HEMANT BABUBHAI DESAI Vs. JAYANT VITAMINS LTD.

JUDGEMENT

(1.) THE present petition is filed by invoking the provisions of Section 237(b) of the Companies Act, 1956 ("the Act") by the petitioners alleging various acts committed by the respondent -company such as fraud, misfeasance, mismanagement, suppressing statutory information to the members, non -holding of annual general meeting for eight years in a row, non -filing of annual accounts and returns within the stipulated time, failure in appointing the whole time company secretary as per Section 383A of the Act, misuse of company funds for personal gain, fraudulent sale of company's fixed assets, etc., and prayed that this Bench order a reference to the Central Government to appoint inspectors to investigate into the affairs of the company as per the provisions of Section 237(a)(b) of the Act.

(2.) DR . K. S. Ravichandran, learned practising company secretary, appearing for the petitioners submitted that the petition was originally moved before the Principal Bench, New Delhi on May 19, 2009. However, the Principal Bench directed to file the petition before the Mumbai Bench, since the matter pertains to the Mumbai Bench. The petition was mentioned before this Bench on June 8, 2009 and this Bench directed the respondents to file reply by June 26, 2009 and the matter was posted on June 29, 2009. On June 29, 2009 the director of the company Mr. Hiten Mange, was present and sought fifteen days time to file counter and the matter was posted to August 3, 2009. On August 3, 2009 the respondents failed to appear before this Bench and the petitioner requested this Bench to order for an investigation without any further delay. The matter was called on March 30, 2010, none appeared for the respondents, however, a representative on behalf of the petitioner was present. This Bench once again directed the respondents to file counter within a period of two weeks and the matter was posted on April 26, 2010 at 2.30 p.m. A notice was also sent along with the copy of the order to the respondents. The matter was finally called on April 26, 2010, none appeared for the respondents. Since sufficient time was given to the respondents to file the counter but the respondents failed to file counter and failed to appear before this Bench, hence, the matter was taken up for hearing and disposal.

(3.) HEARD the learned practising company secretary and perused the pleading and documents filed in his support. From the perusal it is clear that the directors have violated various provisions of the Act and committed various acts which are prejudicial to the interest of the company and its shareholders at large. It is also seen from the documents that the Registrar of Companies, Gwalior issued notice dated September 2, 2008 to its directors under Section 234(1) directing the company to furnish information and explanation within ten days or else action will be initiated under Sections 234(3A), 234(4) of the Act, Further, the Registrar of Companies issued another letter dated September 19, 2008 to the directors to furnish the minutes book of the board of directors and general meetings, fixed asset register, register of debenture holders, index of debenture holders, shareholders' attendance register, register of investments, copy of the annual report and balance -sheets for the last two years. It is seen from the records that having not received any information from the company and its directors, the Registrar of Companies referred the matter to the Regional Director for prosecution. The Registrar of Companies, Gwalior in response to the notice regarding the filing of the present petition before the Principal Bench, Company Law Board, vide his letter dated June 10, 2009 mentioned the details of the company and its directors and the fund position on the basis of the balance -sheets and also the assets and liabilities. It is also stated at paragraph (6) of the letter that the company has not filed its balance -sheet as at March 31, 2001 and the company held only one annual general meeting on December 1, 2007 for the years 2001 to 2007 instead of holding separate annual general meetings for each year. It is also observed that no extension of time was obtained by the company. It is also mentioned that the annual returns filed with the office of the Registrar of Companies from the year 2001 to 2008 that the shareholding detail is given in CD whereas no CD was received in that regard by the Registrar of Companies. It is also stated that there are several complaints received by the Registrar of Companies against the company.