TaxTMI 
TaxTMI 
2001 (4) TMI 942
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....ion under section 397/398 of the Companies Act, 1956 ('the Act') alleging oppression and mismanagement in the affairs of the company. 2. The main acts of oppression and mismanagement relate to enhancement of the shares capital and allotment of shares to the respondents in exclusion of the petitioners, suppression of the income from the business of the company and siphoning of funds by the respondents. 3. Shri Harikrishnan, senior advocate appearing for the petitioners, while initiating his arguments has submitted that the company was incorporated in the year 1939 by Shri A.RM.AN. Annamalai Chettiar and A.RM.S. Sockalingam Chettiar, both brothers to engage in the production of films. The petitioners and the second respondent ar....
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....in a fiduciary position towards the company and that the directors do not in the circumstances constitute an independent Board and every member of the company present and future is to be deemed to join the company on this basis." The said article shows the family nature of the company and the company is only for the family members. There is no scope for the outsiders to lake part in the company. The company having been run as a family company, the requirements of the provisions of the Act have not been strictly complied with. No notices were used to be sent for any of the meetings of the company. It transpired subsequently that the company increased its share capital on 25-6-1971 from Rs. 3.5 lakhs to Rs. 5.5 lakhs. When the petitioners ....
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....perties of the company and dubbing theatre at a lower rental. The company is adopting various unfair practices, thereby the actual income is being suppressed resulting in huge loss to the petitioners. The various acts of mismanagement can be unearthed only by conducting investigation of the affairs of the company. Shri Harikrishnan, therefore, sought for the reliefs made in the petition. 4. Shri A.K. Mylsamy, Advocate appearing for the respondents, while refuting the charges levelled by the petitioners has reiterated that the business of the company is not a family business. The company is not a joint family property and its governed by the provisions of the Act. When the company was incorporated in the year 1939, the paid-up capital of ....
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....count of the increase in value of the properties of the company. The petitioners cannot seek for partition of the properties in 397/398 proceedings and claim remedies before the CLB. He, therefore, prayed for dismissal of the petition. 5. We have considered the pleadings and arguments of the counsel. The only substantive relief sought for in the petition is for a declaration that the petitioners' families and the respondents' families have equal rights of management and share in the properties of the company. This prayer is based on the claim of the petitioners that the company is a joint family property and that by allotment of further shares periodically the second respondent has reduced the petitioners' group into a minori....