RAJENDRA PRASAD RUNGTA Vs. AMBER COMMERCIAL (P.) LTD.

JUDGEMENT

(1.) IN this order I am considering Company Petition No. 82 of 2005 filed by the petitioners against the respondents [R -1 -company, namely, Amber Commercial (P.) Ltd. and others] under sections 397, 398, 402 and 409 read with section 111 of the Companies Act, 1956 ('the Act') alleging oppression and mismanagement and, hence, seeking setting aside of illegal and fraudulent transfer of 21,000 shares held by P -1; 9,090 shares held by P -2; 20,000 shares held by P -3; 20,000 shares held by P -4; 35,500 shares held by P -5 and 3,000 shares held by P -6 in R -1 -company; rectification of register of members accordingly; setting aside appointment of R -4 to 11 as directors appointed, vide Board resolution dated 5th July, 2004; appointing of an administrator; directing a thorough investigation to be conducted into the affairs of the company and directing holding of an extraordinary general meeting ('EGM') of the R -1 -company under a chairman appointed by the Company Law Board ('CLB') in accordance with the provisions of the Act and in accordance with the articles of association of the company. The R -1 -company, namely, Amber Commercial (P.) Ltd., was incorporated on 11th August, 1988 to carry on the business as exporters, importers, traders, dealers, distributors, buyers, sellers, agents, brokers, processors, laminators, and manufacturer of Jute, Jute goods, bags, laminated jute cloth, corrugated products, packaging materials and of plants, machinery and to carry on business of distributors tea, coffee and textiles, cotton cellulosic or synthetic fibre, silk, yarn, wool and woollen goods, handicrafts, marble and other stones, etc. The R -1 -company is an investment company having its registered office at 1/2, Darpanarayan Tagore Street, Kolkata -700 006. The authorised capital of the company is Rs. 20,00,000 divided into 2,00,000 equity shares of Rs. 10 each. The subscribed capital of the company as per the annual return filed for the year 2004 was Rs. 19,45,000.

(2.) THE petitioners' case is that they have filed the company petition in the capacity of the shareholders holding 1,31,090 equity shares representing 67.39 per cent of the total 1,94,500 equity shares of the R -1 -company. In addition, R P Rungta, Hindu undivided family ('HUF'), part of petitioner group, is also shareholder holding 15,000 equity shares representing 7.71 per cent of the total 1,94,500 equity shares of the R -1 -company. The R -3 and others are shareholders holding 48,410 equity shares representing 24.89 per cent of the total shareholding of the R -1 -company. The P -1 is holding 36,000 equity shares out of total 1,94,500 equity shares and is the single largest shareholder of the R -1 -company. According to the petitioners this correct position has been reflected in annual returns for the years 2002 and 2003 duly signed by the R -2 and 3 respectively. The R -3 has wrongfully deleted 1,23,590 equity shares held by the P -1 to 6 from the register of members and added the said equity shares in the name of the R -3, 12 to 15 without any transfer deeds and without producing any corroborative evidence in this respect and unlawfully reflected in the annual return of the year 2004 signed by the R -2 and another director respectively. As a result of manipulation of records, the shareholding of the petitioners was illegally reduced to 22,500 equity shares representing 11.57 per cent of the total shareholding of the R -1 -company. On the contrary, as a result of manipulation of records, the shareholding of the respondents was increased to 1,57,000 equity shares representing 80.72 per cent of the total shareholding of the R -1 -company. It was pointed out that there are 15 respondents in the present petition and R -3 alone has filed the reply to the present petition and has tried to justify the manipulated shareholding of the R -1 -company, the R -12 to 15, who have been allegedly shown as shareholders in annual return 2004, have not filed any reply or affidavit in support of alleged shareholding in their names, the balance sheet of the R -12 to 15 do not show the investment for the alleged shareholding in the R -1 -company.

(3.) MY attention was drawn to the annual return of the R -1 -company for the year 2002 signed by the R -2 and 3 filed by the respondents and annual return 2004 which have shown totally different position of shareholding without showing any transfer of shares in the said annual return 2004, the list of shareholders shown in the annual return 2004 is forged and fabricated and on the contrary, the list of shareholders shown in annual return 2002 signed by the R -2 and 3, it was argued, is based on factual position and the same needs to be sustained. My attention was drawn to the balance sheet of the P -2 for the year ended 31st March, 2000 which under the heading Schedule 9 'Investment' clearly shows 9,090 equity shares held in the R -1 -company, the balance sheet of the year 2000 has been duly signed by the R -3 along with P -1. It was argued that the respondents including the R -3 are estopped from alleging to the contrary. It was also argued that the respondents including the R -3 has never sent notice of the shareholders meetings of the R -1 -company.