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of <h1>Court dismisses petition alleging fraud, misconduct, and misfeasance in company affairs. No evidence found.</h1> The court dismissed the petition, finding no evidence of fraud, illegality, misfeasance, or misconduct justifying an investigation into the company's ... Investigation of company’s affairs in other cases, Company when deemed unable to pay its debts Issues Involved:1. Alleged theft or loss of newsprint.2. Alleged irregularities and corruption in the purchase of a flat at Bombay.3. Writing off large sums as bad debts.4. Purchase of land at Trivandrum.5. Appointment of a public relations manager and an adviser.6. Appointment of a director in violation of section 299 of the Companies Act.7. Borrowing one crore of rupees by the company.8. Withholding information regarding the company's affairs.Detailed Analysis:1. Alleged Theft or Loss of NewsprintThe petitioner alleged theft or loss of newsprint, suggesting the management failed to take action. The court noted that the complaint was raised at several general meetings, and a committee was appointed to investigate. The committee's report (Exhibit A-2) did not conclusively establish theft but indicated possible malpractice by a former manager. The court found no prima facie case of breach of fiduciary duties, especially given the time elapsed and improvements in handling waste newsprint.2. Alleged Irregularities and Corruption in the Purchase of a Flat at BombayThe petitioner alleged corruption in purchasing a flat in Bombay. The court examined Exhibit A-2, which indicated suspicion but no conclusive evidence of wrongdoing. The title deed (Exhibit C-1) showed the company acquired the flat legitimately. The court found no prima facie case of misfeasance, misconduct, breach of trust, or fraud.3. Writing Off Large Sums as Bad DebtsThe petitioner alleged large sums were written off as bad debts. The court noted the amounts were written off following standard procedures and approved by the general body and auditors. There was no evidence of irregularity or improper benefit to directors. The court found this allegation devoid of merit.4. Purchase of Land at TrivandrumThe petitioner claimed the purchase of land at Trivandrum was a reckless venture. The court found the land was intended for the Trivandrum edition of the newspaper, and its value had increased. The court concluded there was no material to support the claim of a reckless or foolish investment.5. Appointment of a Public Relations Manager and an AdviserThe petitioner alleged irregularities in appointing a public relations manager and an adviser. The court found the managing director was competent to make such appointments, and there was no evidence of financial misconduct. The court also noted the adviser's appointment was legitimate and sanctioned by the Reserve Bank. This complaint was dismissed.6. Appointment of a Director in Violation of Section 299 of the Companies ActThe petitioner argued a director was appointed without disclosing his interest in an advertising firm. The court found the director had disclosed his interest, and no fresh contracts were given to his firm after his appointment. The court concluded there was no violation of section 299.7. Borrowing One Crore of Rupees by the CompanyThe petitioner challenged the company's decision to borrow one crore rupees. The court noted the decision was unanimously approved at an extraordinary general meeting, including by the petitioner. The court found no breach of fiduciary duties or bad faith.8. Withholding Information Regarding the Company's AffairsThe petitioner alleged the company withheld information. The court found no evidence that any specific information requested by the petitioner was withheld. The court emphasized that not all questions at general meetings must be answered immediately and that the company complied with statutory disclosure requirements.Conclusion:The court, after thorough consideration, found no prima facie evidence of fraud, illegality, misfeasance, or misconduct to justify an investigation into the company's affairs. The petition was dismissed without costs.
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