Judgment 1. THIS is an application under sections 397, 398 and 186 of the Companies Act, 1956 (hereinafter referred to as the Act. Both the petitioner and the Clive Mills Co. Ltd. (hereinafter referred to as the Company) are public Companies incorporated under the Indian Companies Act, 1913. The petitioner is a holding Company, its main object being to acquire and hold shares, stocks, debentures, bonds etc. in other Companies. The dispute, out of which this application has arisen, is a dispute between the step mother and the step sons. The petition is supported by Sm. Tribeni, Debi, the respondent No. 7. Sambhu prosad Bajoria, Dwarka Prosad Bajoria and Radhebehari Bajoria, the respondent Nos. 2, 3 and 6 are the step sons of Sm. Tribeni Debi. The application is opposed by the Company which is the respondent No. 1, though no affidavit has been filed on its behalf. Sourendra Mohon Basu, the respondent no. 5, is also opposing this application, though no affidavit in opposition has been filed by him. 2. THE petitioner was the Managing Agent of the company from 1949 up to October 19, 1959. It claims to be the holder of 1,63,9581/2 equity shares in the capital of the company which are registered in its name in the company's books. It is alleged, however, that actually the petitioner is the owner of l,38,5931/2 equity shares. The present Directors of the Company are the said Sambhu Prosad Bajoria, Dwarka Prosad Bajoria, Sourendra Mohan Basu and one Babulal Shroff, the respondent no. 4. It is alleged that each of the said respondents and Radhebehari, the respondent No. 6 hold only 100 shares of Rs. 10/-, each. It is further alleged that out of the said 1,63,9581/2 shares registered in the name of the petitioner, Sm. Tribeni Debi holds 71,721 shares with transfer deeds duly executed in her favour by the petitioner. Out of the shares which are registered in the petitioner's name, 73,225 shares were pledged with the Punjab National Bank Ltd. to secure the petitioner's overdraft account with that Bank. This block of pledged shares was taken away by Sambhu Prosad, after payment of the claims of the said Bank. Out of this lot, 64,525 shares were registered in the names of Radhebehari and Dwarka Prosad on August 22, 1963. This block of pledged shares was taken away by Sambhu Prosad, after payment of the claims of the said Bank. Out of this lot, 64,525 shares were registered in the names of Radhebehari and Dwarka Prosad on August 22, 1963. I shall refer to the matter of release of the shares by the said Bank later in this judgment. Sambhu Prosad's conduct in taking the pledged shares from the Bank and thereafter having a portion of them, registered in the names of Radhebehari and Dwarka Prosad, has been severely criticised by the petitioner in this application. These matters also constitute one of the major charges made by the petitioner in this application. In order to appreciate the merits of this application, it is necessary to examine the charges as laid in the petition. The principal charge is that the respondents other than Sm. Tribeni Debi and the company are controlling the affairs of the company as Directors, although they are holders of a negligible minority of shares. Radhebehari, though not a Director, purports to act as such, and takes part in the day to day management of the company's affairs. The petitioner and Sm. Tribeni Debi who control the overwhelming majority of equity shares, carrying voting rights, have been kept out of the management and control of the company's affairs, by various unlawful means. The petitioner and Sm. Tribeni Debi who have the right to elect the Directors and are in a position to do so, by reason of their voting strength, have been prevented from exercising their lawful rights. A negligible minority of share holders are in control of the Company's affairs, and being in such control they have committed various wrongful and unlawful acts including misappropriation of the company's assets. I set out below the other major charges, as framed in the petition:- (1) The respondents Nos. 2, 3, 4 and 6 are guilty of wrongful, fraudulent and illegal acts which are detrimental to the interest of the company. They are mismanaging the company's affairs and their conduct is oppressive to the shareholders. (2) The said respondents have by improper and fraudulent means misused and misapplied large sums of money belonging to the company and are guilty of contravention of the provisions of the Companies Act, 1956. The company has suffered huge loss since the petitioner ceased to be the managing agent. (2) The said respondents have by improper and fraudulent means misused and misapplied large sums of money belonging to the company and are guilty of contravention of the provisions of the Companies Act, 1956. The company has suffered huge loss since the petitioner ceased to be the managing agent. The chart which is Annexure A to the petition will show the loss suffered by the company. (3) The Company has not been utilising the loom hours allotted to it and has been selling the same surreptitiously. Secret profits have been made by such sale. Large sums obtained by selling the loom hours have not been credited in the company's account. (4) Honest and proper management would have resulted in huge profits. But the company is shown to be running at an enormous loss. (5) For the year ending with 31. 3. 61, trading loss has been shown at Rs. 8,75,000/- and for the year ending 31. 3. 62 rading loss has been shown at Rs. 16,80,000/ -. Other jute mills of similar nature had shown profits during the said years. (6) The loss and reduction in profit for the past few years has been due to the wrongful and illegal acts of the Directors. (7) The expenditure incurred is exorbitant and irregular and the Directors do not exercise any control over such exorbitant expenditure. (8) The said respondents have sold and are selling various machinery, waste products and other valuable articles belonging to the company without keeping any accounts and have misappropriated the sale proceeds. (9) Two working softeners have been sold and have been replaced with two discarded softners. The said sale fetched a very high price and the sale proceeds have been misappropriated. (10) Jute procured is of inferior quality, the middle quality used is nothing but the bottom quality and the bottom quality is no better than cross bottom. (11) There has been abnormal rise in stores consumption and also in salary and wages, though production has been going down in the past few years. (12) By the aforesaid wrongful acts the respondents have made wrongful gains for themselves and the amount of such gain is Rs. 40,00,000/-. (13) The illegal activities of this said respondents have become notorious in the business community and in consequence thereof the value of the shares of the Company has come down from Rs. (12) By the aforesaid wrongful acts the respondents have made wrongful gains for themselves and the amount of such gain is Rs. 40,00,000/-. (13) The illegal activities of this said respondents have become notorious in the business community and in consequence thereof the value of the shares of the Company has come down from Rs. 15/- at the time of the death of the petitioner's Managing Director Ramnath Bajoria in 1959 to Rs. 9,75 np. per share. (14) In September 1959 Sambhu Prosad withdraw from the Company's accounts with Allahabad Bank Ltd. a sum of Rs. 8,10,000/ -. On September 3o, 1959 he paid Rs. 5,00,000/- to Punjab National Bank Ltd. and wrongfully obtained 73,225 equity shares belonging to the company. Out of this lot 8700 shares were deposited by Sambhu Prosad in the petitioner's account with the Central Bank of India Ltd. and the balance of the shares is still wrongfully withheld by him. Being threatened with legal action Sambhu Prosad paid Rs. 3,05,000/- to the company in part payment of the said sum of Rs. 8,10,000/ -. The balance has not yet been paid by him. (15) Large number of equity and preference shares of the company have been lodged for registration, but such registration has not been done. (16) By letter dated April 1, 1963 Tribeni Debi requested the Directors of the petitioner to co-opt three of her nominees in the Board of the petitioner. An extraordinary general meeting of the petitioner was called for that purpose. On May 7, 1963, one Biswanath Dalmia instituted a suit in this Court being suit no. 827 of 1963 and in that suit he applied for and obtained an injunction restraining the petitioner, its Directors and Tribeni Debi from holding the said extraordinary general meeting or from passing any resolution for appointment of the nominees of Tribeni Debi as Directors. At the final hearing of the application for injunction no order was made. The suit itself was withdrawn on June 20, 1963. (17) Sambhu Prosad filed a suit for partition in this Court in April 1963, being suit no. 783 of 1963. In that suit a claim has been made for declaration of the title to the shares of the company, partition of the joint properties and other reliefs. (18) The affairs of the company are being badly mismanaged. (17) Sambhu Prosad filed a suit for partition in this Court in April 1963, being suit no. 783 of 1963. In that suit a claim has been made for declaration of the title to the shares of the company, partition of the joint properties and other reliefs. (18) The affairs of the company are being badly mismanaged. Particulars of such mismanagement will appear from the chart which is Annexure 'a' to the petition. This chart will show the result of mismanagement and the state of affairs of other companies. (19) The company and its Directors are not maintaining proper contract register in violation of sections 260, 356, 358 and 369 of the Companies Act, 1956. It is alleged that the particulars mentioned in the contract register are inadequate and not in compliance with the provisions of the Act. (20) The respondents Sambhu Pro-sad, Dwarka Prosad, Babulal Shroff and Radhebehari are charged with misappropriation and misapplication of the funds of the company by fraudulent and illegal means. These respondents are making personal gains at the expense of the company. For this reason the company is suffering loss running into lakhs of rupes. The alleged method of misappropriation and misapplication have been set out under paragraph 40 of the petition. (21) The Directors have suppressed material information about the affairs of the company from the shareholders. The respondent nos. 2, 3, 4 and 6 have failed to supply information asked for on frivolous pretexts. (22) A material change has taken place in the management of the company consequent upon the relinquishment of the office of managing agent by the petitioner in 1959. (23) The respondents Nos. 2, 3, 4 and 6 have been intimidating the employees of the company to suppress evidence against the said respondents. The said respondents are also wrongfully dismissing old and efficient employees of the company. R. S. Sharma was summarily dismissed on June 24, 1963. (24) The company is maintaining a huge cash credit account up to a limit of Rs. 40,00,000/- with Allahabad Bank Ltd. It is not necessary to maintain such an overdraft account and this account is maintained for the benefit of respondent nos. 2, 3, 4 and 6. (25) The shareholding of the company is in the most unsatisfactory state for general meeting. Large blocks of shares have been immobilised. 40,00,000/- with Allahabad Bank Ltd. It is not necessary to maintain such an overdraft account and this account is maintained for the benefit of respondent nos. 2, 3, 4 and 6. (25) The shareholding of the company is in the most unsatisfactory state for general meeting. Large blocks of shares have been immobilised. Tribeni Debi and her children have been restrained by an injunction from exercising voting rights. 46,356 shares belonging to the petitioner stand registered in the name of the Central Bank of India Ltd. The company's share register does not correctly represent the share position as many applications for transfer remain undisposed of. The petitioner and other shareholders have called upon the company not to hold the general meeting on July 29, 1963 for which a notice had been issued. But the respondents threatened to hold the meeting and obtain a snap vote to enable them to act in furtherance of their wrongful schemes. (26) The views of the shareholders about the proposed general meeting are important and to ascertain such views an investigation should be made into the affairs of the company. The company and the respondents nos. 1 to 6 should be restrained by an injunction from holding the general meeting. (27) Relationship between the Bajorias and Tribeni has become bitter by reason of their disputes and differences. The respondents have been interfering with the affairs of the petitioner so that no. steps may be taken by the petitioner against the company. (28) The petitioner wanted to requisition for a meeting of the company far appointment of more Directors. But by reason of the existing feeling between the parties it has become impracticable to call or to hold or conduct such a general meeting. Any attempt to call or hold such a meeting would result in a crop of litigations and will jeopardise the position of the petitioner company. (29) It is claimed that the respondents nos. 2, 3, 4 and 6 should be directed to refund to the company the sum of Rs. 40,00,000/ -. 