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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 10^TH DAY OF AUGUST, 2021

BEFORE

THE HON'BLE MR. JUSTICE H.P. SANDESH

R.F.A.No.1305/2005 (DEC)

BETWEEN:

1.

M/s. SRILAKSHMI ELECTRO SMELTERS

PRIVATE LIMITED

CORPORATE OFFICE AT SWATHI COURTS

112-B, KATTOOR ROAD

COIMBATORE-641 037

REPRESENTED BY ITS MANAGING DIRECTOR

2.

SRI P.VENKATAPATHY

S/O PAPPUSWAMY NAIDU

AGED ABOUT 47 YEARS

THE ADDRESS OF THE APPELLANT No.2 IS

THAT OF APPELLANT NO.1 HEREINABOVE.

SINCE DECEASED BY HIS LRS.,

2(A). SMT. V.MALLIKA

W/O LATE P.VENKATAPATHY

AGED ABOUT 50 YEARS

2(B). SRI V.RANJITH CHANDRA

S/O LATE P.VENKATAPATHY

AGED ABOUT 23 YEARS

2(C). SMT.P.KAMALAMMAL

MOTHER OF LATE P.VENKATAPATHY

AGED ABOUT 81 YEARS.

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ALL ARE R/AT KAMALALAYA,

4-1, CO-OPERATIVE COLONY,

UPPILIPALAYERM

COIMBATORE-641 105.

LRs9 OF A2(A) TO 2(C)

ARE BROUGHT ON RECORD

AS PER COURT ORDER DATED 27.11.2012 & APPELLANTS

(BY SRI SOMASHEKAR, ADVOCATE FOR

M/s. S.N.MURTHY ASSOCIATES)

AND:

1.

SRI PRABHAKAR

S/O K VARADAN

AGE: MAJOR,

NO.1956/82, 8^TH 8E9 BLOCK

2^ND STAGE, RAJAJINAGAR

BENGALURU-560 010.

2.

SRI K. VARADAN

S/O KRISHNASWAMY

AGE: MAJOR

SINCE DECEASED BY HIS LRs.,

R1.

SRI V.PRABHAKAR

S/O LATE K.VARADAN

R3.

V.VIJAYAKUMAR

S/O K.VARADAN

R4.

SRI V.BABU

S/O LATE K.VARADAN

LRs OF R2 i.e., R1, R3 AND R4

ARE BROUGHT ON RECORD

AS PER COURT ORDER DATED 26.11.2010

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3.

SRI V.VIJAYAKUMAR

S/O K.VARADAN

AGE: MAJOR

4.

SRI V. BABU

S/O K. VARADAN

AGE: MAJOR

THE ADDRESS OF

RESPONDENT Nos.2 TO 4 ARE

THAT OF RESPONDENT NO.1.

... RESPONDENTS

(BY SRI G.PAPI REDDY, ADVOCATE FOR R1, R3 AND R4;

R2 IS DEAD AND R1, R3 AND R4 ARE TREATED AS HIS

LRs9 VIDE ORDER DATED 27.11.2012)

THIS R.F.A. IS FILED UNDER SECTION 96 OF CPC

AGAINST THE JUDGMENT AND DECREE DATED 06.06.2005

PASSED IN O.S.NO.10189/1998 ON THE FILE OF XXVIII

ADDITIONAL CITY CIVIL JUDGE, MAYOHALL UNIT, BENGALURU

(CCCH-29), DISMISSING THE SUIT FOR DECLARATION AND

PERMANET INJUNCTION.

THIS R.F.A. HAVING BEEN HEARD AND RESERVED FOR

JUDGMENT

ON

27.07.2021,

THIS

DAY,

THE

COURT

PRONOUNCED THE FOLLOWING:

J U D G M E N T

This appeal is filed by plaintiff Nos.1 and 2 challenging the

judgment and decree of dismissal of the suit filed by plaintiff

Nos.1 to 5 passed in O.S.No.10189/1998 dated 06.06.2005 on

the file of XXVIII Additional City Civil Judge at Mayohall Unit,

Bengaluru.

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2.

The parties are referred to as per their original

rankings before the Trial Court to avoid the confusion and for the

convenience of the Court.

3.

The factual matrix of the case is that the plaintiffs in

the suit have contended that the defendants were the promoters

and had started a factory at Erumathala, Aluva, Kerala. The

factory building was half constructed and due to financial

difficulties, the respondents were not able to complete the same.

The plaintiff No.2 and other three persons have approached the

respondents with an offer to take over the Company and paid a

sum of Rs.46,75,000/- to the defendants towards taking over of

the first plaintiff 3 company. Accordingly, on 15.03.1996, 10

shares each was allotted by the defendants to plaintiff No.2 and

others. On 16.03.1996, respondent Nos.2 to 5 have resigned

from the Company. On 18.03.1996, Form No.32 was filed about

induction of plaintiff No.2 and 3 others as Directors of first

appellant 3 Company. On 26.03.1996 Form No.2 was filed

before the Registrar of Companies about co-opting plaintiff No.2

and 3 others as Directors. On 03.04.1996, defendant No.1 gave

a letter and handed over the charge of first plaintiff - company.

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On 17.10.1996, the new board of management allotted 6270

shares each to plaintiff No.2 and 2 others and 6120 shares to

another director. Respondent No.1 was continued as Joint

Managing Director.

4.

When the plaintiffs took over the Kerala Factory, it

was half constructed and the same was completed by obtain