SAMARTHMAL PHOOLCHAND SETH Vs. PRAVIN MEHTA

JUDGEMENT

(1.) THE present petition is filed by invoking the provisions of Sections 397 and 398 of the Companies Act, 1956 ('the Act') alleging certain acts of oppression and mismanagement in the affairs of the company by the Respondent and sought reliefs as prayed for in paragraph 13 of the petition.

(2.) SHRI V.B. Yadav, learned Counsel appearing for the Petitioner, submitted that the brief facts which necessitated to file the present petition. He submitted that the Petitioner and his family members, viz., Mr. Ramesh Samarthmal Seth, Smt. Babli Samarthmal Seth, Miss Manju Samarthmal Seth, Miss Vidya Seth, Smt. Lalika Ramesh Seth and Mr. Ronak Ramesh Seth are shareholders holding 20 per cent paid -up share capital of the company and hence entitled to file the present petition under Sections 397 and 398 of the Companies Act, 1956, against it for committing gross mismanagement and oppression in running the day -to -day affairs of the company and thereby causing huge financial loss to the Petitioner and his family members who are shareholders of the company. Mr. Pravin Mehta, the Respondent, is a managing director of the company and he indulged in mismanagement and oppression of the company by resorting to various means in connivance with the manager of the company and also fabricating false record to gain profit to themselves and loss to other shareholders as the dividends declared do not reflect the true financial position of the company and the business of the canteen and rental income has been misappropriated in wasteful expenditure in the name of the company without any transparency and/or accountability to other shareholders since 1980 when the Petitioner went into illness and depression due to which the Petitioner was not able to attend the day -to -day affairs of the company running the main theatre business. He further submitted that the Petitioner through his advocate had issued notice dated 23 June, 2008, to Mr. Pravin Mehta, managing director of the company, however, the Respondent has chosen not to file any reply to the said notice on the obvious reasons that the Respondent has committed gross illegality, mismanagement and oppression in running the day -to -day affairs of the company thereby causing huge financial loss on year to year basis to the shareholders. He further submitted that the company is bound to furnish its true and accurate income since 1980 before this Bench in the interest of justice as the gross weekly income of the theatre business is Rs. 2,50,000 per week and Rs. 10,00,000 per month which amounts to Rs. 1,20,00,000 per year apart from Rs. 6,00,000 per month of the rental income which amounts to Rs. 72,00,000 per year from the premises rented out to the Vijaya Bank and further there is income of Rs. 3,00,000 per month from the canteen business of the company which amounts to Rs. 36,00,000 per year. He submitted that the Petitioner asked for the following information in the notice dated 23 June, 2008, which was sent to the Respondent:

(3.) THE Respondent has filed detailed counter to the petition. Ms. Priya Ranade, learned Counsel appearing for the Respondent,. raised the preliminary objection stating that the petition is not maintainable since the Petitioner does not fulfil the requisite criteria as contemplated under Section 399 of the Companies Act. Section 399 of the Act prescribes right to apply under Sections 397 and 398.