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



Naginder Singh Shiena v/s R.S. Infrastructures Ltd.


Company & Directors' Information:- C K INFRASTRUCTURES LIMITED [Active] CIN = U70200DL1997PLC089706

Company & Directors' Information:- D B INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U04520MP2006PTC018493

Company & Directors' Information:- R S INFRASTRUCTURES LIMITED [Active] CIN = U45201PB1997PLC020316

Company & Directors' Information:- K R INFRASTRUCTURES LIMITED [Active] CIN = U73100TG1992PLC013995

Company & Directors' Information:- SINGH INFRASTRUCTURES (INDIA) PRIVATE LIMITED [Amalgamated] CIN = U45203DL2005PTC134734

Company & Directors' Information:- I M B INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70102DL2009PTC195079

Company & Directors' Information:- Y K M INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45202CH2006PTC029960

Company & Directors' Information:- R 3 INFRASTRUCTURES LIMITED [Active] CIN = U45400DL2014PLC268953

Company & Directors' Information:- P G M INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U01119AP2007PTC054326

Company & Directors' Information:- N H INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45209CH2010PTC032243

Company & Directors' Information:- Y D INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70102UP2009PTC037603

Company & Directors' Information:- C 4 INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45201MH2013PTC242843

Company & Directors' Information:- V AND K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200TG2001PTC036581

Company & Directors' Information:- J L INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200TN2008PTC066965

Company & Directors' Information:- T & C INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U70102TG2008PTC060995

Company & Directors' Information:- U R C INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200TG2008PTC058894

Company & Directors' Information:- S R G INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74110DL2005PTC134967

Company & Directors' Information:- S R G INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70101DL2005PTC134967

Company & Directors' Information:- N. C. R. INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45400UP2008PTC034623

Company & Directors' Information:- P T INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U51909DL2007PTC159635

Company & Directors' Information:- S. L. INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45203PB2007PTC031300

Company & Directors' Information:- V C H INFRASTRUCTURES PRIVATE LIMITED [Under Process of Striking Off] CIN = U45203KL2011PTC028762

Company & Directors' Information:- P A INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45208TN2009PTC071929

Company & Directors' Information:- A E K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45309TN2009PTC071702

Company & Directors' Information:- K G N INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74200DL2007PTC167982

Company & Directors' Information:- M A M INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70109KA2012PTC062160

Company & Directors' Information:- P N INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45201OR2010PTC012647

Company & Directors' Information:- R S INFRASTRUCTURES INDIA PRIVATE LIMITED [Strike Off] CIN = U45206TN2013PTC091533

Company & Directors' Information:- J S K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200MH2005PTC156097

Company & Directors' Information:- S A INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45400WB2013PTC192691

Company & Directors' Information:- L & W INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200DL2008PTC182372

Company & Directors' Information:- K R R INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U70102TG2008PTC061194

Company & Directors' Information:- INFRASTRUCTURES PRIVATE LIMITED [Under Process of Striking Off] CIN = U45200JH2007PTC012792

Company & Directors' Information:- S AND A INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45206UR2012PTC000345

Company & Directors' Information:- J & K INFRASTRUCTURES LIMITED [Active] CIN = U40101JK2009PLC003034

Company & Directors' Information:- V. J. S. INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74999UP2008PTC035636

Company & Directors' Information:- K R M INFRASTRUCTURES (INDIA) PRIVATE LIMITED [Strike Off] CIN = U45209TG2011PTC073850

Company & Directors' Information:- M D INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45201CH2001PTC024224

Company & Directors' Information:- V K INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45400UP2008PTC034415

Company & Directors' Information:- K Y INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45201DL2004PTC127815

Company & Directors' Information:- A K C INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200KL2010PTC025716

Company & Directors' Information:- D N D INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45203PN2008PTC133243

