Mrs. S. Rehana Rao And Mrs. Premila Rao vs Balaji Fabricators Pvt. Ltd., Mr. ... on 22 March, 2004
No reliance could be placed on the reconstituted registers, as held in Bhajirao G. Ghatke v. Bombay Docking Company P. Ltd (1984) Vol.56 CC 428 (Bom). There is no need to implead the Directors, who are not necessary parties to the present proceedings, especially when the burden is on the respondents to prove that the impugned transfer of shares was in compliance with the relevant provisions of the Articles. According to the petitioners, though they are holding more than 10% of the equity capital, they do not have any representation on the Board of the Company. The second respondent, by virtue of his brutal majority, has been taking unilateral decisions, thereby unfairly prejudicing the minority shareholders. There is, therefore, every justification for amending the Articles of Association to provide proportionate representation to the minority shareholders in management of the Company. The second respondent is attempting to sell the land and building belonging to the Company worth more than Rs. 3 crores under the guise of settling the bank liabilities and with the object of siphoning off the sale proceeds. The bank dues, according to Shri Ramasamy could be settled by realising the receivables and investments made by the Company, towards which no steps are being taken by the respondents and for executing the orders worth Rs. 5 crores said to have been procured by the Company. The majority shareholders have been mismanaging the affairs of the Company, which resulted in huge losses, financial crisis and poor performance, as borne out by the communication dated 02.11.2001 of the State Bank of India the Company's banker. The Company is unable to meet the demand of the suppliers, statutory Authorities, the contractual obligations and the bank liabilities. For these reasons, Shri Ramasamy sought for the reliefs claimed in the Company Petition.