9911796707
TMI Blog2014 (4) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... it may do so after consideration of circumstances suggesting the conduct of the business in the manner set out in sub clauses (i), (ii) and (iii) to clause (b) of the above section. It is under Section 237(a)(ii) of the Companies the present application has been filed. There is nothing on record produced by the respondents to show that the suspension of trading in equity shares has been revoked or steps have been taken to comply with the listing agreement. Therefore, the apprehension in the minds of the petitioners regarding listing of shares appears to be bona fide - The petitioners, being shareholders of the first respondent/company, it is stated are kept in dark and are not informed of any major activities of the first respondent/company like amalgamation, listing and de-listing of shares. All that the respondents claim is that due notice has been sent to the petitioners and they are not responsible for the non delivery of such notices. The only reason stated by the respondents so far for non compliance of the order passed by this Court earlier is bulkiness of the records required and that by no stretch of imagination can be accepted to be genuine ground for a period of over fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners sent a notice to the second respondent on 23.12.2004, marking a copy to the Registrar of Companies, regarding non receipt of the balance sheet and notices for the Annual General Meetings. The second respondent sent a reply on 3.1.2005, stating to have enclosed the copies of the balance sheets for the years 2001-02, 2002-03 and 2003-04; copy of the scheme of amalgamation; and copy of the EGM notice, which according to the petitioners are incomplete and bereft of particulars. It is stated that the petitioners did not receive the balance sheets and annual reports for the years 2004-05 and 2005-06. 2.4. Based on the said letter dated 23.12.2004, copy of which was also addressed to the Registrar of Companies, the Registrar of Companies called for a reply from the first respondent/company regarding the irregularities and non-compliances. The first respondent, enclosing a copy of the letter dated 3.1.2005 addressed to the first petitioner, stated that they have complied with all the requirements under law. In the said communication, the second respondent has also stated that the company is in the process of getting its shares listed on the Bombay Stock Exchange and Natio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notices and their role ends with the despatch of notices through the Postal Department. It is their case that the meetings of the shareholders were convened before involving in activities like amalgamation, listing and de-listing, and thus, their transactions are transparent. It is their case that the first respondent did not flout the SEBI Guidelines and they will duly comply with the procedure contemplated. 3.3. It is the case of the respondents that the right to declare or not to declare dividend vests on the Board of Directors of the first respondent/company and the petitioners have no right to force the first respondent/company to declare dividend. 3.4. It is pleaded that based on vague allegations the petitioners have filed this company petition and the same has to be dismissed outright. 4. This Court, by order dated 10.12.2008 made in this company petition, after considering the fact that ordering investigation into the affairs of the first respondent company would have serious consequences and ramifications, thought it fit to appoint independent Chartered Accountants to understand the seriousness of the allegations made by the petitioners, so as to enable the Court to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the auditors. 8. In this backdrop of the case, this Court has heard the rival contentions of Mr. R. Venkatavardhan, learned Counsel appearing for the petitioners and Mr. K. Ramasamy, learned counsel appearing for the respondents and perused the documents filed. 9. Before proceeding further, it would be apposite to refer to the relevant provision, namely Section 237 of the Companies Act, 1956, which reads as under: "Section 237. Investigation of company's affairs in other cases.- Without prejudice to its powers under section 235, the Central Government - (a) shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if - (i) the company, by special resolution ; or (ii) the Court, by order, declares that the affairs of the company ought to be investigated by an inspector appointed by the Central Government ; and (b) may do so if, in its opinion or in the opinion of the Tribunal, there are circumstances suggesting - (i) that the business of the company is being conducted with intent to defraud its creditors, members or any other persons, or othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the organization. We are enclosing herewith a copy of the above said letter addressed to the Shareholder for your ready reference and record." It is not in dispute that even as on date, the respondents have not taken any steps to get listed with NSE/BSE. That apart, the Madras Stock Exchange Limited, in the communication dated 30.11.2006, addressed to the first petitioner has stated that even though equity shares of the first respondent/company are listed in their exchange, trading in the equity shares of the company has been suspended from April, 2006, in view of the non-compliance of listing agreement. There is nothing on record produced by the respondents to show that the suspension of trading in equity shares has been revoked or steps have been taken to comply with the listing agreement. Therefore, the apprehension in the minds of the petitioners regarding listing of shares appears to be bona fide. 12. The respondents have also not denied the allegation made by the petitioners that the respondents are taking steps to de-list the shares from the stock-exchanges. They only stated that the de-listing of shares shall be done in accordance with the SEBI Guidelines. The petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first respondent/company, more particularly in view of the fact that the first respondent/company has not furnished the information in respect of its affairs, which it is reasonably expected to furnish. The conduct of the business of the first respondent/company is oppressive to it members and the non-cooperation of the first respondent/company with the Chartered Accountants, despite series of orders of the Court, clearly goes to show that the respondents intend to thwart the attempts of the Court to do substantial justice to either parties. If the respondents had nothing to hide and the first respondent/company is run in a transparent manner, there is no reason for the first respondent/company to withhold information to the Chartered Accountants. However, this Court is able to perceive that the intention of the respondents is to delay the process of compliance of the orders of this Court. The number of applications and appeals filed to stall the verification of accounts by the Chartered Accountants clearly goes to show that it is a case of total non-cooperation, with an intention to hide the relevant materials. Therefore, section 237(b)(i) and (iii) of the Companies Act, 1956 gets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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