Company & Directors' Information:- G V R INFRASTRUCTURES INDIA PRIVATE LIMITED [Strike Off] CIN = U45209AP2008PTC059504

Company & Directors' Information:- K & K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74120KA2006PTC040900

Company & Directors' Information:- A & G INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U31900PB2012PTC036358

Company & Directors' Information:- U D INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45400MH2010PTC203382

Company & Directors' Information:- J W INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74120MH2015PTC268554

Company & Directors' Information:- G AND G INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45200MH2004PTC147316

Company & Directors' Information:- A. N. Y. INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45206MH2013PTC243735

Company & Directors' Information:- J V S M S INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45200TG2010PTC070371

Company & Directors' Information:- K S V V INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45209TG2010PTC069359

Company & Directors' Information:- A V R INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45400DL2009PTC186399

Company & Directors' Information:- A P S INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U70109DL2013PTC248564

Company & Directors' Information:- R R INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70109DL2006PTC150324

Company & Directors' Information:- S D P INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45200HR2013PTC048666

Company & Directors' Information:- B P K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45203KA2009PTC049331

Company & Directors' Information:- T M R INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45400TG2007PTC054647

    Company Petition No. 2 OF 2005

    Decided On, 21 December 2006

    At, Company Law Board Principal Bench New Delhi

    By, S. BALASUBRAMANIAN
    By, CHAIRMAN

    Virender Ganda and S.K. Giri for the Petitioner. Puneet Bali, Satinder Gulati, Nittan Nehraji and V.P. Chhabra for the Respondent.



Judgment Text

1. The petitioners claiming to hold 71.43 per cent equity shares and 81.47 per cent of the preference shares in M/s. R.S. Infrastructures Limited (?the company?) have complained that all the 3 petitioners have been illegally removed as directors and the 2nd, 3rd and 4th respondents have been illegally appointed as directors and that the respondents have also illegally issued further shares to themselves. On the basis of these allegations, they have sought for consequential reliefs.


2. The facts of the case are that the company was incorporated in August, 1997 with the main business of constructing and managing a four lane railway over bridge near Dera Bassi on Ambala-Kalka sections of Northern Railways. The original authorized capital of the company was Rs. 5 lakhs comprising of 50,000 shares of Rs. 10 each which was raised to Rs. 13.5 crores in the year 2000-01 comprising of 70 lakhs of equity shares of Rs. 10 and 65 lakhs 10 per cent cumulative redeemable preference shares of Rs. 10 each.


