w w w . L a w y e r S e r v i c e s . i n



Girdharlal Nathubhai Dalai V/S Star Grain and Shipping Pvt. Ltd. and Others.


Company & Directors' Information:- STAR GRAIN AND SHIPPING PRIVATE LIMITED [Active] CIN = U01111MH1996PTC097252

Company & Directors' Information:- S A GRAIN PRIVATE LIMITED [Strike Off] CIN = U51101DL2013PTC262644

    C.P. No. 120 of 2013

    Decided On, 29 April 2015

    At, Company Law Board Mumbai Bench

    By, THE HONORABLE JUSTICE: ASHOK KUMAR TRIPATHI
    By, MEMBER

    For Petitioner: Haresh Jagtiani, Sr. Advocate, Yashpal Jain, Vandana Kumawai and Khalid Khimani, Advocates i/b. Haresh Jagtiani & Associates, Advocates And For Respondents: Rahul Narichania, Sr. Advocate, Ankit Lohia, Pooja Tidke, Monisha Mane and Mihir Mekal, Advocates i/b. ALMT Legal, Advocates



Judgment Text


1. The above captioned company petition has been filed by the Petitioner invoking the provisions contained in Sections 397, 398 read with Sections 402 and 403 of the Companies Act, 1956 hereinafter referred to mismanagement purportedly committed by the Respondents in the conduct and affairs of the Respondent No. 1 Company. The Petitioner has sought various reliefs, as set out, in the Petition.

2. The facts in brief leading to filing the present petition are as follows:-

2.1 That since 1951 the Petitioner along with his brother, late Kantilal Dalal, carried on businesses principally through a partnership firm styled "Kantilal & Co.". With the increasing spread of business other partnership firms were formed and private limited companies were floated, but Kantilal & Co., continued to be the flagship concern. Most of the real estate, whether on ownership or on lease, was acquired by the said Kantilal and the Petitioner in the name of one of these partnership firms and private limited companies.

2.2 That the sons of the Kantilal Dalal, being one Surendra Dalal and the Respondent No. 2 were joined as partners in the said Kantilal & Co. during 1969-71.

2.3 That in February, 1976, the Company was incorporated. At about the same time, the Respondent No. 2 had also incorporated a partnership firm with the same name, being Star Grain & Shipping Co., having its registered office at Janmabhoomi Bhavan, Janmabhoomi Marg, Fort, Mumbai 400 001.

2.4 That both the said Kantilal and Surendra Dalal decided to retire from the Indian businesses and the Petitioner and the Respondent No. 2 continued as partners/joint holders in the Indian partnership firms and private limited companies, which were in the nature of glorified partnership businesses. Post reconstitution, the Petitioner continued to have 30% to 50% stake in most of these entities, with the Respondent No. 2 as the other stakeholder. Petitioner became 30% shareholder of the Respondent No. 1 Company as well as the said partnership firm and the Respondent No. 2 and the Petitioner continued to be the only shareholders of the Company. The Petitioner was appointed as the director of the Company with effect from 1/10/1997.

2.5 In or about 1997-98, the Petitioner was informed by the Respondent No. 2 that Deutsche Group, Singapore, was looking for an Indian partner to form a joint venture company to enter the securities market in India. Such joint venture required an initial investment of about Rs. 15,00,00,000/- by the Indian entity, for which the Company would have a 25% shareholding in the resultant joint venture company. The Petitioner lent to the Company about Rs. 4,50,00,000/- (Rupees four crore fifteen lakhs only) of the total Rs. 15,00,00,000/- that was to be invested by the Company in joint venture with Deutsche Group, in proportion to his 30% shareholding. The balance amount was withdrawn by the Respondent No. 2 from Kantilal & Co. and invested into the Company. No external borrowing was taken for this joint venture.

2.6 On 1/4/1999, Deutsche Securities (India) Pvt. Ltd. ("DSIPL") was incorporated and the Company became 25% shareholder in DSIPL, with a capital investment of Rs. 15,00,00,000/-. The Company till date continues to be 25% stakeholder in DSIPL.

2.7 Till about 2004-05, the Petitioner continued to preside as the Chairman at the official meetings of the Company and all decisions were routed through him. DSIPL also recognized the Petitioner as the Chairman of the Company.

2.8 That the disputes and differences seeped up between the parties in between 2005-2007 on account of rude and rough behavior of the Respondent No. 2 with the Petitioner. The relations between them became more strained in the year 2007.

2.9 Around April 2007 the Petitioner thus asked the Respondent No. 2 to give full, correct and genuine details of all his dues in said Kantilal & Co., and affiliated companies as well as the instant Company and on payment thereof, present him with a set of dissolution deeds and other necessary paper work to effect his separation from the businesses. The Respondent did not comply and the matter did not proceed further.

2.10 Then in or about June 2007, the Respondent No. 2 came to Petitioner's room and demanded in an abusive and grossly insulting manner that the Petitioner should not ever again step in the office of the Company or even in the Khushnuma house, which is now the registered office of the Company. The Respondent No. 2 threatened the Petitioner that if the Petitioner ever attempted to step into the offices of the said Kantilal & Co., or any of the affiliated companies including the Company, Respondent No. 2 would humiliate him in front of others and will physically throw him out. The Petitioner was completely taken aback by the menacing manner of the Respondent No. 2 and fearing that the Respondent No. 2 may indeed physically harm him, the Petitioner left the house immediately. The Respondent No. 2 did not even allow the Petitioner to collect his belongings, not even clothes from the house. The Respondent No. 2 thus illegally and unlawfully ousted the Petitioner from the house, the joint businesses and the Company.

2.11 Though deeply aggrieved, the Petitioner in the hope that wiser counsel will prevail on the Respondent No. 2 and that the said Kantilal will intervene to set things right, refrained from taking any legal action against his nephew, the Respondent No. 2. Several attempts were made by the relatives and common friends to reconcile the issues but to no avail.

2.12 The Petitioner then wrote a letter dated 9/8/2011 to DSIPL to get information about the status of the Company's investment in DSIPL and the income generated and distributed there from, but as DSIPL was in cahoots with the Respondent No. 2, it suddenly started contending that the DSIPL only recognised the Company as represented by Respondent No. 2 and thus would not entertain any queries from the Petitioner.

2.13 In July 2011, the Petitioner came to know of an Arbitral Award dated 10/7/2010 apparently passed in the arbitration proceedings between the Respondent No. 2 and the said Kantilal Dalal. The Petitioner was never served with a copy of the said Award but came to know of the same in some garnishee proceedings in Singapore. Further, the said Award though dealing with issues allegedly relating offshore settlement between the Respondent No. 2 and said Kantilal, also dealt with the rights, title, interest and share of the Petitioner in various immovable properties situated in India and standing in the names of the joint business entities without making the Petitioner or any of these entities a party to the arbitral proceeding and without giving any notice thereof to the Petitioner.

2.14 After the death of the said Kantilal on 8/3/2013, the Respondent No. 2 wrote to the Petitioner, ostensibly in his capacity of an executor of the Will of the said Kantilal and called upon the Petitioner to satisfy the claim of the Respondent No. 2 under the Award including transfer of the various immovable properties and interests in entities as illegally awarded under the said Award dated 10/7/2010. Petitioner then pointed out the illegality and unenforceability of the Award and that the same infringes upon the rights and interests of the Petitioner. The Petitioner thus filed appropriate proceedings in the Hon'ble Bombay High Court inter alia for setting aside the said Award and incidental reliefs, being Suit No. 470 of 2013.

2.15 The Petitioner then, apprehending that the Respondent No. 2 may have misused the Award, and being in illegal control of these entities may have prejudiced the rights and interests of the Petitioner, carried out a search of the records of these entities available with the Registrar of Companies and discovered the misdemeanors of the Respondents. It became evident that the Respondent No. 2 had abused his position to usurp the control of these various entities, including the Company, and that he was grossly mismanaging these entities to the detriment of the rights and interests of the Petitioner.

2.16 The Petitioner then issued a comprehensive notice dated 11/9/2013 to the Respondents pointing out the various acts of oppression and mismanagement by the Respondent No. 2, and called upon the Respondent No. 2 to inter alia rectify the same within the time period stipulated therein. Vide the said Notice the Petitioner called upon the Respondents to provide to the Petitioner with inspection of entire records of the Company since 2004 within seven days of receipt of the said Notice, which the Petitioner was entitled to as a 30% shareholder and director of the Company. Further vide the said Notice the Petitioner called upon the Respondents to render true and accurate accounts of the Company and pay to the Petitioner his lawful dues within fifteen days of receipt of the said Notice. The said Notice was received by the Respondents on the same day. Despite expiry of the notice period, the Respondents did not comply with any of the requisition under the said Notice.

2.18 On 25/9/2013, the Petitioner received a letter from the advocates of the Respondents seeking time to reply to the said Notice. Therefore, it became clear that the Respondents were merely buying time to fudge and fabricate the records of the Company to cover their tracks and defeat the rights of the Petitioner.

2.19 In backdrop of the aforesaid events, the Petitioner has filed the instant petition complaining therein the acts of oppression and mismanagement in the conduct of affairs of the Company. In nutshell, the grievances of the Petitioner, are as follows:-

i. Illegal increase in the authorized share capital of the Company with malafide intention of diluting the shareholding of the Petitioner, without any notice to him in the alleged EOGM purportedly held on 18/6/2007, by the Company.

ii. Illegal allotments of the shares to the Respondent Nos. 2 and 3 with malafide intention of diluting the shareholding of the Petitioner from 30% to 0.03%.

iii. Illegal removal of the Petitioner as a Director of the Company, despite being the only shareholder with the Respondent No. 2 and holder of 30% shareholding in the company without following due process of law.

iv. Illegal appointment of the Respondent No. 3 as a Director, only with a view to gain control over the Company's affairs, by the Respondents.

v. No service of notices or statutory documents on the Petitioners since 2007.

vi. Illegal transfer of shares by the Respondent No. 2 to the Respondent Nos. 3 to 12 in a purported meeting dated 1/9/2007, which was in fact never held, and of which no notice was served on the Petitioner. Further, the said allotment of shares was made in violation of Articles of Association of the Company in respect of right of preemption available to the existing shareholders.

vii. Denial of rights of the Petitioner, as a Shareholder and Director of the Company, to seek inspection of the documents and records of the company, to which he is entitled to as a Shareholder and Director of the Company.

viii. Siphoning off funds of the Company by the Respondent No. 2 for his personal benefits.

ix. Non payment of dividends etc.

3. On behalf of the Respondents, a reply has been filed denying all the aforesaid acts of oppression and mismanagement. It is contended that the shares held by the Petitioner, were purely in his capacity as a custodian of the Respondent Nos. 3 and 4 and do not belong to the petitioner and as such he has no locus to file the instant petition. The next plea taken by the Respondents is that the present petition is barred on account of delay and laches as well as on principles of estoppel and acquiescence as the Petitioner did not take any action since 2007. In the reply, it is further averred that the main grievance of the Petitioner is non-payment of his dues for which suit for recovery of money is only remedy and the Petitioner is not entitled to file the petition under Section 398. It is further pleaded that the conduct of the Petitioner, being malafide, he does not deserve for any relief.

4. I have heard the Ld. Counsels appearing for the parties. I have also gone through the documents submitted by the parties, as well as, various citations referred to and relied upon by them, in support of their respective contentions. Mow, I proceed to consider the rival contentions on merits.

5. Dealing with the first complaint as to the illegal increase in the authorized share capital of the Company, with a malafide intention to dilute the shareholding of the Petitioner, it was submitted on behalf of the Petitioner that an EOGM purportedly held on 18/6/2007, wherein the authorized share capital of the Company was increased. According to the Ld. Counsel the said decision is void, invalid, illegal and deserves to be set aside, inter alia, on the following grounds:-

a. No notice was served on the Petitioner for holding of the alleged EOGM on 18/6/2007, as required in law;

b. The notice dated 15/5/2007, purportedly issued for holding of the alleged EOGM, is bad in law, for the reason that in the notice, it is mentioned that the meeting was to be held at the Company's Registered Office, which is situated at Janmabhoomi Bhavan, whereas in the minutes of the meeting the Registered Office of the Company has been shown as Khushnuma Apartments.

c. No authority was given by the Petitioner to the Respondent No. 2.

d. The meeting was held in violation of the Articles of Association.

e. There was no valid quorum for holding the said meeting.

6. Elaborating the aforesaid grounds it is submitted that, as per the ROC records, the old authorized share capital of the Company has been illegally and fraudulently increased from the original Rs. 25,00,000/- divided into 2,50,000 equity shares of Rs. 10/- each to Rs. 1,00,00,000/- divided into 10,00,000 equity shares of Rs. 10/- each. The increase as aforesaid was effected in an Extra Ordinary General Meeting purportedly held on 18/6/2007, of which no notice whatsoever was issued to the Petitioner.

