K VENUGOPAL REDDY Vs. NECTAR LABORATORIES LTD.

JUDGEMENT

(1.) THE dispute in the company petition is centered around the activities of Nectar Laboratories Ltd., a company limited by shares and incorporated in the year 1995, under the Companies Act, 1956 ('the Act') with registered office in Hyderabad. The company is engaged in the manufacture of n -Butyl Cyanoacrylate, pessaries, sachets, tins and injectables. The process know -how for the manufacture of n -butyl cyanoacrylate (the bio -adhesive for suture -less surgery) was released by the Indian Institute of Chemical Technology, Hyderabad. After obtaining the non -exclusive licence for the manufacture and sale of n -butyl cyanoacrylate, Nectar Laboratories commenced commercial production in the year 1997 under the brand name Nectacryl, utilising a conditional and convertible term loan from the Industrial Development Bank of India ('IDBI'). The company, according to the petitioners, began to face financial crisis due to excess borrowing and misappropriation of such borrowings by the 2nd respondent, who is the managing director, and his family directors. The company became defunct in 2002 and the creditors initiated proceedings for recovery of outstanding dues. When the respondent -directors, after about five years, contemplated a revival scheme, the petitioner sent a legal notice to the 2nd respondent demanding the blueprint of the revival scheme. It was not given.

(2.) THE first petitioner, who is a founder director of the company, holding 10,750 equity shares of Rs. 100 each, has filed this petition on his behalf and on behalf of the other six petitioners, who are shareholders. The authorised capital of the company is Rs. 2.50 crore divided into 2,50,000 equity shares of Rs. 100 each. The company was promoted by 14 members. Petitioners 1, 3 and 4 were among them.

(3.) THE petitioner seeks a declaration to the effect that the floating of Dr. C.C. Sahadev & Associates by the respondents and transferring the know -how of the company to the 9th respondent are illegal. The petitioner also wants the amount received from the 9th respondent refunded with interest. He further wants to induct himself as the managing director after declaring the continuance of the 2nd respondent as managing director illegal.