1. In this order I am considering Company Petition No. 47 of 2004 filed by Sh. Prabhjit Singh Johar (P-1) & Anr. under Sections 397 and 398 read with Sections 402, 403, 406 and 408 of the Companies Act, 1956 against M/s. Johar Hotels (P) Ltd. (R-1) & Ors. alleging oppression and mismanagement.

2. M/s. Johar Hotels Pvt. Ltd. (R-1) was incorporated on 14^th January 1980 having its registered office at Baghat Barzulla, Srinagar, Jammu & Kashmir. The Initial authorized capital of R-1 Company was Rs. 5.00 lakhs while the issued subscribed and paid up capital was Rs. 10,000/- comprising of 100 shares of Rs. 100/- each. The first promoter/ Directors and subscribers to the issue were P-1 and R-2; each holding 50 shares each of face value of Rs. 100/-. The control and management of the Company was divided equally between the P-1 and R-2. It has an authorised share capital of Rs. 18,00,000/- divided into 18,000 equity shares of the value of Rs. 100/- each. The main objects of the R-1 Company are to carry out the business of running hotels.

3. The Counsel for the petitioners pointed out that Shri Prabhjit Singh Johar (P-1) who is the younger brother of Shri Amarjit Singh Johar (R-2) upon the death of their father Shri Surinder Singh Johar in 1961, when he died intestate were aged 13 years and 20 years respectively. My attention was drawn to the family properties and business which were as under:

(i) Residential House at Baghat Barzulla, Srinagar with land measuring 15 kanals approximately. (Paragraph 4.1 of the MOU dated 27.9.87; (ii) Residential House at 116-A/D, Gandhi Nagar, Jammu. (Paragraph 4.2 of the MOU dated 27.9.87); (iii) Land at Gol. Tehsil Jammu near Bank Colony approximately 6 to 7 kanals (Paragraph 4.3 dated 27.9.87); (iv) Land at Gol Gujarat, Jammu approximately 42 kanals (Paragraph 4.4 of the MOU dated 27.9.87); (v) Land at Kud approximately 4 kanals (Paragraph 4.5 of the MOU dated 27.9.87); (vi) M/s Johar Enterprises, Srinagar an I ATA approved Cargo Agency partnership firm. (Paragraph 4.6 of the MOU dated 27.9.87); (vii) M/s Super Auto Centre, Jammu a partnership firm. (Paragraph 4.7 of the MOU dated 27.9.87); (viii) Johar Hotel Pvt. Ltd. At Club side Gulmarg (Paragraph 4.13 of the MOU dated 27.9.87); (ix) M/s Johar Holiday Resorts, a partnership firm at Gulmarg. (Paragraph 4.14 of the MOU dated 27.9.87); (x) Land at Buchwara Boulevard, Srinagar. (Paragraph 4.15 of the MOU dated 27.9.87); (xi) Land at Canal, Jammu, (Paragraph 4.16 of, the MOU dated 27.9.87); (xii) Land at Jammu near Amarsingh Club Nazool land. (Paragraph 4.17 of the MOU); and (xiii) Camp Land Jammu, Gol-Gjaral. (Paragraph 4.18 of the MOU ' dated 27.9.87)

4. Further, it was pointed out that the land at Gulmarg, in Kashmir is a leasehold property in respect of which a lease deed was executed by the State of J&K in favour of Late Shri Surinder Singh Johar. The State Government has by order dated 15.10.1981 recognized P-1 and R-2 as successors in interest and conferred the remaining interest in the lease property jointly and equally in their favour. The land on which the hotel is constructed is still in the name of both. In order to advance the interest of the family, in 1980 Johar Hotels Private Limited (in short JHPL) was incorporated and an application was made the State of J & K to give its consent to mortgage the interest in the Gulmarg land in favour of J & K State Financial Corporation and other Financial Institutions for the purpose of raising loans for its project of establishing a running a five star hotel.

5. My attention was drawn to a Memorandum of Settlement (MOS) dated 27.09.87 between Late Shri Surinder Singh Johar, the two branches of Late Shri Surinder Singh Johar's family headed by P-1 and R-2 broadly provided that: (a) properties with respect to which an amicable agreement had been arrived at were divided as per the terms agreed between the two branches; these were clubbed as group 'A' properties and; (b) properties with respect to which