3. Shri Ganda, Advocate, appearing for the petitioners submitted: A tripartite BOT agreement dated 8-9-1999 was executed between Ministry of Surface Transport, Government of Punjab and the 7th respondent for construction of 4 Lane ROB near Dera Bassi. The 1st respondent company was incorporated as a special purpose vehicle to implement the project and accordingly the 7th respondent, which is under the control of the 2nd respondent, assigned the agreement to the 1st respondent. Since the 2nd respondent could not find financial resources to complete the project, he approached the 1st petitioner who was an NRI and his son, the 2nd petitioner for financial assistance. During the discussions, the proposal of the 2nd respondent for marriage of his daughter - the 3rd petitioner with the 2nd petitioner also materialized. To mobilize sufficient funds, one Shri Rana Gurjit Singh and his associates were also invited to join the project. Thus, during the implementation of the project, there were three groups - petitioners? group, 2nd respondent group and Rana group. Each of the group was represented on the board. The total cost of the project was Rs. 37.5 crores and the bridge, on completion, was opened to public from 13-4-2002, for use on payment of toll. Besides equity and preferential capital of Rs. 13.47 crores contributed by the three groups, a sum of Rs. 24 crores was availed as loan from IDBI and PNB. All the three groups had given personal guarantees and the 7th respondent had given corporate guarantee. The 1st and 2nd petitioners also pledged Resurgent India Bonds held in their names, as collateral security for Rs. 3 crores. As per the agreement, company was to have a construction period of 9 years 5 months and 25 days of which 24 months were for completion of the project. After the completion of the project, the parties had entered into an MOU on 29-4-2002 with regard to the management of the affairs of the company. In terms of the MOU, the 2nd respondent was to continue as MD up to 30-4-2002 with Rana Gurjit Singh as the Chairman. Thereafter, on a yearly basis the posts were to be rotated between the two groups. Since the toll collection was not sufficient enough to meet the expenses as also for repayment of instalments due to the bank, the 1st and 2nd petitioners gave an unsecured loan of Rs. 517 lakhs in the year 2004 to the company. Since Rana group was not in a position to contribute further funds, by a settlement deed dated 11-1-2003, the 1st and 2nd petitioners purchased all the shares held by Rana group for a total consideration of Rs. 1.62 crores and these shares have been transferred in favour of 1st and 2nd petitioners after getting the approval from IDBI and PNB which also released the personal guarantees given by Rana group. Shri Rana also resigned from the board. The transfer of shares was also approved in a board meeting held on 17-11-2004. The control and operation of the toll collection which was being managed by Rana group was handed over to the 2nd petitioner. The 2nd respondent also finding that he was not in a position to contribute further funds, sold 101200 equity shares held by his group to the 2nd petitioner. On sale of the shares, he resigned as a director/managing director on 26-6-2004. Thereafter, with the efforts of the 2nd petitioner, the IDBI and PNB restructured their loans with reduced rate of interest due to which the viability of the project improved substantially. Once the project became viable, with the mala fide intention of taking over the control of the company, notwithstanding the fact that the 2nd respondent was no longer a director, he filed Form No. 32, dated 2-12-2004 with the ROC indicating therein the appointment of 2nd, 3rd and 4th respondents as directors and of removal of the 1st, 2nd and 3rd petitioners and the 8th respondent as directors. He also filed Form 1B changing the name of the company from R.S. Infrastructure Limited to R.S. Infrastructure Private Limited. Form No. 5 of the same date was also filed to indicate increase of authorized equity capital from Rs. 700 lakhs to Rs. 850 lakhs. Again by another Form No. 32, dated 20-12-2004 indicating appointment of 5th and 6th respondents as directors was also filed with ROC. The petitioners did not receive any notice either for the board meeting or for the general meeting in which the above decisions were allegedly taken. The petitioners came to know of filing of Form No. 32 only from a letter dated 18-12-2004 received from ROC. Immediately, thereafter petitioners informed the ROC by a letter dated 22-12-2004 that the petitioners could not have been removed as directors without following the provisions of section 284 of the Act and that they had not received any notice for the EGM held on 29-11-2004 in which they had been purportedly removed as directors. In view of this protest, ROC has not taken on record these documents. It is to be noted that after increase in the authorized capital, the company is purported to have allotted 15 lakhs equity shares in favour of the 7th respondent on payment of Re. 1 per share as application money. By doing so, the 2nd respondent has tried to gain majority control of the shareholding which is highly oppressive to the petitioners. Therefore, the EOGM allegedly held on 29-11-2004 should be declared as null and void, the purported removal and appointment of directors should also be declared as null and void as also the allotment of 15 lakh shares to the 7th respondent.


