Medi Projects Pvt. Ltd. v. Cauvery Medical Centre Ltd.

1. The present application is filed under Regulation 44 & 46 of the CLB Regulations, 1991 praying this Bench to permit the applicants to amend the pleadings as mentioned in the application from page 9 to 23. Shri B.C Thiruvengadum, learned counsel appeared for the applicants submitted that the petitioners seek leave of this Hon'blc Board to amend the petition for the reason that the amendments sought are facts and circumstances relating to events subsequent to the filing of the above petition. It is submitted that the petitioners in the company petition at para 43 to 50 have referred to a few investor in the 1 respondent company, who are also the investors in the 2 respondent company and were unhappy with the 3 respondent managing the affairs of the 1 respondent company, resulting in huge debts. Annexure Z to the main petition talks about selling of the land in Nagawara and there are pleadings as to shady kind deals. The said allegations have been denied in the statement of objections by the contesting respondent and a detailed rejoinder has been filed by the petitioners. At para 95(f)(g)(h) and (p) of the petition, there are averments as to the contesting respondent not maintaining the accounts of the company, statutory registers, falsifying accounts and violating the law of the land including FLRA/FEMA and Karnataka Land Reforms Act, 1961. At para 97 of the petition, it is clearly stated that the contesting respondents are involved in shady land deals in violation of FERA/FEMA and they and guilty of making secret profits from the 1 respondent company. The contesting respondents have made a vague denial and the same has been rebutted in the detailed rejoinder of the petitioners. It is submitted that the subsequent to the tiling of the above petition, in the first week of January 2011, they discovered certain records pertaining to the shady land deals, at a place called Nagawara, situated close to the Hospital Project. In this regard, an application No. 49/2011 to implead Nagawara Estates Pvt. Ltd. (NEPL) was filed on 03.03.2011 In the said application the petitioners had established documents to show that certain shareholders who are non-resident Indians/foreign citizens have been induced by the 3 respondent to invest in real estate project in India, which is prohibited under law and used the 1 respondent company as a conduit and thus diverted the resources of the company towards a real estate project called Nagawara Project and in this regard they floated a company called Nagawara Estates Pvt. Ltd. (NEPL) and there is intermingling of funds and resources as the said NEPL had hardly any capital to support several millions of rupees investment in real estate. It is submitted that this Hon'ble Board was pleased to dismiss the said application on 08.04.2011 However the Hon'ble High Court of Karnataka in company appeal No. 7/2011, vide its order dated 04.07.2011, set aside the order dated 08.04.2011 of the Company Law Board, in its entirety, directing the Hon'ble Board to hear the company application No. 49/211 afresh after giving notice to NEPL. It is submitted that the constituents of NEPL are admittedly shareholders of the 1 respondent company and also shareholders of 2 respondent company. Their position is unique compared to other shareholders of 1 respondent company who have no stake either in the 2 respondent company or in NEPL. The said NHPL, proposed respondent No. 15 in company application No. 49/2011, opposed the impleading application saying that there has been no interlacing of funds and this Hon'ble Board was pleased to dismiss the said application on 30.09.2011 Aggrieved by the order, the petitioners preferred an appeal before the Hon'ble High Court of Karnataka, in company appeal No. 16/2011 filed on 28.11.2011 and emergent notice has been issued to all the parties by the Hon'ble High Court of Karnataka. After filing the appeal, the petitioners have now discovered a set of documents. The said documents comprise of a complaint filed by an entity called CMI/CMC/NRP Investor Group LLC, against the 3 respondent, alleging breach of fiduciary duly, negligent misrepresentation, intentional misrepresentation, alter ego, fraud and constructive fraud and above all mingling of funds of the real estate project with the hospital project. The said entity apparently is a creation of 64 investors in the 2 respondent company, which in turn has invested in the 1 respondent company as well as in the illegal real estate project at Nagawara. The complaint alleges that 64 investors had no intention of investing in the Hospital project as well as Residential project and the 3 respondent solicited such an investment by misrepresentation. The complainants state that the 3rd respondent has cheated them and got land registered in the names of his relatives, apart from various other allegations, they have specifically made an allegation that the 3 respondent has enriched himself improperly and mismanaged the hospital project from the very beginning and comingled the investors' funds. Copy of the said complaint dated 17.10.2011 along with amended complaint dated 15.11.2011 is submitted herewith as Annexure EH and Annexure EJ for the kind perusal of this Hon'ble Board. Under the said circumstances, not only the petitioners have alleged diversion of funds by the 3 respondent and his team, but other 68 shareholders in the above said complaint who had indirectly opposed the impleadment of NEPL, have made serious allegations of fraud, mismanagement and interlacing of funds by the 3 respondent. It is unfortunate that the same entity that has filed the complaint against the 3 respondent, i.e the shareholders of NEPL who are also shareholders in the 1 and 2 respondent companies, for their selfish benefit committed perjury by opposing the impleading application in company application No. 49/2011, when they had an opportunity to expose the fraud committed by the 3 respondent, even though they have made allegations against the said Dr. G.R Ravikumar in their statement of objections to the said company application No. 49/2011. Copy of company application No. 49/2011 along with the statement of objections of the respondents including NEPL, the proposed respondent therein, and the common rejoinder filed by the petitioners to the statement of objections of the respondents 1 to 4 are submitted as Annexure EK, EL, EM, EN and EO respectively for the kind perusal of this Hon'ble Board. In view of the reasons he requested the Bench to allow the application.