3. THE charges mentioned above are the principal charges alleged in the petition. Certain other matters have been sought to be introduced in the affidavit-in-reply, being the affidavit affirmed by Murlidhar Jhunjhunwalla on September 16, 1963. 2, 3, 4 and 6 should be directed to refund to the company the sum of Rs. 40,00,000/ -. 3. THE charges mentioned above are the principal charges alleged in the petition. Certain other matters have been sought to be introduced in the affidavit-in-reply, being the affidavit affirmed by Murlidhar Jhunjhunwalla on September 16, 1963. These charges which have been introduced for the first time in the affidavit-in-reply, which the petitioner had no opportunity of dealing with, cannot be relied upon for the purpose of this application. There appears to be no reason why they should not have been included in the petition so that the respondents other than Tribeni Debi and the company got an opportunity of dealing with the same in their affidavit-in-opposition. 4. ONE other matter that is to be noted at this stage is that no charges have been made in the petition against respondent no. 5. Mr. Sen in his opening of the case on behalf of the petitioner made it clear that he did not wish to make any charges against the respondent no. 5. It is on the charges mentioned above that the petitioner seeks various reliefs in this application. Various prayers have been made in the petition, but the principal prayers which have been pressed in course of the arguments are the appointment of an Administrator, supersession of the Board of Directors, investigation into the affairs of the company and the calling of a general meeting of the company, to enable the shareholders to appoint new Directors. 5. THE main affidavit-in-opposition in this application has been affirmed by Sambhu Prosad Bajoria, the respondent no. 2, on August 30, 1963. It is alleged that the petitioner is a domestic concern ; it is a business of the joint family of which Ramnath Bajoria, since deceased Was the head. He was the father of the Bajoria respondents and the husband of Sm. Tribeni Debi. After the death of Ramnath Bajoria on October 17, 1959, disputes and differences arose among the members of the joint family, who could not agree as to the persons who were to be appointed Directors of the petitioner. 6. ON or about March 7, 1960 Dwarka Prosad and Radhebehari, the respondent nos. 3 and 6 instituted a partition suit in this court being suit no. 326 of 1960. 6. ON or about March 7, 1960 Dwarka Prosad and Radhebehari, the respondent nos. 3 and 6 instituted a partition suit in this court being suit no. 326 of 1960. On March 9, 1960, the disputes among the members of the joint family were referred to the arbitration of one Nanda Kishore Bajoria. The arbitrator gave directions regarding the affairs of the various business claimed by the joint family. Pursuant to such directions, the Board of Directors of the petitioner and also that of the company, were reconstituted. Chinmoy Mullick, a solicitor of this Court, became a Director of the petitioner as he was a well wisher of the family and the parties had confidence in him. The arbitrator himself became a Director of the petitioner and also of the company. No award, however, was made by the arbitrator and the arbitration, therefore, came to an end in March 1961. The arbitrator resigned from the directorship of the petitioner and thereafter there was a deadlock in the petitioner company, whose affairs were conducted by two Directors until February 17, 1962, when Murlidhar Jhunjhunwalla, a nominee of Tribeni Debi was appointed a Director of the petitioner. 7. THERE are allegations in the said affidavit of an extra-ordinary general meeting of the petitioner having been called to be held on May 10, 1963. It is alleged that this meeting was caused to be called by Tribeni Debi in collusion with Murlidhar, for electing three of her nominees as Directors of the petitioner. It is also alleged that a suit was filed in this Court being suit no. 827 of 1963, by one Biswanath Dalmia, and in this suit an interim order was made restraining the petitioner from holding the extraordinary general meeting for electing three nominees of Tribeni Debi as Directors. It is also alleged that further requisitions were caused to be given by Tribeni Debi for appointing the same three nomines as Directors of the petitioner. It is not necessary for the purpose of this application to deal with those charges in the affidavit. It is alleged that Murlidhar is a nominee of Tribeni Debi and has no independent voice, he acts according to the wishes of Tribeni Debi. Similar allegations have been made against Chinmoy Mullick. The charges of misappropriation of the company's funds have been denied. Similar charges relating to disposal of the company's assets have also been denied. It is alleged that Murlidhar is a nominee of Tribeni Debi and has no independent voice, he acts according to the wishes of Tribeni Debi. Similar allegations have been made against Chinmoy Mullick. The charges of misappropriation of the company's funds have been denied. Similar charges relating to disposal of the company's assets have also been denied. 8. THERE are allegations in the said affidavit that the joint family had the controlling interest in the Indian National steamship Company Ltd., Rose Mineral and Ice Co. Ltd., Manton Co. Ltd. It is further alleged that the affairs of these companies are in a moribund condition. It is claimed that 2,10,3141/2 shares in the company are owned by the joint family and chat this company was the only concern which had been running up till now in proper manner inspite of the attempts of Tribeni Debi and her advisors to paralyse the same and to acquire the control thereof. It is alleged that the petitioner leased to be the managing agent on May 24, 1956 long before the death of Ramnath Bajoria in October 1959. No dividend on equity shares of the company has been declared since 1956. The trading position of the company for the last few years according to the balance sheets is as follows: 31. 3. 57loss-Rs. 3,00,142-1-1 pie 31. 3. 58loss-Rs. 37,611. 25 np. 31. 3. 59profit-Rs. 1,92,434. 89 np. 31. 3. 60profit-Rs. 7,38,037. 16 np. 31. 3. 61loss-Rs. 4,56,441. 85 np. 31. 3. 62loss-Rs. 6,85,222. 06 np. The company, it is alleged, was established in 1896. The machineries are all old fashioned. The company had two mills and in 1957 Ramnath Bajoria scrapped the older mill. No improvement or modrenisation was made in the working mills, which has 969 looms of which 441 are workable. 9. IT is alleged that sale of loom hours is an established practice in the jute industry, and the company, during the life time of Ramnath Bajoria also followed this practice. It is claimed that there is no scope for making secret profit by sale of loom hours. It is further claimed that the years 1960, 1961 and 1962 saw an unprecedented slump in the Indian Jute Mills industry. There was a short crop in 1959-60 and this was followed by a poor crop in 1960-61. The supply of jute fibre for the mills was very inadequate. It is further claimed that the years 1960, 1961 and 1962 saw an unprecedented slump in the Indian Jute Mills industry. There was a short crop in 1959-60 and this was followed by a poor crop in 1960-61. The supply of jute fibre for the mills was very inadequate. It is claimed that it was due to the foresight and good management on the part of the Directors that the company went through the years 1961 and 1962 with no greater loss. It is claimed that the mill being old, its working expenses are higher than other modernised mills. 10. REGARDING the chart which is Annexure 'a' to the petition, it is alleged that it proves nothing and has been prepared only to confuse, this Court The particulars contained therein are denied. Regarding the dismissal of R. S. Sharma, it is alleged that he was guilty of insubordination and was dismissed for good reason. Regarding the sale of the softners, it is claimed that the mill had a number of softners in surplus, and the two softners were sold in the usual course, at the proper market price. Regarding the release of 73,225 equity shares of the company from the Punjab National Bank Ltd., it is admitted that the same were released on payment of Rs. 5,05. 000/ -. It is alleged that the shares belong to the said joint family. The deponent denies the withdrawal of Rs. 8,10,000/ - or any part thereof from the Allahabad Bank Ltd. from the Company's account with the said bank. The charges of misfeasance and breach of trust in regard to the release of the said shares and liability to account for the balance claimed to be due are denied. It is claimed that the release of the shares from the Punjab National Bank was obtained in the interest of the joint family, and to prevent possible change of hand of the mill. It is claimed that the entire block of 2,10,3141/2 equity shares in the company belong to and are owned by the joint family of Ramnath Bajoria. It is also claimed that apart from the said joint family, the petitioner company has no existence and it has no right to any of the said shares. The shares with the blank transfer deeds duly signed by the petitioner were and are held by the said joint family and its members. It is also claimed that apart from the said joint family, the petitioner company has no existence and it has no right to any of the said shares. The shares with the blank transfer deeds duly signed by the petitioner were and are held by the said joint family and its members. It is claimed that the application is malafide, that the petition discloses no ground for granting any of the reliefs claimed, that the application is a gross abuse of the process of the Court and that the petitioner company is guilty of suppression of the fact that a winding up application against it had been admitted, and the same was pending. An injunction had been issued by this Court restraining the petitioner from dealing with or disposing of the assets of the company. 11. BEFORE I proceed to deal with the arguments of the parties I should refer to the several suits that are pending in this Court relating to the shares of the company and also suits and proceedings which have been instituted regarding the company's affairs. 12. ON March 7, 1960 suit no. 326 of 1960 (Radhebehari Bajoria and another v. Sm. Tribeni Debi and Ors.) was instituted for partition of joint family properties. On March 7, 1960 an injunction was issued by this Court restraining Tribeni Debi from having 41,721 equity shares of the company registered in her name. This suit was dismissed for non-prosecution, on July 27, 1962. On May 1, 1963 suit no. 783 of 1963 (Sambhu Prosad Bajoria v. Sm. Tribeni Debi and Ors.) was instituted for partition of joint family properties, for receiver, injunction and other reliefs. In that suit an ad interim order was made by A. N. Ray, J. on May 1, 1963, restraning Sm. Tribeni Debi, her sons and daughters from dealing with the assets of the alleged joint family and from proceeding further with the application for registration of Tribeni Debi's name as holder of 71, 721 shares of the company and from exercising any voting rights in respect of various shares. On June 14, 1963 the interim order was vacated and the application was dismissed with costs. An appeal was preferred against the said order of dismissal. 13. ON August 14, 1963 the court of Appeal made an order restraining the parties from transferring the shares. On June 14, 1963 the interim order was vacated and the application was dismissed with costs. An appeal was preferred against the said order of dismissal. 