MOHANRAM SASTRY Vs. SWADHARMA SWARAJYA SANGHA

JUDGEMENT

(1.) THE facts of the case in both the petitions are as follows : Company Petition No. 12 of 1982, has been filed under sections 397 and 398 of the Companies Act, 1956 (hereinafter referred to as "the Act"), on the grounds of oppression and mismanagement. Company Petition No. 13 of 1982 has been filed under section 155 of the Act for rectification of the share register. Swadharma Swarajaya Sangha/first respondent in both the petitions (hereinafter referred to as "the Sangha"), a company having the benefits under section 25 of the Act, is a non-profit sharing company. THE memorandum and articles of association of the Sangha would reveal that it is a charitable institution. But, it is in the nature of a trust and is not a company in the strict sense of the term, nor is it a commercial venture. It was founded on March 28, 1930, by the late Kowtha Suryanarayana Rao as a company limited by shares. Subsequently, in the year 1957, licence was obtained from the Central Government under section 25 of the Act on the ground that it is a non-profit sharing firm for promoting religious and charitable activities. THE late K. S. Rao founded the Sangha and also three other business companies, viz. (a) Indian Commerce and Industries Co. Pvt, Ltd. (b) Kowtha Business Syndicate Pvt. Ltd. (c) Beehive Engineering and Allied Engineering Industries pvt. Ltd.

(2.) THE first petitioner in C. P. No. 12 of 1982 was the only son of the late K. S. Rao. THE third petitioner in C. P. No. 12 of 1982 is the son of the first petitioner and the grandson of late K. S. Rao. THE second respondent in C. P. No. 12 of 1982 is also the grandson of late K. S. Rao through the daughter Parameswari. THE third respondent in C. P. No. 12 of 1982 is the daughter of the first petitioner and the grand-daughter of late K. S. Rao and sister of the third petitioner. She is the wife of the second respondent B. V. S. S. Mani. THE fourth respondent in C. P. No. 12 of 1982 is the daughter of K. S. Rao and sister of the first petitioner. Respondents Nos. 5 to 8 in C. P. No. 12 of 1982 are the children of respondents Nos. 2 and 3. THE second petitioner, C. Srinivasan, is the son of C. A. Chettiar, a trusted lieutenant of the founder K. S. Rao. THE ninth respondent in C. P. No. 12 of 1982 is yet another trusted friend of late K. S. Rao and he was taking all the parental interest in the members of the family and he was a scholar of great repute. THE tenth respondent in C. P. No. 12 of 1982 is Sri Bilweswara charitable Trust, an independent trust organisation which came into existence during 1970. It is a separate legal entity. K. S. Rao, the founder, died on september 23, 1964. At that time, C. A. Chettiar, father of C. Srinivasan, was mainly in charge of all the affairs of the Sanga and also the above-named three business companies till his death on February 7, 1976. THE fourth respondent in c. P. No. . 12 of 1982, K. Nagarajalakshmi, died on January 23, 1983, pending the proceedings. THE first petitioner, Mohanram Sastry, also died on January 15, 1988, pending the company proceedings. From the evidence and the records of the Sanga it will be seen that the Sanga was having only 14 members at the time when the present company proceedings commenced in 1982. Excepting C. Srinivasan and V. K. Dongre, all the others are close relations and family members. Even the said C. Srinivasan and V. K. Dongre were very close to the family of the late K. S. Rao. Thus, it is all the more a family affair rather than a company in the strict sense of the term.

(3.) THE evidence of RW-1 relating to the above two meetings is found at pages 294 to 301, 456, 457 and 553 to 560. It is the case of the respondents that the delay in holding the annual general body meetings for the years 1979 and 1980 was solely because of the non-co-operative attitude and the negative approach of the third petitioner from Secunderabad. It is in evidence that the accounts relating to the printing press, Kalyan Mantap and Vidya mandir from Secunderabad were to be sent only by the third petitioner to the madras head office, without which the accounts could not be finalised. THE accounting year of the Sanga is from June 1, to May 31, every year and the annual general body meeting of 1979 should have been held on or before November 30, 1979, and the annual general body meeting of 1980 on or before November 30, 1980.