7. It is next submitted that as per the Notice dated 15/5/2007, (Exhibit W) an extra ordinary general meeting was to be held at the registered office at "Janmabhoomi Bhavan" on 18/6/2007 at 11 a.m. However, in the minutes of the meeting (Exhibit V) the registered office of the Company has been shown as "Khushnuma Apartments". Pertinently, the registered office of the Company was changed from "Janmabhoomi Bhavan" address to the aforesaid "Khushnuma Apartments" address only with effect from 1/9/2009 (Exhibit Y) and the same could not have been the registered office in the year 2007.

8. The Ld. Sr. Counsel for the Petitioner further submitted that the minutes of the said meeting purportedly record that the Petitioner was represented by the Respondent No. 2. The Petitioner did not give the Respondent No. 2 any authority to represent the Petitioner. There is no mention in the minutes that the Respondent No. 2 was authorized by the Petitioner by any letter of authority issued in his favour.

9. It is further submitted on behalf of the Petitioner that even assuming that the shares were held jointly, the Company ought not to have recognized the Respondent No. 2 as a joint shareholder as it is in violation of the articles of association. Article 6 of the AOA of the Company clearly states that the Company shall not recognize any person holding any partial interest in the shares.

10. It is further contended that the only person present at the purported meetings were the Respondent No. 2 as representative of the Petitioner, the wife of Respondent No. 2 as the representative of the Respondent No. 2, and the Respondent No. 3. The Respondent No. 3 became a shareholder only on 1/9/2007 and could not be present at the said meeting as he was not a shareholder then. Thus, there was no valid quorum as per Article 29 of the AOA for holding such meeting as the Articles of Association of the Company mandate personal presence of two of the members of the Company for constituting appropriate quorum for conduct of the meeting.

11. Now, I proceed to consider the next accusation made by the Petitioner upon the Respondents as regards the illegal allotment of the additional shares to the Respondent Nos. 2 and 3 with malafide intention of diluting the shareholding of the Petitioner from 30% to 0.03%. In this connection, it has been argued on behalf of the Petitioner, that as per the ROC records, the Respondent No. 2 was allotted 2,40,000 shares on 15/6/2007 and 7,50,000/- shares in the meeting of 17/7/2007 thereby his shareholding increased to 99.69%. Further, on 1/9/2007, the Respondent No. 3 was allotted 100 shares. The Petitioner was not aware of any such allotment in favour of the Respondent Nos. 2 and 3. No notice was issued to the Petitioner of any meeting wherein such decision to allot the shares to the Respondent No. 2 and Respondent No. 3, was taken.

12. It is next submitted on behalf of the Petitioner that the Respondent No. 2 has illegally used the digital signature of the Petitioner whilst uploading Form 2 showing allotment of 2,40,000 shares to the Respondent No. 2, whereas the list of allottees attached therewith bears the signature of the Respondent No. 3 (Exhibit Z).

13. Mr. Jagtiani, the Ld. Sr. Counsel for the Petitioner further argued that the allotment in question is also in violation to the preemptory clause as contemplated in Article 4 of the Articles of Association of the Company, which mandates that the additional shares have to be allotted to the existing shareholders in proportion to their existing shareholding. The additional shares were never offered to the Petitioner.

14. The next point argued by Mr. Jagtiani is that the Respondent No. 2 has not provided the Minutes of the Meeting of 1/9/2007, 15/6/2007 and 17/7/2007 or resolutions passed whereby the additional shares were issued. The resolutions and the minutes of the meetings have also not been uploaded in the ROC, website.

15. Mr. Jagtiani further argued that the entire exercise of increasing the authorized share capital of the Company and allotment of the increased shares to the Respondent No. 2 and Respondent No. 3 was done by the Respondent No. 2 in furtherance of their oblique motive to gain control over the Company and to oust the Petitioner by reducing his shareholding to a negligible 0.03% as compared to the original 30%.

16. Dealing with the letter dated 12/11/2005 of the Petitioner, upon which the Respondents have placed strong reliance to contend that the Petitioner himself intended to give up his share in profits, Mr. Jagtiani argued that such letter was never given effect to. It was submitted on behalf of the Petitioner that by a letter of 12/11/2005, the Petitioner intended to restrict his exposure in the losses that may occur in the joint venture between the Company and DSIPL. By the said letter, the Petitioner only offered to relinquish his share in the profit and losses and not his shareholding. Further, the said offer was subject to complying with the requisite formalities, which have not been complied with by the Respondent No. 2 and therefore, the question of relinquishment does not arise.

17. The Ld. Sr. Counsel pointed out that even according to Respondent No. 2, the letter was issued not because the Petitioner intended to give up his share and interests in Company, but because the Petitioner wanted to protect his capital as he was risk averse and did not approve the unconventional methods of DSIPL's directors, as can be seen from the letter dated 19/5/2007, sent by the Respondent No. 2 to the Petitioner.

18. In addition to the above, Mr. Jagtiani submitted that the Respondent No. 2 after two years of issuance of this letter vide his letter dated 19/5/2007, and letter dated 1/10/2008, called upon the Petitioner to transfer his shares to his two sons not on the basis of this letter but because of nature of his holding. Furthermore, the Petitioner, vide letter dated 11/9/2008 revoked the letter dated 12/11/2005 stating it was never given effect to officially in three years and claimed his proportionate share in dividends, profits etc. The Respondent No. 2 in his response letter dated 1/10/2008 (Exhibit M) did not say that the letter dated 12/11/2005 has already been given effect to and he made no reference to the alleged meeting of 30/9/2006.

19. Taking me through the Minutes of the 30/9/2006, the Ld. Sr. Counsel argued that the Respondents have fabricated these Minutes as the Petitioner was never present at the said meeting. Mr. Jagtiani submitted that on pointing out the fact that this letter was never given effect to, the Respondent No. 2 for the first time in reply produced the fabricated minutes of AGM of 30/09/2006 (Exhibit G) where supposedly this letter was given effect to in the records of the company. The minutes of the said meeting are fabricated for following reasons:-

a. In the minutes of the meeting of 30/9/2006 the registered office is shown as "Khushnuma Apartments" which, as stated above, became the registered office of the Company on 1/9/2009. In the year 2006, the registered office of the company was at "Janmabhoomi Bhavan".

b. The said minutes though falsely records that the Petitioner and the Respondent No. 2 were present at the said meeting, the said minutes have been signed only by the Respondent No. 2.

c. The Petitioner had sought inspection of the said minutes. However, the Respondent No. 2 has only provided a photocopy of the same. The photocopies were not taken from the minutes book, nor was it certified or paginated.

d. The Respondent No. 2 has not provided inspection of the attendance register which was sought vide letter dated 11/9/2013 nor produced the same at the time of the hearing despite repeated requests of the Petitioner to produce the same.

e. In none of the correspondence between 2005 to 2008 the Respondent No. 2 made any mention of the AGM of 30/9/2006. Had the letter of 12/11/2005 ever been taken note of in the AGM of 30/9/2006, then the Respondent No. 2 would have mentioned the same in the correspondence especially when the subject issue of the correspondence was demand of share of the Petitioner. The Petitioner in his letter dated 11/9/2008 revokes his letter dated 12/11/2005 and demands share in profit. The Respondent No. 2 does not in his response in letter dated 1/10/2008 state that the same is given effect to in the AGM of 30/9/2006, and calls upon the Petitioner to transfer shares to his sons. Similarly, the Respondent No. 2 vide letter dated 1/10/2008 issues a show cause notice as to why the Petitioner should not be removed as a shareholder and director of the Company. If the meeting of 30/9/2006 ever took place and the Petitioner gave up his share, as contended, way back in 2005, then the Respondent No. 2 would not have issued a show cause notice in 2008. Further, even when the Petitioner in his letter dated 2/10/2008 specifically asked for resolution, if any, disqualifying him from getting profits the Respondent No. 2 did not make any mention of the AGM of 30/9/2006.

f. The Respondents at the time of the hearing came up with a new case, though not pleaded in the petition, that the Annual Returns of 31/3/2006 were signed by the Petitioner in the meeting of 30/9/2006. The purported minutes of the meeting held on 30/9/2006 do not record that the annual returns of 31/3/2006 was signed by the Petitioner on that date. Further, the annual return of 31/3/2006 makes no mention of the letter dated 12/11/2005.

20. Coming to the next complaint with respect to illegal removal of the Petitioner as a Director of the Company, it has been argued on behalf of the Petitioner that the Petitioner has been a permanent director of the Company ever since his induction as a shareholder in 1996-97 and had also been the Chairman of the Company. DSIPL also recognized the Petitioner as the principal person of the Company and his approvals were regularly sought by DSIPL as can be seen from the letters dated 6/4/1999 (Exhibit F) and letter dated 16/8/2011 (Exhibit O). The Respondent No. 2 in his letter dated 1/10/2008 (Exhibit M-) addressed to the Petitioner has also admitted that the Petitioner was a director and a chairman of the Company.

21. It is further submitted on behalf of the Petitioner that from the search of record of the ROC, it may be seen that the Petitioner was shown as a director till 2007-2008 as reflected in the Annual Return for the year 2007-2008 (Exhibit "D"), and since 2009 he has been illegally removed as a director of the Company. (Exhibit "CC-Form 20 B filed along with Annual Return of the Company for the year 2008-09). According to the Ld. Counsel, the Petitioner was never served with any notice of the meeting in which decision for his removal as a director was allegedly taken and as such it is in violation of Section 284 of the Act.

22. Assailing the validity of the EOGM, Form Nos. 61 and 62, it was argued by the Ld. Sr. Counsel appearing for the Petitioner that the Respondents have annexed documents to their reply such as notice to call for EOGM dated 2/5/2008 (Exhibit H), minutes of the board meeting dated 5/5/2008 (Exhibit I), Form 32 (Exhibit J) Form 61 (Exhibit K) and Form 62 (Exhibit L) showing the alleged removal of the Petitioner as a director. The Ld. Sr. Counsel submits that these documents are fabricated for the following reasons:-

a. The Petitioner carried out a repeat search on the ROC website, (Exhibit "B" and "C"). The Petitioner could not trace any such Form 32 allegedly filed by the Respondents with the Registrar of Companies for removal of the Petitioner as a director nor could the Petitioner find the alleged Form 61 and 62 allegedly filed by the Respondents. Even in the prior search in April 2013, the Petitioner was unable to locate any of these documents pertaining to his removal.

b. The Form 32 for removal of directorship annexed is hand written whereas all the other forms are computerized, which casts serious doubts on the genuineness of the document.

c. The documents shown during inspection as copy of the purported Forms 32, 61 and 62, were not even web print outs from the ROC website. The Respondent No. 2 was called upon to produce the challan to show that these documents were actually filed with the ROC which has not been produced.

d. The purported notice of the Board Meeting dated 2/5/2008 is neither issued on the letter head of the Respondent No. 1 Company nor does it bear any company stamp.

e. The notice as well as the Agenda of the alleged notice described the registered office of the Company as "Khushnuma Apartments" when till 1/9/2009 the registered office of the Respondent No. 1 Company was at "Janmabhoomi Bhavan". It is similarly the case with the purported minutes of the board meeting allegedly held on 6/5/2008. These alleged minutes also appear to have been signed only by the Respondent No. 2 though it appears that Respondent No. 3 was also present as Director of the Respondent No. 1 Company.

f. The Respondent No. 2 was called upon to produce the proof of service of the notice dated 2/5/2008 and also of the notice of EOGM allegedly held on 30/5/2008 on the Petitioner. The same has not been produced on record by the Respondent No. 2 nor has he produced the Minutes of the EOGM dated 30/5/2008.

g. The documents annexed as Exhibit "H" and "I" to the Reply are described as Notice for convening the EOGM dated 2/5/2008 and Minutes of the said EOGM, respectively, whereas, the documents actually annexed at Exhibit "H" and "I" respectively appear to be a notice for convening a board meeting on 6/5/2008 and the Minutes of the Board Meeting allegedly held on 6/5/2008.

h. The Respondent No. 2 in his letter dated 1/10/2008 (Exhibit M) written to the Petitioner (which is after his removal as a Director) does not make any mention of removal of the Petitioner as a director but has instead, recognized the Petitioner as a director and stated that the said letter is in the nature of a Show Cause Notice to show cause why the Petitioner should not be expelled from the Respondent No. 1 Company in his capacity either as a shareholder or a director of the Company.