13. ON August 14, 1963 the court of Appeal made an order restraining the parties from transferring the shares. Liberty was given to the parties in possession of the shares to have the same registered in their names and also to exercise voting rights in regard to the same. This suit is still pending. On May 7, 1963 suit no. 827 of 1963 (Biswanath Dalmia v. Srikrishna Investment Company Ltd. and Ors.) was instituted for restraining the defendant and its Directors from holding an extra-ordinary general meeting of Srikrishna Investment Co. Ltd. on May 10, 1963. On May 8, 1963 an ad interim order was made by A. N. Ray, J. restraining the defendants from holding the extra-ordinary general meeting. On June 20, 1963 leave was given to the plaintiff to withdraw the suit. 14. ON August 8, 1963, suit no. 1418 of 1963 (Srikrishna Investment Co. Ltd. v. Sambhu Prosad Bajoria and Ors.) was instituted for recovery of the statutory books, minute books, papers, documents and files of the plaintiff. In this suit a receiver was appointed by A, N. Ray, J. on November 26, 1963 after trial of the application for receiver on evidence. On September 12, 1963 another suit was filed by the petitioner (Srikrishna Investment Co. Ltd. v. Clive Mills Co. Ltd. and Ors.) for rectification of the share register of the company by removing therefrom the names of Radhebehari and Dwarka Prosad, and inserting therein the name of srikrishna Investment Co. Ltd. in respect of 64,525 shares which belong to the petitioner. In this suit an ad interim order was made by A N. Ray, J. on September 13, 1963 restraining Sambhu Prosad, Radhebehari and Dwarka Prosad from exercising voting rights in respect of 64,525 shares of the company, at the annual general meeting to be held on September 30, 1963 or at any other meeting. This suit is still pending. On September 16, 1963 Srikrishna Investment Co. Ltd. filed another suit against Bajoria Trading Private Ltd. and others for redemption of 46,406 shares of the company mortgaged to it by the plaintiff. Pursuant to orders made in interlocutory proceedings, the plaintiff on September 19, 1963 deposited to the credit of the said suit the sum of Rs. 4,01,250. On September 16, 1963 Srikrishna Investment Co. Ltd. filed another suit against Bajoria Trading Private Ltd. and others for redemption of 46,406 shares of the company mortgaged to it by the plaintiff. Pursuant to orders made in interlocutory proceedings, the plaintiff on September 19, 1963 deposited to the credit of the said suit the sum of Rs. 4,01,250. This suit is also pending. 15. ON September 23, 1963, Title Suit No. 381 of 1963, in the 1st Court of the 5th Munsif, Alipore (Dungarmull Bagla v. Clive Mills Co. Ltd.) was instituted for an injunction restraining the company from holding the annual general meeting on September 30, 1963. On September 25, 1963 ad interim injunction was granted by the Alipore Court restraining the company from holding the said Annual General Meeting. The application has not been finally disposed of and the suit is pending. 16. ON November 19, 1963 another suit was instituted in this Court (Rameswar Prosad Bajoria and ors. v. Clive Mills Co., Ltd. and ors.) for a declaration that the meeting of the shareholders of the company held on September 30, 1963 was the annual general meeting of the members of the company and was validly held and that the plaintiffs were validly appointed Directors of the company and other reliefs. In this suit an ad interim order was made on November 19, 1963, and later on confirmed on December 3, 1963, restraining the defendants Nos. 5-10 from acting as Directors of the com- But having regard to the orders of company or taking part in the administration and control of the company's affairs. This suit also is pending. Although the said suits mainly relate to rival claims to title to the shares, the real dispute between the parties is the control of the company's management and affairs. The grievance of the petitioner and Tribeni Debi is that although they are registered owners of an overwhelming majority of shares, their nominees have been kept out of the Board of Directors of the company. 17. I shall now deal with the questions of supersession of the Board of Directors of the company, the appointment of an Administrator to take charge and control of the company's affairs and also the prayer for an order for investigation into the company's affairs. The position of share holding of the parties is that the petitioner holds 1,38,5931/2 equity shares. I shall now deal with the questions of supersession of the Board of Directors of the company, the appointment of an Administrator to take charge and control of the company's affairs and also the prayer for an order for investigation into the company's affairs. The position of share holding of the parties is that the petitioner holds 1,38,5931/2 equity shares. Tribeni Debi holds 71,721 equity shares, of this lot 25,050 equity shares have been registered in her name, the balance being registered in the name of the petitioner and are lying with her with transfer deeds duly executed on behalf of the petitioner The petitioner itself is registered in the books of the company, as the holder of 27,6621/2 shares. Therefore the voting strength of the petitioner supported by Tribeni Debi at any general meeting of the company is 52,721 according to the books of the company. By reason of the operation of the orders for injunction issued by this Court holders of 1,10,931 shares have been restrained from exercising voting rights. It is claimed, however, that the petitioner is registered in respect of 74,000 shares. But having regard to the orders of junction, the free shares in respect of which the petitioner can exercise voting rights are 27,6631/2. As against this, the respondent other than the company and Tribeni Debi control only 1306 shares. The position therefore is that a very small minority of share holders are controlling the affairs of the company to the exclusion of the holders of a very considerable majority. It was contended that the Bajoria respondents manipulated matters in such a way that it had become impossible for the petitioner and Tribeni Debi to exercise their rights as the majority group of shareholders. This, according to Mr. Sen, the learned counsel of the petitioner and Mr. De, learned counsel for Tribeni Debi, is contrary to the Articles of the company and also the provisions of the Companies Act, 1956. Mr. Sen argued that majority must be allowed to control the affairs of the company according to the doctrine of the majority rule. But is this company the voice of the majority has been silenced by the unlawful acts of the Bajoria respondents. 18. Mr. Sen argued that majority must be allowed to control the affairs of the company according to the doctrine of the majority rule. But is this company the voice of the majority has been silenced by the unlawful acts of the Bajoria respondents. 18. IT is contended that the majority rule should be restored and until such restoration, the control of the company's affairs, should be taken put of the hands of the present Board of Directors of the company and should be placed in the hands of an Administrator to be appointed by this Court. In support of this argument reliance has been placed on two decisions of this Court, namely, In Re: Albert David Ltd., (1) 68 C. W. N. 163 and In Re: Sindhri Iron Foundry (P) Ltd., (2) 68 C. W. N. 118. In Albert David's case it was held, that where the Board of Directors carry on the business of the company overriding the wishes and interest of the majority of shareholders, the affairs of the company were conducted in the interest of groups of shareholders and not in the interest of the company. In that case also the petitioner's group represented the majority of shares and the minority group was in control and management to the total exclusion of the majority group. Relying upon this judgment it was contended by Mr. Sen that the principles laid down in Albert David's case should be applied to this case. If was further argued that in this case the petitioner's claim for the appointment of an Administrator is much stronger, because in Albert David's case there was no charge of mismanagement. On the other hand the management of the company by the minority group had shown very considerable improvement in its trading result. Large profits were made by the company under the management of the minority group, and the future prospects were still brighter. But in this case there are serious charges of mismanagement, misappropriation and misapplication of the company's assets and therefore it was contended by both Mr. Sen and Mr. De that the petitioner's claim for supersession of the present Board and appointment of an Administrator, rests on much stronger grounds. Reliance was also placed on my judgment in Sindhri Iron Foundry's case mentioned above. In that case also the affairs were controlled by a minority group of shareholders and the majority group was excluded. Sen and Mr. De that the petitioner's claim for supersession of the present Board and appointment of an Administrator, rests on much stronger grounds. Reliance was also placed on my judgment in Sindhri Iron Foundry's case mentioned above. In that case also the affairs were controlled by a minority group of shareholders and the majority group was excluded. In Sindhri's case, however, there were various other charges, namely, removal of the books of account and statutory books of the company, trespass into the company's factory, suppression of notices of Board meetings and general meetings and also various other charges. In both Albert David's case and Sindhri's case, the possibility of a protracted litigation between the rival groups of shareholders was taken into consideration and was one of the grounds on which the Court relied, for the purpose of appointing an Administrator. Reliance was also placed on Re: H. R. Harmer Ltd., (3) (1958) 3 A. E. R. 689. 19. MR. R. C. Deb appearing for the company and also for the respondent No. 5 while admitting the position regarding shareholding contended that an Administrator should not be appointed in the facts of this case. He argued that no reliance should be placed on the petition, which is verified by an affidavit of Murlidhar Jhunjhunwalla affirmed on July 25, 1963. He became a Director of the petitioner only on February 17, 1962. He had, therefore, no personal knowledge of the events that had happened prior to his appointment as a Director of the petitioner. He has not stated in the petition how he came to know of the events that had happened prior to February 17, 1962. It was further argued that persons having personal knowledge regarding the allegations made in the petition, have not come forward to affirm the affidavit in verifying the petition and no explanation has been given as to why the affidavit verifying the petition has not been affirmed by persons who had personal knowledge of the facts alleged in the petition. 20. BEFORE proceeding any further, I shall deal with Mr. Deb's contentions regarding sufficiency of the pleadings, as they have material bearing on the prayer for an order for investigation. Mr. Deb urged that most of the material allegations in the petition are verified not as true to knowledge, but as based on information. 20. BEFORE proceeding any further, I shall deal with Mr. Deb's contentions regarding sufficiency of the pleadings, as they have material bearing on the prayer for an order for investigation. Mr. Deb urged that most of the material allegations in the petition are verified not as true to knowledge, but as based on information. It was submitted that where serious charges have been made of fraud, misappropriation, misapplication of funds and mismanagement, the affidavit should be affirmed by a person having personal knowledge of the facts. Applications of this nature are disposed on allegations made in the petition and affidavits which are treated as evidence and that being so, when the allegations are verified as based on information supplied by others, the evidence contained in the affidavit becomes purely hearsay and this Court cannot act on such evidence. The next point urged by Mr. Deb was that in all cases when the parties relied on fraud, breach of trust, wilful default and similar other allegations, particulars should be stated in the pleading. He contended that no particulars had been given regarding the charges of mismanagement and misappropriation of the company's assets and therefore the Court should not rely upon the allegations in the petition. 21. IN respect of this branch of the argument Mr. Deb first of all referred to the decision of the Judicial Committee in Abdool Hoosein Zenail Abadin and Anr. v. Charles Agnew Turner (Official Assignee of the Estates of Aga Mahomad Shirazee), (4) 14 I. A. 111 in which it was held that a charge of fraud must be substantially proved as laid and when one kind of fraud has been charged another kind of fraud cannot, on failure of proof of the fraud charges; be substituted for it. Mr. Deb next referred to John Wallingford v. Mutual Society, (5) 5 A. C. 685 in which the House of Lords held that a general allegation of fraud, however strong the words used, is insufficient even to amount to an averment of fraud of which any Court ought to take notice. In that case the allegations of fraud were general and vague in nature, no material fact was pleaded to enable the Court to understand the acts which were alleged to be fraudulent. Lord Selborne, L. C., held that such charges must be entirely disregarded. The next case referred to by Mr. In that case the allegations of fraud were general and vague in nature, no material fact was pleaded to enable the Court to understand the acts which were alleged to be fraudulent. Lord Selborne, L. C., held that such charges must be entirely disregarded. The next case referred to by Mr. Deb is Bal Gangadhar Tilak v. Shriniwas Pandit, (6) 42 I. A. 135 in which the Judicial Committee accepted the aforesaid proposition of Lord Selborne, L. C. Mr. Deb next referred to the decision of the Supreme Court in Bishundeo Narayan and Anr. v. Seogeni Rai and Ors. (7) A. I. R. 1951 S. C. 280 in which Bose, J. held at page 283 of the report that where allegations of fraud, undue Influence and coercion are made, full particulars must be furnished and they could only be decided on the particulars as laid. It was also held that this rule was firmly established in the rules of pleading in this country. Mr. Deb also referred to several other cases to which I do not think it necessary to refer, as I accept his contention, that in so far as the charges of fraud have been made, this Court should disregard them because no particulars have been furnished. 