade and either to retain any property so acquired for the purpose of the company's business or to turn the same to the account as may seem expedient.

(3.) FURTHER, the Counsel for petitioner contended that the respondents had increased share capital illegally as per decisions of Supreme Court and Company Law Board. The respondent has not even pleaded leave alone prove the necessity of increase in share capital. The respondents have not produced anything on record to prove the necessity for such an increase. The respondent has not placed on record anything to show the need of the company for further investment and hence need for further allotment of additional shares. The R-2 as a director owed a fiduciary duty to inform the shareholders of the company to issue shares for a proper purpose and in the interest of the company as laid down in: Needle Industries case (1982) 1 comp LJ (SC) Punt v. Symons (1903) 2 Ch 506; Moonshine Films (P) Ltd. and Shri. Rajesh Patil v. Moonshine Films (P) Ltd. and Ors. (2006) 6 Comp LJ 161 (CLB); Arun Kumar Mohta and Anr. v. Ganesh Commercial Co. Ltd. and Ors. (2006) 6 Comp LJ 351 (CLB); Dinesh Sharma and Anr. v. Vardaan Agrotech (P) Ltd. and Ors. (2007) 1 Comp LJ 155 (CLB).