1. The petitioner along with seventeen other consenting shareholders, holding in excess of ten percent of the paid up capital of M/s Samarasa Mutual Benefit Fund Limited, ("the Company"), aggrieved on account of (a) appointment of the respondents 2 to 4 as directors in violation of articles of association of the Company; (b) improper conduct of the day-to-day affairs of the Company at the hands of the respondents 2 to 4, which is prejudicial to the interests of the Company and its members; (c) unilateral appointment of the second respondent as Chairman of the Company; (d) illegal rejection of nominations of V.S. Raghavan and S. Sadagopan for the office of director at the 31^st annual general meeting; (e) exertion of force on R. Muthukumarasamy to withdraw his nomination for directorship; (f) irregular conduct of the proceedings of the 31^st annual general meeting and issue of gifts to the shareholders; (g) several of discrepancies and financial irregularities reflected in the auditor's report and the balance sheet of the Company for the years 1999-2000 and 2000-2001; (h) failure to rectify any of the irregularities and discrepancies pointed out in the auditor's report; (i) preventing all the shareholders to participate in the 31^st annual general meeting of the Company; (j) fabrication of the annual report and balance sheet; (k) suspension of the petitioner from the office of director at the Board meeting held on 29.11.2001; and (1) payment of reduced dividend to members, as reiterated by Shri P.C. Harikumar, learned Counsel, have invoked the jurisdiction of the CLB under sections 397 and 398 of the Companies Act, 1956 ("the Act"), claiming the following reliefs :

(a)to declare that 31^st annual general meeting of the Company held on 28.09.2001 is null and void and decisions taken in the annual general meeting are not binding on its shareholders;

(b)to declare that the respondents 2 to 4 are not additional directors of the Company; and

(c)to cause an investigation into the accounts of the Company maintained by the respondents 2 to 4 and direct them to make good the loss suffered by the Company.

2. Shri K. Ramasamy, learned Counsel, appearing for the respondents opposed the Company Petition on the following, among other, grounds :

nThe Company Petition does not meet the requirements of section 399 of the Act, since the required number of members, neither authorised appropriately the petitioner to file the present petition nor applied their mind, while giving consent letter in favour of the petitioner. A mere consent for filing an application under section 397 or 398, as held by the Madras High Court in M.C. Duraiswami v. Sakthi Sugars Ltd [1980] 50 CC154, without any particulars such as the nature of the allegations or complaint to be made in the petition and the nature of relief sought to be claimed in the petition cannot be the result of an application of mind to the question before them. The consent letter produced by the petitioner does not indicate whether any of the seventeen consenting shareholders has applied his or her mind either with reference to the grievances or the reliefs, as set out in the Company Petition, especially when the recitals of the consent letter including the reliefs thereto arc in variance to those forming part of the Company Petition. This Board in V. Shankar v. South India Concerns Ltd [1997] 1 Comp. LJ 307 held that (a) the consent in writing is a substantial matter, which goes to the root of entitlement to file a petition under section 397/398 and hence its validity has to be viewed rigidly; (b) there must be an indication in the consent letter that the consentors are aware of the various acts of oppression as well as mismanagement and the reliefs which are required to put an end to the acts complained of; and (c) the application of mind by the consentors must be apparent from the consent letter. The consent letter of the consenting shareholders, in the present case, not satisfying any of the afores