TaxTMI 
TaxTMI 
2002 (8) TMI 869
X X X X Extracts X X X X
X X X X Extracts X X X X
....e initiating his arguments submitted that initially the printing business was carried on by the respondents 2 and 3 as a partnership concern, wherein the petitioner was subsequently inducted as a partner in April 1986, all the three being equal partners and the petitioner being a qualified technical partner. With the growth of business, the partnership was converted into a private limited company in May 1993, which subsequently became a public limited company in March 1995 with the capital of Rs. 1.27 crores. The petitioner was the whole-time director up to 1996 and was taking care of production. During the year 1996, the Company made a profit of Rs. 20 lakhs and had an accumulated reserve of Rs. 37 lakhs for the year ended 31-3-1996. At this stage, the respondents had diverted the business of the Company to their own partnership concerns, which used to give job work to the Company adversely affecting the profit position of the Company. The second respondent has started yet another similar business in the premises of the Company with his family members utilizing the entire infrastructure of the Company amounting to unfair prejudice of the shareholders and entitling the petitioner t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs. 12.50 lakhs from Mr. Bijal Patel towards his share capital in the Company through personal contact of the second respondent. The said loan was guaranteed by the second respondent. The petitioner never bothered to repay the said loan, which was ultimately cleared by the second respondent. The wife of second respondent has lent Rs. 38 lakhs to the petitioner. No interest is paid to her. The petitioner, therefore, has no locus standi to question the acts of respondents. According to Shri Datar, even though the petitioner continues to be a director of the Company he never participates in the management and affairs of the Company. He further pointed out that the petitioner himself had started his own printing business in 1986-87, without the knowledge of the respondents, which incurred a huge loss and has bank liability of Rs. 20 lakhs. According to Shri Datar, the petitioner sought the assistance of the respondents to bail him out from the financial difficulties resulted on account of his private business, which was declined by the respondents resulting in filing of this petition. Shri Datar justified the borrowal from Global Trust Bank as well as the sale of land by the Company, b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Court. Pointing out the conduct of the petitioner, Shri Datar submitted that the petitioner could not seek any remedy against the petitioners, in support of which he relied on : (iv) Desein (P.) Ltd. v. Elcctriom India Ltd. [2001] 3 CLJ 459 (CLB) (v) Anand Kumar Saigal v. Manu Properties (P.) Ltd. [2001J 3 CLJ 425 (CLB) and (vi) Ajit Singh v. DSS Enterprise [2001] 4 CLJ 421 (CLB)- to show that the conduct of the parties is an important aspect in moulding relief by the CLB. 5. Shri Datar while concluding his submission submitted that in case the petitioner is asked by the CLB to get out of the Company and shares are valued, the CLB may take into account the interest payable to the relatives of the directors who have given loan to the petitioner and also the loan amount guaranteed and paid by the second respondent enabling the petitioner to subscribe to his share capital of the Company. 6. We have considered the pleadings and arguments of the Counsel. The main grievances of the petitioner are that being a director of the Company he has been excluded from the management and the affairs of the Company since 1996; that the respondent have di....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of a person is on the register of members and shares have been allotted to him, we would not go into as to the source of investment. However, since the respondents had produced an affidavit from Shri Bijal K. Patel, who is purported to have arranged the loans through M/s. Chittamoor Holdings and Finance (P.) Ltd. and M/s. Chottabhai and Company to the petitioner for subscribing to the shares, which was later repaid by the second respondent, we gave the opportunity to the petitioner to rebut the same. The petitioner has now produced two letters dated 21-6-2002 and 10-7-2002 from M/s. Chittamoor Holdings and Finance (P.) Ltd. The letter dated 21-6-2002 shows that loans were taken by the petitioner and respondents 2 and 3 during June 1995 from M/s. Chittamoor Holdings and Finance (P.) Ltd. These loans were settled by them during the financial year 1996-97. It further confirms that these loans were given only against promissory notes and not guaranteed by anyone. In the reply affidavit to these letters, the respondent has pointed that inspite of directions given by this Bench, the petitioner has not produced his bank statements to evidence the repayment of the loan by himself. The let....