23. Refuting the contention of the Respondents that the Petitioner was removed as a director on account of non procurement of DIN, it is submitted that Non procurement of DIN is not a disqualification from being appointed as a director under Section 274 of the Companies Act. Furthermore, the notice and minutes of the board meeting do not state that the Petitioner was removed as a director on account of his non procurement of DIN.

24. Dealing with the Respondents' another contention that the Petitioner was removed as a Director on account of letter dated 12/11/2005, it was argued that if this stand of the Petitioner is to be believed, then the Respondent No. 2 would not have waited till May 2008, i.e. approx 2 years, to remove the Petitioner as a Director of the Company.

25. The next allegation made by the Petitioner is that the Respondent No. 3 has been illegally appointed with a view to gain control over the management of the Company by the Respondent No. 2 alone. In this connection, it was argued that the Respondent No. 3 was first appointed as an additional director of the Company vide a resolution purportedly passed at the board of directors meeting dated 1st October 2006 and then was appointed as an Independent Director vide a resolution dated 29th September 2007. According to Mr. Jagtiani, the Petitioner was neither consulted nor apprised of such an appointment. As the Petitioner and the Respondent No. 2 were the only two shareholders and directors of the Company, no such resolution could have been passed and no such meeting could have been convened in absence of the Petitioner. Furthermore, the Petitioner has neither ratified the appointment of the Respondent No. 3 as a director at any Annual General Meeting of the Company subsequently held.

26. The next point argued on behalf of the Petitioner is that the Respondent No. 3 was appointed as a Director with an ulterior motive to gain control of the company and oust the Petitioner as after the appointment of Respondent No. 3 as a director, the Respondents 2 and 3 illegally increased the authorized capital and allotted shares to Respondent No. 2 thereby reducing the shareholding of the Petitioner from 30% to 0.03%.

27. It was also argued by Mr. Jagtiani that the Respondent No. 2 could not have legally conducted any business without the consensus of the Petitioner. It was therefore to circumvent this and to render meaningless the position of Petitioner as director and shareholder, the Respondent No. 3 was appointed as additional Director. Additionally, the same was done in order to make the requisite quorum (2 directors) at the board meetings held subsequently in 2006-07 as prescribed under Article 63 of the AOA.

28. The next charge relating to the act of the mis-management made by the Petitioner is that the Respondents did not serve notice or statutory documents on the Petitioner since 2007. In this regard, it is argued that since 2007, no notices of board meetings, AGM, and other meetings have ever been served on the Petitioner. The ROC records reveal that, as per the compliance certificate dated 20/8/2008 filed with the Registrar of Companies, in the financial year 2007-08, the board of directors met 6 times on 15/5/2007, 15/6/2007, 17/7/2007, 1/9/2007, 26/12/2007 and 31/3/2008 and that, there was even one Extra Ordinary General Meeting dated 18/6/2007 (Exhibit "BB"). No notices of any such meetings were ever issued to the Petitioner. The Petitioner was not even given a copy of the minutes of these meetings.

29. It is further submitted by Mr. Jagtiani that the Respondent No. 2 was aware that the Petitioner was residing at Pondicherry, and therefore, the notices of the meetings ought to have been served on the Petitioner at the Pondicherry address and not at "Khushnuma Apartments" which is the residential address of the Respondent No. 2 and in his exclusive possession. The Ld. Sr. Counsel pointed out that the Respondent No. 2 had addressed letters to the Petitioner at his Pondicherry address with respect to Company. In fact, in the letter dated 1/10/2008 in paragraph 3C the Respondent No. 2 requests the Petitioner to update the company records with respect to his address which shows clear knowledge of the Respondent No. 2 that the Petitioner was in fact residing at the Pondicherry address (Exhibit K). Apart from the above, it was argued that the Respondents have not produced any evidence/acknowledgment receipt to show that the notices of the meetings were ever served on the Petitioner at the "Khushnuma Apartments" as well.

30. The next grievance of the Petitioner is that the Respondent No. 2 has illegally transferred the shares to the Respondent Nos. 3 to 12 in violation of right of pre-emption as provided in the Articles of Association of the Company. Dealing with this issue, it was argued that on 1/9/2007 the Respondent No. 2 transferred 100 of his 7000 paid up equity shares to the Respondent No. 3. The Petitioner was not aware of any such transfer nor was his permission sought for the same and hence is illegal (Exhibit C).

31. It is further submitted by the Petitioner's counsel that in the year 2013, the Respondents 2 vide resolution dated 13/7/2013 has illegally transferred 13 shares to Respondent Nos. 4 to 12. According to the Ld. Counsel, the transfer of 13 shares of Respondent Nos. 2 to 9 persons was only with a view to debar the Petitioner from filing the present petition by illegally increasing the number of members of the Company to 12 shareholders. The Ld. Counsel pointed out that this illegal purpose can also be evinced from the fact that the Respondents have not provided any cogent reasons for the transfer of these shares, that too only 13 in number and to only 9 persons. Further, the said transfer has been done behind the back of the Petitioner without serving any notice of the meeting in which the said transfer took place Exhibit P and Q (share transfer forms).

32. Apart from the above, it was argued that the said transfers of shares are in violation of Article 10 of the AOA as the shares ought to have been offered to the Petitioner before transferring the same to outsiders as the Petitioner had a preemptory right to purchase the shares. Further, according to the Ld. Sr. Counsel, reliance placed on Article 11 by the Respondents to suggest that the transfer did not require prior board approval, is wholly misplaced as the shares have been transferred to outsiders, being the Respondent Nos. 9 to 12 and, therefore, under Article 11 of the AOA of the Company prior board approval was necessary before effectuating the said transfer, which has not been done.

33. Furthermore, challenging the transfer of shares in favour of Respondent Nos. 4 to 12, it was contended that the transfer of the shares is the violation of the provisions contained in the Articles of Association of the Company with respect to the preemptive rights of the Petitioner. In this connection, it is the contention of the Petitioner that the transfer of the shares are in violation of Article 10 of the AOA of the Company, as the shares ought to have been offered to the Petitioner before its transfer to the outsiders, and the Petitioner had a pre-emptive right to purchase the shares. In this regard, the Ld. Counsel appearing for the Petitioner submitted that on 1/9/2007 the Respondent No. 2 transferred 100 shares to the Respondent No. 3 and further 13 shares were transferred by the Respondent No. 2 to the Respondent Nos. 4 to 12, which are bad in law. In addition, the Petitioner was never aware of any such additional transfer of shares, nor was his permission sought for the same. No notice was served on the Petitioner in this regard. According to the Ld. Counsel for the petitioner, these additional transfers of shares were made illegally with a view to debar the Petitioner from filing the present petition by illegally increasing the members of the Company up to 12. Moreover, the Respondents have not provided any cogent and convincing reason for transfer of these shares and that too only 13 in number and to only 9 persons.

34. The next grievance ventilated by the Petitioner is that he has been denied his rights as a shareholder and Director of the company to seek inspection of the documents of the Company and the records of the Company and despite notice being given on 11/9/2013, no inspection has been granted to the Petitioner of the statutory records of the Company and of all the documents to which he is entitled to as a shareholder and permanent director of the Company. Mr. Jagtiani submitted that the Respondents have also not given inspection of the original documents referred and relied upon by them in their Affidavit-In-Reply, which has been recorded in the Minutes of the Inspection letter dated 19/11/2013.

35. Dealing with the last complaint as to the siphoning of funds and nonpayment of dividend, it was argued on behalf of the Petitioner that the initial investment of Rs. 15,00,00,000/- in DSIPL was done through internal borrowings i.e. through loans received from the shareholders and not by raising any monies from any financial institutes or otherwise. The Petitioner had invested approximately Rs. 4,50,00,000/- in proportion to his 30% shareholding in the Respondent No. 1 Company. The auditor's report and the balance sheet for the year ending 31/3/2002 reflect the loan of Rs. 4.50 crores invested by the Petitioner. However, the unsecured loan given by the Petitioner to the Company for investment in DSIPL, has illegally disappeared from the balance sheet post 2007-2008 without any repayment to the Petitioner.

36. Apart from the above, it is contended on behalf of the Petitioner that he has not received his share of the income/profits/dividend earned from the investment made in DSIPL. According to the Petitioner, the Company in the year 2008 had received a cheque of Rs. 9 crores as dividend from DSIPL which has been recorded in the letter dated 2/10/2008 addressed by the Petitioner to the Respondent No. 2, which has not been denied by the Respondent No. 2. The Ld. Sr. Counsel alleged that the Petitioner did not receive any share in the dividend paid by DSIPL despite contributing 30% of the investment.

37. Dealing with the Respondents' contentions that the Petitioner did not invest any money in DSIPL and his role in the company was that of a custodian holding shares on behalf of Respondent Nos. 3 and 4 till they turned major, it was argued that the Respondent No. 2 for the first time during the course of hearing produced originals of the balance sheets for the year 2004-2005, 2005-2006 and 2007-2008 to show that the loan given by Petitioner of Rs. 4.5 crores was not towards his 30% share in the investment made by Company in DSIPL, as Petitioner himself has signed the balance sheets of 2004-2005 and 2005-2006 wherein the loan given by him is reduced to Rs. 2 crores. The Ld. Sr. Counsel in order to prove the Petitioner's allegation has cited the following facts and figures available on record:-

a. The Respondents have not given any explanation for what purpose did the Company take the loan from the Petitioner if not for making investment in DSIPL except for a bare denial that Petitioner lent money for making investment in DSIPL. Further, the Respondent has not provided any proof/ bank statements to show that the loan given by the Petitioner has been repaid.

b. The Respondents have admitted in their pleadings that the company does not do any other business nor does it have any assets except being an investment partner in DSIPL. Hence, it is but obvious that loan given by the Petitioner to the Company of Rs. 4.5 crores was only towards the investment made by it in DSIPL.

c. If the case of the Respondents that the Petitioner did not invest a penny is true, then the Respondent No. 2 would not have signed the Balance Sheet of 2005-2006 showing investments made by the Petitioner in the Company.

d. The Respondent No. 2 has not produced anything on record to show that the Balance Sheet of 2002 showing investment of Rs. 4.5 crores of the Petitioner is fabricated. Except for bare denial that the Respondent No. 2 ought to have produced the original documents including the Balance Sheet of 1999 to show that the entire investment of Rs. 15 crores was made by him.

e. The Balance Sheets of 2005 and 2006 only reflect that the Petitioner has signed the same probably at the request of Respondent No. 2. The explanation is more than plausible, especially when during 2005-2006 the relations between the parties were cordial and the Petitioner had never imagined then that the Respondent No. 2, his nephew, would dupe him. However, with the passage of many years, the Petitioner is now unable to recall as to how and in what circumstances he has affixed his signatures on the said Balance Sheets.

38. Replying to the Petitioner's contention, the Ld. Sr. Counsel appearing for the Respondents raised a preliminary point as to delay and latches in filing the instant petition and submitted that on this ground alone the Petition deserves to be dismissed. In this regard, taking me through the relevant averment made in the petition, the Ld. Sr. Counsel for the Respondent No. 2 submitted that the Petitioner has filed the present Petition with malafide intentions and as a clear afterthoughts.

39. The Ld. Sr. Counsel for the Respondent No. 2 further submitted that although, according to the Petitioner, he was sidelined by the Respondent No. 2 in the year 2004, however, the Petitioner failed to address this issue or take any action against the same. Further, it is the Petitioner's own contention that he was ousted from the Respondent No. 1 Company from the year 2007, however, even after his alleged forceful removal from the Respondent No. 1 Company and the Khushnuma flat, the Petitioner failed to take any action. According to the Ld. Sr. Counsel, in such circumstances, the least a prudent person would do is, to file a FIR against such forceful removal, which the Petitioner neglected to do.

40. It is further submitted that the grievances with regard to the alleged illegal increase in the authorized Share Capital happened in the year 2007 whereas the present petition was filed on 18/10/2013. According to the Ld. Sr. Counsel, there is an unexplained delay of 9 years. It is, therefore, contended that the petition suffers from gross unexplained delay and laches.

41. The Ld. Sr. Counsel for the Respondents submitted that the Petitioner had knowledge of all the alleged events since 2007 but he did not initiate appropriate proceedings and neglected to do the same. According to him, if the Petitioner had bonafide apprehensions that the affairs of the Company were being mismanaged, being a prudent shareholder, the least that he could have done is to check the documents filed by the Company with the Registrar of Companies ('ROC') from time to time, for which he was not even required to visit the office of the Company and/or ROC as the same can be accessed through the website of the Ministry of Corporate Affairs by making a minimal payment of Rs. 50/-. The learned Counsel added that the Petitioner ought to have acted with diligence in his capacity as a shareholder of the Respondent No. 1 Company, especially in light of his grievance that he has not received any notices since 2006/2007. It was, therefore, contended that the Petitioner, who claims to be a bonafide and prudent shareholder with alleged grievances against the Company and the other Respondents, failed and neglected to review the documents filed with the ROC since 2006.

