SRIHARI RAO Vs. GOPAL AUTOMOTIVE LIMITED

JUDGEMENT

(1.) SRIHARI Rao and his wife, Mrs. Manorama, together holding roughly about 11 per cent. shares in Sri Gopal Automotive Limited ("the company"), a deemed public company have filed this instant petition under sections 397/398/402 and 403 of the Companies Act, 1956 ("the Act") alleging oppression and mismanagement in the affairs of the company. In addition to various reliefs, they have also sought to invoke the provisions of Section 406 read with Schedule Xi to the Act.

(2.) According to the petitioners, the company was incorporated on September 17, 1985, as a private limited company for taking over the business carried on by a partnership firm in the name of Sri Gopal Auto Service in which respondents Nos. 2, 4, 8 and 9 were partners. The main line of business of this company is to carry on the business of manufacturing, purchase and sale of various types of automobiles, parts and automobile machinery. Apart from these, the company is also carrying on business as distributors, dealers and agents for the manufacturers of various kinds of automobiles, spare parts, and lubricants. In addition, it is also engaged in the repair, servicing and body building of all kinds of vehicles. The company employs about 800 workers.

(3.) DIVERSION of funds for the personal gain of the respondents by opening benami firms in the name of clerks working in the company and SRMT.