1. In this order I am considering Company Petition No. 12/2005 filed by the petitioners namely, Shri Dinesh Sharma (P-1) and Smt. Bina Sharma (P-2) under section 397/398 of the Companies Act, 1956 alleging "oppression" and "mismanagement" by the respondents namely Vardaan Agrotech Pvt. Ltd. (R-1); Shri Dwaraka Nath (R-2); Smt. Indira Sharma (R-3); Smt. Ekta Sharma (R-4); Smt. Geeta Vats (R-5) and Shri Rajesh Sharma (R-6). The petitioner No. 1 is the son and the Petitioner No. 2 is the daughter-in-law of Respondent No. 2.

2. The undisputed facts of the case are: The respondent No. 1 company namely, Vardaan Agrotech Pvt. Ltd. was incorporated as a private limited company on 23-10-2000 having its Regd. Office initially at Rohini and then at 29/2, Ground Floor, East Patel Nagar, Delhi. The initial capital of the company was Rs. 1 lakh divided into 10,000 shares of Rs. 10 each. The company was jointly promoted by P-2 and R-2 by subscribing 2,100 equity shares of Rs. 10 each. As per the records of the Registrar of Companies the authorized share capital of the company at present is Rs. 7,45,00,000 divided into 74,50,000 equity shares of Rs. 10 each and the issued and subscribed capital of the company is Rs. 7,36,15,000 divided into 73,61,500 equity shares of Rs. 10 each. Petitioner No. 1 holds Rs. 5,93,300 of Rs. 10 each (fully paid) and petitioner No. 2 holds 24,100 equity shares (fully paid) including holding 2,100 equity shares by subscribing to the Memorandum and Articles of Association of the company. The petitioners jointly hold 6,48,300 equity shares of Rs. 10 each. Respondent No. 2 and Petitioner No. 2 were the first directors of the company w.e.f. 23-11-2000. Petitioner No. 1 was appointed as Director and Managing Director of Respondent No. 1 company vide Board’s resolution dated 23-7-2002. The respondent company is engaged, inter alia, in the business of dehydration, irradiation process, preserving of all kinds of agricultural, horticultural and food items of every description by way of chemical or cobolt-60 nuclear science electron beams or of any other type of dehydration. The project is being implemented under the guidance of the Bhabha Atomic Research Centre and the Atomic Energy Regulations Board with the investment of more than Rs. 10 crores taken from the Technology Development Board (TDB), Ministry of Science and Technology, New Delhi (Rs. 4.95 crores), and from the Ministry of Food Processing, New Delhi (Rs. 7.42 crores) besides other assistance taken from Banks. The Technology Development Board by sanctioning a loan of Rs. 4.95 crores facilitated the commissioning of the project of the company.

3. Shri Krishna Kumar, counsel for the petitioner contended that Peti-tioner No. 1 who was the Managing Director of the company appointed vide Board’s resolution dated 23-7-2002 has to be the permanent Managing Director of the Company as per Articles of Association. He was also conferred with the single authority to operate the bank account of the company w.e.f. 30-8-2002. Petitioner No. 2 along with R-2 had also provided their unconditional personal guarantees and pledged their entire shareholding alongwith Petitioner No. 1 with the TDB and other financial institutions. It was pointed out that more than 50 per cent investment was made by the petitioners at the time of purchasing the land for company’s purpose. It was pointed out that the company had only three directors viz. Petitioner No. 2, Respondent No. 2 and Petitioner No. 1. It was averred that R-2 illegally bypassing and violating the legal provisions of the Companies Act removed the petitioner No. 1 from the directorship of the company by a fictitious resolution of the Annual General Meeting on 30-9-2003 without giving notice of the Annual General Meeting and the Board Meeting for calling the Annual General Meeting. It was pointed out that such illegal removal of the petitioner from the Board is highly objectionable and oppressive to the petitioner. The counsel