PRADIP KUMAR SENGUPTA Vs. TITAN ENGINEERING CO PVT LTD

JUDGEMENT

(1.) SHRI Pradip Kumar Sengupta and three other shareholders holding roughly about one-third of the shares in Titan Engineering Co. Pvt. Ltd. (company) have filed this petition under Sections 397, 398, 399, 402 and 403 of the Companies Act, 1956, alleging acts of oppression and mismanagement in the affairs of the company. This petition was filed on April 30, 1993, and finally heard on April 20, 1998. The delay in hearing the matter was on account of the parties expressing a desire to amicably settle the disputes, the attempts at which unfortunately failed, and also later on account of the respondents' inability to file a detailed reply to the petition since most of the records of the company were in the custody of a criminal court in Durgapur from which the respondents were able to get copies of all the exhibits only some time in July, 1997, after which only the respondents filed their replies. In addition to the allegations in the petition, the petitioners later filed a few applications wherein certain additional allegations were also made. During the pendency of the petition, petitioner No. 2 and respondent No. 2 expired and on an application made by the legal heirs of these persons, we allowed the substitution of the legal heirs in the place of the expired persons. An application was filed by petitioner No. 4 seeking that his name may be struck off the array of parties for reasons stated in that application and another application was filed by the employees of the company seeking to be impleaded as they were supporting the respondents.

(2.) In addition to the present petition, the petitioners have filed certain criminal proceedings as well as civil proceedings in respect of some of the allegations contained in the petition and the applications. In some cases, while proceedings were initiated in other fora before filing of this petition, some proceedings were initiated after filing of this petition.

(3.) IN 1991, one Radha Krishna Oxygen, a client of the company, furnished invalid sales tax declaration forms with forged registration date with a view to avoid payment of sales tax to the tune of Rs. 1.33 lakhs and the third respondent abetted and aided this fraudulent activity and in spite of the petitioner's demanding corrective action, the respondents are not taking any steps towards this end. Such an action on their part may result in this company being liable for a sum of Rs. 1.33 lakhs which would be against the interest of the company and shareholders.