ORDER
1. This is a petition filed under Section 397/398 of the Companies Act, 1956, by Shri K. Naraindas, a shareholder holding 25 per cent. of the paid up capital in Bristol Grill Private Ltd. (company), alleging acts of oppression and mismanagement in the affairs of the company.
2. A summary of the petition is as follows :
The company was incorporated in 1947. The company opened a restaurant known as Bristol Grill, and even though this restaurant was initially functioning well, it incurred losses later. The shareholding of the company changed from time to time and finally all the shares in the company were acquired by the Dasaprakash family of which the petitioner is a member. On the basis of a family settlement entered into in 1988, the shares in the company were distributed to four brothers including the petitioner at 25 per cent. each. The company has taken a building known as Laxmi Insurance Building (premises) on a long lease from the LIC, wherein the restaurant was being run. Shri K. Balram, respondent No. 2, the eldest of the four brothers was designated as managing director of the company. Since the family had private liabilities, it was decided, through three board resolutions dated April 9, 1989, June 1, 1989, and April 25, 1990, to borrow, from Indian Bank, Rs. 32 lakhs, 18 lakhs and 10 lakhs, respectively to meet the liabilities. Finding that this amount was not sufficient to meet the private liabilities, other measures were explored and finally an agreement was entered into with the Indian Bank to give the premises on a long lease on a monthly rental of Rs. 6 lakhs. The bank also agreed to advance a sum of Rs. 36 lakhs being six months’ rent and also a loan of Rs. 3.6 crores. This was approved at the board meeting held on October 25, 1990. The allegation of the petitioner is that, after this agreement to borrow money, there had been a visible change in the attitude of respondent No. 2 resulting in the petitioner being completely excluded from the management of the company and respondent No. 3 also colluded with respondent No. 2 by not answering any of the letters written by the petitioner to the bank on the utilisation of the loans and advances granted by the bank. The petitioner also wrote to the bank vide his letter dated December 30, 1990, that no money should be permitted to be withdrawn from the bank without the approval of the directors. A communication from the petitioner for copies of the balance-sheet and profit and loss account of the company for various years also went unanswered. His efforts to convene an extraordinary general meeting, through a letter on April 19, 1991, also, in spite of his being present at the meeting on September 4, 1991, did not take place. The information sought for from the company for discussion in the meeting specially relating to the bank account, was also not provided. So, the petitioner has been placed in such a situation that he was not provided with any information on the subject by the bank, respondent No. 2 or the auditors of the company. Such an indifferent attitude on the part of the company and respondent No. 2 is oppressive and prejudicial to the interest of the company. Further, according to the petitioner, respondent No. 2 had not taken any action to finalise the accounts for the years 1989-90, 1990-91 and 1991-92 nor any shareholders’ meeting during these years. According to him, no board meeting was held nor the income-tax returns of the company filed. Further, the MD failed to account for the various drawals made amounting to Rs. 60 lakhs during the period April, 1989 to October, 1990. In spite of the funds being available, respondent No. 2 had not been discharging the liabilities of the company but had been diverting the same to a partnership in which he is interested. While the company had to pay interest to the bank, yet, the money diverted to his own firms and companies do not bear any interest, thus jeopardising the interest of the company. This has been made possible only because respondent No. 2, against the decision of the board that all the bank accounts of the company should be operated jointly by all directors, operated the funds by himself by forging resolutions as if he had been authorised to do so. The petitioner has also cited the observation of the State Consumer Disputes Redressal Commission wherein it has passed adverse remarks against respondent No, 2 and respondent No. 3 relating to diversion of funds. He has also complained of non-filing of the annual report, non-keeping of records at the registered office of the company, etc. Finally, he has prayed that all the transfers of funds of the company maintained by respondent No. 3 should be declared null and void, directing respondents Nos. 2 and 3 to restore all the funds transferred without proper authority, removal of the second respondent from the post of MD, direction for convening the general body meeting of the company and auditing the annual accounts of the company.
