1999 (4) TMI 629 - Board - Companies Law

Issues Involved:
1. Allegations of oppression and mismanagement u/s 397/398 of the Companies Act, 1956.
2. Ownership dispute over an industrial shed.
3. Non-issue of share certificates.
4. Removal of the petitioner as a director.
5. Denial of access to company records.
6. Allegations of non-holding of board meetings.
7. Apprehensions regarding alteration of articles and issuance of further shares.
8. Transmission of shares held by the deceased father.
9. Allegations of siphoning of company funds.
10. Claims for reimbursement and unsecured loans.

Summary:

1. Allegations of Oppression and Mismanagement u/s 397/398:
The petitioner, holding about 25% shares in Hymatic Agro Equipment Private Limited, alleged acts of oppression and mismanagement. The company, a family-managed entity, faced internal disputes after the death of the father, who was the managing director.

2. Ownership Dispute Over Industrial Shed:
The petitioner claimed ownership of an industrial shed in his name, while the respondents asserted it was part of the partnership firm's assets taken over by the company. This matter is already under civil litigation, and no direction was sought in the main petition.

3. Non-Issue of Share Certificates:
The petitioner alleged non-issue of share certificates. The company stated that share certificates had been issued and offered to issue duplicates if applied for by the petitioner.

4. Removal of Petitioner as Director:
The petitioner was removed as a director without proper notice, which was deemed an act of oppression. The respondents' claim of sending notices was not substantiated convincingly. The removal was not in accordance with law, but no directions were given due to potential further friction.

5. Denial of Access to Company Records:
The petitioner alleged denial of access to company records. The company refuted this, stating the petitioner had signed documents as a director. The petitioner was allowed to seek inspection of documents with prior notice.

6. Allegations of Non-Holding of Board Meetings:
The petitioner alleged non-holding of board meetings post the father's death. The company claimed regular meetings were held. The company was directed to hold meetings in accordance with the law.

7. Apprehensions Regarding Alteration of Articles and Issuance of Further Shares:
The petitioner feared alterations to make respondent Nos. 3 and 4 permanent directors and issuance of further shares. The company denied these allegations, and no directions were given.

8. Transmission of Shares Held by Deceased Father:
The petitioner contested the transmission of the father's shares to the mother. The respondents stated it was done per the father's will, with the petitioner's knowledge. The petitioner's contention lacked a specific prayer, and no finding was given.

9. Allegations of Siphoning of Company Funds:
The petitioner alleged siphoning of funds without providing details. The respondents dismissed these as baseless, and the Board did not consider these allegations.

10. Claims for Reimbursement and Unsecured Loans:
The petitioner claimed reimbursement for payments made to suppliers and unsecured loans. The respondents agreed to reconcile accounts for the unsecured loans but contested the reimbursement claim, which the petitioner was advised to pursue in civil court.

Conclusion:
The Board suggested the petitioner sell his shares to the respondents to resolve disputes. An independent valuer was to be appointed to determine the share price. Both parties were directed to suggest a valuer's name for appointment.

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