22. IN my view, it is not only in case of fraud, but in case of all other allegations relating to mismanagement, misappropriation or other improper conduct with which a party is charged, in applications under sections 397 and 398 of the Act full particulars must be set out in order to enable the party charged to understand what he is charged with, and also to enable him to answer such charges. If vague and general charges are made without giving any particulars or setting out any material facts, this Court should ignore such charges and not proceed to investigate them. The party charged, must be given the opportunity of answering the charges made against him, and this he cannot do unless he knows what he is charged with. General and vague allegations of misappropriation, misapplication, of funds, mismanagement or other improper conduct in the management of the company's affairs do not justify this Court in making any order on such allegations. The next point urged by Mr. General and vague allegations of misappropriation, misapplication, of funds, mismanagement or other improper conduct in the management of the company's affairs do not justify this Court in making any order on such allegations. The next point urged by Mr. Deb was that allegations of fraud should not be accepted if they are based on information and belief and not on the personal knowledge of the deponent. In support of this proposition Mr. Deb referred to Gilbert v. Endean, (8) (1878) 9 Ch. D. 259. As I have already held that the allegations of fraud as laid in the petition, should be disregarded for want of particular's, it is rot necessary for me to deal with this question. 23. MR. De contended that since particulars of fraud have not been furnished, they may be ignored, but there are other charges of misapplication and misappropriation of funds, mismanagement and other improper conduct which are enough to induce this Court to rely upon those charges for the purpose of this application. I have already expressed my views in this matter, and I need only add that when a party is charged with acts of mismanagement, misappropriation or improper conduct, full particulars of the acts complained of must be set out in the pleading and unless so set out, such charges should be ignored and no reliance should be placed on them. 24. THE next point urged by Mr. Deb was that most of the material allegations in the petition have been verified by Murlidhar Jhunjhunwalla as being based on information. The deponent was not on the scene at the material time, and therefore could have no personal knowledge. Mr. Deb referred to such of the paragraphs in the petition and analysed the verification in the affidavit affirmed by Murlidhar Jhunjhunwalla verifying the petition. Mr. Deb contended that under Rule 11, Sub-Rules 12 and 13 of the Companies (Court) Rules, (hereinafter referred to as the Rules), applications under sections 397 and 398 of the Companies Act, 1956 have to be made by petition. Under Rule 21, the petition has to be verified by an affidavit which is required to be in Form No. 3 of the Forms prescribed in Appendix IV of the Act. Under Rule 21, the petition has to be verified by an affidavit which is required to be in Form No. 3 of the Forms prescribed in Appendix IV of the Act. He contended that it might be argued by the petitioner that the petition had been verified by an affidavit according to Form No. 3, which requires that certain statements should be verified as true to the knowledge of the deponent and certain other statements, as based on information believed by the deponent to be true. It was argued that the statutory verification was not enough for the purpose of investigation into charges of fraud, collusion, mismanagement and misappropriation. Statutory requirement, according to Mr. Deb is the minimum, but the law requires much more, when charges of fraud and other improper conduct have been made. In support of this argument Mr. Deb referred to Buckley on the Companies Act, 13th Ed. at page 1029. Dealing with Rule 30 of the English Companies (Winding up) Rules, 1949, which deals with verification of petition, the learned author stated that the statutory affidavit is not sufficient, if fraud is alleged against the Directors, and needs to be supplemented where the petitioner alleges that the affairs of the company require investigation or where the petitioner's case rests on documents so that they may be exhibited. It is further stated that in the case of petitions under S. 210, it is seldom wise or even possible to rely solely on the statutory affidavit. Section 210 of the English Companies Act, 1948, corresponds to sections 397 and 398 of the Companies Act, 1956. That being so, it seems that where serious charges of misapplication, misappropriation, misconduct or other improper acts are alleged, verification of the petition merely in the statutory form, will not be enough to support a case for investigation into the charges. Mr. Deb also relied on In Re: Ilbracombe Permanent Mutual Benefit Building Society (9) (1901) 1 Ch. 102. In this case a winding up petition was presented by a creditor alleging irregularities by the Company's Officers and claiming an investigation into the affairs of the company. Mr. Deb also relied on In Re: Ilbracombe Permanent Mutual Benefit Building Society (9) (1901) 1 Ch. 102. In this case a winding up petition was presented by a creditor alleging irregularities by the Company's Officers and claiming an investigation into the affairs of the company. Dealing with the charges in the petition Wright, J. held at page 110 of the report as follows : "the petition contains only very general charges of misconduct or negligence against the Directors or officers of the Company, and it was supported simply by the ordinary statutory affidavit, which, of course, is quite insufficient to establish charges of that kind. There was no other affidavit of any sort, and no other affidavit of any kind was produced in support of any charges of the sort until the hearing to day and the respondents had never seen those affidavits, until by leave, they were used in Court, rather for the purpose of seeing whether an adjournment ought to be granted than for any other purpose. However, they are in evidence now. The evidence of misconduct is very weak and vague, and mostly founded on hearsay, and to my mind there is nothing in it." 25. MR. Deb next referred to Re: S. A. Hawken Ltd. (10) (1950) 2 A. E. R. 408, in which Wynn-Parry, J., after quoting the observations of Lindley, L. J. In Re: Gold Hill Mines, (11) 23 Ch. D. 214 as follows: "the statutory affidavit strictly is no proof of anything. It is hearsay as to almost everything in it, but it is sufficient to require an answer." 26. HELD that while the statutory affidavit is always necessary it is not always sufficient and it is never sufficient where the petition is based on allegations of fraud. The next case referred to by Mr. Deb is In Re: J. L. Young Manufacturing Co. Ltd., (12) (1900) 2 Ch. D. 753, in which it was held that an affidavit on information and belief not stating the source of the information or belief, is irregular and therefore inadmissible as evidence, whether on an interlocutory or on a final application. Mr. Deb is In Re: J. L. Young Manufacturing Co. Ltd., (12) (1900) 2 Ch. D. 753, in which it was held that an affidavit on information and belief not stating the source of the information or belief, is irregular and therefore inadmissible as evidence, whether on an interlocutory or on a final application. Mr. Deb next referred to Order 19, Rule 3, of the Code of Civil Procedure and contended that under that rule, the affidavit should be confined to statements based on knowledge excepting in the case of interlocutory matters when facts derived from information can be relied upon, provided the source is disclosed. It was argued that this petition is not an interlocutory application, but final orders are sought for on charges of fraud, misappropriation, mismanagement and other improper conduct and therefore the Court cannot rely upon those allegations for the purpose of this application. It was next argued by Mr. Deb that under Rule 6, of the Companies (Court) Rules the provisions of the Code of Civil Procedure apply to proceedings under the Companies Act, and therefore the requirement of Order 19, Rule 3 should be strictly complied with. In support of this argument Mr. Deb referred to the decision of the Court of Appeal of this Court in Padmabati Dasi v. Rasiklal Dhar, (13) I. L. R. 37 Cal. 259 in which it was held that the provisions of Order 19, Rule 3, of the Code of Civil Procedure must be strictly observed. Every affidavit should clearly express how much is based on the deponent's knowledge and how much is based on his belief and the grounds of belief must be stated with sufficient particularity. The observations of the Court of appeal were approved by the Supreme Court in State of Bombay v. Purushottam Naik, (14) A. I. R. 1952 S. C. 317. Mr. Deb also relied upon the decisions in Amulya Chandra Bhaduri v. Satis Chandra Giri (15) 35 C. W. N. 1267 ; Dr. I. P. Gupta and Ors. v. W. R. Natu and. Ors (16) A. I. R. (1956) Bom. 518 and L. H. Sugar Factories and Oil Mills (P) Ltd. v. State of Uttar Pradesh (17) A. I. R. (1962) All. 70. 27. MR. Deb next referred to a decision of the Court of Appeal in Sarkar Estates (P) Ltd. v. Kusumika Iron Works (P) Ltd. (18) A. I. R. 1961 Cal. Ors (16) A. I. R. (1956) Bom. 518 and L. H. Sugar Factories and Oil Mills (P) Ltd. v. State of Uttar Pradesh (17) A. I. R. (1962) All. 70. 27. MR. Deb next referred to a decision of the Court of Appeal in Sarkar Estates (P) Ltd. v. Kusumika Iron Works (P) Ltd. (18) A. I. R. 1961 Cal. 439, in which Bose, J. (as he then was) held that it is enough if the verification of the petition for winding up is in accordance to the Rules and the forms prescribed thereby and that these Rules override the general provisions of the Code of Civil Procedure. Mr. Deb contended that this case is not an authority against his proposition that Order 19, Rule 3 should be complied with, where serious charges of fraud, misapplication, misappropriation and other improper conduct have been made. This case is an authority for the proposition that in ordinary matters where serious charges, such as those mentioned above, have not been made in the petition, compliance with the requirement of Form No. 3 in Appendix IV of the Act is enough. But where the petitioner wants the Court to investigate charges like those made in this petition, the provisions of Order 19, Rule 3 of the Code of Civil Procedure must be complied with. 28. IN view Mr. Deb is right in his contention that where the petitioner has made serious charges of fraud, collusion, misapplication, misappropriation and other improper conduct, the petition must be confined to facts within the knowledge of the deponent. In the case of Sarkar Estates Private Ltd. mentioned above, the petition was a winding up petition and the whole question was that, in the petition it was alleged that the solicitor demanded, by a letter sent by registered posit, payment of a certain sum of money which came back marked "refused". In the affidavit in opposition the receipt of the letter of demand was denied an behalf of the company and it was also denied that the company had returned the letter. It was while dealing with verification of the allegations in the winding up petition regarding service of the demand letter from the solicitor that it was held that compliance with the form No. 13 prescribed under the previous Company Rules was enough. It was while dealing with verification of the allegations in the winding up petition regarding service of the demand letter from the solicitor that it was held that compliance with the form No. 13 prescribed under the previous Company Rules was enough. The Court of Appeal was not considering the question of allegations made in that petition as in this case nor was that Court considering the sufficiency of the verification when allegations such as those made in this petition have been made. In my view, therefore, the said observations of Bose, J. (as he then was) have no application to this case. Mr. De contended that it is enough if the verification has been made, as prescribed in Form No. 3 of Appendix IV of the Act. He further contended that it is not necessary to comply with Order 19, Rule 3 of the Civil Procedure Code. Mr. De referred to the observations of Mallick, J. in Albert David's case to the effect that it is enough if the petition is verified according to the provisions of Order 6, Rule 15, of the Code of Civil Procedure and it was not necessary to comply with Order 19, R. 3. But it is to be noted, however, that in Albert David's case no charges of mismanagement, misapplication or misappropriation were made. Therefore, Mallick, J. did not consider the question if charges are made such as those in this petition, the verification would be enough, if the requirement of Order 19, Rule 3 of the Civil Procedure Code is not complied with. Therefore, in my view the observations of Mallick, J. do not help Mr. De. 29. IN my judgment Mr. Deb's contentions that no notice should be taken of the allegations made in the petition regarding fraud, collusion mismanagement, misapplication of funds, are sound. This Court cannot take notice of such allegations when no particulars have been furnished. In my view Mr. Deb is also right in his contention that, mere verification on the basis of Form No. 3 in Appendix IV of the Act in cases where charges, such as those mentioned above, have been made, is not enough. : An application under sections 397 and 398 of the Act is not interlocutory application. The matter is finally disposed of by the order made on the application itself. 