JUDGMENT: The appeals are filed against the order of the Company Law Board, Principal Bench, sitting at Chennai dated 21.5.2000 made in C.P. Nos.68 and 69 of 1998. The respondents in C.P. No.69 of 1998 are the appellants in C.M.A. No.923 of 2000 and the respondents in C.P. No.68 of 1998 are the appellants in C.M.A. No.924 of 2000. The petitioner in C.P. No.69 of 1998 is the respondent in C.M.A. No.923 of 2000 and the petitioner in C.P. No.68 of 1998 is the respondent in C.M.A. No.924 of 2000.

2. The appeals deal with two companies, viz., M/s.Micromeritics Engineers Private Limited and M/s.Microparticle Engineers Private Limited. As far as Microparticle Engineers Private Limited is concerned, it was incorporated on 13.1.1992 under the Companies Act, 1956 (hereinafter referred to as ‘the Act’). The respondent in C.M.A. No.924 of 2000, by name, Senthamarai Munusamy along with S.Sounder, the second appellant and one Nalini Chandrasekar were holding shares in the said company and all of them were holding 990 shares each. Later on, Nalini Chandrasekar transferred her shares equally to the second appellant Sounder and the respondent Senthamarai Munusamy with the result the second appellant Sounder was holding 1485 shares out of 2970 shares initially allotted by M/s.Microparticle Engineers Private Limited.

3. The respondent Senthamarai Munusamy approached the Company Law Board stating that on perusal of the records of the Registrar of Companies, she found that further shares were alleged to have been allotted on 16.4.1997 to the close relatives of the second appellant, Sounder. According to the respondent Senthamarai Munusamy, the allotment was ex facie illegal and invalid, and hence, she approached the Company Law Board for oppression of her rights as a member of the company.

4. Before considering the issues raised in the appeal, it is relevant to mention here that M/s.Microparticle Engineers Private Limited, as already observed, was incorporated on 13.1.1992 under the provisions of the Act and having its registered office at 298, 4th Floor, Khaleel Shiraji Estate, Fountain Plaza, Pantheon Road, Egmore, Chennai-8 and the authorised share capital of the company is Rs.5,00,000 consisting of 5,000 equity shares of Rs.100 each and the paid up capital of the company is Rs.3 lakhs. The main objects of the company are to manufacture, produce, treat, process, manipulate, trade, etc. Its ancillary objects are set out in the memorandum of association. According to the respondent Senthamarai Munusamy, she was the promoter and a Director of the company, M/s.Microparticle Engineers Private Limited and subscribed her name in the memorandum of association as promoter. I have already set out the shares held by the second appellant, Sounder as well as the respondent Senthamarai Munusamy along with one Nalini Chandrasekar.

5. In 1985, the husband of the respondent herein, by name, Munusamy, who is the respondent in the other appeal in C.M.A. No.924 of 2000, along with one Chandrasekar and Sounder, second appellant herein, formed a partnership firm in the name and style, M/s.Micromeritics Engineers Private Limited and its nature of business, inter alia, was the manufacture and supply of machines for mixing, dispersion and size reduction and the company was catering mainly to the requirement of printing ink, paint and ceramic industries. The business of the firm, M/s.Micromeritics Engineers Private Limited expanded resulting in the acquisition of assets and in 1992, M/s.Micromeritics Engineers Private Limited the first appellant was incorporated to take over the business of the firm, M/s.Micromeritics Engineers Private Limited It is relevant to mention here that M/s.Micromeritics Engineers Private Limited took over the business of the associate firm, M/s.Micromeritics Engineers Private Limited.

6. The case of the respondents in both the matters before the Company Law Board was that both the companies, viz., M/s.Micromeritics Engineers Private Limited and

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