N.Krishna Murthy v. Chandra Spinning and Weaving Mills Private Limited

Karnataka HC24 Nov 2023COP/10/1991

Case brief

AI extract

What is this about?

The High Court of Karnataka upheld an application to transfer Company Petition Nos. 10 and 11 of 1991, involving proceedings under Sections 397 and 398 of the Companies Act 1956, to be heard and disposed of by the National Company Law Tribunal at Bengaluru under Section 434(1)(c) of the Companies Act 2013.

What did the court decide?

Company Petition Nos. 10 and 11 of 1991 were transferred to the National Company Law Tribunal (NCLT) at Bengaluru to be heard and disposed of.

N.Krishna Murthy Vs Chandra Spinning and Weaving… — Company and Corporate | Karnataka HC (2023)

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1 - NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 24^TH DAY OF NOVEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE C.M. POONACHA

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COMPANY PETITION NO. 10 OF 1991 A/W COMPANY APPLICATION NO.97 OF 2022 C/W COMPANY PETITION NO. 11 OF 1991 A/W COMPANY APPLICATION NO.340 OF 2012

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IN COP NO. 10/1991

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BETWEEN:

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N. KRISHNAMURTHY, SINCE DEAD BY HIS LRS.

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1(A). M.S. NAGARTHNA, D/O LATE M. KRISHNAMURTHY, AGED ABOUT 70 YEARS,

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Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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1(B). BALACHNARA S/O LATE M. KRISHNAMURTHY, AGED ABOUT 56 YEARS,

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1(C). SHYMASUNDARA, S/O LATE M. KRISHNAMURTHY, AGED ABOUT 55 YEARS,

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1(D). PURUSHITTAMA, S/O LATE M. KRISHNAMURTHY, AGED ABOUT 50 YEARS,

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ALL ARE RESIDING AT NO. 73/1, 5TH MAIN,

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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CHAMARAJPET, BENGALURU - 560 018.

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M. NAGARAJ, S/O D.R. MADHAVAKRISHNAIAH, AGED ABOUT 48 YEARS, V MAIN ROAD, CHAMARAJPET, BENGALURU - 560 018. SINCE DEAD BY HIS LRS,

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2(A). SMT. BHAGYA NAGARAJ, AGED ABOUT 77 YEARS, W/O M. NAGARAJ, R/AT NO. 71, 5TH MAIN, CHAMRAJPET, BENGALURU SOUTH, BENGALURU - 560 018.

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2(B). SRI. YASHWANTH N, AGED ABOUT 54 YEARS, S/O M. NAGARAJ, R/AT NO. 71, 5TH MAIN, CHAMRAJPET, BENGALURU SOUTH, BENGALURU - 560 018.

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2(C). SRI. AJAY NAGARAJ, AGED ABOUT 51 YEARS, S/O M. NAGARAJ, R/AT NO. 71, 5TH MAIN, CHAMRAJPET, BENGALURU SOUTH, BENGALURU - 560 018.

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2(D). SRI. NAVEEN NAGARAJ, AGED ABOUT 47 YEARS, S/O M. NAGARAJ, R/AT NO. 71, 5TH MAIN, CHAMRAJPET, BENGALURU SOUTH, BENGALURU - 560 018.

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…PETITIONERS (BY SRI. R OMKAR, ADVOCATE FOR P1 (A,C,D) AND P2; SRI. PRAVEEN KUMAR N.K FOR P1(B) )

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AND:

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3 - NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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CHANDRA SPINNING AND WEAVING MILLS PRIVATE LIMITED, HAVING ITS REGISTERED OFFICE AT NO.79, 5TH MAIN ROAD, CHAMARAJPET, BENGALURU - 560 018.

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MANOHAR, S/O LATE MADHAVA KRISHNAIAH, SINCE DEAD BY LRS.

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2(A). CHANDRA PRABHA, W/O LATE MANOHAR, AGED MAJOR,

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2(B). SRINIVAS PRASAD, S/O LATE MANOHAR, AGED MAJOR,

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2(C). CHAITHANYA, S/O LATE MANOHAR, AGED MAJOR,

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2(A) TO 2(C) ARE RESIDING AT NO. 71, 5TH MAIN ROAD, CHAMRAJPET, BENGALURU - 560 018.

