Company Law Board Sri Suresh Kumar Rungta vs Roadco (India) Pvt. Ltd. And Ors. on 10 August, 2007 Equivalent citations: (2008)215CTR269, [2008]84SCL407(CLB) ORDER Vimala Yadav, Member 1. In this order I am considering Company Petition No. 93 of 2005 filed by Sh. Suresh Kumar Rungta under Sections 397, 398, 402, 409 and 31 of the Companies Act, 1956(hereinafter referred to as 'the Act') alleging certain acts of oppression and mismanagement in the affairs of the R1 by the respondents. It has been alleged that the conversion of the respondent company from Public Ltd. into Private Ltd. was done by fraudulent means and falsification of records, without notice and consent of the shareholders as prescribed in the Act and false information was filed with the statutory authorities; allotment of 422000 shares on 25.11.2001 and 245000 shares on 14.2.2003 was manipulated by the respondents in order to alter the rights of the shareholders after amalgamation. Prayers include seeking a direction to the Respondent No. 1 to recognize the rights of the shareholders of the Transferee Companies according to the scheme of amalgamation subject to the outcome of the proceedings before the Calcutta High Court and High Court of Rajasthan (Jaipur Bench). 2. The undisputed facts of the case are: M/s Rungta Trojan Chemicals Ltd. was incorporated on 8.12.1994. The registered office of the company was situated at Rungta Hospital Campus, Malviya Nagar, Jaipur. The name of the company was changed to Roadco (India) Limited with effect from 12.7.2004 pursuant to a scheme of amalgamation approved by the Rajasthan High Court. The Registered Office of the company was also changed to T6, SS Tower, Dhamani Street, Chaura Rasta, Jaipur. The authorized capital of the company was Rs. 1,50,00,000/ comprising of 15,00,000 equity shares of Rs. 10/ each. The issued, subscribed and paid up share capital of the Respondent No. 1 company is Rs. 1,34,62,190/ divided into 13,46,219 fully paid up equity shares of Rs. 10/. The main objects of the Respondent No. 1 company is to carry on the business of manufacturers, buyers, sellers, exporters, importers of and dealers in all kind of heavy and light chemicals, whether organic, inorganic and organo metallic chemicals including rubber chemicals, leather chemicals, polymer chemicals, synthetic chemicals, water treatment chemicals, metal treatments, detergent and textile chemicals, industrial explosives, petrochemicals, chlorinated paraffin wax phenol and petroleum based products. They are also manufacturers and dealers in all kinds and classes of pigments, varnishes, paints, synthetic paints, and thinners, varnishes, synthetics, resins, enamels, lacquers, distemper, oil chemicals, tannins, tannin extracts, essences, turpentine, plasticizers, oils and lubricants, etc. The petitioner holds 178801 shares (13.28%) in the Respondent No. 1 company. 3. Shri U.K. Chaudhary, Counsel for the respondents raised preliminary objections and argued that the present petition is not maintainable as the present Company Petition is merely a counter blast to the disputes arising in CP No. 37 of 2004 titled as R.P. Rungta v. RMC Med. Ltd. and Ors. wherein the Respondent Nos. 1 and 2 had filed a CP under Sections 397, 398, 402 and 409 of the Companies Act, 1956 against the petitioner and his group Companies for oppression and mismanagement and which is pending adjudication before the Company Law Board. It was contended that the petitioner in this CP carried out various malpractices and fraudulent activities in the affairs of RMC Med. Ltd. It was further pointed out that the Respondent Nos. 1 and 2 also filed petition under Section 397 in various companies, namely, Raja Trade and Credit Pvt. Ltd. (C.P. No. 81/2005); Active Traders Pvt. Ltd. (CP No. 54/2004); Dharni Pharma Pvt. Ltd. (CP No. 84/2005); Amber Commercial Pvt. Ltd. (CP No. 82/2005); Camaro Marketing Pvt. Ltd. (CP No. 83/2005); Camaro Projects Pvt. Ltd. (CP No. 85/2005); Choon Moon Trading and Finance Pvt. Ltd. (CP No. 55/2004). It was contended that the conduct of the petitioner disentitles him from any relief from this Hon'ble Board. The intention of the petitioner is malafide and the petitioner has filed the present petition only with the intention to avenge himself by filing a frivolous petition in which no such single averment in relation to the oppression and mismanagement is made by the petitioner against the respondents. It was argued that a petition under Sections 397 and 398 of the Act cannot be made out a tool to extract money/harass the company and the respondents. The petition under Sections 397 and 398 of the Companies Act, 1956 in order to succeed has to be genuine, bonafide and the petitioner should actually be oppressed in the respondent company. Therefore, it was reiterated that the petitioner is not entitled to any relief from this Board. 4. Further, the counsel for the respondents pointed out that as per Company Law Boa