Company Law Board
M.G. Subrahmanyam And M.G. Venkatesh ... vs Mannariah & Sons Private Limited, M.M. ... on 7 November, 2002
Equivalent citations: [2003]45SCL8(CLB)
ORDER
K.K. Balu, Member
1. The petitioners holding more than 10 per cent of paid-up capital of M/s Mannariah and Sons Private Limited ("the Company") have filed this petition under Section 397/398 of the Companies Act, 1956 )"the Act") alleging acts of oppression and mismanagement in the affairs of the Company.
2. The main acts of oppression and mismanagement relate to the allotment of impugned shares, increase of authorized capital of the Company, illegal removal of the petitioners as directors of the Company and sale of the products of the Company for less than the market price, thereby causing losses to the Company etc.
3. Shri C. Harikrishnan, Senior Counsel appearing for the petitioners, while tracing the history of the Company and its promoters has submitted that the Company was promoted in December, 1946 at the instance of one late M.R. Mannar Aiyah by two of his sons, namely, M.M. Gurunath ("MMG"), since deceased and Shri M.M. Subrahmanyam ("MMS"). Mannar Aiyah had three sons, namely, MMG, MMS (second respondent) and Shri M.M. Shankaranarayanan ("MMSN" - 7th respondent). MMG is sur-vived by the petitioners. The respondents 3 to 6 and respondent No.8 are children of the second respondent. During the year 1943, Mannar Aiyah got salt works known as the Karapad Extension comprising of 50 acres of land to his share in a partition between him and his two brothers. Shri Harikrishnan pointed out that the Karapad Extension is a joint family property of Manner Aiyah and his three sons - MMG, MMS and MMSN. The Company was incorporated with the object to purchase and take over of the rights title and interest of Mannar Aiyah in the Karapad extension and with a view to adopt the agreement referred to in Clause 3 of Articles of Association, according to which, the Company entered into an agreement with Mannar Aiyah, whereby the transferred to the Company all his rights title and interest in the Karapad extension. MMG, MMS and MMSN are the directors of the Company. Every member of the Company present or future is to be deemed to join the Company on this basis. Pursuant to the formation of the Company, Mannar Aiyah transferred the Karapad extension in favour of the Company and allotted to himself Rs. 2 lakh worth of shares in lieu of the property acquired by him through the family partition. Though the properties and business were carried on in the shape of an incorporated company, it is in reality a co-parcenary property headed by Mannar Aiyah. In this connection, Shri Harikrishnan referred to the decision in Murarka Properties (P) Ltd. v. Beharilal Murarka - AIR 1978 SC 300, wherein a joint family consisted of eight sons and their families and transferred the entire properties of the family to a Company formed by them with the object of preserving the properties. The Apex Court on consideration of the entire evidence held that the transaction was only for the purpose of preserving the properties for all members. There was no dissipation of the property. The transaction was for the benefit of the family and as such even if it was found that there was a joint family property, the transactions would be binding on all the coparceners. He further relied on C. Sundaram v. Rukmani Ammal - AIR 1975 Madras 83 - to show that as the father and two sons indisputably lived as members of a joint family and both the sons used to actively help the father in carrying on the business started by him without any remuneration for the work done by them, it must be regarded as joint family business. Upon the death of Mannar Aiyah in November, 1951, his three sons, MMG, MMS, MMSN divided the shares held by their father equally, thereby the Company was vested in them with equal participation and equal sharing of the benefits. The transfer of shares had taken place in the meeting of the Board of directors of the Company held on 08.12.1951, as seen from the extract of the report of the directors to the Board. Accordingly the shareholding in the Company as at December, 1951 was as under:-
Equity shares Preference shares MMG 6,666 334 MMS (R-2) 6,667 333 MMSN (R-7) 6,667 333 The petitioners beings sons of late MMG have been residing in USA and Canada respectively since 1972 and used to visit India intermittently. The petitioners were appointed as directors of the Company in the year 1977. The respondents 2 & 7 were carrying on the affairs of the Company. The petitioners came to know in the year 1983 that the affairs of the Company were not being properly managed. The funds of the Company were diverted and some of the assets of the Company were sold by the respondent No.7. At the instance of the petitioners, a meeting of the respondents 2, 3, 7, 8 was held in August, 1984, wherein it was confirmed that the Company