30. : An application under sections 397 and 398 of the Act is not interlocutory application. The matter is finally disposed of by the order made on the application itself. 30. NOTHING remains outstanding, unless orders are made keeping certain matters outstanding. The application is disposed of on the basis of the averments in the pleadings, unless the matter is directed to be tried on evidence. The pleadings in the matter, including the petition and the affidavits are to be treated as evidence, and that being so, the rules of evidence must be strictly adhered to. The averments in the petition and in the affidavits, which are verified as based on information, are by their very nature, hearsay evidence. And if such averments are the foundation of the case made out by the petitioner, or the foundation of the defence made out by the respondents, the Court should not rely or act upon the same. To do otherwise, would be to ignore the fundamental principles of the rules of evidence. If the averments in the pleadings are such, that but for them, an order cannot be made, persons who have personal knowledge of the facts stated must come forward and put what they have to say on affidavits. If other persons, having no personal knowledge of the facts are set up to verify facts stated in petitions or affidavits, as being based on information supplied and believed to be true, the averments so verified cannot be relied on by the Court. I must make it clear, however, that my views in this matter are confined to proceedings under sections 397 and 398 of the Companies Act, 1956, in which orders are asked for on the basis of charges laid in the petition and affidavits. These views should not be taken to apply to other proceedings under the Companies Act, 1956 or to interlocutory matters in other proceedings. In the petition and affidavits filed in proceedings under sections 397 and 398 of the Act, the provisions of Order 19, Rule 3, Sub-Rule (1) must be strictly complied with, when serious charges of fraud, collusion, mismanagement, misappropriation and misapplication of funds, violations of the provisions of the Companies Act or other similar charges are made or denied. 31. BUT while Mr. Deb's contention regarding the charges generally is correct, there are, however, certain other charges with regard to which particulars have been furnished. 31. BUT while Mr. Deb's contention regarding the charges generally is correct, there are, however, certain other charges with regard to which particulars have been furnished. One of these charges relates to the withdrawal of rs. 8,10,000/-, from the company's account with the Allahabad Bank Ltd. by Sambhu Prosad. This charge has been made in paragraph 29 of the petition which has been verified as partly matters of record and partly submissions. It is alleged that the petitioner had pledged 73,225 shares with the Punjab National Bank Ltd. to secure its overdraft account. On September 30, 1959 Sambhu Prosad withdrew the said sum and out of the sum, paid Rs. 5,05,000/- to the Punjab National Bank Ltd. and obtained delivery of 73,225 shares. In his affidavit in opposition Sambhu Prosad admits that the shares were taken delivery of by him from the Punjab National Bank Ltd. but he contends that the shares belong to the joint family of Ramnath Bajoria. He has, however, denied the allegation of wrongful and fraudulent withdrawal. 32. IT appears that this matter was considered by the Board at several meetings. At the meeting held on October 5, 1959 Sambhu Prosad's power to operate on the Company's account was revoked and he was called upon to explain why he withdrew the money from the company's account. It was resolved that if he failed to furnish sufficient explanation a complaint was to be lodged with the police. At the meeting held on November 14, 1959, the Board decided to place the matter before the Advocate-General, west Bengal, for his opinion. At the meeting held on November 25, 1959, the Board decided to institute a suit against Sambhu Prosad, according to the advice of the Advocate-General, for recovery of the sum of Rs. 8,10,000. At its meeting held on November 29, 1960 the Board noted that Sambhu Prosad explained his conduct about the withdrawal of the sum of Rs. 8,10,000/ -. It was recorded that out of this sum, Rs. 5,00,000/- had been advanced by him to Messrs. I. S. 3. Co. (1951) Private Ltd. as loan on September 30, 1951 and on the same day Rs. 5,000/ - was paid to the petitioner, who was then the managing agent of the company, towards part payment of its loan to the company. The balance of Rs. 3,05,000/- remained in the cash balance of the company. I. S. 3. Co. (1951) Private Ltd. as loan on September 30, 1951 and on the same day Rs. 5,000/ - was paid to the petitioner, who was then the managing agent of the company, towards part payment of its loan to the company. The balance of Rs. 3,05,000/- remained in the cash balance of the company. A receipt from I. S. S. Co. (1951) Private Ltd. dated September 30, 1951 was produced before the Board. The Board further ratified the advance of Rs. 5,00,000/- to I. S. S. Co. (1951) Private Ltd. at an interest of 6 per cent, per annum. It appears from the minutes of the Board meetings that Sambhu Prosad had not misappropriated the money withdrawn by him. But it cannot be overlooked that his conduct in withdrawing the money was wrongful as the Board had not authorised him to withdraw the money and utilise the same in paying off the debt due from the petitioner to the Punjab National Bank Ltd. There is no doubt that his purpose and object were to secure possession of the shares and get them registered in the names of himself and his nominees. This, he succeeded in doing, as he got a block of 64,525 shares, which was part of the shares pledged with the Punjab National Bank, registered in the names of Radhebehari and Dwarka Prosad, on August 22, 1963. It is in respect of these shares that an injunction was issued by A. K. Mukherjee, J. on October 3, 1963, restraining the exercise of voting rights in respect of the said shares. 33. MR. Deb contended that the company had suffered no loss by reason of Sambhu Prosad's conduct in withdrawing the sum of Rs. 8,10,000/ -. On the other hand the company's funds were invested in I. S. S. Co. (1951) Private Ltd. He contended that no charge has been made in the petition that it was a bad investment. It appears that Sambhu's conduct was sought to be regularised by showing a loan transaction by the company to the I. S. S. Co. (1951) Private Ltd. who in its turn advanced the same amount to the petitioner and this sum was shown as having been utilised by the petitioner in obtaining release of the pledged shares. In the light of these facts, the charge of misappropriation against Sambhu Prosad fails. (1951) Private Ltd. who in its turn advanced the same amount to the petitioner and this sum was shown as having been utilised by the petitioner in obtaining release of the pledged shares. In the light of these facts, the charge of misappropriation against Sambhu Prosad fails. But his conduct cannot be justified on any ground whatsoever. The money was withdrawn by him without authority and a part of it was utilised for paying off a debt due from the petitioner to the Punjab National Bank Ltd., and thereafter he got hold of the shares and caused a block of 64,525 shares to be registered in the names of his nominees. Such conduct in company administration must be met with unequivocal censure from this Court. But in this application the question is whether a charge of this nature is enough for the purpose of obtaining an order for investigating the company's affairs under sections 397 and 398 of the Act. 34. IT is a single wrongful act by a Director of the company and it was open to the company to proceed against him by an action at law for recovery of the money and for such other reliefs to which it might be entitled. Nor is the act of such a nature, as to be productive of a continuous course of oppression. I cannot hold that this charge by itself would justify an order under sections 397 and 398 of the Act. Besides it is to be noted that the loan from I. S. S. Co. (1951) Private Ltd. is included in the balance sheet of the petitioner. The petitioner's balance sheet for 1959 shows unsecured loan at Rs. 42,33,917. 64 np. In the balance sheet for the year 1960 unsecured loan is shown at Rs. 47,82,482. 62 np. Mr. Deb rightly contended that the petitioner has acknowledged the loan of Rs. 5,00,000/- from I. S. S. Co. (1951) Private Ltd. In the petitioner's balance sheet for the year 1960 the Director's report is signed, amongst others, by Murlidhar Jhunjhunwalla and Chinmoy Mallick. The petitioner thus had acknowledged the loan of Rs. 5,00,000/ - and whatever other criticism can be made of Sambhu Prosad's conduct, the petitioner cannot make the withdrawal of the sum of Rs. 8,10,000/-a ground of complaint. The petitioner thus had acknowledged the loan of Rs. 5,00,000/ - and whatever other criticism can be made of Sambhu Prosad's conduct, the petitioner cannot make the withdrawal of the sum of Rs. 8,10,000/-a ground of complaint. There is another matter to be noted in this connection, namely, the general meetings of the company held on February 26, 1960. A general meeting was held on that date at which no questions were raised with regard to the withdrawal of the money by Sambhu Prosad. The accounts which were sought to be passed at this meeting related to the year ending with March 31, 1959. The withdrawal of money by Sambhu Prosad had already taken place. Yet no questions were raised at this meting. The next general meeting to be considered is the one held on December 29, 19. 60. This meeting was attended by Shri Chinmoy Mallick in his personal capacity as also as a representative of the petitioner. The meeting was held for adopting the accounts ending with March 31, 1960. The accounts were passed unanimously and no objection was raised by the petitioner's representative who attended the meeting. The next important general meeting is the one held on September 27, 1962. This meeting was also attended by Shri Chinmoy Mallick. By the first resolution passed at the meeting, the balance sheet and profit and loss account up to March 31, 1962 were unanimously adopted. 35. BY the next resolution Sambhu Prosad who retired from the directorship by rotation was proposed for re-election by Chinmoy Mallick and was seconded by another person. This proposal was unanimously accepted. It is true that Shri Chinmoy Mallick attended this meeting in his personal capacity, but it cannot be overlooked that he represented the petitioner at a previous meeting. Yet he was the proper for re-election as a Director of a person who, it was known, has committed an act, which is alleged to be injurious to the interest of the company. 