TaxTMI 
TaxTMI 
2006 (11) TMI 345
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....alienating, or creating third party rights in the movable and immovable properties of defendant Nos. 4 and 5. 3. Since I am dealing with an interim injunction, I would be briefly noting the rival versions. Needless to state, observations and findings in the present order would be for purposes of forming a prima facie opinion. Nothing stated in this order would be read as an expression on the merits of the controversy between the parties. The ultimate fate of the suit would be decided in view of the evidence led by the parties. 4. Suit has been instituted by a private limited company. Plaint has been signed and verified on behalf of the plaintiff by one Gautam Khandelwal styling himself as the director of the plaintiff. 5. Case pleaded in the plaint is that late G. D. Khandelwal was the proud father of 5 sons. The five sons carried on various businesses either as copartnerships or as private limited companies. That share of the respective branches, whether as partners or as shareholders of the companies was in proportion to their share as if the assets were joint family assets. That two companies, namely, the plaintiff and Uma Shanker Forging Ltd. were constituted by the br....
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..... Abhey Shanker Khandelwal and his family members. 10. The plaintiff states that M/s. USK Exports Pvt. Ltd. was set up for dealing in iron and steel and manufacturing of forgings, etc., with similar facilities as that of the plaintiff. Defendant No. 4 is directly in competing business with the plaintiff. 11. The plaintiff states that with the intention of further damaging the business of the plaintiff-company, in the year 2002, another company by the name of M/s. USK Trading Pvt. Ltd. (defendant No. 5) was incorporated by Mr. Sameer Khandelwal (defendant No. 1). That M/s. USK Trading Pvt. Ltd. is in the business, inter alia, of purchase and sale of licences, etc. M/s. USK Trading Pvt. Ltd. has been set up by Mr. Sameer Khandelwal (son of Mr. Abhey Shanker Khandelwal) and Mr. Subhash Khandelwal (husband of Madhu Khandelwal) (defendant No. 2) and father of Mr. Kapil Khandelwal (defendant No. 3) who are shareholders in the plaintiff. It is submitted that M/s. USK Trading Pvt. Ltd. is carrying on the business of trading in iron and steel, and also in business of sale and purchase of licences and other related items, etc. 12. The plaintiff states that memorandum and articles of....
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....ty to the plaintiff, in that, are obliged to carry on all business activities for the benefit of the plaintiff and therefore the said defendants cannot associate themselves with companies which are doing competing business. 9. The core area of the allegations are as pleaded in paragraphs 14, 15 and 17 of the plaint. The same reads as under : "14. The plaintiff states that since defendant Nos. 1 and 2 are the directors of the plaintiff, they not only have access to all the records, documents including quotations submitted by the plaintiff, orders procured, rates at which the raw materials were procured, etc., but are also dealing with customers on behalf of the plaintiff. It is submitted that using the business connections and business practices of the family businesses of the Khandelwal group, Mr. Sameer Khandelwal, in connivance with Mr. Subhash Khandelwal and Mr. Abhey Shanker Khandelwal started negotiating with the vendors of the family businesses and procured raw materials at bulk quantities at lower/discounted prices, for M/s. USK Exports Pvt. Ltd. They also instructed the vendors and suppliers not to work with the plaintiff. Mr. Sameer Khandelwal in connivance with Mr. ....
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....ding any proceedings inter se the family members pending before the Company Law Board. However, I note that an affidavit sworn to by Gautam Khandelwal was filed on 31-7-2006, i.e., the date when the suit was listed for preliminary hearing. The said affidavit was filed in the registry vide filing No. 19228. In the said affidavit reference has been made to C.P. No. 110 of 2005 in which C.A. No. 39 of 2006 is stated to have been filed, both proceedings being before the Company Law Board. 11. Relevant for the purposes of the present order is the following statement in para 3 of the affidavit : "3. . . . I say that along with the company petition the hon'ble Company Law Board heard the C.A. No. 39 of 2006. I say that the reliefs claimed by me in the C.A. No. 39 of 2006 in the Company Law Board were similar to the reliefs claimed by the plaintiff herein." 12. Opposing the application, defendants have stated that incorporation of defendant Nos. 4 and 5 was within the knowledge of the family members. That no diversion of any business has been done. That there is no prohibition for directors of a company to be directors of a second company doing competing business. That the plainti....
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....gistered office at 61/4, Ramjas Road, Karol Bagh, New Delhi-110 005 as a party respondent in Company Petition No. 110 of 2005; (c )restrain petitioner Nos. 1 and 2 from attending the board meetings of respondent No. 1 company as directors; (d)restrain petitioner Nos. 1 and 2 from holding themselves out as directors in respondent No. 1 company or to attend the board meetings of respondent No. 1 company; (e )appoint an administrator/special officer to take charge of the management of the newly impleaded respondents (M/s. USK Exports Pvt. Ltd. and M/s. USK Trading Pvt. Ltd.); (f )direct M/s. USK Exports Pvt. Ltd. and M/s. USK Trading Pvt. Ltd. to submit accounts from their incorporation before this hon'ble Board; (g )direct M/s. USK Exports Pvt. Ltd. and M/s. USK Trading Pvt. Ltd. to submit to this hon'ble Board weekly accounts in future; (h)direct that the profits of USK Exports Pvt. Ltd. and USK Trading Pvt. Ltd. prior to the MOM dated 15-1-2004, be paid over to respondent No. 1 company; (i)restrain USK Exports Pvt. Ltd. and USK Trading Pvt. Ltd. from creating any liabilities, debts, or taking any loans from banks, financial institutions or otherwise, pending th....
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.... for the reason a company always acts through individuals. Gautam Khandelwal is the author of C.A. No. 39 of 2006. He has signed the plaint and has instituted the suit under his signatures on behalf of the plaintiff. 20. Knowledge about the business of defendant Nos. 4 and 5 by all family members of the Khandelwal group is evidenced from the minutes of the meeting relied upon by the plaintiff. No doubt, the said minutes of the meeting dated 15-1-2005, is a subject-matter of debate between the parties but the contents thereof show that the various branches of the Khandelwal family including Shri Gautam Khandelwal were aware of the nature of business conducted by defendant Nos. 4 and 5. The minutes of the meeting are self-evident. Competing business done by said two companies is brought out in the minutes of the meeting dated 15-1-2004. 21. I reproduce the minutes of the meeting in their entirety. The same are as under:- "Minutes of meeting held at Norma (India) Pvt. Ltd. on 15-1-2004. Present : Shri Uma Shanker Khandelwal Shri Abhey Shanker Khandelwal Shri Udai Shanker Khandelwal Shri Subhash Khandelwal Shri Rohit Khandelwal Shri Praveen Khandelwal S....