should function for the benefit of all the three families, namely, MMG, MMS & MMSN in equal proportion, as evidenced from Annexure P-4. The Company has been selling the entire salt produced by it to the ninth respondent, managed by the second respondent and his family members at a rate less than the market rate, thereby the profits of the Company are being enjoyed by the ninth respondent and the second respondent, in contravention of the agreement entered on 06.08.1984. As per this agreement, all the monetary benefits from the Company should be shared equally among the branches of MMG, MMS and MMSN. The person in-charge of the management of the Company should render true accounts at the family meetings and effect proper distribution of funds. The products of the Company should be sold directly. Shri Harikrishnan pointed out that the recitals of this agreement would establish that the Company is a family company and incorporated only for the benefit of the families of MMG, MMS and MMSN, with an understanding that no single group should exclude the other nor should have a better status in the Company and that the business and properties of the Company are the properties of a Hindu undivided family. In April 1999 when the first petitioner came down to India he came to know of the extraordinary general meeting proposed on 21.04.1999, for which he neither received any notice nor consent taken as direct or of the Company. The first petitioner on an enquiry from the second respondent regarding the extraordinary general body meeting came to know that the petitioners ceased to the directors of the Company with effect from 26.03.1999. The Company at its extraordinary general meeting held on 21.04.1999 increased the authorized capital of the Company without entertaining the proxies by the eighth respondent sent by the petitioners. Thereafter, the petitioners came to know that the respondents 2 to 6, issued in the year 1992, 60,000 shares of Rs. 5/- each to themselves. The eighth respondent was allotted 10,000 shares, thereby MMS branch acquired more than 73 percent of paid-up capital of the Company. The respondents 2 to 6 had allotted further 1,00,000 shares of Rs. 5/- each to themselves on 01.06.1999, thereby the second respondent together with respondents 3 to 6 took over the Company as a whole and treated the Company in disregard of the family arrangement entered between the family members of MMG, MMG and MMSN. Shri Harikrishnan pointed out that the increase in authorized capital is only to benefit the ninth respondent and indirectly respondents 2 to 6. There are no benefits on the part of the respondents 2 to 6 in having increased the authorized capital and further allotment of shares. The second respondent excluded the petitioners with ulterior motive by allotment of the impugned shares exclusively in their favour reducing the petitioners' shareholding from 33 per cent to 6.67 per cent. According to the petitioners, respondents 2 to 6, save respondent No. 4 do not have any known source of income. They have not contributed any money towards the allotment of impugned shares. Therefore, both the allotments should be set aside.
Shri Harikrishnan, in support of his legal contentions has relied upon the following decisions:-
Trackparts of India Ltd. v. K.N. Bhargava & Smt. Radhika Bhargave v. K.N. Bhargava -(2000) 4 Comp LJ 310 (All) - to show that the CLB has wide powers for bringing to an end the oppression and mismanagement and can make any order that it considers just and equitable. The division of assets can also the ordered by the CLB in appropriate cases while exercising such powers.
New Horizons Ltd. v. Union of India - (1997) 89 CC 849 - to show that in certain exceptional cases the court is entitled to lift the veil of corporate entity and to pay regard to the economic realities behind the legal facade and that in the expanding horizons of modern jurisprudence, the lifting of the corporate veil is permissible. Its frontiers are unlimited. It must, however, depend primarily on the realities of situation. In this case Shri Harikrishnan pointed out that the CLB should go into the details of the shareholders and the arrangement among them in finding out the really of the management among the members.
(a) M.K. Haridas v. Asal Malabar Beedi Depot Pvt. Ltd. (2002) Vol. 110 CC 31.
(b) T.V. Prasadachandran Nair v. Anandaman-diram Hotels Pvt. Ltd. - (2002) Vol. 110 CC 394.
(c) Kshounish Chowdhury v. Kero Rajendra Monolithics Ltd. - (2002) Vol. 110 CC 441.
(d) Ahok Kumar Oswal v. Panchseel Textile Manufacturing and Trading Co. (P). Ltd. - (2002) 110 CC 800 - to show that the CLB has ignored the plea of delay raised by the respondents while determining the contentious issue.
Pushpa Prabhudas Vora v. Voras Exclusive Tools (P) Ltd.- (2000) 3 Comp LJ 271 (CLB) - to show that in family companies equity plays greater role than the observance of legal requirements.
