PUCCI DANTE Vs. RAFEEQUE AHMED

JUDGEMENT

(1.) THIS is a petition filed under Section 186 of the Companies Act, 1956 (hereinafter referred to as "the Act"), seeking directions of this Bench against Grace Shoes Private Limited (hereinafter referred to as "the company") to convene an extraordinary general meeting of the company to transact the following business :

(2.) The facts of this case as stated in the petition and reiterated by Mr. Thomas Dilip Singh, counsel for the petitioner are that the second respondent -company was incorporated under the provisions of the Act on November 6, 1995, to carry on business in shoes. The first respondent and one Mr. Faiz Mohammed, are subscribers to the memorandum and articles of association of the company each subscribing to 100 shares of Rs. 10 each. Being subscribers to the memorandum and articles of association, the first respondent and Mr. Faiz Mohammed, became the directors on incorporation of the company. The Government of India, Ministry of Industry, granted permission in favour of the company to obtain foreign equity participation from Italy, upon which, Pucci SRL of Italy subscribed to 9,00,000 equity shares of Rs. 10 each, accounting for 90 per cent, of the equity share capital. Pucci SRL is represented by the petitioner, being its president. Though the remaining 10 per cent, of equity share capital was held by the first respondent the amount for acquiring the shares in favour of the first respondent was advanced by Graziella Shoes Private Limited in which the petitioner is a director and investor. The first respondent is not the beneficial owner of 10 per cent, shares. Besides the share capital contributed by Pucci SRL, Pucci SRL advanced an amount of Rs. 4,14,06,228 by way of payments towards imports by the company and Rs. 1,19,72,000 by way of unsecured loans. In the circumstances, the petitioner alone has a stake in the company and neither has the first respondent nor Mr. Faiz Mohammed. The factory was commissioned at Vellore on March 28, 1996. The goods were exported to buyers in Europe. While the petitioner was mainly concerned with the production as well as marketing, the day -to -day administration was looked after by the first respondent. There used to be periodical meetings of the company from time to time to discuss various issues relating to the management of the company. The first respondent was responsible for maintenance of the statutory and other records along with his responsibilities. During the visit of the petitioner to India on December 16, 1997, he came to know of irregularities and acts of commission and omission on the part of the first respondent which were discussed in an informal meeting held on December 19, 1997, at the factory premises of the company. At the said meeting, several differences of opinion arose between the petitioner and the first respondent which were left unresolved and the meeting ended with both the petitioner and the first respondent deciding to part ways. Thereafter, the first respondent stopped attending the factory at Vellore and became belligerent. The first respondent misappropriated huge amounts of money belonging to the company upon which the petitioner caused a lawyer's notice threatening to lodge a criminal complaint against the first respondent. The disputes between the petitioner and the first respondent had created a serious deadlock in relation to the management of the company causing enormous loss. In the situation, the administration of the company was totally paralysed.

(3.) THE court may, eiTHEr on its own motion or on THE application of a director or any member entitled to vote, order a meeting to be called, held and conducted in such a manner as THE court thinks fit, and may direct a 'meeting' of one member."