ANUGRAHA JEWELLERS LIMITED Vs. K R S MANI

JUDGEMENT

(1.) THESE appeals are preferred against the order passed by the Company Law Board, Southern Region Bench, Chennai ('clb') on 23rd september, 1998, in Company Petition. No. 16 of 1997 {1999 32 CLA 120 ). The respondent Nos. 1 to 4 hold 15. 5 per cent shares in anugraha Jewellers Ltd. They filed the petition under sections 397, 398, 402 and 403 of the Companies Act, 1956 ('the Act') alleging certain acts of oppression and mismanagement in the affairs of the company.

(2.) THE gist of the case THEre has been irregularity in the allotment of shares to the petitioners. Funds from the company have been siphoned off in the form of loans and advances to certain companies. THE appointment of the managing director is neither legal nor proper. THE petitioners were removed from the board in a irregular manner. THEre is defalcation of stock. Mainly on the basis of the above allegations, which have been stated above broadly, the application was filed by the respondents herein as petitioners before the CLB. THE averments made by the petitioners were replied by the respondents by filing a detailed reply and denying the various allegations. It is seen from the proceedings of the CLB that on behalf of the appellants herein, an objection was also raised to the maintainability of the petition on the ground that already a complaint has been registered, alleging certain irregularities and therefore, a parallel proceeding cannot be permitted under law. It was also put forward by the appellants that the respondents herein have also moved the civil court, viz. , the Subordinate Judge, Coimbatore. THErefore, as there is already a complaint, alleging certain irregularities, which is pending investigation, and as on identical grounds, the respondents have also filed a suit before the sub court, the present application is not maintainable in lawthe CLB held that it was appropriate that the management of the company should be entrusted for some time to an independent person so that the inter se disputes between the promoters do not affect the business of the company any further and, therefore, the Board appointed one Aghoramurthy, former regional director of the Department of Company Affairs, as the administrator. Aggrieved by the said order, the present appeal is preferred, challenging the said decision of the CLB.

(3.) IT, is to be pointed out that the respondents herein has filed this petition before the Board on identical grounds. IT is also to be pointed out that there was yet another suit filed with reference to the affairs of the company. Thus, we find that there were proceedings already initiated and pending with reference to the dispute between the parties, vis-a-vis, the company of which they were directors and shareholders. A complaint was laid which was registered under sections 406 and 477a. Apparently, the investigation on the said complaint is pending. There was also the suit filed with reference to the, resolution dated 4th September, 1996. There was other proceeding by way of another suit between the parties with reference to the affairs of the company. When proceedings have been already initiated, it is really understandable as to why petition was filed before the CLB. IT may be that after the initiation of this proceeding, the plaintiffs in the suit might have withdrawn the suit. But that will not erase the effect of action taken by them. This only will indicate the absence of bona fide in the proceedings initiated by the respondents before, the CLB. This has to be viewed further in the context of the participation of the respondents herein some of the very activities which are now questioned by them. Having been a party to certain decisions or actions, the respondents would now file an application before the Board accusing the appellants herein of those acts. This would only underline the oblique motive in filing the applicationi have already referred to the ruling in Nurcombe's case (supra), where it has been pointed out that the court has to satisfy itself that the person who comes forward is a proper person to do so. If it is shown that the person, who has come forward, has a conduct tainted in some way, then the court will not be justified in allowing the person to maintain such an application. In other words, as field in Gower's Principles of modern Company Law (4th edn. , 1979) if he had participated in the wrong of which he complains, he cannot maintain an action.