1. The petitioners, who collectively held 7,600 shares out of 9,800 shares, thus contributing 77.6% shares in M/s Pioneer Colours & Coatings Private Limited, have filed this petition alleging that the 2^nd respondent, without the consent and knowledge of the majority shareholders had issued and allotted, on various dates, 35,500 shares to himself and to respondents 3, 4 & 5 and had thus reduced the shareholding of the petitioners to 16.8%. This according to the petitioners, is a grave act of oppression and as such they have sought that the allotment of 35,500 shares should be declared as null and void and that an AGM should be directed to be held to appoint directors.

2. This petition was mentioned on 21.11.2006. While directing the company/respondents to maintain status-quo with regard to the shareholding as well as fixed assets of the company, directions were also given to the respondents to file their reply by 10.12.2006 and the matter was fixed for hearing on 24.1.2007. When the matter was taken up on a subsequent date on 1.3.2007, the Counsel for the petitioner submitted that notices were sent to the registered office of the company and also to the respondents as per their addresses in the ROC office, but, the same came back undelivered. Since the petitioners submitted that the address of the company and the respondents had changed, notices were sent to them as per the order of this Board to the new address, but they also came back undelivered. Accordingly, on 18.1.2008, this Board directed the petitioners to issue a public notice regarding the pendency of the petition and the notice, was published in "Statesman" on 1.3.2008. Even then, the respondents have neither filed their replies to the petition nor entered appearance. Accordingly, the matter was heard ex-parte on 6.8.2008. Since it was felt that one more opportunity should be given to the respondents, notices were given to them for hearing on 27.3.2009, but, none appeared and, therefore, the matter was again heard on that day ex-parte.

3. Shri Mathur, appearing for the petitioners submitted: The company was promoted by the 3rd petitioner, 2^nd respondent and one P.C. Kulsherestha for manufacture of printing ink in a factory at Gurgaon. The day-to-day affairs of the company were being looked after by the 2^nd respondent. The petitioners 1 & 5 were appointed as directors on 27.11.2000 and on the same day the 4 respondent and two other persons were also appointed as directors. The company was incorporated with an authorized capital of Rs.5 lakhs and the paid-up capital was Rs.98,000/- consisting of 9,800 shares of Rs.10/- each. The petitioners held 7,600 shares constituting 76.6% shares, while the 2^nd respondent held only 1,200 shares constituting about 11% shares. After 27.11.2000, the 2^nd respondent, being in management of the company, did not send any notice for any Board meeting. Aggrieved with the inaction of the 2^nd respondent, the petitioners caused a legal notice to be issued to the 2^nd respondent on 25.4.2002 asking him to convene a Board meeting immediately. Simultaneously, they also issued a notice under section 190 for convening an EOGM under section 169 of the Companies Act to consider a proposal to remove the 2^nd respondent as a director. However, no such EOGM was convened. Since the petitioners were sidelined, they caused an inspection of records in the office of ROC. The inspection revealed that the company had allotted shares on five occasions from 19.6.2002 to 14.7.2003 to the respondents 2 to 5. The total number of shares allotted on these days was found to be 35,500 shares. By these allotments, while the respondents' shareholding went up from 11% to 83%, the shareholding of the petitioners came down from 77.6% to 16.8%. In S. Varadharajan v. Udhayam leasing & Investment (P.) Ltd. [2005] 65 CLA 21, this Board has held that even though the provision of section 81 are not applicable to a private company, issue of shares only to gain majority to a sing