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M. MADHUSUDAN, S/O SRI. D.R. MADHAVAKRISHNAIAH, SINCE DEAD BY LRS.

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3(A). M. LEELA, W/O LATE MADHUSUDAN, AGED MAJOR, NO.22, 16TH CROSS, J.P. NAGAR 5TH PHASE, BENGALURU - 560 078.

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3(B). M. AARTHI, D/O LATE M. MADHUSUDAN, AGED MAJOR, NO.22, 16TH CROSS, J.P. NAGAR 5TH PHASE,

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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BENGALURU - 560 078.

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3(C). KIRAN NAGARAJ, D/O LATE M. MADHUSUDAN, AGED MAJOR, NO.307, 11TH MAIN, BEML LAYOUT, 3RD STAGE, R.R. NAGAR, BENGALURU - 560 098.

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3(D). M. AVINASH, S/O LATE MADHUSUDAN, AGED MAJOR, 47TH A CROSS, 8TH BLOCK, JAYANAGAR, BENGALURU - 560 011.

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…RESPONDENTS

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(BY SRI. JIDESH KUMAR, N.K, ADVOCATE FOR R2(A TOC); SRI. UDITA RAMESH, ADVOCATE OR R3 (A TO D); SRI. PARVATHY NAIR, ADVOCATE FOR R3 (A TO D) )

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THIS COMPANY PETITION IS FILED UNDER SECTION 155 OF THE COMPANIES ACT 1956 FOR RECTIFICATION OF REGISTER OF MEMBERS PRAYING TO DIRECT THE REGISTER OF MEMBERS OF THE COMPANY TO BE RECTIFIED BY DELETING THE ENTRIES THEREIN RELATING TO THE SHARES ALLEGEDLY ALLOTTED TO RESPONDENTS 2 AND 3 ON 10.08.1988 AND ETC.,

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IN CA NO. 97/2022

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BETWEEN:

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SMT. LEELA MADHUSUDHAN RESPONDENT NO. 3(A), W/O LATE SHRI. M. MADHUSUDAN, AGED ABOUT 75 YEARS, RESIDING AT NO.22, 16TH CROSS, J.P. NAGAR, 5TH PHASE, BENGALURU - 560 078.

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MS. M. ARATHI, RESPONDENT NO. 3(B),

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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D/O LATE SHRI. M. MADHUSUDAN, AGED ABOUT 57 YEARS, RESIDING AT NO.22, 16TH CROSS, J.P. NAGAR, 5TH PHASE, BENGALURU - 560 078.

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MS. KIRAN NAGARAJ, RESPONDENT NO. 3(C), D/O LATE SHRI. M. MADHUSUDAN, AGED ABOUT 53 YEARS, RESIDING AT NO.307, 11TH MAIN, BEML LAYOUT, 3RD STAGE, R.R. NAGAR, BENGALURU - 560 098.

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MR. M. AVINASH, RESPONDENT NO. 3(D), D/O LATE SHRI. M. MADHUSUDAN, AGED ABOUT 50 YEARS, RESIDING AT 47TH A CROSS, 8TH BLOCK, JAYANAGAR, BENGALURU - 560 011.

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LRS OF DECEASED RESPONDENT NO.3, SHRI. M. MADHUSUDHAN.

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…APPLICANTS

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(BY SMT. PARVATHY NAIR, ADVOCATE )

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AND:

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M/S CHANDRA SPINNING AND WEAVING PRIVATE LIMITED, A COMPANY ITS REGISTERED UNDER THE COMPANIES ACT,1913 AND HAVING ITS REGISTERED OFFICE AT NO.79, 5TH MAIN ROAD, CHAMARAJPET, BENGALURU - 560 018.

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MR. M. KRISHNAMURTHY, (PETITIONER NO.1) SINCE DEAD BY HIS LRS.

