L. CHANDRAMURTHY Vs. PEARL METAL PRODUCTS PRIVATE LIMITED

JUDGEMENT

(1.) THE petitioner claiming 12.25% of the issued and paid up capital of M/s Pearl Metal Products (Bangalore) Private Limited (" the Company") aggrieved on account of certain acts of oppression and mismanagement in the affairs of the Company, has complained under Sections 397 and 398 read with Sections 402 and 409 of the Companies Act, 1956 ("the Act") as well as Regulation 44 of the Company Law Board Regulations, 1991 ("the Regulations"), seeking the following reliefs:

(2.) SHRI T. Rukmangadachar, learned Counsel, appearing for the petitioner while initiating his arguments submitted:

(3.) THE petitioner, the respondents 2 & 4, and Smt. Leelamma Joseph, wife of the third respondent, promoted the Company in February 1997, with the main object of manufacturing of insulated wires, by converting a partnership firm under the name and style of "Pearl Metal Products", wherein the promoters of the Company were the equal partners. The promoters are the first directors, who shall hold the office permanently. However, the third respondent later became a permanent director, consequent upon acquiring the shares from his wife, namely, Smt. Leelamma. The entire issued and paid up capital of Rs. 50 crores of the Company was equally held among the petitioner and the respondents 2 to 4. By virtue of a Share Purchase Agreement (SPA) dated 03.12.1998 and Shareholders Agreement (SHA), dated 03.12.1998, the sixth respondent, had acquired 51% of the equity shares from the petitioner jointly with the respondents 2 to 4 at a price of Rs. 448/ - per share. By means of the SHA, the promoters and the sixth respondent agreed that for a period of five years from the completion of the SPA, each of the promoters would have a continuing right to sell and the sixth respondent would have an obligation to buy 12.25 percent shareholding on the terms and conditions specified therein. The promoters will have only a right of refusal in respect of shares offered to them in proportion of their respective shareholding.