Dr. Kamal K. Dutta v. Ruby General Hospital Ltd. - (200) 2 Comp LJ 289 (CLB) - to show that the conduct of the respondent in allotting shares to himself at the back of the petitioner and in declaring that the petitioner directors had vacated office etc. and thus taking over the company is highly unfair and lacks in probity.
Micromeritics Engineers Pvt. Ltd. v. S. Munusamy in CMA Nos. 923 & 924 of 2000 (High Court of Madras) - to show that mere production of certificates of post is not adequate to prove service of notice in the absence of production of despatch register of the company or books of account showing the expenses incurred by the company for posting the letters.
4. Shri A.K. Mylsamy, Advocate appearing for the respondents, while opposing the petition has submitted that the petitioners are residing abroad and that they never participated in the management of the company. The present petition has been initiated at the instance of the eighth respondent, who was grievances against the respondents. The second respondent and others have filed CPs No.66 to 68 of 1999 before the CLB in respect of the affairs of M/s Sudarshana Carbide Private Limited, M/s Gulf Olefines Private Limited and M/S Prasanna Investments Private Limited respectively, which are under the control and management of the eighth respondent. M/s Gulf Olefines Private Limited, controlled by the eighth respondent owes substantial amount to the Company. Similarly, M/s Archana Spinnders Limited under the management of the eighth respondent is indebted to the ninth respondent which is controlled by the second respondent. The eighth respondent is aggrieved on account of these developments and consequently responsible for the present litigation. The petitioners are having grievances against the respondents' group as they did not agree to pay the enhanced salary sought by them. The eighth respondent had filed a civil suit in O.S. 4/99 before the District Court, Tuticorin, challenging the holding of the general meeting held on 21.04.1999 yet another suit in O.S. 170/99 after the general body meeting at the instance of the petitioners. Both these suits were withdrawn by the eighth respondent in order to file a company petition. The averments made by eighth respondent in the plaints have been used in the present petition. Thus, the petitioners have put up the eighth respondent. Therefore, there are no bonafides in the present litigation. As the petitioners have not come with clean hand, they are not entitled for any equitable relief from the CLB, in support of which he relied the following decisions:-
(a) Anugraha Jewellers Ltd. v. K.R.S. Mani - (2002) CC 501.
(b) Nurcombe v. Nurcombe - 1985 (1) All ER 65.
(c) Srikanta Datta Narasimharaja Wadiyar v.Sri Venkateswara Real Estate Enterprises (Pvt.) Ltd. - (1991) Vol. 72 CC 211
(d) S.Ajit Singh v. DSS Enterprises Pvt. Ltd. - (2002) Vol. 109 CC 597.
Shri Mylsamy denied that the Company is a joint family company. He made a reference to Article 3 of the Articles of Association of the Company, according to which, Mannar Aiyah transferred all his right title and interest in the Karapad extension in favour of the Company for a consideration of Rs. 1, 20,000. Mannar Aiyah and his sons are interested in the Karapad extension and they are the directors of the Company and no one should challenge the agreement on the ground that the directors themselves are interest in the Karapad extension. He pointed out that by virtue of Article 3 and the agreement entered between the parties, the Company became the absolute owner of the Karapad extension. The property cannot continue to be the joint family asset and the business carried on by the Company cannot continue to be the joint family business. Clause 3 of the Articles makes it clear that the Karapad extension, acquired by Mannar Aiyah in a family partition between himself and brothers, has been purchased by the Company and the Company has taken over all rights title and interest of Mannar Aiyah in the said property. After the death of Mannar Aiyah, the shares held in his name were divided among his three sons, MMG, MMS and MMSN. According to Shri Mylsamy, there is no Board resolution or resolution passed in general meeting of the Company to show that three branches of Mannar Aiyash would have equal shares and equal representation on the Board. He further pointed out that piercing veil of incorporation does not arise in the present case, as the particulars of shareholders and the directors are apparent from the records. In regard to the minutes of the family meeting held on 06.08.1984 to share the monetary benefits in the Company equally among the families of MMG, MMS and MMSN, Shri Mylsamy pointed out that the said understanding was not acted upon. Moreover, the proceedings of the Board meeting held on the same date do not also reflect the understanding reached between the family members. He further submitted that the Company is not bound by the said memorandum without the same being incorporated in the Articles of Association of the Company, as held in the following cases:-
(i) V.M. Rao v. Rajeswari Ramakrishnan - (1987) Vol. 61 CC 20.