3. Respondents Nos. 1 and 2 have filed a common reply. They have raised a preliminary objection that the petitioner has already taken other proceedings-one in the State Consumer Redressal Forum–and one in the Madras High Court. The Consumer Forum has already dismissed the petition and in the suit, the cause of action and relief sought are similar to the one in the instant petition before us and as such the Company Law Board should not proceed with the petition. They have also pointed out that the petitioner has suppressed the material fact regarding the dismissal of the petition before the Consumer Forum but has clandestinely quoted the observation of the dissenting member of that Forum. Thus, according to them, the petitioner has not come before the Company Law Board with clean hands and, therefore, is not entitled for the equitable remedies provided under Section 397/398. Since the petitioner is already pursuing a parallel remedy in the suit filed prior to the instant petition, the matter should not be heard by the Company Law Board to avoid multiplicity of the proceedings and conflict of decisions. It is further submitted that the transactions which the petitioner seeks to set aside are past transactions with third parties and no relief can be given against such parties. Further, when the petitioner is alleging collusion between respondents Nos. 2 and 3, no particulars have been given of such alleged collusion. It is also wrong, as alleged, that there was any agreement between the shareholder brothers that they will be in joint management at all times. No such provision has been incorporated in the articles of association. Even though one of the shareholders, namely, Shri K. Ramdas, was a joint plaintiff before the High Court, he has not been joined as a petitioner nor has he been impleaded as a party as Shri Ramdas has disassociated himself from the petitioner after realising that the petitioner is unnecessarily dragging the other brothers to litigation. The respondents have not received any letter purported to have been written by the petitioner seeking details of the bank operations. The audit of the company could not be proceeded with only because of the intervention of the petitioner and consequent resignation of the auditor as is evident from annexure R-9 to the reply. At no time the petitioner sought for inspection of books of account under Section 209 of the Companies Act even though he was allegedly writing various letters to the chartered accountant/lawyers, etc. As far as requisitioning of the board meeting on May 7, 1991 (annexure-XV of the petition), the board of directors could not agree to the presence of outsiders in a board meeting as was sought in the notice. The company did not organise any board meeting on that date but had agreed to hold a meeting on September 4, 1991. The meeting on September 4, 1991, could not take place because of the petitioner’s insisting on the presence of outsiders who are not legally entitled to be present in a board meeting. While the petitioner has chosen to implead the MD as respondent No. 2, he has not done so in respect of the other two shareholder directors nor has he produced any affidavits from those directors to substantiate the allegations made by the petitioner. As far as the holding of the annual general meeting is concerned, the meeting for 1988-89 was held on September 30, 1990, and for 1990-91 on September 30, 1991. All business except relating to adoption of accounts was transacted in these meetings. Further meetings on September 30, 1991, September 30, 1992 and September 29, 1993, could not be held due to the restraint order passed by the Company Law Board. It is not correct to say that the minutes of the meetings have been fabricated as if the meetings were held on account of the fact that there was delay in filing of the returns with the ROC.
4. As far as utilisation of Rs. 32 lakhs, Rs. 18 lakhs and Rs. 10 lakhs is concerned, it is averred that the entire amount was spent to meet the liability of the company and that too on the basis of resolutions passed by the Board at which the petitioner was present and he has also signed the minutes. Therefore, it is wrong to allege that there was siphoning off of funds.
5. As far as leasing out of the building to the Indian Bank is concerned, it was done with the knowledge and consent of the petitioner and as a matter of fact, the company has greatly benefited by the arrangement. In addition to Rs. 3.6 crores granted as loan and Rs. 36 lakhs as rental advance, the company is receiving Rs. 6 lakhs per month by way of rent from the Indian Bank and the loan of Rs. 3.6 crores granted by the bank could be adjusted against the rental payment and the loan could be brought to nil in 10 years time. The entire effort in this direction was undertaken by respondent No. 2. Even these amounts of Rs. 3.6 crores and the advance of Rs. 36 lakhs were utilised to clear off all the amounts owed by the various firms and trusts in which the petitioner and respondents have substantial interest. This has been specifically provided in the loan agreement itself to which the petitioner was also a party. Accordingly, whatever has been done by the company, particularly the MD, was in the interest of the company and the petitioner can have no grievance in this regard. The petition has been filed with a collateral purpose as the petitioner has been in the habit of dragging all his family members to various courts and, therefore, even the grounds adduced by the petitioner do not call for grant of any relief under Section 397/398 of the Act.
6. The third respondent, namely, Indian Bank has, in its reply stated, that, as far as the allegations against the company are concerned, the Indian Bank has nothing to say. They are concerned only with the transfer of funds made out of the rental advance as well as the loan given to the company. In the loan agreement entered into with the company, the bank had been authorised to appropriate this amount towards outstanding loans against Sitaram Trust as well as the respondent company, at Indian Bank branches at Nariman Point, Bombay and Purasawakkam, Madras. On the basis of the authorisation dated December 21, 1990, given by the company as well as further authorisation received from the company, the transfers were effected. What the bank had done was only on the basis of authorisation by the company. It is also stated that the petitioner has already filed a suit in the High Court of Madras against the bank levelling the same allegations and as such the Company Law Board should not deal with these allegations against the bank. It is also stated that the Consumer Redressal Forum has already decided against the petitioner stating that the bank was justified in acting in accordance with authorisation by the company.
