Directors found liable for mismanagement, ordered to repay Rs. 16.48 crores. Director removed, restrictions imposed.

The tribunal found that acts of omission and commission by R2 and R3 constituted mismanagement, though not oppression, causing losses to the company. R3 was held solely liable for the losses, amounting to Rs. 16.48 crores, and directed to repay with bank interest. R3 was removed as director, and the petitioner appointed as Director-cum-Managing Director, with R2's support mandated. Restrictions were placed on the petitioner to prevent competition with the company. The petition was disposed of without costs.

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Issues Involved:
1. Whether the acts of omission and commission of R2 and R3 constitute acts of oppression and mismanagement of the affairs of R1 company.
2. Liability of R3 for the losses allegedly caused to R1 company by R2 and R3.
3. Reliefs.

Issue-Wise Detailed Analysis:

1. Acts of Omission and Commission as Oppression and Mismanagement:
The petitioner argued that the company had a mutual arrangement where each director (the petitioner, R2, and R3) managed their projects independently, functioning as individual cost and profit centers. The petitioner and R2 successfully completed their projects, while R3 failed to complete his projects, resulting in cancellations and significant financial losses. R3 overdrawn from his sub-account to the tune of Rs. 16.48 crores as of 31.03.2012. The petitioner claimed he should not be liable for the losses caused by R3’s mismanagement. The tribunal found that the acts of omission and commission by R2 and R3 caused losses to the company, which, while not oppressive, constituted mismanagement. Thus, issue No. 1 was partly proved against R2 and R3.

2. Liability for Losses:
The tribunal concluded that the petitioner, having successfully completed his projects, should not be held liable for the losses incurred by the company due to R3’s mismanagement and overdrawn funds. R3 alone was held responsible for the losses suffered by the company. Consequently, R3 was directed to pay the company Rs. 16.48 crores with bank interest, being the money overdrawn by him through current account No. 2233 operated by R3 as a sub-account.

3. Reliefs:
The tribunal ordered the removal of R3 from the directorship of the company and appointed the petitioner as Director-cum-Managing Director, with R2 directed to support the newly appointed Director-cum-Managing Director. Additionally, the company was instructed not to allow third parties to use its goodwill. The petitioner was also forbidden from competing with the company to ensure its future growth. The petition was disposed of without any order as to costs.

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