N. Kumar, J.—These two appeals arise out of the order passed by the Company Law Board, Additional Principal Bench, Chennai (Kobian Pte Ltd. v. Kobian India P. Ltd. [2005] 126 Comp Cas 675 ) under Section 402 of the Companies Act, 1956.

2. For the purpose of convenience, the parties are referred to as they are referred to in the proceedings before the Company Law Board.

3. The Petitioner M/s. Kobian Pte Ltd., is a body corporate incorporated in Singapore owning the brand name "Kobian" and "Mercury". It is engaged in the manufacture of mother-boards and other accessories used in computer hardware. It has introduced several products all over the world including India. Kobian ECS India P. Ltd., an associate company of the Petitioner is manufacturing "Mercury" brand mother-boards and other computer accessories in India.

4. The case of the Petitioner is that it employed the second Respondent, Sunil Sharma in order to set up a subsidiary company in India for the purpose of servicing its products and of its other associates. Accordingly, the company was incorporated with an authorised share capital of Rs. 30,00,000 divided into 3,00,000 equity shares of Rs. 10 each. The second Respondent, his wife, the third Respondent subscribed to the memorandum and articles of association of the company. However, they did not make any material investment of their own. The Petitioner had transferred a sum of Rs. 7,50,000 by way of gift to the second Respondent, which was invested by him towards his share capital thereby, allotting 75,500 equity shares of Rs. 10 each in his favour. Respondents Nos. 2 and 3 are mere name lenders and functioning not more than as trustees to the interest of the Petitioner.

5. The Petitioner had invested a sum of Rs. 22,42,500 towards the allotment of shares in the company upon which, 2,24,250 equity shares of Rs. 10 each were allotted on March 30, 2000, in favour of the Petitioner constituting 74.75 per cent. of the paid-up capital of the company thereby, the company became a subsidiary of the Petitioner. After such allotment of shares, the share certificates were not sent to the Petitioner in spite of repeated requests and demands. However, it is not in dispute that the first Respondent-company is a subsidiary of the Petitioner-company.

6. According to the Petitioner, when the Respondents failed to furnish the requisite information, the Petitioner was constrained to correspond with the statutory auditor of the company who provided a very bald and vague certificate on shareholding structure upon which, the Petitioner came to know the allotment of 1,60,000 shares made exclusively in favour of the second Respondent on May 3, 2004, by gaining controlling interest of 51.25 per cent. and simultaneously reducing the Petitioner to a minority of 48.75 per cent. Thus, the Respondents committed criminal breach of trust and acted unfairly. On verification, the Petitioner came to know that Form No. 5 was filed on April 30, 2004, disclosing the enhancement of authorised capital from Rs. 30,00,000 to Rs. 1,00,00,000 purportedly approved at the fourth annual general meeting held on September 30, 2003. However, copy of the notice dated June 30, 2003, received by the Petitioner from the company convening the fourth annual general meeting on September 30, 2003, did not contain any agenda of the resolution under Section 173 of the Act, to enhance the authorised capital of the company. Similarly, copy of notice of the fourth annual general meeting filed by the company with the Income-tax Authorities, Bangalore, did not contain such an agenda. The notice of the fifth annual general meeting of the company dated June 30, 2004, is on similar lines of the notice dated June 30, 2003, sent for convening the fourth annual general meeting of the company, without details of timing of the meeting, business relating to profit and loss account, name of the auditor, etc., though the fifth annual general meeting of the company was reportedly held on J