7. When the matter was taken up for hearing, Shri T. K. Seshadri, advocate for the respondents, raised a preliminary objection, that, in view
of a suit having been filed by the petitioner in the Madras High Court containing similar allegations, this matter should not be proceeded with. He cited a number of cases to reinforce his arguments that since there is a pending suit filed prior in time, this matter should not be proceeded with. His arguments were supported by Shri Shekhar Shetye, counsel for Indian Bank. Counsel for the petitioner, Shri Dushyant Dave, argued to state that the suit was essentially against the bank and not against the company or other respondents and that the relief sought in that suit was a limited one and as such the suit and the petition before the Company Law Board cannot be construed as parallel proceedings. We are not elaborating the arguments advanced by counsel from both sides on this issue as during the course of hearing, the petitioners have withdrawn the suit. Another objection raised by Shri Seshadri was that the scope of enquiry should be confined only to the pleadings in the petition and no supplementary information or allegation made in the rejoinder should be considered by the Company Law Board. According to him, the only allegation regarding the usage of funds in the petition relates to a sum of Rs. 60 lakhs. However, in the rejoinder, the entire scope has been changed and now the petitioner seeks to enlarge the scope of enquiry against utilisation of the entire loan and rental advance given by the bank. According to him, this enlargement of scope of the enquiry on the basis of a rejoinder should not be permitted.
8. Counsel for the petitioner, Shri Dushyant Dave, contended that the entire petition is on the utilisation of funds provided by the bank and the allegation is that the bank and the respondent had colluded with each other to syphon off or misutilise the funds so provided without the knowledge of the petitioner who is one of the directors and joint signatories of cheques. He also drew our attention to the prayer XXIX(J) at page 22 of the petition to state that the prayer is to declare null and void the transfer of funds from the accounts of the first respondent maintained with the third respondent to any other account other than in discharge of the liability of the first respondent. In other words, according to him, what has been alleged in the petition not only covers Rs. 60 lakhs but also the entire funds made available by the bank account of respondent No. 1.
9. We have considered the pleadings and arguments of counsel. The allegations of the petitioner could be divided into two major categories. One relating to non-compliance with the various provisions of the Act particularly in relation to maintenance of the accounts, finalisation of accounts, auditing of the accounts, holding of annual general meetings and board meetings, etc. The second category relates to allegations of financial mismanagement and misappropriation of funds of the company by respondent No. 2. It is pertinent to note that even though the Indian Bank has been impleaded as respondent No. 3, no relief has been sought against the same. We shall first consider the allegation relating to financial mismanagement.
10. The allegation regarding financial mismanagement/misappropriation of funds could further be divided into three groups : one relating to drawal of Rs. 60 lakhs comprising (a) Rs. 32 lakhs drawn on April 11, 1989 ; (b) Rs. 18 lakhs drawn on April 27, 1989 ; and (c) Rs. 10 lakhs drawn on October 16, 1990. All these drawals had been made before the agreement was entered into with respondent No. 3 for leasing out the premises. This agreement was signed on December 21, 1990. In other words, whatever was the outstanding liability of the company on this date in the bank account frdm which Rs. 60 lakhs was drawn, the same was known to the petitioner and he had given his consent to such outstanding. In view of this, without going into the contentions of the petitioner and respondent No. 2 in regard to the correctness of the proper utilisation of these amounts, we do not propose to deal with the same on the ground that the petitioner has concurred to the outstanding liability to the bank which included these drawals also.
11. The second group of allegations relates to the utilisation of the loan and rental advance given by respondent No. 3 to the company. This also comprises two segments : one relating to transfer of funds from respondent No. 3 to various other entities within the family group and another segment is the drawal of the amounts from the bank account for meeting various liabilities/expenses of the company.
12. It is an admitted position, as could be seen from the various records produced before us, that the petitioner holds 25 per cent. shares in the company with three other shareholders each holding the same percentage of shares and that all of them were directors of the company and were joint signatories, The shareholding arrangement arose out of a family settlement. The company, through the directors, had entered into an agreement with the Indian Bank for leasing out the premises on a consideration of Rs. 6 lakhs per month as rent and the agreement also provided grant of Rs. 360 lakhs as loan and Rs. 36 lakhs as rental advance. By an agreement dated December 21, 1990, signed by all the four shareholders including the petitioner, as directors of the company, they authorised the bank to adjust the outstanding liability of respondent No. 1-company and Sitaram Trust group under the accounts maintained at the Nariman Point branch, Bombay, and the Purasawakkam branch, Madras of Rs. 2,04,72,128.66 and Rs. 1,08,98,523.48, respectively as on September 30, 1990, and any interest payable thereon. On the same date, they had also given a letter of authorisation signed by all the four directors confirming the liability of the company and Sitaram Trust group as indicated in the agreement and authorising the bank to pay directly to the respective branches of the bank the respective aforesaid outstanding amount and debit the same to the account of the company. They had also indicated in that authorisation letter that the outstanding liabilities as mentioned were subject to the bank’s decision on waiver of excess and penal interest said to be charged under the said accounts, and the signatories would not raise any objection to the bank’s appropriating the funds towards such excess and penal interest. In addition, the letter also authorised the bank to appropriate a sum of Rs. 25 lakhs paid by the bank to LIC. Further, this letter also authorised the bank to appropriate the monthly compensation payable by the bank to the company towards the loan.
13. The allegation of the petitioner is that the respondents, without the knowledge of the petitioner and in collusion with the bank had appropriated, out of the loan and rental advance, more than what had been authorised in the letter of authorisation and agreement and the excess appropriation was either diverted to discharge the liabilities of respondent No. 2 or firms in which he was a partner or misappropriated by respondent No. 2.
14. The contention of counsel for the company as well as the bank is that the authorisation to adjust was not only with reference to the amount outstanding as on September 30, 1990, but to adjust even the subsequent additions to the liabilities till the exhaustion of the funds provided under loans and rental advance and as such there was no infringement of the provisions of the agreement.
15. A close reading of the agreement as well as the letter of authorisation signed by all the four directors would clearly indicate that the bank was authorised to adjust only the outstanding amount as on September 30, 1990, with further interest thereon. Not only have the words “outstanding liability” been used more than once, even the amount outstanding has been specifically provided in the agreement and the letter of authorisation. The only exception made apart from further interest thereon, is that the amount indicated therein would be subject to the bank decision for waiver of excess and penal interest. The letter of authorisation further provided that, if there was any balance left out of the premises loan and rental deposit, after adjusting the outstanding liability as on September 30, 1990, the bank was authorised to appropriate the sum of Rs. 25 lakhs paid by the bank to the LIC of India. In other words, it appears that the signatories were not sure whether or not there would be a surplus. Even though the agreement does not give the details of the outstandings in various accounts of the Sitaram Das group, the details have been given by the respondent company in its reply to Suit No. 1451 of 1991 in the High Court of Madras filed by the petitioner. In other words, the amounts of outstanding which the bank was authorised to adjust was the sum outstanding on September 30, 1990. Therefore, we have no hesitation to come to the conclusion that the agreement does not cover any liability that arose in the accounts of Sitaram Trust group after the date of September 30, 1990. Thus any adjustment of the liability accrued in these accounts after September 30, 1990, is not authorised by the agreement. As far as the accounts of the company are concerned, since it is a running current account maintained in the name of the company itself, we would not be in a position to restrict the adjustment to the liability as on September 30, 1990. Alternatively, any liability of the company even after September 30, 1990, is not barred for adjustment by the agreement.
16. We had called for the details of the various transfers made by the bank in settlement of the account of Sitaram Trust group entities. The adjustment towards liability made in these accounts were found to be a bit complicated in the sense all the adjustments had taken place only in the month of March, 1991, or later and whatever amount was shown as outstanding on the date of adjustment, the entire amount had been adjusted as against the stipulation in the agreement that the outstanding as of September 30, 1990, were to be adjusted. Credits to excess and penal interest had been given only on July 1, 1991. As such, we were not in a position to find out what was the exact amount due in respect of these accounts as on September 30, 1990, after adjustment of interest waiver to find out the exact excess adjustment, if any, in these accounts. In other words, it is obvious that the accounts of various Sitaram Rao group entities had been adjusted with more money than what was due as on September 30, 1990.
17. Now the question that arises is whether the company/bank was right in adjusting more than what was in the agreement. This poses a very important question as to whether the company and its directors were at all entitled to take over the liability of entities with which the company did not have any business dealings.
18. As per the agreement with the bank, the bank was authorised to adjust the outstanding liability of not only the respondent company but also a sum of about Rs. 1.08 crores as on September 30, 1990, shown as outstanding in respect of 11 other accounts standing in the name of other entities maintained in the Nariman Point branch, Bombay, as well as the Purasawakkam branch at Madras.
19. The outstandings in respect of these accounts as on September 30, 1990 was as follows :
(Rs.)
1.
K. Seetharama Rao’s
Trust
22,62,979.50
2.
Hotel Dasaprakash
17,42,612.77
3.
Hotel Dasaprakash
33,07,377.71
4.
Ooty Dasaprakash A/c I
3,62,536.27
5.
Ooty Dasaprakash A/c II
7,29,083.54
6.
Ooty Dasaprakash term
loan
15,18,051.95
7.
K. Balarama Das
3,21,040.84
8.
K. Bhagwan Das
1,94,464.48
9.
K. Rama Das
1,32,797.81
10.
K. Narayana Das
1,81,663.26
11.
K. Vishnumohan Das
1,45,915.35
1,08,98,523.48
20. It may be seen that out of the 11 accounts, which were adjusted, one is a trust account and five of business entities and five of personal accounts including all the shareholders/directors of the company. It was reported during the hearing that in the case of the trust and other business entities, the shareholders of the company are partners and as a sort of family settlement among the brothers it was agreed that all the outstandings of these entities could be taken over by the company and as such the bank was authorised to adjust these liabilities. The directors of the company should be more concerned about the interest of the company as an entity. It is an admitted position that the company will have to pay interest on the premises loan granted by the bank. But at the same time, a substantial portion of the money has been used to clear the liabilities of other entities. Even though in the books of account, the amount so adjusted has been shown as loan advances given to these entities, there does not seem to be any agreement with these entities regarding the terms of repayment of these loans nor is there any indication that any interest is going to be charged on these amounts. Therefore, the entire agreement to wipe out the liability of these parties out of the loan proceeds should be held to be against the interest of the company. However, one may take a view that since there are only four shareholders in the company and that they had all agreed to clear the liabilities of other entities in which all of them are in one way or other interested, the agreement, though apparently against the interest of the company, may not be held irregular. But at the same time, looking into the contents of the agreement, we are of the view that any amount that was adjusted over and above the amount that was due as on September 30, 1990, after interest remission should be held to be irregular and does not have the sanction of all the shareholders. From the statements, we find that the bank had committed an error and has thus exceeded the authority given by the company by adjusting more amount than what was due on these accounts as on September 30, 1990, and as such it is responsible for the error committed by it and, therefore, should rectify the same by correcting these accounts. As we have already pointed out, since there are no details as to what was the exact amount after remission of interest as on September 30, 1990, we hereby direct the bank to rework all these accounts and find out what was the exact amount due as on September 30, 1990, after interest remission in respect of all accounts and intimate the same to the company and to the holders of the 11 accounts. Simultaneously, the bank should also give credit for the excess amount earlier adjusted in the accounts of the company by correspondingly debiting the respective accounts. We have taken note that, even though some of the entities are not before us as entities, yet the directors of the company who hold controlling interest in these entities are before us. The adjustment as directed above should be completed within three months from the date of receipt of this order.
31. The next segment of the allegation relating to financial mismanagement is in respect of the drawal of amounts from the bank account of the company. According to respondent No. 3, after adjusting the various liabilities as per the agreement and also after paying a sum of Rs. 25 lakhs to the LIC, a sum of about Rs. 14,10,101 remained. This is in addition to the sum of Rs. 36 lakhs credited as rental deposit. The following had been the drawals from the bank :
(a)
Rs. 10 lakhs on December 19, 1991.
(b)
Rs. 4.42
lakhs on July 27, 1993.
(c)
Rs. 18,02,790 on July 31, 1993.