42. The Ld. Sr. Counsel pointed out that the Petitioner has sought to explain the delay in filing the present Petition inter-alia, contending that the Petitioner was under a belief that Kantilal Dalal would prevail upon the Respondent No. 2 to pay to the Petitioner his alleged dues. In addition, the Petitioner has further sought to contend that on the demise of Mr. Kantilal Dalal on 8/3/2013, the Petitioner sought to take legal advice and look into the records of the Respondent No. 1 Company in April, 2013. According to the Ld. Sr. Counsel, the said explanations sought to be provided by the Petitioner are hopelessly misconceived and cannot be sustained inter-alia on account of the following averments made by the Petitioner in the Petition:

i. It is the Petitioner's case in paragraph III (vi) at page 16 of the Petition that the Petitioner was humiliated abused and ousted from the joint business and from the Company in 2007.

ii. It is further the Petitioner's case in paragraph III (vii) at page 17 of the Petition that no resolution could be arrived at by Kantilal Dalal in 2007.

iii. In paragraph III (viii) at page 17 of the Petition, the Petitioner has sought to contend that on several occasions, the Petitioner called upon the Respondent No. 2 to give details relating to the Respondent No. 1 Company.

iv. It is further contended by the Petitioner that the Respondent No. 2 continues to "oppress the Petitioner by denying him his legal rights and interest in the Company."

v. In paragraph 10 of the Affidavit in Rejoinder, the Petitioner has stated that "all the later attempts in 2008-2009 also were of no avail".

43. According to the Ld. Sr. Counsel for the Respondents, it is inconceivable that the Petitioner, who claims to have all along been interested in the affairs of the Respondent No. 1 Company and who claims that the Respondent No. 1 Company is nothing but a glorified partnership would not have taken any steps between 2004 and 2007 and from 2007 to 2013 to find out about the affairs the Respondent No. 1 Company. Furthermore, according to the Respondents' Counsel, it is impossible to believe that for more than 6 years the Petitioner, who claims to be aggrieved by the conduct of the Respondent No. 2, would not have taken legal advice or taken search of the records of the Respondent No. 1 Company which are accessible on the website of the Ministry of Corporate Affairs on payment of a nominal fee of Rs. 50/-.

44. The Ld. Sr. Counsel further contended that the Petitioner failed to explain as to why despite having taken a search in the records of the ROC on 23/4/2013, he did not address a single notice to the Respondents till 11/9/2013. Furthermore, the complete falsity in the case of the Petitioner is also apparent from the fact that having signed the Company's Annual Return for the year ending 31/3/2006 (Exhibit "C"), the Petitioner has in the Petition not only sought to contend in paragraph 8(i)(g) that he was not served with any notices for meeting(s) or financial statements since 2004 but also in the Advocate's Notice dated 11/9/2013 (Exhibit "S"), he sought inspection inter-alia, of the Annual Returns and the financial accounts "since 2004".

45. Apart from the above, the Ld. Sr. Counsel submits that the averments in the Petition read with the subsequent explanation sought to be given in the Rejoinder, makes it abundantly clear that the Petitioner intended to separate from the various firms/companies in which, the Petitioner and Respondent No. 2 were associated. This is also borne out by the letter dated 12/11/2005 (Exhibit I) read with the Minutes of Meeting held on 30/9/2006 being Exhibit G. Furthermore, neither during the course of opening submissions nor during the rejoinder, has the Petitioner offered any explanation for the delay in seeking to enforce its purported rights.

46. As regards increase in Share Capital and the Petitioner's removal from the post of the Director of Respondent No. 1 Company, it has been submitted on behalf of the Respondents that though the Petitioner has sought to allege that his removal From the post of Director as well as the increase in Share Capital is allegedly illegal, the fact that the Petitioner intended to separate from various firms/entities, in which inter alia he and Respondent No. 2 were associated, is evident from the letter dated 12/11/2005 (Exhibit I), which reads as under:-

"1. As a Director and Shareholder of the above firms, I hereby willingly and of my own accord give-up/relinquish my share of profit in the above Partnership Business.

2. I also hereby willingly and of my own accord assign/transfer my share of profit and all other benefits in the above Partnership Business to Mr. Bharat K. Dalal.

3. In order to formalise my above decision, if any legal formality is to be done or any documents are to be prepared the same may be forwarded to me for my signature."

47. The Ld. Sr. Counsel for the Respondents then invited my attention to the Minutes of the AGM held on 30/9/2006, which state as follows:-

"It was further proposed that Paid Up Capital of the Company must be raised to it fully authorized capital of Rs. 25,00,000/-. In view of the letter dated 12th November, 2005 issued by its share holder Mr. Girdharlal Nathubhai Dalal, to the other Principle Share Holder Mr. Bharat K. Dalal, was also decided that, the letter be accepted and the Company will have all the rights in respect of the future issues, such as declaration of Dividend, Issue of Further Equity Shares etc. It was also decided that, the company may raise its paid up capital from Rs. 1 Lac to Rs. 25 Lacs. It was also clear from the letter Dated 12th November, 2005 received from Mr. Girdharilal Dalal that he does not wish to add any further capital and hence if the shares to be issued in future, then as per the Companies Act, 1956 the same may be issued and allotted to the another member of the Company i.e. Mr. Bharat Dalal."

48. Referring to the said Minutes, it was submitted on behalf of the Respondents that the very fact that the Petitioner himself has signed the document itself proves that he was himself a part of the Respondent No. 1 Company and had also attended the meeting dated 30/9/2006. Further, the Petitioner has nowhere in his petition nor in his rejoinder stated that he had not attended the meeting dated 30/9/2006. On the contrary, the Petitioner has expressly stated that he has not received notices of the meetings dated 15/5/2007, 15/6/2007, 17/7/2007, 1/9/2007, 26/12/2007 and 31/3/2008, and he has never mentioned that he did not attend the meeting dated 30/9/2006 or received notice for the same.

49. In addition to the above, the audited reports of the Respondent No. 1 Company for the FY 2005-2006 display that the Petitioner was very much a part of the Respondent No. 1 Company in the year 2006 when the 30/9/2006 meeting took place. This further shows that the alleged investment made by the Petitioner has been paid back by the Respondent No. 1 Company to him. The audited report of the Respondent No. 1 Company reflects the signature of the Petitioner and this audited report was further filed by the Respondent No. 1 Company with the ROC in the year 2006, hence, it was argued that the Petitioner had attended and consented to the contents of the minutes of the meeting dated 30/9/2006. According to the Respondents' Counsel, this falsifies all the allegations raised by the Petitioner in his Petition.

50. Next submission advanced by the Ld. Sr. Counsel for the Respondents is that the contents of the letter dated 12/11/2005 read with the Minutes of Meeting dated 30/6/2008 make it clear that the Petitioner had acquired the entire holding of his shares from Mrs. Jyoti Bharat Dalal at par with issue price solely as a Trustee, for eventually completely transferring the said shares at par to the Respondent No. 2 and his two sons, after they joined the business. Apart from the above, since the business of the Company was highly speculative in nature, its sole activity being the partnership with Deutsche Securities (India) Pvt. Ltd., the Petitioner was not comfortable being exposed to a high possibility of unlimited losses or gains and therefore, sought to relinquish his shares. It is submitted that even if these shares were issued at par, as contended by the Petitioner, he has failed to provide any proof to demonstrate that any consideration was paid by him Petitioner to the Respondent No. 1 Company or Mrs. Jyoti Bharat Dalal for acquiring the shares in the Respondent No. 1 Company. This was despite the fact that the Respondents have called upon the Petitioner to provide proof of payments made towards purchase/allotment of shares. On the contrary, the Petitioner has sought to create an impression that he was the initial subscriber to the shares. Furthermore, the Petitioner has also denied that the shares were transferred from Ms. Jyoti Dalal to the Petitioner.

51. It is the contention of the Respondent's Counsel that the fetter dated 12/11/2005 was issued and submitted by the Petitioner to the Respondent No. 2 reiterating that he does not want any share in the dividends and/or profits and/or fosses of the Company that have accrued in the past and will accrue in the future. According to the Respondents, from a reading of this letter, it is clear that the Petitioner has given up/relinquished his share in dividends, profit and losses from past/future business, as well as his shares in the Respondent No. 1 Company. It is also clear that the Petitioner has assigned and/or transferred for the sole benefit and account of the Respondent No. 2, his share of accumulated profit/retained earnings in the Company's books, interest in the profit or loss of the Company for past years as well as the future years and all other benefits/gains accrued till date.

52. Next point argued on behalf of the Respondents is that the Petitioner has sought to contend, inter alia, that his involvement in the business of the Respondent No. 1 Company is evident from the purported loan of Rs. 4.5 crores which was allegedly granted by the Petitioner to Respondent No. 1 Company. The Ld. Sr. Counsel submitted that the fact that the Petitioner had relinquished or given up his purported right, title and interest in the shares/business of the various entities, is also evident from the annual accounts for the FY 2005-06 which have been signed by the Petitioner and show that the loans from the Petitioner were Rs. 2,27,89,874/-. According to the Ld. Sr. Counsel, this itself goes to show that a substantial portion of the purported loan amount was withdrawn by the Petitioner. Furthermore, the Petitioner has failed to provide any explanation for the withdrawal of the loan. In fact, the Petitioner has deliberately suppressed the accounts for the year 2005-06 from this Board. On the contrary, with the malafide intent of misleading this Board, the Petitioner sought to tender the annual accounts for the FY 2007-08, by which he sought to contend that the Respondents have siphoned off the money lent by him to Respondent No. 1 Company. The Ld. Sr. Counsel pointed out that the issue of Rs. 2,27,89,874/- that is raised by the Petitioner during the course of oral arguments, was never a subject matter of the Petition and is merely being raised by him as an afterthought with a view to create prejudice.

53. It is further submitted that at no point of time since 2004, has he called upon the Respondent No. 1 to hold a Board Meeting or to issue notices calling for a Board Meeting, which he ought to have done especially in light of his claiming to be the Chairman of the Respondent No. 1 Company, for a long duration of time. This is further supported by the fact that the Petitioner had in the letter dated 2/10/2008 stated that "No BOD meeting of our firm has ever being called. It is only I as a Chairman can summon the meeting". According to the Respondents Counsel, despite the Petitioner raising such a contention in the letter dated 2/10/2008, in the Advocate's notice dated 11/9/2013, at Exhibit S, the Petitioner has still sought production of the minutes of Board Meeting from 2004.

54. It is further contended on behalf of the Respondents that the Petitioner has failed to apply for and obtain a Director Identification Number ("DIN") under Section 266-A of the Act and has not shown any interest in doing so till date. It is also a fact that the Petitioner has failed to attend the Board Meetings since 2007 and was, therefore, liable to be removed from the directorship of the Company under Section 283(g) of the Act.

55. On behalf of the Respondents the next point argued is that though the Petitioner has sought to allege that Form 32, in respect of his removal as a Director, has not been filed, but the documents at Exhibits J, K and L make it clear that the requisite Form 32 was filed as an attachment to Form 61. Further, though the Petitioner has sought to contend that Form 32, which is produced at Exhibit-J, is fabricated on account of the fact that the same is handwritten and is at variance with the procedure of online filing, it is submitted that on account of the Petitioner's failure to obtain the DIN, it was not possible to upload Form 32 directly on the online system and it was, therefore, necessary for Form 32 to be uploaded as an attachment to Form 61. In addition, though the Petitioner has sought to allege that Form 61 and 62 have not been filed with the ROC. The Respondents' Counsel pointed out that Form No. 61 and Form No. 62 have been filed and the Challan of the same is attached to the Compilation of documents.

56. Refuting the Petitioner's contention that the holding of shares by the Petitioner in trust for the Respondent No. 2 is barred under the Benami Transactions (Prohibition) Act 1988 ("said Act"), under Sections 3 and 4, the Ld. Sr. Counsel appearing for the Respondents submitted that this arguments is not tenable because under Section 3(b) of the said Act, where any property, including shares, is held by a person as a trustee or in fiduciary capacity, the same is excluded from the purview of the said Act. It was, therefore, argued that the said Act does not bar the Respondent No. 2 from giving the shares of the Respondent No. 1 Company to the Petitioner as a trustee. Further, the letter dated 19/5/2007 states that the Respondent No. 2 had given the shares to the Petitioner in good faith, which were to be returned in time. The Ld. Sr. Counsel pointed out that the aforesaid fact was reiterated by the Respondent No. 2 vide his letter dated 1/10/2008, wherein the Respondent No. 2 stated that the said shares were given to the Petitioner merely as a custodian. The Ld. Counsel further pointed out that the aforesaid contention of the Petitioner is further supported by the fact that the Petitioner himself has failed to demonstrate that any consideration was paid by him for the said shares. According to the Ld. Sr. Counsel for the Respondents, the denial of the fact that the shares were transferred by Ms. Jyoti Dalal to the Petitioner, is not only malafide but also a complete afterthought.