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1(A). MS. M.S. NAGARTHNA, (PETITIONER NO.1(A) ),

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6 - NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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D/O LATE MR. M. KRISHNAMURTHY, AGED ABOUT 75 YEARS,

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1(B). MR. BALACHNARA, (PETITIONER NO.1(B) ), S/O LATE MR. M. KRISHNAMURTHY, AGED ABOUT 61 YEARS,

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1(C). MR. SHYMASUNDARA, (PETITIONER NO.1(C) ), S/O LATE MR. M. KRISHNAMURTHY, AGED ABOUT 61 YEARS,

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1(D). MR. PURUSHOTTAMA, (PETITIONER NO.1(D) ), S/O LATE M. KRISHNAMURTHY, AGED ABOUT 60 YEARS,

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PETITIONERS NOS. 1(A) TO 1(C) ARE ALL RESIDING AT NO. 73/1, 5TH MAIN, CHAMARAJPET, BENGALURU - 560 018.

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MR. M. NAGARAJ, (PETITIONER NO.2) S/O D.R. MADHAVAKRISHNAIAH, AGED ABOUT 55 YEARS, RESIDING AT 5TH MAIN ROAD, CHAMARAJPET, BENGALURU - 560 018.

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MR. M. MANOHAR, (RESPONDENT NO.2) S/O LATE MADHAVA KRISHNAIAH, SINCE DEAD BY LRS.

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2(A). SMT. M.S. CHANDRA PRABHA, (RESPONDENT NO.2(A) ) W/O LATE SHRI. N. MANOHAR, AGED MAJOR, RESIDING AT NO.71, 5TH MAIN ROAD, CHAMRAJPET, BANGALORE - 560 018.

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2(B). MR. SRINIVAS PRASAD, (RESPONDENT NO.2(B) ) S/O LATE SHRI. N. MANOHAR, AGED MAJOR, RESIDING AT 63, 5TH CROSS, IAS OFFICER'S COLONY,

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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16TH MAIN, II STAGE, BTM LAYOUT, BANGALORE - 560 076.

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2(C). MR. CHITHANYA MANOHAR (RESPONDENT NO.2(C) ) S/O LATE SHRI. N. MANOHAR, AGED MAJOR, RESIDING AT NO.71, 5TH MAIN ROAD, CHAMRAJPET, BANGALORE - 560 018.

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…RESPONDENTS (BY SRI. R. OMKAR, ADVOCATE FOR R2 (A.C.D); SRI. PRAVEEN KUMAR N.K,ADVOCATE FOR R2(B) )

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THIS COMPANY APPLICATION IS FILED UNDER RULE 9 OF THE COMPANIES (COURT) RULES, 1959 READ WITH SECTION 434(1)(C) OF THE COMPANIES ACT, 2013 AND RULE 3 OF THE COMPANIES (TRANSFER OF PENDING PROCEEDINGS) RULES, 2016 PRAYIN TO TRANSFER THE INSTANT COMPANY PETITION COP 10/1991 AND THE CONNECTED COMPANY PETITION COP 11/1991 FOR BEING HEARD AND DISPOSED BY THE NATIONAL COMPANY LAW TRIBUNAL (NCLT) AT BENGALURU IN THE INTEREST OF JUSTICE AND EQUITY.

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IN COP NO. 11/1991

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BETWEEN:

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N. KRISHNAMURTHY, SINCE DEAD BY HIS LRS.

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1(A). M.S. NAGARTHNA, D/O LATE M. KRISHNAMURTHY, AGED ABOUT 70 YEARS,

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1(B). BALACHNARA S/O LATE M. KRISHNAMURTHY, AGED ABOUT 56 YEARS,

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1(C). SHYMASUNDARA, S/O LATE M. KRISHNAMURTHY, AGED ABOUT 55 YEARS,

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8 - NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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1(D). PURUSHITTAMA, S/O LATE M. KRISHNAMURTHY, AGED ABOUT 50 YEARS,

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ALL ARE RESIDING AT NO. 73/1, 5TH MAIN, CHAMARAJPET, BENGALURU - 560 018.

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M. NAGARAJ, S/O D.R. MADHAVAKRISHNAIAH, AGED ABOUT 48 YEARS, V MAIN ROAD, CHAMARAJPET, BENGALURU - 560 018. SINCE DEAD BY HIS LRS,

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2(A). SMT. BHAGYA NAGARAJ, AGED ABOUT 77 YEARS, W/O M. NAGARAJ, R/AT NO. 71, 5TH MAIN, CHAMRAJPET, BENGALURU SOUTH, BENGALURU - 560 018.