4. The learned counsel appearing for the respondents submitted : When the petitioners claim that they are the majority shareholders and are controlling the affairs of the company including custody of the records, the question of alleging that the respondents are either oppressing or mismanaging the affairs of the company does not arise. In Rai Saheb Vishwamitra v. Amar Nath Mehrotra [1986] 59 Comp. Cas. 854 (All.), it has been held that when the petitioners hold effective control over the affairs of the company and the new directors had not taken over, the question of invoking the provisions of section 397/398 of the Act does not arise. In Dale & Carrington Investment (P.) Ltd. v. P.K. Pratapan [2004] 54 SCL 601, the Supreme Court has held that if fraudulent means have been adopted to obtain control of a company throwing out the main promoters, no relief could be granted. In the present case, by illegal acquisition of shares from Rana group and inducing the 2nd respondent to resign as MD, the petitioners have not only acquired majority shares but have also taken over the control of the company. Therefore, they do not deserve any relief. Further, in a proceeding under section 397/398, directorial complaints cannot be entertained and since the main complaint in the petition relates to appointment/removal of directors, the petition should be dismissed as not maintainable. Even otherwise, on merits, the petitioners cannot have any claim over the control and management of the company. The entire project was given only because of the expertise of the 2nd respondent but for him the project could not have been awarded to the 7th respondent. The 1st and 2nd petitioners have no experience of construction and maintenance of projects of this magnitude. The 1st respondent company was promoted by the 2nd respondent and his group. Since the 2nd petitioner who is his son in law was unemployed, the 2nd respondent transferred the project from the 7th respondent to the 1st respondent company. It was the 2nd respondent who organized the entire funding for the project through IDBI and PNB along with his own resources and that of Rana group. Even though the 2nd petitioner was taken as a director on 13-12-1999, the petitioners? group had contributed only Rs. 2.92 lakhs till February 2000 by which time the project had achieved the substantial progress. The shareholding pattern as on 30-9-2004 would indicate that the 2nd respondent group held 42.88 per cent equity shares, Rana group 40 per cent and the petitioners? group only 17.12 per cent. The petitioners invested in 10 per cent cumulative redeemable preference shares only with a view to get a fixed income of 10 per cent and not to risk their investment in equity capital. Even though the petitioners have asserted that they have contributed Rs. 5.18 crores as unsecured loans, the same was not needed as the project had already been completed in April, 2002 and the company had started earning by way of toll collection. The Resurgent India Bonds given as collateral security matured in October 2003 and as per the understanding among the parties, the maturity amount should have been paid to the bank for reducing the debt component of the project. Since the petitioners did not fulfil their commitment, disputes started after which they paid that amount to the company as unsecured loans. Therefore, this cannot be taken as financial contribution by the petitioners. When the 2nd petitioner became ill and was hospitalized, the 2nd petitioner, assuring that the son of the 2nd respondent would be appointed as the managing director during the period of illness of the 2nd respondent, got a letter of resignation signed by the 2nd respondent on 26-6-2004. Immediately thereafter he appointed the 3rd petitioner?his wife as the managing director. In the next AGM, the 4th respondent who was an additional director was not confirmed and the 5th respondent who came up for re-election was not reappointed. No notice of the AGM was sent to the respondent shareholders. After taking control of the company and also the toll collection, the 2nd petitioner started mismanaging the affairs of the company. The bridge was not maintained properly resulting in the Ministry issuing a letter of threat to cancel the contract. With great efforts on the part of the 2nd respondent, the matter was resolved.


5. The learned counsel further submitted : Because of the mismanagement by the 2nd petitioner, the 7th respondent, as a shareholder issued a notice under section 188 of the Act on 28-8-2004 proposing special businesses in the ensuing AGM. The special businesses proposed related to appointment/removal of directors, change in the name of the company, amendment to the Memorandum to increase the authorized capital and allotment of shares to the 7th respondent. Since no notice of the AGM was received up to 29-10-2004, a requisition was given for holding an extraordinary general meeting under section 169 of the Act to consider the proposal. The notice for the requisitioned EOGM was sent to all the shareholders on 29-10-2004. The meeting was held on 29-11-2004 wherein all the decisions impugned in the petition were carried through. Therefore, what has been alleged in the petition regarding the forms filed by the 2nd respondent has been done legally and in accordance with law. However, none of the resolutions has been given effect to since this Board has ordered maintenance of status quo.


