9911796707
TMI Blog1998 (9) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents Nos. 6 and 8 to 12 as illegal; (b) to delete the name of respondents Nos. 6 and 8 to 12 from the register of members of the company in relation to the impugned shares; (c) to supersede the board of directors of the company and appoint an administrator to regulate the affairs of the company; (d) to appoint a statutory auditor for preparation of the accounts for the year ending March 31, 1993; (e) to convene an annual general meeting of the company; (f) to surcharge the third respondent for misappropriation of the company's assets, and funds; and (g) to declare that the sixth respondent is not the director of the company. 2. By the time when the matter was taken up for hearing it transpired that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 lakhs in the course of enjoying the credit facilities from TIIC. (ii) Diversion of ₹ 15,23,109.62 and misappropriation of ₹ 1,84,025 on account of Canara Bank account. (iii) Diversion of ₹ 1,00,100 in purchase of land for the company's factory use and misappropriated funds by inflating the construction cost of the factory building. (iv) Diversion of ₹ 83,000 on account of jeep account. (v) Misappropriation of funds of the company by showing payment of interest of ₹ 9.42 lakhs without being supported by any voucher. (vi) Inflation of day-to-day expenses of the company by tampering with the vouchers and embezzling funds of the company. (vii) Deliberate manipulation of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted their written arguments. During the hearing, it transpired that the petitioners had already filed a criminal complaint on the alleged financial irregularities and the police had seized practically all the documents and records of the company for the purpose of conducting an enquiry on the criminal complaint. The material before us without the original documents are not adequate even to form a prima facie opinion on the various allegations, in a proceeding under Section 397/398. By virtue of Section 406, the Company Law Board is empowered to invoke the provisions of Schedule XI by which it can impose penalty, for fraud committed by the officers for not keeping proper account, for fraudulently conducting the business of the company and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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