9911796707
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Issues Involved:
1. Interim Orders and Appointment of Special Officer 2. Alleged Illegal Allotment of Shares 3. Mismanagement and Misappropriation of Company Funds 4. Validity of Directors' Minutes Book 5. Functioning and Quorum of the Board of Directors 6. Convening of Requisition Meetings Detailed Analysis: 1. Interim Orders and Appointment of Special Officer The court had issued ad interim orders appointing a special officer to take possession and inventory of the respondent-company's statutory books and documents. The respondents were allowed to apply for vacating or modifying these orders. The primary point for consideration was whether these interim orders should be maintained or vacated, and whether a special officer should be appointed given the circumstances. The court noted the absence of an active board of directors and the lack of authorization for representation in court proceedings. 2. Alleged Illegal Allotment of Shares The petitioners alleged that 1,200 shares were wrongfully, illegally, and clandestinely allotted to certain respondents, violating Article 5 of the company's articles of association and Section 77 of the Companies Act, 1956. The court found that the petitioners had made a prima facie case showing serious questions to be tried, including allegations of mala fide intentions and ulterior motives to gain control of the company. The court also noted the delay in making the application but accepted the petitioners' explanation that they discovered the wrongful allotment only in April 1979. 3. Mismanagement and Misappropriation of Company Funds The petitioners alleged mismanagement and misappropriation of funds by the respondents, including the renovation of a company flat for personal use and diversion of funds through another company. The court found sufficient prima facie evidence of these allegations, including violations of Section 295 of the Companies Act, 1956, by obtaining loans in the name of others. 4. Validity of Directors' Minutes Book The court examined the directors' minutes book produced by the special officer and found it to be in violation of Section 193 of the Companies Act, 1956, as it was a loose leaf binder and typewritten. The court held that such a book is not admissible as it could lead to interpolation, manipulation, and fabrication. 5. Functioning and Quorum of the Board of Directors The court noted that there was no active board of directors at the present moment, as the company required three directors to constitute a quorum, and there were none. The court dismissed the submission that the resignation of a director could be withdrawn, noting that the disputes before the court made it unlikely for the board to function properly. 6. Convening of Requisition Meetings The court observed that both groups had given requisitions for holding meetings, and respondent No. 2 had convened two general meetings. However, the court decided that it would not be proper to allow these meetings to be held until the interim application was disposed of, given the serious disputes and allegations of forgeries and defalcations. Conclusion: The court appointed Mr. Moni Bhusan Sarkar and Mr. Monindra Kumar Bose as joint special officers to supervise and control the business and management of the company. The joint special officers were directed to convene a board meeting to ascertain the directors' willingness to act and to decide on the conduct of the litigation. The interim orders were modified to allow respondent No. 6 to resume duties and to continue the ad interim injunctions. The requisition meetings were to be adjourned for a month. The respondents were directed to file their affidavit-in-opposition by 13th August, 1979, and the matter was scheduled for further hearing on 22nd August, 1979.
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