36. IN my opinion, in the background of the events that have happened, the conduct of Sambhu Prosad with regard to the withdrawal of the money cannot be regarded as an act which should induce this Court to make an order for investigating the affairs of the company under sections 397 and 398 of the Act. But as I said earlier, this conduct must meet with disapproval from this Court. But as I said earlier, this conduct must meet with disapproval from this Court. Such a conduct cannot be condoned. But though it may provide grounds for other proceedings, it cannot be treated as an act of oppression or an act prejudicial to the interest of the company within the meaning of sections 397 and 398 of the Act of which the petitioner, at any rate, can be heard to complain. There is another charge which has been pressed by Mr. Sen as providing a sufficient ground for an order for investigation. This charge relates to the sale of loom hours. This charge has been laid in paragraph 21 of the petition in which it is alleged that Sambhu Prosad, Dwarka Prosad, Babulal and Radhebehari have wrongfully, fraudulently and surreptitiously sold unused loom hours and have made secret profits. It is alleged that since 1959, lakhs of rupees have been obtained by sale of loom hours, but the money has not been credited in the books of the company and have been misappropriated. In regard to this charge, no particulars have been given of the sale of loom hours beyond stating that several lakhs of rupees have been realised by sale of loom hours and that the money so obtained has been misappropriated. I should at once point out that charges of this nature cannot be investigated by this Court, nor can they be relied upon in dealing with an application under sections 397 and 398 of the Act, on the grounds discussed by me earlier in this judgment. 37. THE charge relating to the sale of loom hours, however, has been sought to be strengthened by a letter from Sambhu Prosad dated August 17, 1959, an unofficial translation of which has been annexed to the affidavit in reply affirmed by Murlidhar Jhunjhunwalla on September 16, 1963. It is strange that if the petitioner was serious in pursuing this charge, the vital document which was in its custody, was not, referred to in the petition, but was annexed to the affidavit in reply. It was contended on behalf of the Company and also the Bajoria respondents, and I think rightly, that no notice should be taken of this letter nor any reliance should be placed on the same, as it was annexed to the affidavit in reply and therefore the respondents got no chance of dealing with the same. It was contended on behalf of the Company and also the Bajoria respondents, and I think rightly, that no notice should be taken of this letter nor any reliance should be placed on the same, as it was annexed to the affidavit in reply and therefore the respondents got no chance of dealing with the same. I should note, however, that no explanation has been given as to why this letter was not referred to in the petition itself. Besides, Mr. Deb argued that sale of loom hours can never be done surreptitiously, that all money realised by such sale have been received by cheques, that the sales have been made to recognised jute mills and that sales of loom hours have to be reported to the Indian Jute Mills Association. I am not at all convinced by the allegations relating to the sale of loom hours and secret profits made out of the sale proceeds of the same. A reference was made to the ledger entries relating to the sale of loom hours and also to the profit and loss accounts in which the sale of loom hours has been recorded. It seems to me that the sale of loom hours has been correctly entered in the ledger. In any event sufficient explanation has been given by the Bajoria respondents of the charge relating to sale of loom hours, which is of a very general and vague nature. 38. IT is to be noted that the company has not denied the respective strength of the parties regarding shareholding. But accepting the position of shareholding to be as made out by the petitioner, Mr. Deb next argued that the shares of the company belong to the members of the joint family of Ramnath Bajoria and neither the petitioner nor Tribeni Debi are owners thereof. It was argued that the petitioner is a domestic concern and its shares are owned by members of the Bajoria family. It was further argued that the business of the company is a joint family concern and the shares of the company belong to the members of the joint family. In support of this argument Mr. Deb referred to the arbitration agreement dated July 6, 1957 among the members of the Bajoria family. It was further argued that the business of the company is a joint family concern and the shares of the company belong to the members of the joint family. In support of this argument Mr. Deb referred to the arbitration agreement dated July 6, 1957 among the members of the Bajoria family. In this agreement it is stated that the joint family was the owner of various properties and carried on various businesses in various names. Among the businesses mentioned in the agreement are Clive Mills Co. Ltd. and Srikrishna Investment Co. Ltd It was provided in the agreement that the arbitrators were to have the powers, inter alia, to divide the businesses. It was also provided that the arbitrators should divide the joint family properties. Ramnath Bajoria, Tribeni Debi, Sambhu Prosad, Radhebehari, Dwarka Prosad, Sheoratan and Bijoy Shankar were all parties to the said agreement, the last five named persons being the sons of Ramnath Bajoria. Mr. Deb also referred to a second arbitration agreement dated March 9, 1960 between Tribeni Debi, Sambhu Prosad, Radhebehari, Dwarka Prosad, Sheoratan and Bijoy Shankar. In this agreement also, it was stated that the joint family owned various properties and carried on various businesses which included, inter alia, Clive Mills Ltd. and Srikrishna Investment Co. Ltd. This agreement also provided for division of the businesses among the parties, as the arbitrator may think fit. Next Mr. Deb referred to the partition suit which is pending in this Court being Suit No. 783 of 1963 (Sambhu Prosad Bajoria v. Tribeni Debi and Ors. In this suit it has been claimed that the shares of the company belong to the joint family and not the individuals in whose names they are registered in the books of the company. Relying upon the said arbitration agreements, and the Partition Suit, Mr. Deb argued that neither the petitioner nor Tribeni Debi are the owners of the shares of the company, and that the arbitration agreements show that the parties agreed that the business of the company and also of the petitioner belonged to all the members of the joint family. Mr. Deb contended that no orders should be made in this application, at the instance of the petitioner and Tribeni Debi who are not the owners of the shares at all, although the shares are registered in their names. Mr. Mr. Deb contended that no orders should be made in this application, at the instance of the petitioner and Tribeni Debi who are not the owners of the shares at all, although the shares are registered in their names. Mr. Deb further contended that neither the petitioner nor Tribeni Debi had any rights to the shares, which were registered in their names to the exclusion of the other members of the joint family and therefore it was submitted that this application is not maintainable. 39. I cannot accept the contention of Mr. Deb. So far as the company is concerned it is bound to recognise as share holders, the parties whose names appear in the share register of the company, the claims made by the members of the joint family or by any other person notwithstanding. The Companies Act does not recognise the claims to ownership of any party to the shares of the company, other than the one who is registered in the share register of the company. It may be that the members of the joint family are beneficial owners of the shares, but the company cannot take notice of such claims to beneficial ownership. Moreover, suits are pending in this Court regarding title to the shares and until those suits are disposed of, this court in exercising its jurisdiction under the Companies Act, cannot recognise the claims to title to the shares of any person, other than those whose names are registered in the books of the company. I cannot, therefore, accept Mr. Deb's contention that no order can be made on this application because the real owners of the shares are the members of the joint family and neither the petitioner nor Tribeni Debi are the owners of the shares which are registered in their names. In my judgment the objections raised to an order that an Administrator be appointed to take charge of the company's affairs, properties and assets and the Board of Directors be superseded cannot be accepted. I have already discussed the position relating to holding of the shares of the company, it is plain that the Bajoria respondents who are registered in respect of a very small minority of the company's shares, are controlling the affairs of the company to the total exclusion of the petitioner and Tribeni Debi who are registered in respect of a majority of shares. This, they have no right to do. Apart altogether from the charges of mismanagement, misapplication of funds, misappropriation, fraud and collusion, a small minority of share holders cannot be allowed to control the affairs of the company, completely ignoring the wishes of the majority of share holders according to the share register of the company. It is true that claims have been made in the said suits, that the shares belong to the members of the joint family, but until those suits are finally disposed of, and the claim to title to the shares is adjudicated upon, the company must proceed on the basis of the ownership of the shares as registered in its share register. And on the basis of the Company's share register, the Bajoria respondents, who quite clearly have forfeited the confidence of the petitioner and Tribeni Debi, have no right to control the Company's affairs. 40. IN the circumstances I hold that the affairs of the Company are being conducted in a manner oppressive to the petitioner and Tribeni Debi. The attention of this Court was drawn to the fact that the Directors have closed the Mill for financial difficulty. Mr. Mukherjee submitted that this difficulty had arisen because the income from sale of loom hours had stopped. It is true that the Mill was closed after the arguments in this matter were concluded. But since in my opinion, as discussed later in this judgment, events subsequent to the presentation of the petition can be taken note of, the situation that has arisen, by reason of the closure of the Mill cannot be ignored or disregarded. No doubt the Directors of the Company, took the decision to close the Mill, having no other alternative. But the only business of the Company, namely, manufacture of jute goods, have come to an end and there seems to be no prospect of resuming the same. That being so, I am of the opinion, that the facts would justify the making of a winding up order on the ground that it is just and equitable that the Company should be wound up, but such an order would unfairly prejudice the petitioner arid Tribeni Debi. But apart from the closure of the Mill, this Court should take notice of the litigation between the parties. The dispute is serious and deep rooted. But apart from the closure of the Mill, this Court should take notice of the litigation between the parties. The dispute is serious and deep rooted. In form some of the suits relate to claim to title to shares. But in substance the object is to acquire control of the Company's affairs. Annual General Meeting of the Company called and held is being challenged and a suit is pending for a declaration that it was a valid meeting. Claim of some persons to act as Directors is being challenged by their rivals ; injunction has been issued by this Court restraining certain persons from acting as Directors of the Company. The prospect of protracted and costly litigation between rival groups relating to control and management of the Company's affairs, in which the Company is a necessary party, cannot be overlooked. Whatever may be the merits of the claims of the rival parties in the litigation now pending, so far as the Company is concerned, the effect is ruinous. To my mind the state of things justify the making of an order to wind up the company, on the ground that it is just and equitable to do so. But such an order would unfairly prejudice the petitioner and Tribeni Debi, who have been kept out of control and management of the Company, though holding a large majority of the Company's shares. The litigation is the direct result of the conduct of the minority group in persistingly keeping the majority at bay. 41. IF conditions permitted, I would have directed a general meeting of the Company to be held for the purpose of appointing a new Board of Directors. But the position regarding share holding at the moment and the matters discussed by me hereafter, are such, that this Court cannot direct a general meeting to be called for that purpose. I shall deal with the question of a general meeting later on in this judgment. But the present Board of Directors ought not to be allowed to control the Company's affairs any longer. The Board of Directors should be superseded and the control of the Company's affairs should be placed in charge of an Administrator, who should continue to discharge the functions of the Board of Directors, until the rival claims to the shares of the Company and the dispute regarding control of the company's affairs are finally adjudicated upon. The Board of Directors should be superseded and the control of the Company's affairs should be placed in charge of an Administrator, who should continue to discharge the functions of the Board of Directors, until the rival claims to the shares of the Company and the dispute regarding control of the company's affairs are finally adjudicated upon. Until then the interest of the Company must be protected, and that can be best done by placing the control of the Company's affairs in the hands of an independent person. 