ORDER

1. This present Petition is filed by Petitioner/ Shri Yata Srinivasa Reddy under Section 241 and 242 of the Companies Act, 2013 seeking the following reliefs to :

a. The regulation of conduct of affairs of the Company in future;

b. Direct the Respondent No.2 to reinstate the petitioner or his nominees as the director with immediate effect

c. Direct the Respondent No.2 herein to conduct through audit of the Company call for the EGM immediately

d. Direct the Respondent No.2 herein to pay the damages charges with respect to the wrongful information placed before the Registrar of Companies with respect to the Resignation of the petitioner to exceeding Rs.10,00,000/- (Rupees Ten Lakhs only);

e. Direct the Respondent No.2 not to divert the funds/ profits/ business of the Company into his newly incorporated company;

f. As per the Balance sheet filed by the Company for the year 2019 it is evident that an amount of Rs.90,00,000/- is available in the company, Direct the Respondents of the Company not to use the same until completion of the present case;

g. And pass such other order/orders, direction/directions as may deem just and proper in terms of Section 242 of the Companies Act, 2013.

2. AVERMENTS BY PETITIONER

2.1 It is averred that the Petitioner was approached by the Respondent No.2 as he intended to incorporate a new company to do Chit Fund business and the Petitioner to invest in the proposed company. After discussions, the petitioner decided to subscribe the share of the Company i.e., “Sri Adidurga Chit Fund Private Limited”.

2.2 It is averred that the Petitioner trusting the Respondent No.2 invested by way of subscription of the shares to the tune of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand Only) into the Company. And was nominated on the Board of the Company. Similarly, the Respondent No.2 introduced two more other persons who also infused capital in the Company and were made directors.

2.3 It is averred that the Respondent No.2 inducted two more directors on the condition that they also invest amount of Rs.1,50,000/- each. With that such induction of paid-up capital from all, the Respondent No.2 managed to collect an amount of Rs.9,00,000/- (Rs.1,50,000/- each from 6 Directors) and continued the business to rotating that money only.

2.4 It is further averred that the Respondent No.2 at any point of time never shared any documents or statement regarding the affairs of the management of the Company as well as its business. All the directors again invested an amount of Rs.50,000/- each into the company trusting words of the Respondent No.2 as well as with an intention to save the company from its financial crisis.

2.5 It is averred that after completion of 2 months, the Respondent No.2 used to provide Rs.6,000/- as remuneration to the directors other than the said amount no other payments were received by the directors of the company.

They had met their expenses on their own means and funds.

2.6 It is stated that apart from the investments infused as paid up capital by the directors into the company, they had contributed an amount of Rs.2,00,000/- each to purchase a shop for the company to do the business from that premises. Thus, the Contributions of the Directors totally amount to Rs.24,00,000/-(Rs.12,00,000 + 12,00,000) for the period 2011- 12. Thereafter Respondent No.2 decided to give a remuneration of Rs.10,000/- to all the directors. The applicants understand that there was no board resolution or shareholders resolution passed by the company for that effect.

2.7 It is averred that the petitioner decided to exit from the Company. An understanding was arrived between Respondent No.2 and the Petitioner to transfer his shares for a total consideration of Rs.5,00,000/- in place of his original investment of Rs.4,00,000/- along with the profits available in the company arrived at Rs.2,00,000/- in Total Rs.6,00,000/-. The Respondent No.2 also advised the Petitioner and other directors also to resign from the Company by taking the am