57. Dealing with the charge as to the alleged failure to provide Notices and Minutes of Meetings by the Respondents to the Petitioner, it was argued on behalf of the Respondents that it is amply clear from the documents available on record up to the year 2006, the Petitioner had not only signed accounts but also the annual returns of Respondent No. 1 Company. Further, the contention of the Petitioner that he was not provided with Notices of Board Meetings since 2004, is contrary to his own case in paragraph (ix) at page 18 of the Petition, wherein he has stated that "the Company was nothing but a glorified partnership and that the affairs of the Company were never conducted through the formal procedure of board meetings etc."

58. Assailing the conduct of the Petitioner, the Ld. Sr. Counsel appearing for the Respondents submitted that the Petitioner wrongly tried to sell the Respondent No. 2's flat in his absence, and this displays the misconduct of the Petitioner. In this connection, it is submitted that while the Respondent No. 2 was away from home and the Petitioner was at that point of time staying with the Respondent No. 2 in his house, the Petitioner taking advantage of the fact that the Respondent No. 2 was away from home, fraudulently attempted to sell the property(ies) i.e. Flats Nos. 51 and 52 to a third party through a real estate broker without the Respondent No. 2's knowledge. According to the Respondents, the Petitioner even went to the extent of addressing a letter dated 6/10/2007 to the Secretary of Khushnuma Co-operative Housing Society mischievously and fraudulently calling upon the society to confirm that the Petitioner and the Respondent No. 2's father were legal and sole owners of the said Flats Nos. 51 and 52 in spite of the fact that the said Flats had been transferred to the Respondent No. 2 and were solely owned by the Respondent No. 2 under the Gift Deed dated 26/12/1994, as has been stated hereinabove.

59. It was further submitted that the Respondent No. 2 was utterly shocked to learn of the letter dated 6/10/2007, which was brought to his notice only in a meeting with the managing committee on 7/5/2009. The learned Counsel submitted that upon discovering the fraudulent acts of the Petitioner, the Respondent No. 2, through his advocates, published advertisements in widely circulated newspapers cautioning public at large to refrain from paying any heed to the offer of sale put up by the Petitioner. However, the Respondent No. 2 did not take any stern action against the Petitioner as he believed that the said issue could be resolved within the family. Pursuant to the above, the Petitioner told Respondent No. 2 that he no longer wished to stay with him in the house and that he would move out of the house and expressed that he will stay in another relative's house.

60. It is next submitted that it was the Petitioner's responsibility to get the records of the Company rectified so that all the communications that are to be sent to him could be sent to his new address of communication. However, the Petitioner did not take any steps to rectify the records of the Company or to request that the address for communication of the Petitioner be changed to his new address. It was, therefore, argued, that the Company never defaulted in issuing notices to the shareholders regarding the affairs of the Company.

61. As regards, the alleged illegal transfer of shares in favour of the Respondent Nos. 4 to 12, the Ld. Counsel appearing for the Respondents, submitted that the Petitioner, who has relinquished his rights in respect of the purported shares in the Company, has no right to object to any transfer of shares inter se the Respondents. Further, according to the Ld. Counsel, the provision of Article 11 of the AOA, permits transfer of shares in favour of the third parties without approval of the Board of Directors. It is, therefore, contended that the Petitioner, who was no longer a Director on the Board of Directors of the Company, has no legal right to object to any transfer of shares inter se the Respondents. In the alternative, it was submitted that if it is assumed that the contention of the Petitioner is correct even with regard to the transfer of shares in favour of the Respondent Nos. 4 to 12, the only relief, which the Petitioner is entitled to, is that he could pray for annulment of the transfers of these shares to the Respondent Nos. 4 to 12 and restoration of the said shares back to the Respondent No. 2.

62. It is urged that in order to overcome the issue of maintainability, the Petitioner has sought to contend that the transfer of shares by the Respondent No. 2 in favour of the Respondent Nos. 4 to 12 is contrary to the provisions of Articles 10 and 11 of the Articles of Association of Respondent No. 1 Company. In this regard, it is submitted that the Respondent Nos. 4 to 12 are the family members of Respondent Nos. 2 and 3. It is also submitted that the provisions of Article 11 of the Articles of Association clearly provide for transfer of shares by a member of the Company to his family members without any approval by the Board of Directors.

63. Based on the above contentions, the Ld. Counsel for the Respondents also submitted that the Petitioner is no longer holding requisite shares on the date of the petition and has no locus to file the instant petition being ineligible in terms of Section 399 of the Act and further as he has failed to prove his allegations as to alleged acts of oppression and mismanagement and hence, the petition deserves to be dismissed.

64. I have considered the submissions advanced by the Ld. Counsels appearing for the respective parties and examined the record. I have also perused the Written Submissions filed by both the sides and the decisions cited by them in support of their respective contentions.

65. On the basis of the pleadings and submissions, the first question that arises for my consideration is as to whether the Petitioner is eligible to file the present petition in terms of the provisions contained in Section 399 of the Act. In this regard, it has to be noted that the Petitioner claims to be 30% shareholder in the total paid up capital of the company. According to him, by illegally increasing the authorized share capital and illegal allotment of further shares, the Respondents have diluted his shareholding from 30% to 0.03%.

66. It is a trite that in a petition where the allotment of further shares is challenged and the same is the subject matter of the petition, the original shareholding is the criteria to determine the eligibility of the petitioner to file a petition as provided in Section 399 of the Act. Admittedly, prior to the alleged allotment of the shares, the Petitioner was 30% shareholder in the total paid up capital of the company. I, therefore, hold that the Petitioner is eligible to file the present petition in terms of Section 399 of the Act. In support of my finding I would like to rely on the following decisions:-

i] Vijayan Rajesh v. M.S.P. Plantations Private Limited : [2009] 151 Comp Cas 413 (Kar) wherein the Division Bench of the Karnataka High Court has held as follows:

"32. The reasoning given by the Company Law Board does not appeal to us. If the finding is to be that the persons presenting the petition do not qualify for presenting a petition under Section 399 of the Act, no further Question arises and the petition was to be dismissed at the threshold. But the Company Law Board has viewed the working of the Section 399 of the Act in the converse way, which is not a proper understanding of the provisions of Section 399. But, on authority, it has been established that for the purpose of examining as to whether the petitioning members qualify for maintaining a petition under Section 399 of the Act, the question to be looked into is as to whether the petitioners constitute the requisite number of members or they had the requisite shareholding in the company prior to the acts complained of. If the date of presentation of the petition should be looked into in a technical way, it could defeat the very purpose of the legislative enactment of Sections 397 and 398 of the Act, as the overbearing majority shareholders can simply by highhanded action or even for other purpose and by oppressive methods, dismember minority shareholders and leave them with no remedies, as the dismembered minority shareholders technically do not qualify for maintaining a petition under Section 399 of the Act, being not member at all. As the minority shareholders will be complaining only after the acts occurred and when they have been removed from the membership of the company, the understanding and interpretation to be given to Section 399 is only so as to Author the object of relief to be given in a situation governed by Sections 397 and 398 of the Act and not to foreclose the options to an aggrieved person and to deny the very relief sought to be extended to a complaining minority shareholder/s envisaged under Sections 397 and 398 of the Act."

[Emphasis Supplied]

ii] In the case of Raajratna Metal Industries Ltd. Vs. K and S Consulting Group P. Ltd. and Ors: [2009] 148 Comp Cas 756 (CLB) and Dinesh Sharma v. Vardaan Agrotech P. Ltd : [2007] 135 Comp Cas 133, the CLB it has held as follows:-

"15...........On issue of maintainability, though the petitioner's shareholding is brought down to 5.92 per cent, after issue of further allotment of shares, otherwise the petitioner was holding 12.11 per cent, of the paid up capital. In view of the challenge of further allotment of shares, the petition is maintainable in accordance with law and also as held by the Company Law Board in Dinesh Sharma v. Vardaan Agrotech P. Ltd : [2007] 135 Comp Cas 133. Accordingly, the maintainability issue is answered in favour of the Petitioner."

iii] Further, in the case of T.N.K. Govindaraju Chetty and Co. Vs. Kadri Mills (CBE) Limited : [1999] 96 Comp Cas 871 (CLB), it has been held hereunder:

"14........Allotment of shares to the exclusion of some shareholders has been held, by many High Courts and the Company Law Board itself, as an issue which could be agitated as an act of oppression, in a petition under Section 397/398. Therefore, we are of the view that when the holding of a petitioner is reduced below 10 per cent due to further allotment of shares and such allotment itself is impugned in a petition under Section 397/398, the petition should be held to be maintainable on the strength of his holding before the further allotment of shares......."

[Emphasis Supplied]"

iv] The above case of T.N.K. Govindaraju Chetty and Co. has been relied upon in the case of Prabhjit Singh Johar Vs. Johar Hotels P. Ltd : [2010] 157 Comp Cas 98 (CLB) wherein it was held that:

"56.........It has been rightly contended by the petitioners that the Company Law Board in the case of T.N.K. Govindaraju Chetty and Co. v. Kadri Mills (CBE) Ltd : [1998] 3 Comp. LJ 329 : [1999] 96 Comp Cas 871, has held that the transfer and allotment of shares which has been done with mala fide motive cannot be impugned in a petition under Section 111 and they have to be agitated as an act of oppression in the petition under Sections 397 and 398. It was held in that case that if the holding of the petitioner is reduced below 10 per cent, due to further allotment of shares and the allotment itself is impugned and the petition under Sections 397 and 398 should be held maintainable on the strength of the holding before the transfer and allotment of the shares. In the case of Navin Ramji Shah v. Simplex Engineering and Foundry Works P. Ltd : [2007] 136 Comp Cas 770 (CLB), it has been held that in family companies any reduction in the percentage of shareholding irrespective of quantum of percentage, the affected parties can always allege oppression as his position vis-a-vis other family members gets altered due to non-allotment of shares and in this case the petitioners have alleged that their 50 per cent, shareholding has been reduced to 26.6 per cent, besides that the transfer shown is fraudulent showing their 50 per cent, shareholding as reduced to nil. Thus the respondents' contention that before filing a petition under Sections 397 and 398 of the Act the petitioners should seek the rectification of register of members under Section 111/111A of the Act is misplaced. In any case, this objection was not taken by the respondents in their reply. The petitioners have succeeded in making out a case that they held 50 per cent, shares in this closely held family company in the nature of quasi-partnership. The respondents' preliminary objection regarding non-maintainability of the company petition in terms of the requisite qualification under Section 399 is not tenable. The petition cannot be thrown out at the threshold."

[Emphasis Supplied]

67. Apart from the above, it is the case of the Respondents that the Petitioner was holding shares in his capacity as a trustee of the minor sons of the Respondent No. 2, and therefore, the Petitioner was not the actual owner of the shares-in-question. Hence, he has no locus standi to file the present petition under Section 397/398 of the Act.

68. Having examined the provisions contained in Section 4(1) and (2) of the Benami Transactions (Prohibition) Act, 1988, I am of the view that the said provisions specifically bars the Respondent No. 2 to claim the ownership in the manner stated above. The Respondent No. 2 is not entitled in law to take a defence that the shares held by the Petitioner were as a Benami Holder. Further, the Respondents' claim that the provisions of the Benami Transactions (Prohibition) Act, 1988 are not attracted to the present case as the impugned shares held by the Petitioner were in the capacity of a trustee for the Respondent Nos. 3 and 4, and hence, covered by the Exception of Section 4(3)(b) of the said Act, in my opinion, is also not tenable. The Hon'ble Supreme Court and Hon'ble High Courts have clearly held that the defence of the trustee to get out of the rigours of the Benami Transaction Act is available only when the property is purchased by a person in his name by playing fraud on the real owner or in pursuance to the provisions of law. To my mind, the present case does not come within these exceptions. The first reason is that in none of the correspondences between the Respondent No. 2 and the Petitioner, did the Respondent No. 2 ever contend that the shares were held jointly by them. In fact, in the letter dated 1/10/2008 addressed by the Respondent No. 2 to the Petitioner, the Respondent No. 2, himself, recognized the Petitioner as a shareholder and director of the company and issued a show cause notice as to why he should not be expelled from the company in his capacity as a shareholder and director, and thus, the Respondents have admitted in their correspondence that the shares held by the Petitioner were in his individual capacity. In addition to the above, the Respondent No. 2 in his letter dated 19/5/2007 and 1/10/2008, addressed to the Petitioner, admitted the fact that the shares were purchased by the Petitioner from Ms. Jyoti Dalal for a price. Moreover, the alleged minutes of the meeting of 30/9/2006, which are purportedly signed by the Respondent No. 2 record that the shares were issued to the Petitioner at par.