6. The learned counsel further submitted : The acquisition of shares from Rana group and 2nd respondent?s group as claimed by the petitioners is fraudulent. The deed of settlement with Rana group was never disclosed to the board of directors and as a matter of fact in terms of the original MOU, if Rana group were to transfer their shares, the respondents were entitled to acquire 35 per cent of such shares. But by fraudulent means, the petitioners acquired the entire shares of Rana group. Likewise, when the 2nd respondent was unwell, the 2nd petitioner induced him to sign transfer deeds in respect of 10,50,000 shares from his group to the 2nd petitioner. No consideration has been received in respect of these shares and therefore the alleged transfer is a nullity in law. Even otherwise, the transfer deeds are invalid because the dates of transfer deeds are 20-2-2003 and 28-9-2003 whereas the registration of transfer was approved only on 17-11-2004 and as such they were outdated instruments. Further, on that day, there was no proper quorum in the board as majority directors were interested directors.


7. The learned counsel further submitted : The control of the company can never go to the petitioners in view of the various stipulations in the original BOT agreement. It is the 7th respondent which has been styled as the entrepreneur and it has executed an indemnity bond, assignment agreement etc. In terms of clause 2.1 of the assignment agreement, it is the 7th respondent which has undertaken to indemnify the Government and third parties including the financial institutions against any injury, damage, grievance or inconvenience on account of assignment of the contract. Therefore, it is absolutely essential that the 7th respondent through the 2nd respondent continues to control and manage the company.


8. The counsel further submitted: The suggestion of the petitioners that they would purchase the shares held by the respondents at the price at which they purchased the shares of Rana group is not acceptable to the respondents. However, after settling the disputes relating to the shares purchased from Rana group, the respondents would hold 51.33 per cent shares (both equity and preference) and they would be prepared to purchase the shares of the petitioners at Rs. 0.50 over and above the price offered by the petitioners.


9. In the rejoinder, Shri Ganda submitted: Insofar as the resignation of the 2nd respondent as a director and MD is concerned, he had done so voluntarily since he was finding it difficult to carry the financial burden. While in the reply to the petition, he has averred that the petitioners requested him to resign, in a letter to the Central Government dated 3-1-2005, he has stated that when he was in unconscious position, the petitioners got resignation letter signed by him. This contradiction itself would show that no credence could be given to his stand. As averred in CA 35 of 2005 filed by the petitioners, the 2nd respondent has not been a person of sound mind for over 2 and half years. Insofar as the alleged EOGM held on 29-11-2004 is concerned, the company did not receive the special notice dated 29-8-2004 nor the requisition dated 29-9-2004. Even the respondents have not stated that these notices were served on the company but have only averred that the same were served on Shri Ujjagar Singh who is the brother of the 2nd respondent. Therefore it is quite obvious that these documents have been manipulated within the family by the 2nd respondent and his brother. When there is a regular managing director, the question of serving the notices on an ordinary director did not arise. Even otherwise, in terms of section 188, requisition requiring a special notice should be given not less than 6 weeks before the meeting. Since the AGM was scheduled on 30-9-2004, the notice given on 29-8-2004 cannot be a valid notice. Further, even the requisitioned meeting had not been convened by the requisitionist but by the company itself under the signature of the 2nd respondent as the MD. Whatever might be the mode and manner of convening and holding the meeting, the fact is that petitioners never received the notices for the EOGM. On this account alone, the meeting has to be held as invalid.


10. I have considered the pleadings and arguments of the counsel. The respondents have challenged the maintainability of the petition on the ground that the main allegation being related to directorial complaints cannot be agitated in a petition under section 397/398 of the Act. The admitted fact is that the company is a closely held company originally with three groups and presently with two groups. The petitioners were associated with the company right from the time when the project was assigned to the company by the 7th respondent, i.e., on 13-12-1999. Both by way of equity share capital and preference share capital, the petitioners had invested nearly Rs. 462 lakhs out of the promoters? contribution of Rs. 1348 lakhs towards the project cost. This Board has always held that in case of closely held companies, the removal of any shareholder from the board who has been associated with the company for long, could be considered to be an act of oppression and could be agitated in a petition under section 397/398 of the Act.


