TaxTMI 
TaxTMI 
2009 (4) TMI 462
X X X X Extracts X X X X
X X X X Extracts X X X X
....sisting of 1,00,000 equity shares of Rs. 100 each. The issued, subscribed and paid-up capital was initially standing at Rs. 33,00,000 comprising of 33,000 equity shares, which are fully paid-up. The first petitioner was holding 1,819 shares, while the second and third petitioners hold 851 and 825 shares, respectively. Thus, the three petitioners together hold a little more than 10 per cent, of the paid-up share capital. 3. It is asserted by the petitioners that in or about the year 1996, the authorised share capital of the respondent-company has been increased by a further sum of Rs. 17,00,000 by issuing 17,000 shares and. again during the year 2001, the share capital has been raised from Rs. 50,00,000 to Rs. 1,00,00,000. 4. The main objects for which the respondent-company came to be established are to acquire the business carried on by M/s. V. Sreehari Rao and fourteen others, in the name and style of "Pressteels and Fabrications"; and for carrying on the said business by undertaking to manufacture and to sell precision tools, jigs, fixtures, dies, machinery spares, and also carrying on business in light engineering, sheet metal components, etcetera. The petitioners assert that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en regularly booked in the books of account. There is no consistency from year to year maintained on this account. Thus, indicating the hollowness of the claim that the said money is used for meeting the expenditure of the staff. It is nothing but a devise worked out for misappropriation. Be that as it may, the company has been consistently making loss, as a result of which, the accumulated losses have reached more than Rs. 1.54 crores, thus, completely knocking out the substratum of the company. It is also further pointed out that without furnishing any details, it was tersely indicated that the State Bank of India had initiated recovery proceedings before the Debts Recovery Tribunal for recovering a sum of Rs. 2,41,95,389,40 from the respondent-company. Till the year 2000, the respondent-company has not shown any such loan transaction between it and the State Bank of India and strangely it has been reported in the financial statement for the year 2000 that a loan in a sum of Rs. 84,02,900 has been taken from the State Bank of India. Thus, the affairs of the company are being carried on in such a manner that it is anything, but transparent and proper. It is further alleged that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3, it acquired acre 4.30 guntas of land at Fathenagar in Ranga Reddy District, for starting a fabrication unit for the purpose of manufacturing special tools, dies, jigs and special machine tools, etcetera. It was also carrying on-civil, mechanical and electrical contracts and it was registered as a small-scale industrial unit. The said firm executed major works to the State Electricity Board at Kothagudem Thermal Power Station, Paloncha, Khammam District. In view of its growing business activity, it was felt desirable to convert the partnership firm into a private limited company. The first petitioner being an erstwhile partner of the firm was initially allotted 300 shares of Rs. 100 each. Subsequently, the first petitioner was allotted 1,107 bonus shares as per his entitlement. The first petitioner has also acquired 412 shares through transfer from Smt. Raghavamma, during the year 1990. The second and third petitioners were allotted 400 equity shares each. They both, in turn, acquired further 876 shares from Smt. Raghavama, by way of transfer. It is asserted that as of now, the entire share capital of Rs. 1,00,00,000 has been issued, subscribed and paid-up. Therefore, as of now, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is directly paid to the first petitioner herein. Having, thus, received the decreetal amount in the year 1992 itself, the first petitioner moved an execution petition bearing No. 11 of 1994, on the file of the Additional Senior Civil Judge, Gudiwada, claiming that a further amount of Rs. 1,66,512 is due and payable by the respondent-company on the ground that the , full decreetal amount was not paid and got the landed property of the company of acre 6.40 cents, situate at Chinaautapalli Village, near Gannavaram in Krishna District, attached. The company as well as its banker, to whom :the said land was offered as a security, contested the said case, resulting in the execution-petition being dismissed, as it was brought out that the first petitioner has realised more money than he is actually entitled to collect from the HPCL. The final accounts have revealed that the firm floated by the first petitioner, in fact, owes money to the respondent-company and for that purpose the respondent-company has to file a civil suit in O. S. No. 424 of 2006, before the Chief Judge, City Civil Court, Hyderabad. The first petitioner was so keen to knock away the landed property of. acre 6.4, situat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch 3, 2008. The first petitioner filed an appeal before the District Court, Machilipatnam. In the mean time, the first petitioner has approached the National Highways Authority and drawn an amount of Rs. 85,609 towards compensation for a part of the land acquired at Gannavaram for road widening purpose. As is already noticed supra, the land does not belong to the first petitioner, but it belongs to the company and hence, another civil suit in O.S. No. 241 of 2003 has been filed before the civil court at Gudiwada for recovering Rs. 85.609 from the first petitioner. The said suit was decreed with subsequent interest at 12 per cent, per annum. The first petitioner preferred an appeal to the District Court at Machilipatnam against the said judgment and it was still pending. 9. Therefore, the respondent-company submits that there is no warrant for winding up of the respondent-company as there are no justifiable or equitable grounds for doing so. It is pleaded that the first petitioner has been harassing the respondent-company on one pretext or the other and he has been using the forum of one court or the other to arm twist the company into submission to his dictates. Therefore, the abo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntioned in the petition . It is now well-established that the sixth clause, namely, 'just and equitable', is not to be read as being ejusdem generis with the preceding five clauses. While the five earlier clauses prescribe definite conditions to be fulfilled for the one or the other to be attracted in a given case, the just and equitable clause leaves the entire matter to the wide and wise judicial discretion of the court... There must be materials to show when 'just and equitable' clause is invoked, that it is just and equitable not only to the persons applying for winding up but also to the company and to all its shareholders. The company court will have to keep in mind the position of the company as a whole and the interests of the shareholders and see that they do not suffer in a fight for power that ensues between two groups." 13. Bearing these principles in mind, the material on record, when properly analysed, discloses that the petitioners herein have approached the Company Law Board under sections 397 and 398 of the Companies Act, 1956, alleging acts of oppression and mismanagement against the respondent-company. The Company Law Board was not totally convinced that the c....