69. Furthermore, the Share Certificates annexed by the Respondent No. 2 to the reply to the petition allegedly showing shares of the Respondent No. 5, were held jointly by the Petitioner and the Respondent No. 2 are, on the face of it, appear fabricated. These share certificates are forged as there is an overwriting on the folio numbers mentioned in the share certificates showing the Respondent No. 2 as a joint shareholder along with the Petitioner. It is pertinent to mention here that, the Respondent No. 2 has not offered inspection of the original share certificates, as can be seen from the Minutes of inspection dated 29/11/2013. There appears sufficient force in the submission of the Petitioner that the failure to produce the Register of Members by the Respondents in spite of repeated requested made by the Petitioner clearly goes to prove that the entries made therein are in the name of the Petitioner and, therefore, the Respondents did not produce the same.

70. It is therefore dear that the contention of the Respondents that the Petitioner has no locus standi to file the present petition as he is not the actual owner of the shares-in-question, is without merits and deserves to be dismissed for the reasons referred to above. I, therefore, hold that the Petitioner has locus standi to file the present petition.

71. The next issue which arises for my consideration is as to whether the present petition is barred on account of delay and laches as well as principles of "estoppel" and "acquiescence" as the Petitioner did not take any action since 2007.

72. It is an established proposition of law that the provisions of Limitation Act, 1963 do not apply to the proceedings under Section 397/398 of the Companies Act. Therefore, the contention of the Respondents that the petition is barred by limitation does not arise. In so far as the question of delay and laches is concerned, it cannot be disputed that the same do apply to the proceedings under Section 397/398 of the Act. But, in the present case, in my opinion, having regard to the facts and circumstances of the case, the said preliminary objection is not tenable. The facts of the present case have to be viewed in the background that the Company is a closely held family company and was one of the jointly owned companies of the Petitioner and the Respondent No. 2. The Respondent No. 2 is the nephew i.e. the real brother's son, of the Petitioner. The Petitioner and the Respondent No. 2 were the only members and directors acting on mutual trust. It is further matter of record that the Petitioner had shifted from Mumbai and was staying in "Arbindo Ashram" at Pondicherry for the last few years. There is nothing on record to show that the Respondent No. 2 did disclose to the Petitioner that he has removed the Petitioner as a Director and that after increasing the authorized share capital of the company and pursuant to further allotment of shares, the petitioner's shareholding in the company has been reduced from 30% to 0.03%. There is nothing on record to show that any communication was made by the Company and/or other Respondents at the Petitioner's Pondicherry address, despite knowing fully well that the Petitioner mostly stays at Pondicherry and seldom visits the Mumbai address. Needless to say that the real uncle i.e. the Petitioner was having utmost faith and trust in his nephew i.e. the Respondent No. 2, who was solely in charge of the affairs of the Company and at whose representation the Petitioner was induced to invest in the Company, was in entire control of the affairs of the company. In these circumstances, if the Petitioner did not bother to keep on regularly checking filings of the company and/or making enquiries from the company as to its shareholding pattern, he cannot be blamed and it cannot be held that the petition suffers from delay and laches and/or barred by the principles of "waiver" and "acquiescence". The record reveals that it was only in 2013 after the death of his real brother Mr. Kantilal Dalal, the father of the Respondent No. 2, when the Respondent No. 2 started contending ownership of various entities, in which the Petitioner was a partner/shareholder and of the properties held in the name of those entities, the Petitioner made searches into the records of the Company. I do not find any reason to disbelieve the contention of the Petitioner that on an online search of the records of the company, as available with the ROC, carried out on 23/4/2013, he discovered the various acts of oppression and mismanagement committed by the Respondent No. 2 in collusion with the Respondent No. 3. On discovery of these gross acts of oppression and mismanagement, the Petitioner in order to safeguard his interest, on 11/9/2013 issued a notice to the Respondents bringing to their notice the various acts of mismanagement and oppression and also asked for inspection of the company's records, which was never granted despite his persistent demands even in the course of arguments before this Bench. Apart from the above, it is a settled proposition of law that if an act of oppression having continuous effect until the date of the petition, such petition is not hit by the principles of delay and laches.

73. It is relevant to note here that in the case of Sangramsinh P. Gaekwad & Ors. v. Shantadevi P. Gaekwad (dead) through L.Rs & Ors : (2005) 11 SCC 314 it has been held that an act of oppression is a continuous wrong until it is brought to end by passing an appropriate order. In the case of Pearson Education Inc. V/s. Perntice Hall India (P) Ltd. & Ors : (2006) DLT 450, it was held that if the act complained off amounting to oppression has a continuing effect, in that case, the question of limitation does not arise. In the case of Ramashankar Prosad V/s. Sindri Iron Foundry (P.) Ltd : [1966] AIR Cal 512, it was held that a petition under Section 397 would be maintainable if the effect of the alleged act of oppression persists indefinitely. In the case of Suhasini P. Kurkure v. Metalurgical Laboratories (P) Ltd. & Ors : [2012] SCC 112 (CLB), it has been laid down as follows:

"The doctrine of laches is based on equitable consideration and depends on general principles of justice and fair play. There is no presumption that delay is deliberate. To be the laches delay should be such that it could be said that the petitioner is not entitled to relief on account of gross negligence or inaction or for want of bonafide imputable to him or that he has given up (waived) his right by acquiescence or by his conduct or neglect. Further, this Board has consistently taken the view that in case of allotment of shares, even if it is a single act, since it has continuous effect allegations relating to the same can be entertained in a petition under Section 397. In a 397 petition, if the alleged act of oppression has a continuous effect, then the issue of limitation is of no consequence."

(Emphasis supplied)

74. Same view has been in the case of Prabhjit Singh Johar & Anr. vs. Johar Hotels P. Ltd. & Ors- reported in : 2010, 157, CompCas 98(CLB) and Jagjit singh Chawla & Ors. vs. Tirath Ram Ahuja Ltd. & Ors. reported in 2004, 385 CompCase 19 (CLB).

75. In light of the above proposition of law and having regard to the facts of the case in hand, I hold that the present petition is not barred by delay and laches. It is also not barred by the principles of doctrine of "waiver" and "acquiescence".

76. The next preliminary objection that fails for my consideration is whether the Petitioner has suppressed material facts and documents and thus has approached this Bench with unclean hands, and hence the petition deserves to be dismissed.

77. I have considered this objection as well. It is a well settled proposition of law that if a party approaches a court for redressal of his grievances under equitable jurisdiction, he must come with dean hands and, in case, such party conceals any material facts or suppresses the relevant documents, he is not entitled to the discretionary reliefs from the court. However, elaborating the aforesaid proposition of law, it has been held by various courts that the ground of alleged suppression cannot arise unless it is demonstrated that (i) firstly, the fact was "vital and material" to the issue to be decided in relation to the reliefs claimed; (ii) secondly, that such vital fact was not to the knowledge of the Respondents or that the document could not have been in the knowledge of the Respondents, or that the document was not a public document, and (iii) lastly, that by suppression of such fact, orders were obtained which would not have been granted if the correct and true facts were pleaded. In this regard the following decision and the relevant observations therein are relevant to be cited:-

(i) Enercon Gmbh vs. Enercon (India) Ltd. & Ors : [2008] 143 CompCas 687 (CLB), wherein it has been held as follows:-

"In the present case, no relief has been granted as yet and whether the documents which are alleged to have been not been disclosed are material documents is a matter yet to be determined. Once the other side has produced all the documents, then the question of suppression of material documents to apply the decision of the Supreme Court, does not arise...."

(ii) Dhanraj Mills Pvt. Ltd. and Anr. v. Global Trust Bank Ltd. & Ors : (2003) 105 bomlr 609, wherein it has been held as follows:

"But it is not the law that if particular document is not file court should immediately draw an inference that there is intention to suppress. This document is before the Court. No order interest or otherwise was even sought nor obtained by the Respondent Nos. 1 G.T.B. by suppression of this document"

(iii) Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad : (2005) 11 SCC, 314, wherein the Hon'ble Supreme Court has held as under:-

"197. The Court may also refuse to grant relief where the petitioner does not come to court with clean hands which may lead to a conclusion that the harm inflicted upon him was not unfair and that the relief granted should be restricted. (See London School of Electronics, Re [1986] Ch. 211)."

(iv) The above principle has been reiterated in a recent judgment of the Hon'ble Supreme Court in the case of Dalip Singh vs. State of U.P : [2010] 2 SCC 114, wherein it is inter alia held as follows:-

"1...... it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final."

78. In light of the above proposition of law, I have examined the facts of this case. I do not find that the Petitioner has suppressed any material facts or documents in this petition. Therefore, this preliminary objection is also not tenable and deserves to be rejected.

79. Now, I come to the merits of the case. It has not been denied that the authorized share capital of the Company was increased from the original Rs. 25 lacs divided into 2.50 lacs equity shares of Rs. 10/- each to Rs. 1 Crore divided into 10 lacs equity shares of Rs. 10/- each. The said increase in the share capital of the company was effected in the EOGM purportedly held on 18/6/2007. The Petitioner was the shareholder on that date holding 30% in the total paid up capital of the company. There is nothing on record to show that any notice was issued to the Petitioner inviting him to participate in the said meeting. There is also nothing to show that the Petitioner had ever issued any authority to the Respondent No. 2, as shown in the minutes of the meeting, to represent the petitioner as a shareholder. The contention of the Respondent No. 2 that the impugned shares were held jointly, is found false. The entries made as joint holders, on the face of it, appear forged entries. Furthermore, a joint shareholding is not approved in the Articles of Association of the Company and Article 6 thereof clearly states that the company shall not recognize any person holding any partial interest in the shares. There was no valid quorum in terms of AOA of the Company in the said meeting. Minutes reveal that the only persons present at the purported meeting were the Respondent No. 2 as the representative of the Petitioner, the wife of the Respondent No. 2 as the representative of the Respondent No. 2 and the Respondent No. 3. Undisputedly, the Respondent No. 3 became a shareholder only on 1/9/2007 and could not be present at the said meeting as he was not a shareholder then. The said meeting was not held at the registered office of the company. All these reasons clearly go to prove that the purported meeting held on 18/6/2007 for increasing the authorized share capital of the company was not held in accordance with law. The decisions taken at the said meeting smack malafide intention on the part of the Respondents. It is well proved that their sole intention was to dilute the shareholding of the Petitioner and sideline him from the affairs of the company. I, therefore, hold that the impugned EOGM dated 18/6/2007 is contrary to law and the provisions of Articles of Association of the company, and therefore, it is declared as invalid, unlawful and so the resolutions passed thereat, and, therefore, I am of the view that the resolutions deserves to be set aside.

80. Now, I enter into adjudication of other complaints made by the Petitioner as to the illegal allotment of additional shares to the Respondent No. 2 and the Respondent No. 3 in the meetings purportedly held on 15/6/2007, 17/7/2007 and 1/9/2007. In the meeting held on 15/6/2007, the Respondent No. 2 was allotted 2,40,000 shares, and in the meeting dated 17/7/2007 he was again allotted 7,50,000 shares, and on account of these allotments the Respondent No. 2's shareholding was increased from 70% to 99.6%, whereas the Petitioner's shareholding was reduced from 30% to 0.03%. Further, in the meeting held on 1/9/2007, the Respondent No. 3 was allotted 100 shares. The onus to prove the fact that the meetings were held validly after service of statutory notices upon the Petitioner lies upon the Respondents in which they have utterly failed. The Respondents have failed to prove the service of notice. No proof has been filed in this regard by them. There is no reason to disbelieve the Petitioner's case that he was not served any notice with respect to these meetings wherein such decisions to allot additional shares to the Respondent Nos. 2 and 3 were taken. There is also nothing to disbelieve that the Respondent No. 2 has illegally used the digital signature of the Petitioner while uploading Form 2 showing allotment of 2,40,000 shares to the Respondent No. 2, whereas, as is seen from Exhibit 'Z', the List of Allottees attached therewith, bears the signature of the Respondent No. 3. On perusal of AOA it is noted that the Articles of Association contemplate that additional shares have to be allotted to the existing shareholders in proportion to their existing shareholding. Admittedly, the additional shares were never offered to the Petitioner in terms thereof. Therefore, the impugned allotment of shares is in clear violation of the pre-emption clause of the AOA.

