The court affirmed that acts of directors constituting financial mismanagement and oppression warrant removal from office and restitution of misappropriated funds.

ORDER

1. This present Petition is filed by the Petitioner under Sections 241, 242, 119 and 213 of the Companies Act, 2013 read with Rules 11, 23 and 43 of the NCLT Rules, 2016 seeking the following reliefs:

a. To declare the acts of the Respondents No.2 to 5 as oppressive and prejudicial to the interests of the 1^st Respondent Company and the Petitioner;

b. To conduct an investigation into the affairs of the Respondent Company under Section 213 of the Companies Act, 2013;

c. To direct the Respondents to conduct the affairs of the 1^st Respondent Company in accordance with the provisions of the Companies Act, 2013 and applicable law;

d. To direct the Respondents to not alter the equity shareholding structure in the Respondent Company except in accordance with law;

e. To direct the Respondents to provide the following documents to the Petitioner;

i. Books of Accounts of Respondent Company since incorporation till date;

ii. Bank Account details of Respondent Company and the Account Statement since incorporation till date;

iii. Minute Book for meetings of Shareholders and Directors of Respondent Company till date;

iv. Details of Notices issued by the Respondent Company calling for meetings till date;

v. Details of all loans obtained by the Respondent Company till date; vi. Details of all security/ charge created by the Respondent Company on its assets till date;

vii. Copies of all loan agreements and security documents in relation to loans obtained by Respondent Company till date; and viii. Bill Books, Purchase Orders, Sales Invoice, Electricity Bills etc., of the Respondent Company for the last 5 years.

f. To remove Respondents 2 to 5 as Directors from the Board of Directors of Respondent No.1 Company as they have grossly violated their fiduciary duties towards the Company and have intentionally siphoned off funds to make wrongful gains.

g. To direct the Respondents No.2 to 5 to jointly and severally return the entire amount of Rs.23,09,07,181/- (Rupees Twenty Three Crores Nine Lakhs Seven Thousand One Hundred and Eighty One only) together with interest at the rate of 18% per annum which they have siphoned off from the 1^st Respondent Company and all further such amounts which may be determined by the Forensic/ Special Auditors appointed by this Hon’ble Tribunal during the pendency of this Company Petition.

h. To direct Respondent No.7, Aarush Super Block Building Materials Private Limited and Respondent No.3’s son Pavuluri Yugandhar to transfer into the name of the 1^st Respondent Company lands purchased by them in their names using the money siphoned off from the 1^st Respondent Company being approximately Acres 23-00 Cents or transfer the money equivalent of the said Acres 23-00 Cents at the market rate as on the date of Order of this Hon'ble Tribunal.

2. AVERMENTS BY PETITIONER

2.1 Petitioner is a doctor by profession and a resident of United States of America. The Petitioner is a promoter and Director of 1^st Respondent Company. Petitioner is the shareholder of Respondent Company holding1604400 equity shares in the respondent Company which is 40% of the paid-up equity share capital of the Respondent Company.

2.2 Respondent No.2 (Director and promoter of the 1^st Respondent Company holding 12,03,300 equity shares which is 30% of the paid-up share capital of the 1^st Respondent Company) is the son of the 4^th Respondent (promoter and shareholder holding 4,01,100 equity shares which is 10% of paid-up share capital of the 1^st Respondent Company) and 5^th Respondent( promoter and shareholder holding 4,01,100 equity shares which is 10% of the paid-up share capital of the 1^st Respondent Company) is the son of the 3^rd Respondent( promoter and shareholder holding 4,01,100 equity shares which is 10% of the paid-up share capital of the 1^st Respondent Company) and 6^th Respondent is the son of 3^rd Respondent Respondent no.7 and Respondent No.8 are Companies.

2.3 It is averred that Petitioner is represented by his General Power of Attorney Holder Mr. Ramanand Namburi