1. The petitioners constituting one-half of the total number of members of M/s Tirupur Karur Transports Private Limited, ("the Company"), before further issue of shares impugned in the Company Petition, aggrieved purportedly on account of, inter alia, (a) unauthorised increase of the authorised capital of Rs. 1 lakh to Rs. 2/- lakhs; (b) illegal issue of additional shares of the Company to the respondents. 4 to 19, without any consideration thereby, reducing the petitioners to a minority status; (c) illegal appointment of the respondents 4 & 5 as directors; (d) illegal cessation of the petitioners as directors of the Company; (e) amendment of the articles of association of the Company at the annual general meeting of 26.09.2001; (f) fictious borrowings from directors and relatives; (g) lease of the Company's immovable property to the 20th respondent and construction of a building in the said property, thereby changing the character of the assets of the Company; (h) manipulation of the respondents, by which the Company ceased to be the subsidiary of the second respondent Company; and (i) preventing the petitioners from participating in the management of the Company, have invoked the jurisdiction of the Company Law Board, under section 397 read with section 402 of the Companies Act, 1956 ("the Act"), seeking the following reliefs:

(i)to set aside the increase of authorised capital and the issue of further shares to the respondents 2, 4 to 19;

(ii)to rectify the register of members of the Company, deleting the names of the respondents 4 to 19 as members of the Company;

(iii)to declare that the co-option of the respondents 4 & 5 as directors is not binding on the Company;

(iv)to declare that the annual general meeting held on 26.09.2001 and the extraordinary general meeting held on 15.11.2001 are not binding on the Company and to declare that any action taken at the aforesaid meetings is not binding on the Company;

(v)to declare that the removal of the petitioners from directorship of the Company is void and illegal;

(vi)to remove the third respondent from the board of directors and consequently from the post of the Managing Director of the Company;

(vii)to declare that the borrowings made by the respondents 3 to 5 from the 20^th respondent are not binding on the Company:

(viii)to declare that the lease of the property belonging to the Company in favour of the 23^rd respondent is not binding on the Company; and

(ix)to declare that the 21^st respondent is not entitled to deal with the property belonging to the Company.

2. Shri T.K.. Seshadri, learned Senior Counsel, while initialing his arguments in support of the petitioners, submitted:

OThe Company has been incorporated in July, 1947 with the main object of carrying on the business of common carriers. Palanisamy Naidu, father of the second petitioner and the third respondent was one of the signatories of the memorandum of association and one of the first directors of the Company. As at March 2001, the second respondent Company held more than 90% of the shares of the Company and the balance was held among the petitioners (2.77%+3.73%) and the third respondent (2.90%). The second respondent Company's main asset is its holding in the Company, which holds valuable immovable properly in the town of Tiruppur. Alter the death of Palanisamy Naidu in 1984, the petitioners and the third respondent have been directors of the Company and the third respondent became Managing Director of the Company, pursuant to an understanding among themselves.

OThe third respondent colluding with the respondents 4 & 5 in March 2001 had fabricated records, as if, (a) the annual general meeting was held on 26.09.2001, wherein the articles were reportedly amended, but no such meeting was ever held, (b) the Company had borrowed funds from its directors and relatives, including from the 20^th respondent, without any need for funds against security of the Company's assets, while the Company ceased to carry on any business f