Document Fragment View

Matching Fragments

(c) to surcharge the second respondent in terms of Section 406 of the Act read with Schedule XI by ordering an investigation in relation to the affairs of the Company.

2. Shri R. Murari, learned Counsel, while initiating his arguments submitted that the Company was formed in the year 1989 with main objects of carrying on the business of reprographics, design creations, making animations, photo type setting including computer software programmes etc. While the petitioners together hold 7500 equity shares of Rs. 10/-each, the respondent group is holding 92.14% of the paid up share capital of the Company. The first petitioner has been the director since the year 1990 and Chairman from the very inception of the Company. The second respondent who became an additional director in the year 1995, continued on the Board, but failed to take any initiative to convene the annual general meeting for the past three years and further excluded the first petitioner from the management and administration of the Company denying, among other things, access to the books of account of the Company. The Company by virtue of doing job work for certain foreign companies had received $ 1,87,030.5, which were misutilized by the second respondent to form new companies viz., M/s Venture Infosys Private Limited (VIPL) and M/s Venture Acqua Tech Private Limited (VATPL), of which he is the Managing Director and further diverted the business of the Company to his newly formed companies. The. second respondent opened an account with HDFC Bank, without obtaining any approval from the Board of Directors, for the purpose of clearing his personal debts. The second respondent siphoned off the money from the Company's account maintained with Corporation Bank, as borne out by the bank account statement for the period between 07.08.2000 and 06.02.2002 (pages 64 to 70 of company petition), reflecting payments made to, inter alia, certain financiers in respect of the loans personally availed by the second respondent, VATPL, the third respondent, self cheque withdrawals etc. running into several lakhs of rupees, for his personal benefit, save occasionally towards salary expenses, thereby prejudicing the interest of the Company and minority shareholders. An amount of Rs. 5 lakhs received by the second respondent while vacating the premises of the Company from the land lord is not accounted in the books of account of the Company. The employees of the Company after imparting training at huge costs have been transferred to VIPL, adversely affecting the efficiency of the Company. The averments made in paragraph 12 of counter statement that the operations of VATPL were stopped with effect from 1997 are belied by the bank account statement, (page 64 of company petition) according to which the Company had issued a cheque bearing No. 0581871 of Rs. 50,000/- in favour of VATPL, which was found to be debited on 09.08.2000 in the Company's account. The advertisement brought out by VIPL in the issue dated 09.05.2004 of the Hindu, shows that VIPL is engaged in E-publishing or pre-press services, in competition with the Company. The categorical averment made in paragraph 19 of counter statement that no staff was transferred from the Company to VIPL, runs parallel to the affidavit sworn on 02.07.2004 by the second respondent to the effect that "a minority of the employees of VIPL are former employees of the Company". Shri Murari, learned Counsel relying on the certificate dated 1.9.12.2003 issued by M/s K. Sahayaraj, Chartered Account, Chennai, extracted from the bank statement issued by Corporation Bank for the period between 22.07.2000 and 23.07.2002 reiterated that the second respondent had drawn huge cash from the account without any justification and misappropriated the same for his personal benefits. Though the respondents could explain utilization of certain foreign remittances received by the Company, yet there is no explanation or justification for the entire foreign inward remittances received by the Company. The second respondent illegally convened an extraordinary general meeting without any notice on 05.04.2002 of the meeting to the second petitioner and without any prior Board meeting for approving the proposal to hold the extraordinary general meeting, wherein the third respondent, his wife and fourth respondent, his brother-in-law were elected as directors of the Company, in spite of the objection made in writing by the second respondent, with malafide intention to exclude the petitioners from the management of the Company. None of the minutes of any of the meetings of the Company viz. Board meetings or general or annual general meetings are initialed or signed at each page and they are not dated and signed at the last page, by the first petitioner, as Chairman in terms of Section 193, in which case the legal presumption as provided under Section 195 cannot be drawn as held in Micromeritics Engineers Pvt. Ltd v. S. Munusamy - 2002 (3) CTC 661. Shri Murari, learned Counsel referring to copies of the annual general meetings held on 29.09.1995, (pages 15-21),15.09.1999 (pages 25 and 27) and on 14.11.2000 (pages 29 to 31 of Vol. 1-A) contended that the signatures of the first petitioner as Chairman are forged. In the absence of any concrete proof, the appointment of the third respondent and fourth respondent as directors is neither valid nor binding on the petitioners. The first petitioner did not sign the balance sheet for the period as at 31.03.2001 and the original balance sheet with the purported signatures of the first petitioner filed before this Bench is a fabricated document. The second respondent resorted to the scanning of the first petitioner's signature from some available document and reproduced the same as if the balance sheet was signed by the first petitioner. The second respondent by a letter dated 14.05.2002 intimated the first petitioner that he ceased to be a director since he was not reappointed as a director of the Company, at the eleventh annual general meeting said to have been held on 27.11.2001 on expiry of his term, which amounts to an act of oppression. His removal cannot be true in the light of the fact that the first petitioner was drawing his remuneration till February, 2002; that he was signing cheques even subsequent to the annual general meeting and further that the Company continued with one director since November 2001, contrary to article 35 contemplating the minimum number of two directors. Moreover, no Form No. 32 has been filed with the Registrar of Companies regarding cessation of the first petitioner from the post of director of the Company. The first petitioner is therefore entitled for his remuneration from February 2002 and his grievance in regard to the directorship must be remedied, in support of which Shri Murari placed reliance on the following decisions: