B K PURI Vs. PRIMA INTERNATIONAL PVT LTD

JUDGEMENT

(1.) First, the background facts:

(2.) The respondent No. 1 (hereinafter referred to as 'the company') had four shareholders holding 100 shares each. These shareholders are petitioner No. 1 and petitioner No. 2 on the one side and respondent Nos. 2 and 3 on the other side who may be termed as Puri Group and Munjal Group respectively. The company was formed to take over the running business of partnership firm PRODUKT MARKT in which both the groups held equal shares. The allegation of the petitioners is that to disturb this equilibrium, some time in September, 1979, the Munjal Group fabricated a resolution of the Board of Directors, in the absence of the first petitioner, who was abroad at that time, and allotted 10 equity shares of Rs. 100/- each to his daugther/respondent No. 4. There are certain other allegations of mismanaging the affairs of the company by Mr. I.S. Munjal while the first petitioner was abroad. It may not be necessary at this stage to state in detail these allegations. However, according to the petitioners, the Munjal Group removed the petitioner No. 1 from the office of Managing Director as well as Director; deprived him from operating the bank account; whereabouts of the location of the office of the company were not disclosed; and premises of the company were used as residence of Mr. I.S. Munjal. This property is 23, Todarmal Lane, Bengali Market, of which the company was owner and was allegedly used as residence of Mr. I.S. Munjal. On his return of India, the petitioner No. 1 confronted Mr. I.S. Munjal with these purported illegalities. Mr. Munjal proposed that he was ready to pay to the first petitioner half the price of the house and he would also be paid his share in the assets of the firm and the company on proper valuation with the condition that thereafter the petitioners would sever their connection with the company. The first petitioner, under duress and coercion, accepted this offer and Mr. Munjal brought one Mr. Maier-Aichen, who was Managing Director of a German concern called Artipresent. The said Mr. Maier prepared a draft agreement. Under the said agreement the petitioners were to receive Rs. 1,37,000/- as the house was valued at Rs. 2,74,000/-. This amount was to be paid to the petitioners in four instalments. According to the petitioners, however, the value of the property was Rs. 5.5 lacs and, therefore, the share of the petitioners was not quantified properly in the agreement. The respondents were to give share in the goodwill of the firm/company as well which was not provided in the agreement. Because of these reasons, the petitioners repudiated the agreement and filed CP No. 86/1979 under Sections 397/398 of the Companies Act/1956 (for short 'the Act') alleging oppression and mismanagement as well as winding up of the company. Suit for dissolution and rendition of accounts of the firm PRODUKT MARKT was also filed. Although it is not stated in the present petition as to what happened to the aforesaid petition, it transpires that the respondents filed reply to this petition stating that the petitioners concealed the fact of settlement between the parties recorded on 12th/14th November, 1979 and after that settlement since their shareholding was transferred they ceased to be members of the company and, therefore, had right to file the petition. The petitioners, in these circumstances, filed CA No. 187/1980 on 9th April, 1980 for withdrawal of the said company petition. On 5th May, 1980 CP No. 86/1979 was dismissed as withdrawn. In the present petition, this Court passed the following order on the same date:

(3.) The Court thus allowed the present petition to be treated as one under Section 155 of the Act as it needed consequential modification. Opportunity was given to the petitioners to seek leave to amend the petition. Pursuant to this order, on 21st August, 1980 the petitioners filed the. amended petition CP No. 39/1980 under Section 155 of the Act for rectification of the Register of Members of the company.