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2(B). SRI. YASHWANTH N, AGED ABOUT 54 YEARS, S/O M. NAGARAJ, R/AT NO. 71, 5TH MAIN, CHAMRAJPET, BENGALURU SOUTH, BENGALURU - 560 018.

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2(C). SRI. AJAY NAGARAJ, AGED ABOUT 51 YEARS, S/O M. NAGARAJ, R/AT NO. 71, 5TH MAIN, CHAMRAJPET, BENGALURU SOUTH, BENGALURU - 560 018.

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2(D). SRI. NAVEEN NAGARAJ, AGED ABOUT 47 YEARS, S/O M. NAGARAJ, R/AT NO. 71, 5TH MAIN, CHAMRAJPET, BENGALURU SOUTH, BENGALURU - 560 018.

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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…PETITIONERS

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(BY SRI. R OMKAR, ADVOCATE FOR P1 (A,C,D) AND P2; SRI. PRAVEEN KUMAR N.K FOR P1(B) ) AND:

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CHANDRA SPINNING AND WEAVING MILLS PRIVATE LIMITED, HAVING ITS REGISTERED OFFICE AT NO.79, 5TH MAIN ROAD, CHAMARAJPET, BENGALURU - 560 018.

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MANOHAR, S/O LATE MADHAVA KRISHNAIAH, SINCE DEAD BY LRS.

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2(A). CHANDRA PRABHA, W/O LATE MANOHAR, AGED MAJOR,

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2(B). SRINIVAS PRASAD, S/O LATE MANOHAR, AGED MAJOR,

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2(C). CHAITHANYA, S/O LATE MANOHAR, AGED MAJOR,

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2(A) TO 2(C) ARE RESIDING AT NO. 71, 5TH MAIN ROAD, CHAMRAJPET, BENGALURU - 560 018.

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M. MADHUSUDAN, S/O SRI. D.R. MADHAVAKRISHNAIAH, SINCE DEAD BY LRS.

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3(A). M. LEELA, W/O LATE MADHUSUDAN, AGED MAJOR, NO.22, 16TH CROSS, J.P. NAGAR 5TH PHASE, BENGALURU - 560 078.

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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10 -

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3(B). M. AARTHI, D/O LATE M. MADHUSUDAN, AGED MAJOR, NO.22, 16TH CROSS, J.P. NAGAR 5TH PHASE, BENGALURU - 560 078.

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3(C). KIRAN NAGARAJ, D/O LATE M. MADHUSUDAN, AGED MAJOR, NO.307, 11TH MAIN, BEML LAYOUT, 3RD STAGE, R.R. NAGAR, BENGALURU - 560 098.

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3(D). M. AVINASH, S/O LATE MADHUSUDAN, AGED MAJOR, 47TH A CROSS, 8TH BLOCK, JAYANAGAR, BENGALURU - 560 011.

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…RESPONDENTS (BY SRI. JIDESH KUMAR, N.K, ADVOCATE FOR R2(A TO C); SRI. UDITA RAMESH, ADVOCATE OR R3 (A TO D); SRI. PARVATHY NAIR, ADVOCATE FOR R3 (A TO D) )

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THIS COMPANY PETITION IS FILED UNDER SECTIONS 397 AND 398 OF THE COMPANIES ACT 1956 FOR RELIEF AGAINST OPPRESSION AND MISMANAGEMENT PRAYING TO DECLARE THAT ALLEGED INCREASE IN THE AUTHORISED SHARE CAPITAL OF THE COMPANY FROM RUPEES 5 LAKHS TO RS.10 LAKHS AT THE ALLEGED EXTRAORDINARY GENERAL MEETING HELD ON 20.06.1988 IS ILLEGAL, NULL AND VOID AND ETC.,

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IN CA NO.340/2012

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BETWEEN:

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M KRISHNAMURTHY NO.73/1, 5TH MAIN ROAD

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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11 -

CHAMRAJPET,

BANGALORE-18

…APPLICANT

(BY SRI R OMKAR, ADVOCATE )

