SHREE SHREERADHASWAMY PLASTICS LTD; HARI PRAKASH PODDAR; UMA PODDAR; SHEETALPODDAR Vs. SHREE SHREERADHASWAMY PLASTICS LTD; PRAHLADPODDAR; GAURI SHANKAR PODDAR; AERO INDUSTRIES

JUDGEMENT

(1.) This is a petition filed by a group of shareholders/members of the Board of Directors underSections 397, 398 and 402 of the Companies Act, 1956 alleging oppression of theirshareholding rightsand mismanagement of the affairs of the respondent No.l Company. The petitioners aver in their petition that the first respondent company was incorporated as a limited company on 22.3.1996 with the Registrar of Companies, N.C.T of Delhi and Haryana with an authorized share capital of Rs.5 crores divided into 50,00,000equity shares of Rs.10 each. It is further stated that the main object of the respondent No.l Companyis to carry on the business of manufacturers and dealers of all kinds of man-made fiber cords and manmade fabrics and also to dealin polyesterfilament yarn and other like products of all description and kinds. It is further averred by the petitioners that the issued and paid-up equity capital of the respondent No.l company at the time of filing of the petition is to the extent of Rs.3,53,99,500 divided into 35,39,950 fully paid up equity shares of Rs.10 each. Out of the paid-up capital of the company, it is averred that petitioners No. 1 to 3 holds the following number of equity shares, as detailed below:- <FRM>JUDGEMENT_12_LAWS(NCLT)12_2016_1.html</FRM>

(2.) In all it aggregates to 3,86,500 equity shares of the total paid-up equity capital of the company corresponding to 10.91% and hence entitled to maintain the petition. In relation to the respondents holding, it is stated by the petitioners that respondents No.2 & 3, who happen to be the real brothers of petitioner No.l, and along with their wives hold 36.20% of the total paid-up capital of the company and thereby having a majority stake in the company as compared to the petitioners. The petitioners also aver that petitioners No.l & 2 along with respondents No.2 & 3 comprise the Board of Directors and that in furtherance of its objects, respondent No.l company is engaged in the manufacture of HDPE/PP wovensacks at its factory located at 66 -67 Mile Stone, Patti Kalyana, Samalkha, District Panipat, Haryana and that respondent No.l company have been availing credit facilities from State Bank of lndia,Panipat Branch securing by way of mortgage, the factory land and building situated as per the details above and also by hypothecation therein of all its movable assets. It is also averred by the petitioners that the directors of the company viz. 1st and 2nd petitioners and respondents No. 2 and 3 have also furnished their personal guarantees with the aforesaid bank and the fact of availing the loan as well as mortgage/hypothecation of the assets of the respondent No.l company have been duly recorded by filing requisite forms withthe Registrar of Companies, N.C.TDelhi and Haryana thereby recording the charge over the assets of the company in favour of SBI. The petitioners also aver that the management and control of the first respondent-company was all along with respondent No. 2 and 3 and that in the month of October, 2010 the petitioner received a noticeunder Section 13(2) of the SARFESI Act recalling the loan in a sum of Rs.4,16, 66,659.32 as due and payable as on 30.09.2010 from SBI.lt is contended by the petitionerthat the above default with the bank warranting it to issue notice had basically arisen due to the misfeasance and malfeasance in managing the affairs of the respondent No.l company and that respondent No.2 and 3 had been engaged in the diversion of funds of the company by opening a separate bank account with HDFC Bank in A/c No.13252560000535 contrary to the understanding between the company and bankers viz. SBI Bank which had provided the credit facilities in the first place.Further, it is also alleged by the petitioners that respondents No. 2 and 3 have surreptitiously and with mala fide intention opened and deposited in the bank account with HDFC Bank Limited situated at Samalkha, Panipat district and that during the period between March, 2010 till June, 2010 an amount of Rs.1,50,92, 145/- belonging to the company had been credited to the said account instead of repaying the credit facilities availed from SBI, all being done without the knowledge of the petitioners. Immediately on coming to know about the surreptitious activity in the above bank account, it is submitted by the petitioners that efforts were taken by them to close the bank account by writing appropriate letters to the branch of the HDFC Bank. It is further averred by the petitioner that not only the respondents have engaged in siphoning of funds from the first respondent company, as described above, they have also engaged in the removal of raw materials from the factory premises as well as stocks of the company namely PP fabric rolls, PP woven waste and rejects of scraps lying in the factory premises. It is also alleged that highly priced computers and other electronic equipment including one UPS costing about Rs.13 lakhs to Rs.15 lakhs had been removed by respondent No. 2 and 3. The petitioners allege that respondents No. 2 and 3 are engaged in the asset stripping of the company including its plant and machinery, all purchased at great cost and out of credit facilities made available by the SBI and which was required to be repaid by the first respondent company and for which as stated above, collaterals had been offered by the first respondent company. Since it came to the knowledge of the petitioners that respondents No. 2 and 3 were taking suo motto stepsto finalize the financial statements of the company for the year 2009-10, the petitioners on 4.12.2010 caused a notice to be issued to respondents No. 2 and 3 through their advocates with a copy duly forwarded to the statutory auditors of the company. However, no reply was given to the said notice even though the notice sent on 8.12.2010 was acknowledged by the addressee namely respondents No. 2 and 3. The auditors who werealso put on notice informed the petitioners, it is averred by them, that he is not in the process of preparing the financial statement for the year 2009-10 since thesame according to information has been referred to aChartered Accountant at Delhi,however without any valid authority either from the Board or from the General Body of the first respondent-company.

(3.) In the circumstances, alarmed by the activities of the respondents No. 2 and 3 in relation to the first respondent company, it is averred by the petitioners that petitioner No. 2 visited the factory of the first respondent company at Samalkha, Panipat and was shocked to find that the entire machinery and stocks of the first respondent company were in the process of being removed. The petitioners further aver that the entire exercise of removal had been recorded in a video as well as photographs have been taken for the purpose of record and that the petitioners have also brought this to the notice of the law enforcing agencies as well as SBI vide letter dated 15.03.2011.