PRAVIN JAIN Vs. DIASTAR JEWELLERY PVT LTD

JUDGEMENT

(1.) Order Pronounced on 20.10.2017 The Petitioners, claiming themselves as holding 52.94% shareholding in Rl Company viz. Diastar Jewellery Pvt. Ltd., filed this Company Petition u/s 397, 398, 402 & 111 of Companies Act, 1956 against the Respondents viz. Diastar Jewellery Pvt. Ltd., (Rl) Pramod Jain (R2) and Rachana Srimal (R3) assailing the acts of R2 as oppressive and prejudicial to the interest of the Petitioners, hence sought the reliefs as follows:

(2.) The case of the Petitioners in brief is that aforementioned Kishanlal Jain has three sons i.e. PI, Pradeep Jain and R2. PI says that his brothers i.e. Pradeep Jain and R2 have left to United States of America in early eighties and ever since they have been continuing as residents of USA. Rl Company was incorporated in the Year 1987 primarily for manufacturing and export of Gold and Diamond Jewellery. To run this business, Gala G-5 admeasuring 9500 sq. ft. was allotted on rental basis in SEEPZ SEZ, Andheri (East) , Mumbai. That Pi and his father were the founder directors of Rl Company, wherein the Petitioners together were holding 19.60%, likewise R2 and Pradeep Jain were also holding 19.6% each, whereas their father Kishanlal Jain holding 47,77,600 equity shares amounting to 33.31%. Looking at the growth of Rl from 1988 to 1992, Rl was allotted Plot-58 at SEEPZ admeasuring 35,000 sq. ft., upon which, Rl Company constructed factory to carry out its manufacturing activities, soon thereafter Rl acquired five more properties in Mumbai.

(3.) Since R2 and his another brother Pradeep Jain have already have become citizens of USA, they have incorporated a Company by name Diastar Inc USA for doing similar business, in which, R2 was the President. R2 and another brother Pradeep Jain, being family members, Rl imported modern and mechanized technology from Diastar Inc USA (herein after referred as Diastar Inc) by obtaining necessary approvals from the authorities. The business plan of Rl is to manufacture diamond and gold jewellery basing on raw material and designs supplied by Diastar Inc and in turn to re-export the said material to Diastar Inc. The said arrangement had worked well for the benefit of entire family, but owing to differences within the family, PI resigned as Director of Rl but the Petitioners have continued as Shareholders of Rl. Ever since he resigned as director, for R2 has been controlling Rl Company, it has led Rl into losses, by which it has been heavily burdened by financial liabilities.