2010 (9) TMI 910 - Board - Companies Law

Summary

Issues:
1. Application for injunction against convening annual general meeting and operation of notice.
2. Allegations of oppression and mismanagement by reducing petitioners' shareholding.
3. Appointment of directors and seeking direction to withhold the annual general meeting.
4. Compliance with procedural requirements for convening the annual general meeting.
5. Concerns regarding declaration of dividend based on disputed shareholding.

Analysis:
1. The petitioners sought an injunction against respondents from convening the annual general meeting and restraining the operation of the notice. They alleged oppression and mismanagement due to reduction in shareholding, seeking relief from the meeting scheduled for September 30, 2010.

2. Respondents argued that the meeting was called with proper notice, allowing petitioners to attend and oppose agenda items. They contended that the agenda was regular, hence no objection should be raised. The Bench noted procedural compliance by the company in convening the meeting, deeming the relief sought by petitioners invalid.

3. The appointment of directors (respondents 13, 16, and 17) led to the application seeking to withhold the annual general meeting. The petitioners claimed prejudice due to the allotments made by the directors, prompting the direction sought to prevent the meeting.

4. The Bench acknowledged the company's adherence to the 21-day notice requirement for the annual general meeting, finding no procedural lapses. Consequently, the relief sought by the petitioners to prevent the meeting was deemed unwarranted.

5. Concerning the declaration of dividend, the Bench recognized the serious charges of illegal share allotments affecting petitioners' shareholding. To prevent prejudice, the company was directed to withhold the dividend distribution pending resolution of the case, ensuring fairness in case the petitioners' claims were upheld.

6. Ultimately, the application was disposed of, allowing the company to proceed with the scheduled annual general meeting while keeping the dividend distribution on hold until the case's final resolution, balancing the interests of both parties involved.