SURESH KUMAR SANGHI Vs. SUPREME MOTORS

JUDGEMENT

(1.) This is a petition u/Ss. 397, 398, -103 and 403 of the Companies Act, 1956 filed by a shareholder of M/s. Supreme Motors Limited (hereinafter called the respondent-Company) alleging, inter alia that there has been oppression on . the petitioner - group (here in after referred to as Suresh Group) by the t: Group led by respondent No. 2 (hereinafter referred to as mrit Group) and certain reliefs should he it-anted u/S. 402 of the Companies Act.

(2.) It is an admitted case of the parties hat Suresh Group and Amrit Group have equal shares in the Company. Both the Groups own 500 shares each. Each share is of the face value of Rs. 1000.00. The petitioner and the respondents are closely related. They are cousins. According to the averments made in the petition Amrit Group has been acting to benefit itself at the cost of Suresh Group. It has been alleged that the Company was in the nature of a partnership between the rnembers of the two groups and that Amrit Group is conducting the affairs of the Company in a manner which is unlawful and highly prejudicial to the petitioner and his family. Instances of illegal and arbitrary acts have been set out in the petition. It is contended that there is lack of probity in the conduct of the affairs by the Amrit Group and that there is a state of complete deadlock which has been created in the business. The reliefs which have been prayed for include the relief of the appointment of a Committee of Management, removal of respondent No. 2 from the Board of Director or restraining him from acting as Managing Director, appointing the petitioner as Managing Director in place of responent No. 2 or directing that the Board of Directors should not implement any decision without the concurrence of the petitioner and some other ancilliary reliefs.

(3.) On behalf of the respondents the allegations set out in the petition have been denied. It is contended by the respondents that the petitioner has not come with clean hands and has concealed some material facts. It is admitted by the respondents that the Company was more like a partnership firm in which the two groups had equal shares. It is also stated by the respondents, and not denied by the petitioner, that there is a partnership firm known as M/s Sanghi Motors in which again the groups have equal shares. There is now a dispute going on with regard to the said firm which is pending on the Original Side of this Court. It is contended in the reply affidavit that, by mutual arrangement amongst the two groups the business of the respondent-Company has since its inception been managed by respondent No. 2 who was appointed as its managing Director while the business of Sanghi Motors, the partnership firm, was being managed by the petitioner as Managing 'Partner. The petitioner admits that respondent No. 2 lias been the Managing Director since the inception and that the petitioner has been a Managing Partner of Sanghi Motors but the petitioner does not agree that there was any such mutual arrangement between the two groups. .The respondents have also contended that the petitioner has been guilty of ads of misfeasance and non-feasance and is also guilty of breach of trust reposed in him in the performance of his duties as Managing Fanner of the aforesaid firm thereby causing huge loss. It is also alleged that the petitioner has been abusing his position as a Managing Partner and has started two business units in the name of "Sanghi Aviation' and 'Sanghi Travels'. It is alleged that the expenses with regard to these two units are being borne by the partnership firm and in fact these two units are also using the business premises of M/s Sanghi Motors. Just as the petitioner lias alleged that the respondents have ousted him from the affairs of the Company, the respondents in turn have alleged that they have been ousted from the affairs of the aforesaid firm.