81. Apart from the above, it is the matter of record that the Respondent No. 2 has not provided the minutes of the meeting dated 15/6/2007, 17/7/2007 and 1/9/2007, nor any resolutions passed in those meetings. The resolutions and the minutes of the meetings have also been uploaded on the website of the ROC. Ex facie, it appears that the entire excise of increasing the authorized share capital of the company and then further allotment of the shares to the Respondent Nos. 2 and 3 was done by the Respondent No. 2 in furtherance of their oblique motive to gain control over the company and to oust the petitioner.

82. In defence, the Respondents have only relied upon a letter dated 12/11/2005 of the Petitioner, the contents of which have been gone through by me carefully. At the cost of repetition, I would like to reproduce the contents of the said letter here as under:-

"1. As a Director and Shareholder of the above firms, I hereby willingly and of my own accord give-up/relinquish my share of profit in the above Partnership Business.

2. I also hereby willingly and of my own accord assign/transfer my share of profit and all other benefits in the above Partnership Business to Mr. Bharat K. Dalal.

3. In order to formalise my above decision, if any legal formality is to be done or any documents are to be prepared the same may be forwarded to me for my signature."

83. On a careful perusal of the said letter, the Respondents' contention that keeping in view that the Petitioner was desirous to dis-associate with the company and relinquish his shares, and therefore there was no occasion to allot further shares to him, in my opinion, does not hold water. On analysis of the said letter, it seems that the Petitioner only offered to relinquish his shares in the profits and losses and not his shareholding in the Company. Furthermore, the said offer was a conditional one. It was subject to the compliance of certain requisite formalities, which were never done. It appears that the Petitioner wanted to protect his capital as he was not in favour of such amount of investment on account of risk involved therein. This does not exonerate the obligation on the part of the company and the Respondent No. 2 as a director of the company, having entire control over the affairs of it, not to comply with the requirement of mandatory law by issuing notices at the correct address of the petitioner, informing him and making disclosure as required in law. To support my view, I would like to cite the following decisions:

(i) Nanalal Zaver v. Bombay Life Assurance Co. Ltd : AIR 1950 SC 172 wherein it is held as follows:

"It is well established that directors of a company are in a fiduciary position vis-a-vis the company and must exercise their power for the benefit of the company. If the power to issue further shares is exercised by the directors not for the benefit of the company but simply and solely for their personal aggrandizement and to the detriment of the company, the court writ interfere and prevent the directors from doing so. The very basis of the Court's interference in such cases is the existence of the relationship of a trustee and of cestui que trust between the directors and the company." [(See pg 109 of Needle)]

(ii) BMJ & Sons v. BCC Co : (2002) 108 CompCas 91 (pg 104), the Court observed:

"It is a settled position of law that further shares can be issued only for the benefit /interest of the company and not with a view to create a new majority to reduce a majority into minority even if the powers to issue shares is vested in the board. If the purpose of issue/allotment of shares is for upsetting the existing shareholding to the detriment of one group, then such an allotment of shares is to be held an act of oppression, whether or not partnership principles are applied."

84. On a perusal of the aforesaid decisions, it is thus clear that the power to issue shares is given primarily to enable capital to be raised when it is required for the purposes of the company but it can be used for other purpose also as, for example, to create a sufficient number of shareholders to enable the company to exercise statutory powers, or to enable it to comply with legal requirement. Hence, if the shares are issued in the larger interest of the company, the decision cannot be struck down, on the ground that it has incidentally benefited the Directors is their capacity as shareholders. So if the Directors succeed, also or incidentally in maintaining their control over the company or in newly acquiring it, it does not amount to an abuse of their fiduciary power. What is objectionable is the use of such power simply or solely for the benefit of Directors or merely for an extraneous purpose like maintenance or acquisition of control over the affairs of the Company. Where the Directors seek, entering into an agreement to issue new shares, to prevent a majority shareholder from exercising control of the Company, they will not be held to have failed in their fiduciary duty to the Company if they act in good faith in what they believe, on reasonable grounds, to be the interests of the Company, but if the power to issue shares is exercised from an improper motive, the issue is liable to be set aside and it is immaterial that the issue is made in bonafide belief that it is in the interest of the Company.

85. It is well settled that the directors may exercise their powers bona fide and in the interest of the company. If the directors exercise their powers of allotment of shares bona fide and in the interest of the company. The said exercise of powers must be held to be proper and valid and the said exercise of powers may not be questioned and will not be invalidated merely because they have any subsidiary additional motive even though this is to promote their advantage. An exercise of power by the directors in the matter of allotment of shares, if made mala fide and in their own interest and not in the interest of the company, will be invalid even though the allotment may result incidentally in some benefit to the company.

86. In light of the aforesaid proposition of law, having critically examined the facts of this case, in my opinion, the contention of the Respondents for allotment of shares was malafide and purpose was to gain control and management of the Company. I, therefore, hold that the allotments of further shares purportedly done at the meetings held on 15/6/2007, 17/7/2007 and 1/9/2007 are bad in law and deserves to be set aside.

87. Now, I proceed to consider the validity of the Minutes of the Meeting dated 30/9/2006. These are the Minutes relating to AGM of the company. As contended by the Petitioner, these minutes are also ex facie fabricated for the reasons assigned here as under:-

(i) The Petitioner has categorically denied that he was present in the said meeting. Admittedly, there is no signature of the petitioner on the minutes of the said meeting.

(ii) No attendance register has been produced to prove that the petitioner was present in the said meeting.

(iii) No proof of dispatch of notice has been produced to show that any notice was served on the Petitioner inviting him to attend the said meeting.

(iv) The Petitioner sought inspection of the original minutes of the meeting, but neither he was given inspection of the original minutes of the said meeting nor a certified copy thereof was provided to him. Simply a photocopy of the minutes of the said meetings was provided to the Petitioner. Even in the course of arguments, despite repeated requests on behalf of the petitioner's counsel, the original minutes were not produced. Last but not the least, in none of the correspondences exchanged during the years from 2005 to 2008 between the petitioner and the Respondent No. 2, the respondent No. 2 made a mention of the AGM dated 30/9/2006 saying that in view of the letter dated 12/11/2005 of the Petitioner, the said minutes are recorded. Had the letter dated 12/11/2005 ever been taken note of it in the AGM dated 30/9/2005, then the Respondent No. 2 would have mentioned the same in the correspondences especially when subject issue of the correspondence was demand of shares of the Petitioner. In addition, the Petitioner vide his letter dated 11/9/2008 revoked his letter dated 12/11/2005 and demanded share in profits. The Respondent No. 2 in his response by letter dated 1/10/2008 did not state that the same has been given effect to in the AGM dated 30/9/2006 and called upon the Petitioner to transfer his shares to his sons. The Respondent No. 2 vide his letter dated 1/10/2008 issued a show cause notice as to why the Petitioner should not be removed as a shareholder and director of the company. If the meeting of 30/9/2006 had ever taken place and the Petitioner had given up his share as contended by the Respondents way back in the year 2005, then the Respondent No. 2 would not have issued a show cause notice in 2008. In addition to the above, the purported minutes of the meeting held on 30/9/2006 do not record that the annual returns of the year ended on 31/3/2006 was signed by the Petitioner on that date. Further, the annual return of 31/3/2006 makes no mention of letter dated 12/11/2005 of the Petitioner. The Respondents, therefore, at the time of hearing, have come up with a new case although not pleaded earlier that the annual return of 31/3/2006 was signed by the Petitioner in the meeting of 30/9/2006. For all these reasons, in my opinion, the Minutes of the meeting purportedly held on 30/9/2006 are fabricated.

88. Now, I proceed to consider the removal of the Petitioner as a Director of the company. It is a settled law that in normal circumstances, the removal/termination of a Director cannot be subject matter of the proceedings under Section 397/398 of the Act. However, where a company is in the nature of quasi-partnership the removal/termination of a director cannot be subject matter of such Petitioner and removal/termination can be held as an oppressive act towards a shareholder/director of the Company. Undisputedly, the Company is closely held family company and the Respondent No. 2 is a real nephew of the Petitioner. The Petitioner is admittedly has been primary director of the company ever since his induction as the shareholder since 1996 and 1976 and has also been the chairman of the company. In a family company, undisputedly, the principles of quasi-partnership do apply, as held in various cases, namely,

(i) Gurmit Singh v. Polymer Papers : [2005] 123 Comp Cas 486 wherein it is held as follows:

".........the petitioners have also invoked the principles of legitimate expectations. In cases of legitimate expectations, the denial of the same could be considered to be an act of oppression. For the authority on the principles of legitimate expectations reference could be made to Boyle & Birds' Company Law III Edition wherein it is stated that in a quasi-partnership type company, the Court may take account of legitimate expectations of members." In Re Elgindata Ltd.: [1991] BCLC 959 it has been held that "In general members of a company have no legitimate expectations going beyond the legal rights conferred on them by the constitution of the Company, i.e., to say its Memorandum and Articles of Association, Nonetheless legitimate expectations super imposed on a member's legal rights may arise from agreements or understanding between the members. In Atmaram Modi v. ECL Agrotech (1999 98 CC 463) this Board has held that in the course of business of a partnership, a partner is entitled to have certain legitimate expectations.......In Shri Dipak Mehta v. Shree Anupar Chemicals Pvt. Ltd. (1999 33 CLA 33 CLB) case, this Board has held that we have to examine whether the facts reflect the existence of any understanding of joint management justifying the claim of legitimate expectation of being an MD. Karnataka High Court also, in Synchron Machine Tools Pvt. Ltd. case, has recognized application of legitimate expectation in a petition under Sections 307/398......... As held by this Board in Thirthram Ahuja's case (supra), when certain groups of shareholders who have formed a company and have been participating in the affairs of a company for a long time with remuneration, then there can be a presumption of legitimate expectation and exclusion of one from the management could be an act of oppression. In the present case, in view of my findings that the agreement Shri Sunil Puri and M/s. Fritz is nothing but an between Shri Sunil Puri and Shri Gurmit Singh and that the long continuation of Shri Gurmit Singh as an MD with remuneration, I have no hesitation to come to the conclusion that the principles of quasi partnership and legitimate expectation can be applied in this case.".

ii. Dinesh Sharma v. Vardaan Agrotech Pvt. Ltd., [2007] 135 Camp Cas 133 wherein it is held as follows:

"As a principle, directorial complaints cannot be a ground in a petition under Section 397/398 as the complaints in such a petition should be relating to the rights qua a member. While, as a proposition, it is so in normal circumstances, yet, in cases of family companies or companies in the nature of partnership, depending on the facts of the case, directorial complaints have been adjudicated by this Board in Section 397/398 proceedings. In any view of the matter, in the present case, the petition is a composite petition wherein not only directorial complaints are made, but also complaints relating to conversion of majority into minority. Further, when the promoter having high stake in the company complaints of her exclusion from the management, petitioner No. 2 was the promoter and first director of the company, I feel that equity demands that her complaint should be inquired into in the present proceedings. However, in the present case, the claims of the petitioners are of their claim of quasi partnership and by denying the petitioners a representation on the Board, they are being oppressed by the majority shareholders. In case of dissolution of a partnership, the just and equitable grounds are wider than the just and equitable grounds applicable in the case of winding up of a company."

ii. Dale Carrington Invt. P. Ltd. & Anr. vs. P.K. Parthapan & Ors : (2005) 1 SCC 212 the Hon'ble Supreme Court has held as follows:-

Private limited companies are normally closely held i.e. the share capital is held within members of a family or within a close-knit group of friends. This brings in considerations akin to those applied in cases of partnership where the partners owe a duty to act with utmost good faith towards each other."

89. Upon a close scrutiny of record, I do not find anything on record to show that the Petitioner has been removed as a Director of the company in accordance with the provisions of law. The minutes of the EOGM dated 2/5/2008 and Board Meeting dated 6/5/2008, Form 61 and 62, etc. showing the alleged removal of the petitioner as a director, are fabricated documents. Moreover, the said meetings are invalid for want of valid service of notice on the Petitioner. I hold that the minutes of the said meetings are fabricated since the same are corroborated by the following facts-

(i) The Petitioner failed to trace any such form 32 allegedly filed by the respondents with the ROC for removal of the petitioner as a director nor could the Petitioner find the alleged form 61 and 62 allegedly filed by the Respondents. Even in the prior search in April 2013, the Petitioner was unable to locate any of these documents pertaining to his removal.

(ii) The form 32 for removal of directorship annexed is hand written whereas all the other forms are computerized which casts serious doubts on the genuineness of the document.

(iii) The documents shown during inspection as copy of the purported form 32, 61 and 62 were not even web print outs from the ROC website. The Respondent No. 2 was called upon to produce the challan to show that these documents were actually filed with the ROC which has not been produced.