32. It is the contention of the petitioner, that, since he was not a signatory to the advice given to the bank for drawal of these amounts, the entire drawal is irregular. According to him, as per resolution dated March 27, 1989, all requisitions to the bank were to be signed by all the four directors. It is the contention of respondent No. 2 that the drawal had been made on the basis of the resolution passed by the remaining three directors on various dates and, therefore, the drawals are regular. The bank, respondent No. 3, has also taken a stand that the bank was bound by the resolutions passed by the board. As far as the responsibility of the bank is concerned, in the case relating to transfer of Rs. 10 lakhs to Dasaprakash Hotel, the State Consumer Forum has already held that the bank was not concerned with the internal management of the company and as long as it had before it, a valid resolution, the bank should not be held to have acted in an irregular manner. Respondent No. 2 further states that the resolution dated March 27, 1989, had been modified by a later resolution dated July 23, 1993, by which only three directors had been made joint signatories and all these three directors had participated in the board meetings held on those dates when authorisation for drawals were given. According to the petitioner, since the resolution dated March 27, 1989, was modified only on July 23, 1993, any authorisation to draw money from the bank by three directors during the intervening period is irregular. As far as this allegation is concerned, the company was not right in transferring Rs. 10 lakhs to Hotel Dasaprakash since the petitioner was not a party to the decision and since this amount is beyond the scope of the agreement between the four directors to set off the liability of this hotel as on September 30, 1990, the board will take action to recover the amount from Hotel Dasaprakash.
33. As far as the other drawals are concerned, it is seen from the pleadings and supporting documents that they were all made after a fresh resolution of the board of directors on July 23, 1993. As such, prima facie, these are authorised and cannot be set aside. The auditors of the company shall examine these payments and in case any payment is found to be not for the purpose of the business of the company, the three directors shall be personally held responsible for making good the amount.
34. As already stated by us, from a copy of the balance-sheet of the company for the year 1990-91 (which, however, does not appear to have been audited), it is evident that the liabilities of the Sitaram Trust group settled out of the loan of Rs. 3.6 crores has been shown as outstanding from the various parties including from the directors. As such the payments appear to have been duly accounted in the books of the company. As regards the payments made out of the advance rental of Rs. 36 lakhs made during the year 1993-94, the auditor of the company shall, after examining the payments in the manner as referred to above, ensure that those are duly reflected in the accounts for year 1993-94. With the above directions the alleged financial irregularities are taken care of and appropriate redressal provided. However, the board of directors of the company should ensure that the outstandings are recovered from these persons/entities within a set time frame with applicable interest.
35. As regards the directorship of the petitioner, there have been rival contentions whether the petitioner is continuing to be a director or has vacated his office. The petitioner has also relied on a document filed in reply by respondent No. 1 (at page 147) signed by respondent No. 2 as managing director that as per their own admission, the petitioner continued to be a director of the company. In our view since the entire shareholding is equally held by the four brothers who are all shareholders of the company and since the respondents have not seriously challenged the continuity of the directorship of the petitioner, we are inclined to order that the petitioner should continue to be a director of the company. We are not at this point of time looking into the allegation that the petitioner had vacated the office of director by operation of law in view of our observation and directions as above. We further direct that the petitioner shall be given a registered notice for all board meetings at least three days in advance and he shall be entitled to be present in person.
36. As regards the validity of the subsequent board meetings after 1990, we have not gone into this question mainly because there had been no business activity in the company and no decision of any serious consequence was taken in these meetings stated to have been held by the respondents excepting authorisation for transfer of funds and changing the signatories for the purpose of bank operations in July 1993. As regards the other allegations with regard to violation of various provisions of the Companies Act, they mainly relate to accounts and holding of the annual general meetings. Since the details of the bank operations are already before us and since we have given necessary directions with regard to the withdrawals from the bank there is nothing further for us to intervene on this issue. By our interim order dated September 26, 1994, we restrained the company from holding any board meetings till the final disposal of the petition since the company was not carrying on any business. By another order we had also restrained the company from holding annual general meetings in respect of the accounts for the years 1989-90 and 1990-91. In view of our restraint order in respect of board meetings obviously subsequent annual general meetings also could not have been held. With our directions as regards the payments from the funds of the company to be accounted for properly including recovery from directors in case they are not for the purpose of the company and the direction to the auditors to ensure compliance with the directions, it is necessary that board meetings and general meetings are allowed to be held so that the company is put on the rails once again. Hence, we not only vacate our interim orders but also direct the board of directors including the petitioner to finalise the accounts and convene the annual general meeting in respect of all the years from 1989-90 to 1995-96 before July 30, 1997. We also grant liberty to apply in case of any difficulty in implementing this order.
37. With the above directions the allegations of the petitioner have been adequately taken care of. Since there are no other activities of the company, we consider that there is no need for any further investigation into the affairs of the company as prayed for by the petitioner. We dispose of the petition on the above terms with the fervent hope that the four brothers of the family will manage the affairs of their family company smoothly in future.