(ii) V.B. Rangaraj v. V.B. Gopalakrishnan - (1992) Vol. 73 CC 201.
(iii) Radhe Shyam Tulsian v. Panchmukhi Invetment Ltd. - (2002) 1 CLJ 355.
(iv) Mrs. Deepa Goyal v. Nanda Devi Builders (P) Ltd. - (2002) 1 CLK 414 (CLB).
5. In regard to the allotment of impugned shares, Shri Mylsamy pointed out that on 02.05.1992, the Board of directors resolved to issue 60,000 equity shars of Rs. 5/- each to meet working capital of the Company, upon which letters have been sent to the shareholders advising of decision of the Board to issue shares to all the members. The notice was sent to the shareholders by certificate of posting. Thereafter, the Board at its meeting held on 20.05.1992 allotted the shares in favour of the members who had applied for. He pointed out that 10,000 shares were allotted in favour of eighth respondent also. The Company had field form-2 with Registrar of Companies on 22.05.1992. The petitioners cannot plead ignorance of the allotment of shares, especially when the Company has been sending notices for the general meetings and Board meetings to the petitioners at their addresses in India. The petitioners had been receiving dividends regularly as and when declared by the Company. He further pointed out that the Company while defending a suit (CS No. 614/92) filed by the seventh respondent took the same stand that of 60,000 equity shares were allotted in the Board meeting held on 02.05.1992. In the written statement the seventh respondent did not challenge the action of the Company in allotting the impugned shares to respondents 2 to 6 on the ground that each family would have equal shareholding and equal participation on the Board. In so far the eighth respondent is concerned, he is one of the beneficiaries of the impugned allotment made in 1992. He has also not challenged the allotment. There has been inordinate delay and laches on the part of the petitioners to challenge the impugned allotments and hence the CLB cannot grant any relief for which he relied upon the decision in A.P. Jain v. Faridabad Metal Udyog Ltd. - 1998 (18) SEL page 43 and Ms. Deepa Goyal v. Nanda Devi Builders (P) Ltd. - (2002) 35 SCL 842. In regard to the allotment of impugned shares made on 01.06.1999 Shri Mylsamy justified that the Company was in need of funds to reconstruct one of the dilapidated mill sheds for which the Company took steps to raise the funds by increasing the capital, which was later leased out to the ninth respondent, which is paying Rs. 1 lakh per year by way of rent after carrying out the renovation. The impugned shares were made in the interest of the Company, in which case, these allotments cannot be challenged. In this connection, Shri Mylsamy relied upon the following decisions:-
(i) Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holdings Ltd. - AIR 1981 (SC) 1298.
(ii) Shanti Prasad Jain v. Kalinga Tubes Ltd. - AIR 1965 (SC) 1535.
(iii) B.M. Jain & Sons Co. (P.) Ltd v. Bombay Cable Car Co. (P.) Ltd. - (2001) 30 SCL 140.
(iv) Nanalal Zaver v. Bombay Life Assurance Company Ltd. - (1950) XX CC 179.
(v) S. Ajit Singh v. DSS Enterprises Pvt. Ltd. - (2002) 109 CC 597.
6. He referred to the explanatory statement circulated to the members for the general meeting for increasing the authorized capital from Rs. 5 lakhs to Rs. 25 lakhs, wherein it is made clear that right shares will be issued to the shareholders to mobilize necessary finance for the project. The petitioners are challenging this allotment on the ground that they did not receive the notice for the general meeting, which they came to know through the eighth respondent. The petitioners though had given proxies in favour of the eighth respondents for attending the meeting held on 21.04.1999, the eighth respondent did no attend the meeting, but came to the Company after the meeting was over. Shri Mylsamy pointed out that during the period from 1990 to 1999, the first petitioner had attended only three Board meetings and one general meeting. The second respondent had attended three Board meetings only and never attended any general meeting. The petitioners failed to attend 13 consecutive Board meetings till the Board recorded in March, 1999 the vacation of their office under Section 283(1)(g) of the Act. Their investment in the Company is about Rs. 70,000/-. In regard to the supply of salt produced by the Company to the ninth respondent, Shri Mylsamy pointed out that this arrangement was approved by the Board and accordingly the salt was being supplied to the ninth respondent at the rate higher than market rate. This practice was in force from the year 1958 onwards, which has been continued by the Company. He further pointed out that the main road, water, drainage, canal etc are common to the Company and the ninth respondent. All the expenses were used to be met by both the companies. These companies were having inter-company transaction since the year 1958. Shri Mylsamy pointed out that the Company did not incur any loss on account of supply of its production to the ninth respondent, but benefited by such transaction. He, therefore, sought for dismissal of the petition.
