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26. The only other factual aspect to be noted before I come to the controversy between the parties is that, according to the petitioners, at the instance of the nominee directors of the Swedish shareholders, M/s. S. R. Batliboi & Co., chartered accountants, were appointed to make a special review of the accounts of the Indian company for the accounting year ended December, 1979. In the report which was submitted to the Indian company, there are certain adverse remarks against Mr. B. Singh regarding the Indian company's transactions with Beni Ltd., Pratap Development Co. P. Ltd. and Kantilal T. Garach & Co. According to the petitioners, these findings are totally baseless. In support of this, the petitioners caused a report to be prepared by M/s. K. Prosad and Co., chartered accountants, dealing with the findings of M/s. S. R. Batliboi and Co.

27. At a meeting of the board of directors held on June 23, 1981, the board considered both the reports and decided not to pursue the matter for the present.

28. According to the petitioners, at the instance of Mr. M.T. Shah, who is stated to be openly hostile, to the Singh group of shareholders, the board purported to take up the issue and appointed a sub-committee to make a recommendation on the basis of the report of M/s. S. R. Batliboi and Co., notwithstanding the previous resolution of the board mentioned above.

97. It was pointed out that the report of M/s. S. R. Batliboi & Co. is factually incorrect. This report has been dealt with in the report of M/s. K. Prosad and Co., another firm of chartered accountants. The latter report has been heavily relied upon by the petitioners on this aspect of the matter. In the report of M/s. S. R. Batliboi & Co., it has been alleged that Mr. B. Singh did not disclose his connection with Beni Ltd. to the board of directors of the Indian company. It was submitted, on behalf of the petitioners, that Mr. B. Singh is not a director of the Indian company.

100. With regard to the loan to Pratap Development Co. (P.) Ltd., it was pointed out that the board of directors of the Indian company had approved the loan. If in doing so the board of directors had violated any statutory provisions, they would be responsible for the same. It was further pointed out that this question is now of academic interest since the entire amount with interest has been paid by Pratap Development Co. (P.) Ltd.

101. With regard to the report of M/s. S. R. Batliboi & Co., the findings of which have been discussed above, it was pointed out that at a meeting of the board of directors of the Indian company held on June 23, 1981, it was resolved not to pursue the above report. Thus, at the point of time when the present application was made, there was no apprehension at all of any proceedings being initiated on the basis of the report of M/s. S. R. Batliboi & Co. It is only after the present application was moved and the interim orders obtained that at a meeting of the board of directors held on September 25, 1981, it was resolved to constitute a sub-committee to devise a method for taking steps in pursuance of the report of M/s. S. R. Batliboi & Co. According to the petitioners, it will appear from the draft minutes of the board meeting dated September 25, 1981, as circulated by the secretary of the Indian company and as purported to have been corrected by the chairman, that the chairman, Mr. Shah, has manipulated the minutes and inserted an item therein for revival of the report of M/s. S.R. Batliboi & Co. although this was not one of the items of the agenda for that meeting.