(iv) The purported notice of the Board meeting dated 2/5/2008 is neither issued on the letter head of the Company nor does it bear any company stamp.

(v) The notice as well as the Agenda of the alleged notice described the registered office of the company as "Khushnuma Apartments" when till 1/9/2009 the registered office of the Company was at "Janmabhoomi Bhavan". It is similarly the case with the purported minutes of the board meeting allegedly held on 6/5/2008. These alleged minutes also appear to have been signed only by the Respondent No. 2 though it appears that the Respondent No. 3 was also present as Director of the company.

(vi) The Respondent No. 2 was called upon to produce the proof of service of the notice dated 2/5/2008 on the Petitioner and also of the notice of EOGM allegedly held on 30/5/2008. The same has not been produced on record by the Respondent no. 2 nor has the Respondent No. 2 produced the Minutes of the EGM dated 30/5/2008.

(vii) The Respondent No. 2 in his letter dated 1/10/2008 written to the Petitioner (which is post his removal) does not make any mention of removal of the petitioner as a director but has instead recognized the petitioner as a director and stated that the said letter is in the nature of a show cause notice to show cause why the petitioner should not be expelled from the Company in his capacity either as shareholder and director of the Company.

90. For the reasons discussed above, I hold that the petitioner has been removed as a Director illegally without following due course of law. Further, the Company is in the nature of quasi partnership, hence, the removal of the Petitioner as a director amounts to an act of oppression. The Petitioner, therefore required to be re-instated as a Director.

91. In so far as the issue as to illegal appointment of the Respondent No. 3 as Director is concerned, in the facts and circumstances of the case, it is well proved that he has been inducted as a Director only with a view to gain control of the Company and oust the Petitioner from the Company. It is, therefore, held that the appointment of the Respondent No. 3 as a Director is also bad in law. Having held the appointment of the Respondent No. 3 as illegal, I would not prefer to remove him as a Director in view of the fact that the Respondent No. 2 admittedly had 70% shareholding in the Company whereas the Petitioner hold 30% only. Furthermore, there may be a situation of dead lock in case these remains only two Directors i.e. the Petitioner and the Respondent No. 2. This may further create complications in the functioning of the Company. Therefore, the ratio of 2:1 appears justified as no prejudice is going to be caused to the Petitioner as he has right to vote only on the basis of his shareholding. Therefore, despite the fact that the due procedure was not adopted in the appointment of Respondent No. 3 as a Director, I do not feel it appropriate to remove him as a Director of the Company.

92. I have also considered the impugned transfer of 13 shares by the Respondent No. 2 in favour of the Respondent Nos. 4 to 12. In my opinion, the said transfer is bad in law for two reasons. The first reason is that it is in violation of Article 10 of the AOA of the Company which provides that before making offer for transfer of shares to a non-member, the first offer will be given to the existing members. Thus, there is violation of preemptory rights of the Petitioner, Another reason is that the transfer was made with malafide intent to raise the number of members more than 10 in the company and thus, deprived the Petitioner from being eligible to file a petition in terms of Section 399 of the Ac

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t. I, therefore, hold that the said transfer of shares in favour of the Respondent Nos. 4 to 12 being contrary to the AOA of the Company is illegal and, therefore, the transfer of shares in favour of the Respondent Nos. 4 to 12 is liable to be cancelled. This issue is decided accordingly. 93. The next point that falls for my consideration is with respect to the alleged act of mismanagement in the affairs of the Company. In this regard, the first instance cited by the Petitioner is as to the non-service of notices and statutory documents on the Petitioner by the Respondents since 2007. It is the case of the Petitioner that since 2007, no notice of Board Meetings, AGMs and other meetings have even been served on the Petitioner. There is no rebuttal of the said allegation on behalf of the Respondents. The record reveals that as per the compliance certificate filed with the ROC on 20/8/2008, in the Financial Year 2007-08 the Board of Directors met 6 times i.e. on 15th May, 15th June, 17th July, 1st September and 26/12/2007 and 31/3/2008, besides in one EOGM dated 18/6/2007. The Ld. Counsel appearing for the Respondents could not convince this Bench as to whether any notice has been served with respect to these meetings and meetings held thereafter. No record has been produced to show that the notices were sent to the Petitioner either at his Pondicherry address or his address registered with the Company i.e. "Khushnuma Apartments", Mumbai. There is ample evidence available on record to prove the fact that the respondents knew that the Petitioner most of time resides in Arbindo Ashram, Pondicherry. Despite that the Respondents did not bother to issue any notice to the Petitioner at his Pondicherry address. Holding meetings in violation of the provisions of the Company Act without notice to the Directors/shareholders is clearly a gross act of mismanagement in the affairs of the Company. 94. There is ample evidence on record to show that the Respondents have failed to serve the statutory notices/documents on the petitioner. The Petitioner has been denied inspection of documents and record of the company to which he is entitled to as a shareholder and director of the company. In my opinion, all these further acts amount to oppression. Further, the Petitioner time and again sought inspection of original documents, to which he is entitled to as a shareholder and permanent director of the Company. He even also kept on insisting for inspection of the documents from the respondents in the course of final hearing. However, inspite of repeated demands, no inspection of the documents was provided to the petition and this act of non providing inspection of documents further amounts to an act of mismanagement. The Respondent No. 2, as a Director of the Company has a fiduciary duty to make disclosures of the information and documents of the company to other directors and shareholders as and when demanded by them as held in the case of Dale & Carrington (Supra). 95. As regards the siphoning of the funds of the company, I have taken into consideration the rival submissions. I find that the accounts of the company are also not transparent. It has not been disputed by the respondents that the initial investment of Rs. 15 Crores in DSIPL was done through internal borrowings i.e. through loans received from the shareholders and not by raising any monies from any financial institutes or otherwise. The Petitioner had invested approximately Rs. 4.50 Crores in proportion to his 30% shareholding in the Company. The Auditor's Report and the balance-sheet for the year ending 31st March, 2002 reflect the loan of Rs. 4.5 Crores invested by the Petitioner in the Company. However, the unsecured loan given by the Petitioner to the Company for investment in DSIPL has illegally disappeared from the balance-sheet post 2007-08 without any repayment to the Petitioner. 96. In addition to the above, it is also an undisputed fact that the Petitioner has not received his share of the income/profits/dividend earned from the investment made in DSIPL. In the year 2008, the Company had received a cheque of Rs. 9 Crores as Dividend from DSIPL, as can be seen from the Letter dated 2/10/2008 addressed by the Petitioner to the Respondent No. 2, which has not been denied by the Respondent No. 2. However, the fact remains that the Petitioner, despite contributing 30% of the investment, did not receive any share in the Dividend paid by DSIPL. It is difficult to believe the Respondents' version that the Petitioner did not invest any money in DSIPL and his role in the company was that of a custodian holding shares on behalf of the Respondent Nos. 3 and 4 till they attained majority. Moreover, the Respondent No. 2, for the first time in the course of hearing, produced originals of the balance-sheets for the years 2004-2005, 2005-2006 and 2007-2008 to show that the loan given by the Petitioner of Rs. 4.5 Crores was not towards his 30% share in the investment made by the Company in DSIPL, as the Petitioner himself has signed the balance-sheets for the years 2004-2005 and 2005-2006, wherein the loan given by him is reduced to Rs. 2 Crores. Except for a bare denial that the Petitioner lent money for making investment in DSIPL, the Respondents have not given any explanation for what purpose did the Company take the loan from the Petitioner if not for making investment in DSIPL. Further, the Respondents have not provided any proof/bank statements to show that the loan given by the Petitioner has been repaid to him. Besides, the Respondents have admitted in their pleadings that the company does not do any other business nor does it have any assets except being an investment partner in DSIPL. Hence, it is but obvious that the loan of the Petitioner of Rs. 4.5 Crores was only towards the investment made by the Company in DSIPL. The case of the Respondents appears false for the reason that if the Petitioner had not invested any money, as contended by the Respondents, then the Respondent No. 2 would not have signed the balance-sheet for the year 2005-2006 showing investments made by the petitioner in the company. In my opinion, all these acts fall within the category of "mismanagement" as defined in Section 398 of the Act. 97. It is a well established law that to maintain a petition under Section 397/398 of the Act, it must be established that the oppression complained of affected a person in his capacity or character as a member of the company as harsh and unfair treatment in any other capacity, such as a director or a creditor, is outside the purview of the said section; (b) there must be continuous acts constituting oppression up to the date of the petition; (c) the events have to be considered not in isolation, but as part of a continuous story; (d) it must be shown as a preliminary to the application of Section 397 that there are just and equitable grounds for winding up the company; (e) the conduct complained of can be said to be oppressive only if it can be said that it is burdensome, harsh and wrongful and the oppression involves at least elements of lack of probity and fair dealing to a member in matters of proprietary right as a shareholder." 98. A careful analysis of Section 397 would show that the winding up on just and equitable grounds would be automatic and this Board has to only form an opinion that such winding up would not be in the interests of the Company/share-holders and, accordingly, to mould relief with a view to put an end to the matters complained of. 99. It is a settled proposition of law that where any shareholder is denied his most valuable rights in utter disregard of the statutory provisions, the making of a winding of order, on the ground that it is just and equitable would be justified. Therefore, having regard to the facts of the case in hand, the necessary ingredients of the provision contained in Section 397 which provides that: "to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding up order on the ground that it was just a equitable that the company should be wound up; also stands proved. 100. On a overall analysis of the facts of the case discussed hereinabove, in my opinion, the Petitioner has succeeded to prove that the acts of the Respondents are burdensome, harsh and wrongful and lack in probity and fair deal to the Petitioner. The effect of acts complained of is continuous in nature. The petition, therefore, deserves to be allowed. To bring an end to the acts complained of and to do substantial justice between the parties. The C.P. is disposed of in the following manner:- Order a. It is declared that the EOGM held on 18/6/2007 by the Company, whereat the resolution was passed thereby increasing the authorised share capital of the Company from Rs. 2,50,00,000/- to Rs. 10,00,00,000/-, is declared null and void and hence the said resolution is cancelled accordingly. b. It is declared that the allotments of further shares made on 15/6/2007 and 17/7/2007 of 2,40,000 and 7,50,000 equity shares, respectively, in favour of the Respondent No. 2 are illegal, bad in law, null and void and the same are hereby cancelled. c. It is declared that the transfer of 100 equity shares on 1/9/2007 made by the Respondent No. 2 in favour of the Respondent No. 3 is illegal bad in law null and void and the same is hereby cancelled. d. It is ordered that the Register of Members of the Respondent No. 1 Company be rectified by deleting the names of Respondent Nos. 2 and 3 to the extent of 2,40,000 and 7,50,000 equity shares allotted on 15/6/2007 and 17/7/2007, respectively, and 100 equity shares transferred by the Respondent No. 2 in favour of the Respondent No. 3 on 1/9/2007. e. It is declared that the Petitioner holds 30% of the total paid-up capital of the Respondent No. 1 Company. f. It is declared that the Board Resolution passed on 11/7/2013, by which 13 shares were transferred by the Respondent No. 2 in favour of the Respondent No. 4 to 12, is illegal, bad in law, void and the same is hereby cancelled. It is further ordered that the Register of Members of the Respondent No. 1 Company be rectified by deleting the names of Respondent Nos. 4 and 12 to the extent of 13 shares allotted to them on the basis of the resolution dated 11/7/2013. g. The removal of the Petitioner as a director of the Respondent No. 1 Company is hereby set aside and the Petitioner is reinstated as a director of the Company. The Form 32 showing removal of the Petitioner as a director shall be removed from the MCA Portal and a fresh form shall be filed showing the reinstatement of the Petitioner as a director. h. The company is directed to make compliance of the directions made above within 45 days from the date of the order. The necessary statutory forms shall also be filed by the Company with the ROC concerned in this regard. i. In future, the company shall serve notices upon the Petitioner and other shareholders through registered post as well as through e-mail and the company shall also allow inspection of statutory documents to which the Petitioner is entitled to as per law as director and shareholder of the company. The Company shall also made pending statutory compliances within the stipulated period as required in law. j. M/s. Haribhakti & Co., is appointed as a Special Auditor to conduct special audit of the company w.e.f. 1/4/2007 till 31/03/2015 of the Respondent No. 1 Company. In case, it is found that Respondent No. 2 has siphoned off the Company's funds, and the company has suffered loss, the same shall be reimbursed by the Respondent No. 2. The parties are directed to extend their co-operation to the said Auditor. The fees of the said Auditor shall be paid by the Company. The Special Auditor shall submit his report to the Company after completion of the audit. k. C.P. stands disposed of in the above terms. l. Interim order, if any, and the C.A. if any, stand disposed off accordingly. m. No order as to costs. n. Let copy of order be issued to the parties.
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