7. Shri R. Shankaranarayanan, Counsel appearing for respondents 6 & 7 while adopting the arguments of Shri Harikrishnan, the learned Senior Counsel for the Petitioners has submitted that the seventh respondent had filed a civil suit in CS No. 614 of 1992 on the file of High Court of Madras, inter-alia, for declaration that revocation of his office of Managing Director of the Company is invalid and that the resolutions passed thereafter by the Board of Directors are invalid. The said civil suit has been transferred to the City Civil Court, which has been dismissed for default and steps have been taken for restoration of the suit and the proceedings are pending. If this prayer is considered by the Civil Court, according to Shri R. Shankaranarayanan, the allotment made by the Company in the year 1992 would be set aside. He further pointed out that the Company failed to furnish particulars of persons in whose favour the impugned shares were allotted and that shares were allotted only to one branch of the second respondent ignoring the other branches.
8. We have considered the pleadings and arguments of the learned counsel for the petitioners as well as respondents. The question that arises for our consideration is whether the alleged acts of oppression and mismanagement in the affairs of the Company against the respondents would warrant interference of the Company Law Board to grant reliefs sought in the petition.
9. A careful perusal of the available records reveal that the Company was incorporated on 06.12.1946 by the second respondent and father of the petitioners with the objects, to purchase, take over and acquire all the rights, title and interest of Mannar Aiyah in the Karapad Extension, which was allotted to Mannar Aiyah in a partition made in the year 1943 between himself and his two brothers and with a view to enter into and adopt the agreement referred to in Clause 3 of the Articles of Association of the Company which reads as under:-
"3. The company shall forthwith enter into an agreement with Mr. M.R. Mannar Aiyah of Tuticorin whereby Mr. M.R. Mannar Aiyah will agree to transfer to the company all his right, title and interest in the salt works known as Karapad Extension No.3, Salt Factory (Eastern-Block), and situated at Urani, Tuticorin in terms of the draft agreement expressed to be between Mr. M.R. Mannar Aiyah and the company and signed for purposes of identification by Mr. R. Narasimhachari and the directors shall carry out the same with or without modifications. It shall be no objection to the said agreement that the said Mannar Aiyah the Vendor aforesaid and his son Mr. M.M. Gurunath, Mr. M.M. Subrahamanyam and Mr. M.M. Sankara- narayan, who are interested in the said Salt works and in the consideration payable therefor, are or may be promoters of this company, or that they or some or any of them are directors of this company, or standing a fiduciary relation tot he company or that the terms and conditions of the said agreement have been fixed by them nor shall the said agreement be impeachable on the ground that the Directors of this company are themselves personally interested in the said Salt works and in the consideration payable therefor, or that the Board of Directors of this company do not constitute an independent Board. Every member of the company present or future, is to be deemed to join the company on that basis."