42. THE next question to be discussed is the prayer regarding investigation into the Company's affairs. Apart from the powers of the Court under sections 397 and 398 of the Act, sections 235, 236, 237, 239, 240 and 241 of the Act deal with the question of investigation of the Company's affairs by the Central Government and also with matters connected therewith. Under section 237 (a) (ii) of the Act the Court has been given the power to declare that the affairs of the Company ought to be investigated and thereupon the Central Government appoints one or more competent persons as inspectors to investigate the affairs of the company. This power of the Central Government to act on an order of Court is apart from sand independent of the power conferred on the Central Government under section 235 of the Act. In this case, however, the prayer is not for an order declaring that the affairs of the Company ought to be investigated under sections 237 (a) (ii) of the Act, but for an investigation under the order of the Court. No doubt the Court has been given the power to make any order for the purpose of bringing to an end the matters complained of or for the purpose of preventing the same. Indeed the powers of the Court are very wide, but this amplitude of powers, demands circumspection in their exercise. I have already dealt with the questions of pleadings, verification of pleadings, the nature of the charges made in the petition and also the question if the charges as laid and verified are enough for an order for investigation. These charges, barring one, do not justify a general order for investigation into the Company's affairs. I have already dealt with the questions of pleadings, verification of pleadings, the nature of the charges made in the petition and also the question if the charges as laid and verified are enough for an order for investigation. These charges, barring one, do not justify a general order for investigation into the Company's affairs. Sweeping charges of mismanagement, misappropriation, secret profits and other improper acts have been made in somewhat reckless manner, without giving any particulars of the same. I have discussed the question of furnishing particulars at length. If such charges are to be relied upon and an order for investigation made on the basis thereof, such an 6rder will have a paralysing effect on the administration of Company's affair by any Board of Directors. It is always possible for a minority group of share holders or a majority group, as in this case, to make vague charges of mismanagement, misappropriation, misapplication of funds, failure to earn profits and declare dividend, without giving any particulars. In my view in exercising its powers to make an order for investigation under sections 397 and 398 of the Act the Court should proceed cautiously, before any order for investigation is made on such charges. The management of the Company is vested in its Board of Directors. There may be many and good reasons for the failure of the Company to earn profits. Similarly there may be valid and good reasons for increase in the costs of manufacture and administration of the company. But are such allegations enough to induce this Court to make an order for investigation under sections 367 and 398 of the Act? I do not think so. It is no part of the duty of this Court to lay down business and trading policy of the Company or to regulate control and check its day to day administration. In connection with the charges made in the petition, a reference should be made to annexure 'a' to the petition which is a chart, purporting to show how the Company's affairs were managed, in comparison with other jute mills. It was urged that a reference to the figures in the chart, which have been taken from the balance sheets of the different companies, would make the position of the management of the Company's affairs quite clear. It was urged that a reference to the figures in the chart, which have been taken from the balance sheets of the different companies, would make the position of the management of the Company's affairs quite clear. This chart has been referred to in paragraph 38 of the petition, in which it has been stated that particulars of mismanagement will appear from the chart. 43. MR. Sen and Mr. De relied upon this chart and argued that the chart made it quite clear, that compared to other jute mills, the affairs of the company are being seriously mismanaged. Mr. Deb and Mr. Mukherjee submitted that the chart conveys nothing unless it is supplemented by explanations, as has been done, by Mr. Sen. Secondly, the chart was criticised on the ground that the chart had not been verified at all. Mere reference to the chart in the petition does not make it a part of the pleadings, particularly because matters in the chart are sought to be utilised as furnishing particulars of mismanagement. It was argued that it was not even stated in paragraph 38 of the petition that the figures mentioned in the chart are true or that the chart was correctly prepared. It was further argued that the balance sheets, from which the figures in the chart, are alleged to have been taken had not been produced before the Court. 44. IT seems that there is a good deal of force in the submissions made by Mr. Deb and Mr. Mukherjee regarding the chart. If the chart is intended to be treated as evidence, as no doubt it is, the proper procedure should have been followed. The person who prepared the chart or the person under whose supervision the chart was prepared, should have come forward to make an affidavit so that the Court could rely upon the chart as evidence in these proceedings. In my view, a mere compilation of figures taken from different sources, and then making the compilation an annexure to a petition, does not make it evidence of the facts stated in such compilation. It cannot be overlooked that this matter was not tried on evidence, and there was no material before this Court other than the petition and the affidavits. In these circumstances I cannot rely upon the chart as furnishing materials and particulars of the allegations of mismanagement made in the petition. It cannot be overlooked that this matter was not tried on evidence, and there was no material before this Court other than the petition and the affidavits. In these circumstances I cannot rely upon the chart as furnishing materials and particulars of the allegations of mismanagement made in the petition. There are certain other minor charges, namely, that inferior quality jute was procured, that there has been abnormal rise in stores consumption, salary and wages, and that the employees of the Company are being intimidated. In my view these charges are by no means enough for the purpose of an investigation into the affairs of the Company. Management of the company and the administration of its affairs, from day to day, are vested in the Board of Directors of the Company. It is not for the Court, in matters such as those mentioned above, to interfere with the administration of the Company by a general order for investigating into the affairs of the Company. In the course of hearing of this application, an application was made on behalf of the petitioner relating to sale of some old machinery and certain other goods. Certain orders were made on that application to protect the interest of the petitioner. 45. IT was contended by Mr. Deb that the Court should not take notice of events that have happened subsequent to the filing of the petition. It was further urged that the matters on which Court could rely, must be confined to events which happened prior to the date of filing of the petition. In support of this contention reliance was placed on the decision of the Supreme Court in Rajah Mundry Electric Supply Corporation Ltd. v. A. N. Rao and Ors. (19) A. I. R. (1956) S. C. 213. But in that case the only question as to subsequent events considered by the Supreme Court was the maintainability of the petition, as at the date of its presentation, and it was held, that a petition which was maintainable when presented, could not in the absence of statutory provisions, cease to be maintainable by reason of events subsequent to its presentation. 46. THIS decision is no authority for the proposition that the Court cannot take notice of subsequent events. Mr. Sen relied upon the decision of the Court of Appeal in Vidyasagar Cotton Mills Ltd. v. Musst. 46. THIS decision is no authority for the proposition that the Court cannot take notice of subsequent events. Mr. Sen relied upon the decision of the Court of Appeal in Vidyasagar Cotton Mills Ltd. v. Musst. Nazmunnessa Befum (20) (unreported) (since reported in 68 C. W. N. 702) in which it was held that the Court may take notice of events which have happened since the making of the application and afford relief to the parties on the basis of those events. Mr. Sen also relied upon the decision in Raicharan Mandal v. Biswanath Mandal (21) 20 C. L. J. 107, in which it was held that the Court should take note of subsequent events. Mr. Deb referred to the decision of the Supreme Court in Chunilal v. Adhvaru (22) A. I. R. 1956 S. C. 655. But in that case the whole question was whether the Liquidator after having received an offer according to terms of a tender should accept a higher offer made at a later point of time. The question of the Court's taking notice of events which happened subsequent to the commencement of the proceedings was not involved in that case and hence this decision is of no assistance to Mr. Deb. Mr. Deb next referred to the decision in Rangya Naidu v. Basana Simon (23) A. I. R. (1926) Mad. 594. But all that was held in that case was that it a suit was premature at the date of institution, it should be dismissed with liberty to file a fresh suit. In the instant case it cannot be said that the application is not maintainable, unless notice of the subsequent events is taken. This decision therefore does not help Mr. Deb. In my view, in proceedings under sections 397 and 398 of the Act, if ends of justice demand, the Court is not debarred from taking notice of the events which have happened subsequent to the presentation of the petition. Butt even though notice is taken of the allegations regarding sale of old machinery and other assets as alleged in the application for interim relief, and even assuming that the allegations made therein are true, the matters complained of are not of such magnitude as to require intervention by an order for investigation under sections 397 and 398 of the Act. If the Directors in the exercise of the discretion vested in them, decide to dispose of old and worn out machinery, or jute wastes, this Court should not interfere with the exercise of such discretion. These are matters to be dealt with by the company in its domestic forum. The machinery provided by sections 397 and 398 of the Act cannot be made use of for agitating such charges of irregularity, assuming them to be true. 47. FOR the reasons mentioned above an order for investigating the affairs of the Company cannot be made. To make an order for investigation in these circumstances, would be to put a premium on the making of charges of fraud, misapplication, misappropriation of funds and mismanagement, which as they stand in this case, cannot be relied upon and must be disregarded. The only other matter that remains to be considered is the prayer that a. general meeting should be called for the purpose of appointment of Directors. This prayer for a meeting of the Company has been made under section 186 of the Act. Under that section the Court may, on its own motion or on the application of a Director or member of the Company, order a meeting of the Company to be called, if for any reason it is impracticable to call a meeting of the Company other than an annual general meeting. But although a prayer has been made for an order for a general meeting of the Company, the petitioner in paragraph 47 of the petition has strenuously opposed the holding of a general meeting. It is alleged : "the position of share holding of the Company is in a most unsatisfactory state for