RAMASHANKAR PROSAD Vs. SINDRI IRON FOUNDRY P LTD

JUDGEMENT

(1.) This is an appeal from an order made by a learned Judge of this Court exercising jurisdiction under the Companies Act under Sections 397 and 398 of the said Act, at the instance of three persons who joined as members of the company early in the year 1962 and were also on the Board of Directors when in March 1963 they put in the petition complaining of various malpractices of respondents 2 to 4 and their conduct of the company's affairs in a manner oppressive to the petitioners.

(2.) The Sindri Iron Foundry (P) Limited. the first respondent in the petition, was incorporated under the Indian Companies Act, 1956 on or about September 10, 1957 as a Private Limited Company. Its registered office was then situate at No. 52/1, Dr. Abani Dutt Road, Howrah. Its authorised capital was Rs. 10 lakhs divided into 10,000 equity shares of Rs. 100 each. The paid up capital appears to have been three lakhs sixty thousand six hundred held entirely by a croup which may be called the Prosad group of shareholders. The petitioners and their associates who may be called the Saraogi group joined the company in January 1962.

(3.) Soon thereafter this group acquired no less than 5060 shares for the consideration of Rs. 5,06,000. The objects of the company were, inter alia, to carry on the trade or business of iron founders and iron masters etc. It had its factory at Pathardihi near Sindri in Behar. Article 19 of the Articles of Association of the company provided that "until otherwise determined by a general meeting the number of Directors shall not be less than three and not more than five. The first Directors of the company were Sree Radhakissen Prosad the respondent No. 3 to the petition and Biswanath Prosad. Under Article 22 "the company in general meeting may from time to time and at any time appoint any other person to be Director and may remove any such person, so appointed." On January 25, 1962 the petitioners were elected Directors of the company at a general meeting so that the Board had five Directors after that date.