The above article shows that Mannar Aiyah transferred his interest and title in the Karapad Extension to the Company for consideration by way of allotment of shares in the Company, thereby the Company became absolute owner of the salt works. Upon the death of Mannar Aiyah, his three sons MMG, MMS & MMSN divided the shares held by their father equally. The transfer of shares had taken place int he Board meeting held on 08.12.1951. Thus, the Company came to be vested in them with equal participation. This is further evidenced from the minutes of the family meeting held on 06.08.1984, wherein the family members had agreed to share the benefits of the Company equally among the three groups of shareholders, being sons of Mannar Aiyah. Thus the foundation of this petition is that according to the petitioners the Company is a family company and as such the Board of Directors have to act in the interest of all the family members. It is on record that both the petitioners and respondents are descendants of Shri Mannar Aiyah. On death of Shri Mannar Aiyah, the shares held by him were shared equally among the three brothers. All the three brothers/their family members had representations on the Board. Eventhough the petitioners were residing abroad,they continued as directors and were paid remuneration notwithstanding fact they were not regular in attending the Board meetings. This has been going on for fairly a long time. Further the shareholders of the Company are practically the descendants of deceased Mannar Aiyah, which would indicate that this Company is nothing but a closely held company.In a number of cases, this Board has decided that in case of family companies any disturbance of any of the family shareholders the same could be considered to be acts of oppression. Keeping this background the allegations in the petition have to be examined. Two main allegations in the petition are that the respondents had issued further shares one in 1992 and another in 1999 and that by invoking the provisions of Section 283(1)(g), the petitioners have been declared to have ceased to be directors on the Board. The petitioners are challenging the first allotment on the ground that they never received notice for the Board meeting, wherein the impugned allotments were said to have been allotted. According to the respondents, the Company had sent notices for the general meetings and Board meetings to the petitioners at their respective addresses in India, though the petitioner have been residing outside India. In this connection, it will not be out of context to refer the letter dated 07.08.1996 of the first petitioner (Page 17 of Counter) requesting the Company to send monthly payments to his address in India. It is also not disputed that the dividend warrants were periodically sent to the petitioners at their addresses in India. There is no record to show that the petitioners ever objected at any earlier point of time that the notices were not sent at their addresses where they have been residing. Moreover, after the allotment of shares the Company had filed Form-2 (page 171 of counter). The Company had allotted 10,000 shars in favour of the eighth respondent who is supporting the petitioners. The Company had disclosed this allotment in the civil suit filed by the seventh respondent in CS No. 614/92 as early as 21.05.1992. The respondents 7 & 8 did not challenge this allotment and they had acquiesced to the disturbance in the shareholding. The allotment was made in the year 1992, but the petitions are challenging the allotment after a delay of eight years. In view of this, the CLB will not interfere with this allotment. In regard to the second allotment made in the year 1999, it is the case of the respondent that funds were required to reconstruct the mill godown, which was approved at the Board meeting held on 28.03.1999 (page 1883 of Counter) and as evidenced from the explanatory statement attached to the notice of EGM of 21.04.1999 and the General Body itself had approved the allotment on a right basis. According to the Company offers were made to the petitions which fact is denied by the petitioners. Since this allotment had been made on a date very proximate to the date of the petition and since the general body itself had decided to make right offer, without enquiring as to whether offers were made or not, we are of the view that the petitioners should be entitled to get the shares on the right basis. Therefore, in case the petitioners are interested in acquiring their proportionate stake on the basis of their shareholding prior to the allotment in 1999 they may indicates their willingness to the Company in writing. Thereafter, the Company will make an offer of the right shares to the petitioners within 45 days and the petitions should subscribe to these shares within 30 days thereafter. If necessary, the Company will increase it authorized capital to facilitate the allotment of the right shares to the petitioners. In regard to the plea that the petitioners ceased to be the directors for not attending three consecutive Board meetings, it is observed that the petitioners attended to affairs of the Company as and when they used to come to India. It is not denied that the first petitioner had attended only three Board meetings and one general meeting during the period between 1990 and 1999 and that the second petitioner attended only three Board meetings. This shows that the petitioners did not evince interest in the affairs of the Company. The letter dated 07.08.1996 (page 17 of Counter) shows that the petitioners are not interested in the Company as directors. Yet, since the petitioners had continued as directors even without attending Board meetings regularly and were getting remuneration for a long time, it would show that the intention of the parties had been to provide all the branches of the family some source of income for the Company. Stopping of this source of income on the ground of vacation of office is oppressive.Therefore, we direct that petitioners who were declared to have vacated office under Section 283(1)(g) will be inducted into the Board with immediate effect and they will draw remuneration as earlier. Notices for Board meetings should be sent to them by Registered Post well in advance to enable them to attend the Board meetings and will be subject to disqualification under Section 283(1)(g) of the Act, in future. In regard to the mismanagement in the affairs of the Company, the records show that the Company had financial transactions with the ninth respondent since the year 1958 as borne out by Annexure R-17. The Board resolution dated 05.08.1996 (page 179 of counter) shows that the Company was permitted to sell its entire production to the ninth respondent. Moreover, there has been to record to show that the Company suffered revenue loss on account of sale of the salt by the Company to the ninth respondent. There is no merit in the plea of the petitioners. In the circumstances, the members may convene a general body meeting after allotment of additional shares in favour of the petitioners as ordered supra, and hold a meeting of the shareholders for the appointment of directors and vest with the Board of Directors the day-to-day management of the Company and the Board may take such action as may be deemed fit in the interest of the Company and its members.
10. With the above directions, the petition stands disposed of, without any order as to costs.