9911796707
TMI Blog2000 (2) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... shahar (Punjab). According to the petitioners, the first petitioner has been the chairman of the company since 1988 and the second petitioner as the managing director from 1969. However, the first respondent has manipulated the records of the company by dubious means as elaborated in the petition to show as if the petitioners no longer hold the managerial positions and has also engineered to illegally allot further shares in the company to his own group by which the petitioners have been reduced to a minority. With these allegations, the petitioners have sought for various reliefs, inter alia, including restraining the first and second respondents from claiming themselves to be the managing director and chairman respectively, restraining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were accepted in a board meeting held on January 51, 1997 (annexure A-1). The company was functioning smoothly and on January 1, 1998, the balance-sheet of the company for the year ending March 31, 1998, was signed by the petitioners as the chairman and managing director and also by the first respondent as accountant (annexure A-3). As per the articles, one-third of the directors were to retire in the next general meeting and since the first respondent was one of the directors liable to retire by rotation, he, apprehending that he might not be elected as a director due to his misconduct, secreted all the documents of the company which were in his possession as the accountant. In view of this, the annual general meeting for 1997-1998 cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of the accounting records. He pointed out that on September 1, 1998, the first petitioner continued as the chairman of the company. He further pointed out, referring to alleged minutes of the annual general meeting held on September 30, 1998 (annexure A-10), wherein it is shown that four directors including the first petitioner were not re-elected as nobody proposed their names. He submitted that not only the notice issued by the second respondent is invalid, no such meeting could have taken place without notice to all the shareholders. He also pointed out that as per the notice, three directors were to retire by rotation, in the minutes it is noted as if four directors were liable to retire by rotation and none of them was elected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents themselves, ceased to be the managing director only on November 30, 1998, all notices for the earlier meetings should have been issued by him. Since he had not issued any of the notices for the alleged board meetings and general body meetings, it itself would show that all the notices and the minutes are fabricated. 4. He further submitted that not having been satisfied with fabrication of documents to show that the petitioners had ceased to be holding any managerial positions, the respondents have manipulated the records to show as if 810 shares and 1,900 shares were allotted to the respondents' group in the alleged board meetings held on November 30, 1998 and December 12, 1998, respectively. This manipulation was done only w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents submitted that this petition has been filed only under Section 398. Therefore, the ingredients of Section 398 have to be fulfilled. He submitted that since the company is a closely held family company, no public interest is involved and as such the provisions of Section 398 are not attracted. Further, he submitted that only after the change in the management, the company has declared dividend for the first time and as such as the continuation of the present management is in the interest of the company and the members. Further, he also pointed out that the petitioners have already filed a civil suit with the same allegations relating to the alleged fabrication of notices for the meetings as well as the minutes of the said meetings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioners have sought in the present petition also find a place in the relief portion of the civil suit. The Company Law Board has been taking a consistent stand that to avoid conflicting decisions on common issues, if any proceedings are found to have been initiated prior in time to the filing of the petition before the Company Law Board on issues covered in the petition, the Company Law Board would either stay the proceedings before it or dismiss the petition unless otherwise the earlier proceedings are withdrawn. Since we find that the matters covered in the petition are already before the civil court and since the proceedings are pending and the petitioners have not chosen to withdraw the earlier proceedings, without going into the merit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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