a general meeting. Large blocks of shares have been immobilised. Sm. Tribeni Debi and her children have been prevented by an injunction from exercising their voting rights. The said order was made on July 16, 1963. A block of 46,356 shares belonging to the petitioner is standing registered in the name of Central Bank of India Ltd. (account Bajoria Trading Private Ltd.)" 48. YOUR petitioner has already written to Central Bank of India Ltd. not to issue any proxies in respect of such shares. The share register of Clive mills Co. Ltd. does not correctly represent the share position as many applications for transfer of shares remain undisposed of. YOUR petitioner has already written to Central Bank of India Ltd. not to issue any proxies in respect of such shares. The share register of Clive mills Co. Ltd. does not correctly represent the share position as many applications for transfer of shares remain undisposed of. Your petitioner and many other share holders have called upon the said Company not to hold the said meeting, but the said respondents thereaten and intend to hold the said meeting and obtain a snap vote to enable them to act in furtherance of their wrongful schemes." It is true that these allegations have been made with regard to the general meeting which was proposed to be held on July 29, 1963. This meeting was not held, as this Court issued an injunction restraining the holding of the same. But the grounds of opposition to a general meeting set out in paragraph 47 of the petition, if they applied to the general meeting proposed to be held on July 29, 1963, apply equally to any other general meeting of the company. The petitioner's case as made out in the said paragraph of the petition is that a general meeting of the company ought not to be held and it is on the basis of the statements in the said paragraph of the petition, that the petitioner obtained an order from this Court restraining the holding of the general meeting proposed to be held on July 29, 1963. The grounds of objection to a general meeting as set out in the said paragraph of the petition still remain. Orders for injunction have been made by this Court restraining voting rights in respect of 1,10,931 equity shares of the company. There are 2,40,000 fully paid up equity shares of the company carrying voting rights. Injunctions issued by this Court restrain voting rights regarding a little less than half of the total equity shares capital of the company. 49. ACCORDING to the petitioner itself, there are serious disputes between the Bajoria respondents and Tribeni Debi. These disputes relate mainly to the title to the shares of the company. If a general meeting is held, when a little less than half the share holders of equity shares cannot exercise their voting rights, can such a meeting be called a general meeting of the share holders of the company? These disputes relate mainly to the title to the shares of the company. If a general meeting is held, when a little less than half the share holders of equity shares cannot exercise their voting rights, can such a meeting be called a general meeting of the share holders of the company? Will the Court allow the share holders to 'meet and appoint Directors to take charge of the Company's affairs when nearly half of the share holders cannot exercise their voting rights? In my view, in the circumstances such as these, a general meeting of the Company for the purpose of appointing Directors should not be directed to be called and held under section 186 of the Act. When nearly half the share holders of the Company can have no say in the matter of appointment of Directors, the Court ought not to direct a general meeting to be held under section 186 of the Act for the purpose of appointment of a new Board of Directors. 50. UNDER section 186 of the Act, the Court may order a general meeting to be called only if for any reason, it is impracticable to call a meeting of the Company or to hold or conduct the meeting in the manner prescribed by the Act or the Articles of the Company. Beyond making a vague, bare and indefinite statement that the petitioner wanted to requisition for a general meeting, nothing has been stated in the petition as to why it is impracticable to requisition a meeting of the company or to hold or conduct such a meeting, in accordance with the Articles of the Company and the provisions of the Act. On the other hand, the petitioner's case as set out in the said paragraph of the petition is that a general meeting of the Company ought not to be held. Before the Court makes an order for a general meeting under section 186 of the Act, the Court must be satisfied that it is impracticable to hold the meeting in accordance with the Company's articles. It has been repeatedly held by this Court that in directing a general meeting of the Company the Court must act cautiously. A reference should be made to a few decisions of this Court though they were not referred to from the Bar. In re: Lothian Jute Mills Co. It has been repeatedly held by this Court that in directing a general meeting of the Company the Court must act cautiously. A reference should be made to a few decisions of this Court though they were not referred to from the Bar. In re: Lothian Jute Mills Co. Ltd. (24) 55 C. W. N. 646, S. B. Sinha, J. held that powers under section 79 (3) of the Indian Companies Act (1913) should be exercised with caution and only when it is not practicable to call a valid meeting in exercise of the powers given by the Articles. In re: Malhati T. Syndicate Ltd. (25) 55 C. W. N. 653, Banerjee, J. directed a general meeting to be held under section 79 (3) of the Indian Companies Act (1913) and held that there was no Board of Directors who could call a meeting and therefore it was impracticable for a meeting to be called. The next case to be referred to, is Bengal and Assam Investors Ltd. v. J. K. Eastern Industries Private Ltd., (26) 60 C. W. N. 957. In this case an application was made under section 186 of the Companies Act, 1956, which corresponds to section 79 (3) of the Indian Companies Act (1913) P. B. Mukharji, J. held that this Court would not easily intervene in any Company meeting either in holding or calling or in conducting such a meeting and also that since the power of the Court under this section was great, the discretion granted must be very sparingly used and it should be used with great caution "so that this Court does not become either a share holder or a Director of the Company trying to participate in the internecine squabbles of the Company." 51. IT will be seen from he decisions of this Court discussed above, that the power of the Court under section 186 of the Act should be used, if at all, sparingly and with great caution. The power of the Court under this section to direct a general meeting of the Company is indeed wide and extraordinary in nature, because it is for the Company to manage its own affairs including the calling of a general meeting. The Court intervenes, if at all, only if it is satisfied that it is impracticable to call or hold a general meeting. 52. The Court intervenes, if at all, only if it is satisfied that it is impracticable to call or hold a general meeting. 52. IN this connection I should refer to Article 80 of the Articles of the Company which provides that the Directors shall on the requisition of the holders of not less than one tenth of the paid up capital of the Company forthwith proceed to convene an extraordinary general meeting of the Company. If the Directors refuse to call the requisition meeting, the requisitions themselves may call the meeting on certain conditions. No explanation has been given as to why the petitioner and Tribeni Debi have not submitted a requisition for an extraordinary general meeting of the Company. For the reasons mentioned above, I do not think that I should direct a general meeting of the Company for the purpose of appointment of Directors. Apart altogether from the fact that the petitioner itself has in its petition made out grounds against a general meeting, this Court should not direct a general meeting of the Company to be held in the circumstances mentioned above. The arguments in this application were closed on March 10, 1964 when I reserved judgment for further consideration of the matter. On the next day Mr. S. K. Mukherjee appearing for Sambhu Prosad Bajoria mentioned the matter upon notice to the petitioner, that the Directors were going to close the mills, for various difficulties discussed earlier in the judgment within a few days. On March 18, 1964 Mr. De appearing for the petitioner mentioned to me that the mill had in fact been closed and prayed for immediate appointment of an Administrator to take charge of the Company's assets and books. As the respondents were not present in Court, when the matter was mentioned by Mr. De, I directed the matter to appear in the list to be mentioned on March 19, 1964. On March 19, 1964 the matter appeared in the list, marked to be mentioned, when Mr. De again submitted that the Directors had closed the mills, and that the assets of the Company were in jeopardy and the Court should immediately appoint an Administrator to take charge of the company's assets, books and documents. Mr. On March 19, 1964 the matter appeared in the list, marked to be mentioned, when Mr. De again submitted that the Directors had closed the mills, and that the assets of the Company were in jeopardy and the Court should immediately appoint an Administrator to take charge of the company's assets, books and documents. Mr. S. K. Mukherjee appearing for the Bajoria respondents submitted that since judgment had been reserved, an interim order should not be made appointing an Administrator at this stage. He also submitted that although the mills had been closed, that is no ground for appointment of an Administrator. After hearing the parties I made an order on March 19, 1964 superseding the Board of Directors and appointing an Administrator. It seemed to me that in the situation that had arisen by reason of the closure of mill, an Administrator should be appointed forthwith to take charge of the company's assets and books of account and documents. In the order I then made, I said that the final orders should be made by me later on. 53. THE order made on March 19, 1964 is hereby confirmed. The Administrator will remain in charge of the Company's assets until final determination of the suits relating to the claims, of the parties to the title to the shares of the company. On such determination, the share register of the company should be rectified in accordance with the decrees and orders that may be made in the said suits. Such rectification should be made by the Administrator within one month from the date of service upon him of certified copies of decrees and orders relating to the title to the shares of the company. A general meeting of the Company should be called by the Administrator for the purpose of appointment of Directors according to the Articles of Association of the Company. Such a meeting should be called and held within ten weeks from the date of rectification of the share register. The Administrator will act as Chairman of the general meeting. The Administrator will make over charge of the Company's assets, books of account and documents and all other papers to the Board of Directors of the Company within four weeks from the appointment of the Directors as herein provided. The Administrator will act as Chairman of the general meeting. The Administrator will make over charge of the Company's assets, books of account and documents and all other papers to the Board of Directors of the Company within four weeks from the appointment of the Directors as herein provided. Upon making over charge of the assets and books of account and documents as herein provided the Administrator will stand discharged. 54. THE Administrator will have the accounts of the Company audited by the Company's auditor and the balance sheet and profit and loss account prepared. The Administrator will be at liberty to apply to this Court for leave to call the Annual General Meetings for consideration of the Balance Sheet and Profit and Loss Account and for adoption of same, if thought fit. The Administrator will act as Chairman of such annual general meetings. Voting at such annual general meetings will be subject to and in compliance with the orders for injunctions already made and also in compliance with any other order for injunction that may be made by this Court or any other Court of competent jurisdiction. The Administrator will be at liberty to engage a solicitor, if necessary. He will be also at liberty to incur expenditure to the extent of Rs.200/- per month for the salary and wages of clerical and other staff that he may consider fit to appoint. He will also be at liberty to apply for such further directions as may be necessary. The costs of the petitioner will be paid out of the assets of the Company.