Court dismisses company petition, orders shareholders to resolve deadlock. Share purchase options given.

The court dismissed the company petition but provided directions to resolve the deadlock. Respondents Nos. 2 to 4 were given the first choice to purchase the shares of the petitioners and the fifth respondent at face value within two months. If they defaulted, the petitioners and the fifth respondent would have the choice to purchase the shares of respondents Nos. 1 to 4. If both groups failed to exercise these options, the company would be wound up. The petition was dismissed without costs.

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Issues Involved:

1. Whether respondents Nos. 1 to 4 are managing the affairs of the company oppressively against the other shareholders.
2. Whether the resolutions dated May 19, 1981, of the general body of the company are fabricated and inserted in the minutes book.
3. Whether the minutes book of the meetings of the general body and of the board of directors of the company were being regularly and properly maintained.
4. Whether respondents Nos. 3 and 4 are directors of the company and whether petitioner No. 2 and respondent No. 2 were validly appointed and entitled to continue as directors.
5. Whether respondent No. 1 abused his powers as managing director and falsified the account books.
6. Whether respondent No. 1 mismanaged the affairs and business of the company.
7. Whether there are disputes between the groups of shareholders and directors leading to an impasse.
8. Whether the company petition is maintainable on any other grounds raised in the counter of the respondents.

Issue-wise Detailed Analysis:

Issue No. 1:
The petitioners alleged that respondents Nos. 1 to 4 managed the company oppressively and excluded them from the management. The evidence showed that petitioners Nos. 1 to 3 and the fifth respondent were actively involved in the company's business activities. The court found no material to support the claim that respondents Nos. 1 to 4 alone managed the company oppressively.

Issue No. 2:
The petitioners contended that the resolutions dated May 19, 1981, were fabricated. However, the court found that the evidence of RW-3, a notary public, who attested the minutes book on June 12, 1983, showed that pages 16 to 19 were filled up by that date. The court concluded that the resolutions dated May 19, 1981, were not fabricated and were valid.

Issue No. 3:
The petitioners argued that the minutes book was not properly maintained. The court found that a meeting was held on February 15, 1983, where the second petitioner and the second respondent were removed as directors. The evidence supported that the minutes book was regularly and properly maintained.

Issue No. 4:
The court found that respondents Nos. 3 and 4 were permanent directors and that the second petitioner and the second respondent were removed as directors by a resolution on February 15, 1983. Therefore, the second petitioner and the second respondent were not entitled to continue as directors.

Issue No. 5 and Issue No. 6:
Due to the death of the first respondent, the reliefs sought against him personally became infructuous, and it was unnecessary to give findings on these issues.

Issue No. 7:
The court found that there were disputes between the two groups of shareholders and directors, leading to an impasse and detriment to the company. The evidence showed a scramble for possession and management of the company, causing a deadlock.

Issue No. 8:
The court overruled the objections regarding the maintainability of the company petition. It held that the petition was maintainable, despite the death of the first respondent and the alternate remedy sought in O.S. No. 71 of 1984.

Conclusion:
The court dismissed the company petition but provided directions to resolve the deadlock. Respondents Nos. 2 to 4 were given the first choice to purchase the shares of the petitioners and the fifth respondent at face value within two months. If they defaulted, the petitioners and the fifth respondent would have the choice to purchase the shares of respondents Nos. 1 to 4. If both groups failed to exercise these options, the company would be wound up. The petition was dismissed without costs.

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