11. Another preliminary objection by the respondents is that since the petitioners claim that they are the majority shareholders and are also controlling the affairs of the company, they cannot allege oppression/mismanagement against the respondents especially when the ROC has not taken on record any of the documents filed pursuant to the decisions taken in the EOGM on 29-11-2006. It is not a question of whether the petitioners are in the majority or whether the documents have been taken on record by the ROC. It is a question of conduct and if it is established that the resolutions in the EOGM were passed with a view to oust the petitioners from the management of the company and take control of the affairs of the company, then, the same could be agitated in a petition under section 397/398 of the Act. The entire exercise relating to EOGM appears to have been carried out not only in violation of the provisions of the Act but also in a manner oppressive to the petitioners. First, the notice under section 188 was not served on the company but on individual director who is incidentally the brother of the 2nd respondent. There is nothing on record to show that the said director brought to the notice of the Board the said notice to allege that the company had not taken any action in regard to the said notice. Secondly, even though the respondents have produced copies of the notices for the EOGM, they have not produced any evidence that notices for this meeting had been sent to the petitioners who at that time held, if not majority of the shares but substantial percentage of shares. In the absence of any proof that notices were sent to the petitioner, on this ground alone, the EOGM held on 29-11-2004 has to be held invalid and accordingly I do so, with the result that no statutory authority will take cognizance of the resolutions passed in that EOGM. In other words, the status quo in regard to the board would remain as it was before the EOGM, as also the authorized and paid up capital and the name of the company. Any application money paid by the 7th respondent in pursuant to the allotment made in that meeting, if has been received by the company, will be refunded to the 7th respondent.


12. The respondents have contended because of the credential of the 7th respondent, the contract was awarded to it and only because of the close relationship of the 2nd petitioner, the contract was assigned to the 1st respondent company so that the 2nd petitioner could manage it. However, in the BOT agreement with the Government, the 7th respondent has been styled as the entrepreneur and in clause 2.1 of the assignment agreement, it is provided that the 7th respondent being the entrepreneur, will continue to be liable to the Central Government etc. for any injury, damage, grievance etc., and

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as such the company has to be under the control of the 7th respondent. I find contradiction in the stand of the 2nd respondent. On the one hand he avers that he assigned the contract to the 1st respondent company so that the 2nd petitioner who was unemployed could manage the company, and on the other hand, he contends that the control of the company has to be with the 7th respondent. The control of a company is determined by the shareholding and normally it is the majority which controls a company. In the present case, at no time the 2nd respondent and his group held the majority shares. When Rana group held shares in the company, the 2nd respondent group controlled only 42.88 per cent equity shares and therefore was not in the majority. Now the petitioners claim that they by acquiring the shares of Rana Group and also of a major portion of the 2nd respondent group, they hold 71.73 per cent of the equity shares in the company. Even though the 2nd respondent claims that his group should have got 35 per cent of the shares of Rana group and that he had been induced to transfer his group shares to the petitioners group, yet, he does not seem to have initiated any proceeding in this regard. As the records stand today, the petitioners hold majority shares and therefore, they have the right to manage the affairs of the company. 13. Normally, in a closely held companies when the parties have serious disputes, I have always provided for parting of ways. However, in the present case, during the proceedings, the counsel for the petitioners produced a copy of an undated ?Terms of Settlement? signed by the 2nd respondent and the 2nd petitioner providing for joint management and submitted if the respondents were willing to abide by the said settlement, the petition could be disposed of in terms of the settlement. But the respondents were not willing. Taking into consideration that the 2nd respondent through the 7th respondent had been the prime mover for the project, I dispose of the petition with the direction that if the respondents desire to adopt and abide by the terms of the said settlement which provides for joint management, then the petitioners will be bound by the same. All interim orders stand vacated.
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