Present: 1. Shri S. Balasubramanian,
Vice-Chairman.
2. Shri
K.K.Balu,
Member.
IN THE MATTER OF COMPANIES ACT, 1956 (1 OF 1956)
AND
IN THE MATTER OF M/S
FOREWORD ADVERTISING AND MARKETING PRIVATE LIMITED
PETITIONER:
RESPONDENTS:
1. M/s Foreword
Advertising and Marketing Private Limited
2. Mr. M.S. Murali Mohan
3. Mr. R. Ramachandran
Nair
4. Mr. A.J. Lyrex
5. Mr. V.N. Sreekanth
PRESENT ON BEHALF OF
PARTIES:
1. Shri V.S. Subash, PCS … for Petitioner.
2. Shri Jameskutty Antony, PCA … for Respondents 1,
2 & 3.
O R D E R
(DATE OF FINAL HEARING: 08.11.2001)
S. BALASUBRAMANIAN:
1.
The petitioner
holding 1000 shares out of 4500 shares in M/s Foreword Advertising and
Marketing Private Limited (“the Company”) has filed this petition under Section
397/398 of the Companies Act, 1956 (“the Act”) alleging acts of oppression and
mismanagement in the affairs of the Company.
According to the petitioner, he was forced to resign from the post of
Managing Director due to pressure tactics used by other directors. When he was the Managing Director he issued
a cheque for Rs.3.3 lakhs which was dishonoured due to closure of bank account
due to which proceedings under Section 138 of the Negotiable Instruments Act
have been initiated against the petitioner.
Further, the Company has not held the AGM for 1997-98, nor accounts were
prepared, audited and adopted for the year 1997-98. Annual Return has also not been filed for the year 1997-98. Under these circumstances, directions should
be issued to regulate the management and affairs of the Company.
2.
In the reply, the
respondents have submitted that the petitioner voluntarily resigned as Managing
Director and the closure of the bank account was decided in a board meeting
attended by the petitioner and as a matter of fact it was the petitioner who
addressed the letter to the bank seeking closure of the bank account. As far as non-holding of AGM, finalisation
and auditing of accounts for the year 1997-98 are concerned, the respondents
submitted that it was due to the conduct of the petitioner himself. Being in-charge of Finance and Accounts, the
petitioner did not keep proper records and whatever records were available he
had taken all of them with himself and therefore the accounts could not be
finalised. In spite of repeated letters
to the petitioner he had failed to return the records including statutory
records available with him. In view of this, the Company could not finalise the
accounts for 97-98 and subsequent years.
Further, the Company had already filed a criminal case against the
petitioner and two others for misappropriation of funds of the Company. Further, even though he resigned from the Managing
Director’s post, still he continues to be a director of the Company and he has
been a party to all the decisions taken by the Board. Therefore, this petition is nothing but a motivated petition as
an off-shoot of the criminal case filed against the petitioner by the
Company. Accordingly, they have sought
for dismissal of the petition with further direction to the petitioner to hand
over all the books and records of the Company.
3.
We heard the
authorised representatives appearing for the parties. We do not find any substantive allegation to be considered to be
acts of mismanagement in the affairs of the Company. If the Company has not held the AGM, it is for the appropriate
authority to initiate action in terms of the provisions of the Act, especially
in view of the allegation of the respondent that the books of accounts and the
records of the Company are with the petitioner. As far as the closure of bank accounts is concerned, we find from
annexure R-5 that the letter to the Bank of India seeking for closure of the
account had been signed by the petitioner himself and as such the same cannot
be held against the respondents. We
find that the petitioner has not made out a case for grant of any relief in
terms of Section 402 of the Act and as such we dismiss this petition.
(K.K. BALU) (S.BALASUBRAMANIAN)
Dated this 10th day of December, 2001