1998 (9) TMI 683

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....he following reliefs: (a) to declare the allotment of 3,000 equity shares in favour of the respondents Nos. 6 and 8 to 12 as illegal; (b) to delete the name of respondents Nos. 6 and 8 to 12 from the register of members of the company in relation to the impugned shares; (c) to supersede the board of directors of the company and appoint an administrator to regulate the affairs of the company; (d) to appoint a statutory auditor for preparation of the accounts for the year ending March 31, 1993; (e) to convene an annual general meeting of the company; (f) to surcharge the third respondent for misappropriation of the company's assets, and funds; and (g) to declare that the sixth....

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....ed financial irregularities relate to the following: (i) Diversion of funds of the company to the tune of about Rs. 23 lakhs in the course of enjoying the credit facilities from TIIC. (ii) Diversion of Rs. 15,23,109.62 and misappropriation of Rs. 1,84,025 on account of Canara Bank account. (iii) Diversion of Rs. 1,00,100 in purchase of land for the company's factory use and misappropriated funds by inflating the construction cost of the factory building. (iv) Diversion of Rs. 83,000 on account of jeep account. (v) Misappropriation of funds of the company by showing payment of interest of Rs. 9.42 lakhs without being supported by any voucher. (vi) Inflation of day-to-day expenses of t....

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.... transactions that these institutions had with the company. Arguments were advanced on the above allegations and the parties also submitted their written arguments. During the hearing, it transpired that the petitioners had already filed a criminal complaint on the alleged financial irregularities and the police had seized practically all the documents and records of the company for the purpose of conducting an enquiry on the criminal complaint. The material before us without the original documents are not adequate even to form a prima facie opinion on the various allegations, in a proceeding under Section 397/398. By virtue of Section 406, the Company Law Board is empowered to invoke the provisions of Schedule XI by which it can impose pen....