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AND

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CHANDRA SPINNING & WEAVING MILLS NO.22, 16TH CROSS, J P NAGAR, 5TH PHASE, BANGALORE-78

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SMT LEELA W/O LATE MADHUSUDHAN R/AT NO.22, 16TH CROSS, J P NAGAR, 5TH PHASE BANGALORE-78

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MS M ARATHI D/O LATE MADHUSUDHAN R/AT NO.22, 16TH CROSS, J P NAGAR, 5TH PHASE BANGALORE-78

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MS KIRAN NAGARAJ D/O LATE MADHUSUDHAN NO.307, 11TH MAIN BEML LAYOUT 3RD STAGE, R R NAGAR BANGALORE-98

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M AVINASH D/O LATE MADHUSUDHAN 47TH B CROSS, 8TH BLOCK JAYANAGAR BANGALORE-11

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M/S T R MILLS PVT LTD A PRIVATE COMPANY WITHIN THE MEANING OF COMPANIES ACT 1956,

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12 -

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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5TH MAIN ROAD, CHAMARAJPET BANGALORE

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M NAGARAJ NO.71, 5TH MAIN ROAD CHAMARAJPET BANGALORE-18

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M MANOHAR NO.71, 5TH MAIN ROAD CHAMARAJPET BANGALORE-18

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MRS CHANDRAPRABHA W/O M MANOHAR NO.71, 5TH MAIN ROAD CHAMARAJPET BANGALORE-18

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…RESPONDENTS

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(BY SMT PARVATHY NAIR, ADVOCATE)

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THIS COMPANY APPLICATION IS FILED UNDER RULE 6 & 9 OF THE COMPANY RULES R/W SECTION 151 OF CPC PRAYING TO DISMISS THE INSTANT APPLICATION FILED BY THE PETITIONER TO STAY THE PROCEEDINGS IN COMPANY PETITION 6 & 7 OF 2008 DURING THE PENDENCY OF COP 10 AND 11 OF 1991 AND CMP 13 TO 17 OF 2008, IN THE INTEREST OF JUSTICE AND EQUITY.

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THESE PETITIONS AND APPLICATIONS, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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Company Application No.97/2022 is filed by respondent

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No.3(A) to 3(D) in the Company Petition under Rule 9 of the Companies (Court) Rules, 1959 read with Section 434(1) (c) of

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the Companies Act, 2013 and Rule 3 of the Companies

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13 - NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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(Transfer of Pending Proceedings) Rules 2016, seeking for transfer of the Company Petition Nos.10 and 11 of 1991 being heard and disposed by the National Company Law Tribunal (NCLT) at Bengaluru.

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It is specifically averred in the affidavit accompanying the application that, consequent to coming into force Companies (Amendment) Act, 1988, the power to adjudicate upon the proceedings under Sections 397 and 398 of the Companies Act for subsequent acts of oppression and mismanagement has been vested to the Company Law Board, which has subsequently been vested with the National Company law Tribunal.

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It is also the specific case of the applicant that consequent to coming into force Section 434 (1)(c) of the Companies Act, 2013 and the Companies (Transfer of Pending Proceedings) Rules, 2016, the jurisdiction for adjudication of the issues involved in the present petitions stand transferred to the National Company Law Tribunal and the petitions have to be transferred in terms of the said Section 434 (1)(c) of the Companies Act, 2013.

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14 -

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NC: 2023:KHC:42555 COP No. 10 of 1991 A/W CA NO.97/2022 C/W COP NO.11 of 1991 A/W CA No. 340 of 2012

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The petitioner in the Company Petition have not

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filed any objections to the present application and do not dispute the position of law as has been averred in the affidavit accompanying the application.

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In view of the aforementioned, it is expedient that

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the relief sought for in the application be granted.

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Accordingly, Company Application No.97/2022 is allowed. The Company Petition Nos.10 and 11 of 1991 are transferred to the National Company Law Tribunal (NCLT) at Bengaluru to be heard and disposed of in accordance with law.

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Counsel for the petitioner, at this stage, would submit that having regard to the specific stipulation in Section 434 (1)(c) of the Companies Act, 2013, the proceedings before the Tribunal are required to be continued from the stage at which it has been transferred and the interim order made in the present proceedings are also required to be continued.

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