2. The respondents 1 & 2 filed a memo dated 07.03.2012 wherein it is stated that the constituent members of NEPL filed a complaint against the 3 respondent before the United States District Court, Central District of California. Southern Division and the complaint has been dismissed by the said court by an order dated 16.02.2012 Therefore these respondents requested the Bench to dismiss the C.A

3. The respondent No. 15 filed a detailed counter to this application. It is submitted that the application filed by the petitioner is not maintainable either in law or on facts and the application is liable to be dismissed in limine. It is submitted that, the applicants are making the instant application at a much belated stage. As a result, the application is vitiated by delay and laches. The applicants have not set out any reasons or justifications for this delayed application for amendment. It is submitted that the applicants are attempting to change the nature and character of the company petition by introducing new cause of action which is barred by all tenets of law. On this reason alone, the instant application deserves to be dismissed. It is submitted that the petitioner has filed the captioned petition for various acts of alleged oppression and mismanagement of the respondents herein with respect to the R1 Company. It is submitted that the application is devoid of material particulars in as much as the application does not set out, let alone substantiate, any relationship between the real estate project in Nagawara Village. Bangalore with this respondent. For this reason alone, the application deserved to be dismissed in limine. This respondent is a stranger to the company petition and is neither a necessary nor a proper party to these proceedings, for this reason alone, the application deserves to be dismissed. It is submitted that this respondent holds certain monies, in trust and as an escrow agent, as more particularly staled hereinafter. It is submitted that 92 doctors (‘parties’) entered into a Framework Agreement dated 15.01.1992 to purchase an extent of 85 acres of land in Bangalore, Karnataka for development of a residential complex. The framework agreement reveals that the land to be purchased would be owned by the parties in proportion to the contribution made by them. The documents produced by the applicant, viz., the framework agreement, the addendum and the settlement deed do not, in any manner, indicate that R1 transferred any funds ever to this respondent for the aforesaid purpose or for any other purpose. In as much as this respondent has no connection with the applicants or the company petition, it is submitted with utmost respect that this Hon'ble Hoard ought to dismiss the amendment application in so far as the amendments pertain to this respondent, with costs. Subsequent to the purchase of the land, Manyata Promoters Pvt. Ltd. (‘Manyata’) which owned lands adjacent to the lands owned by the individuals, referred above, had encroached a portion of the land purchased by the parties measuring 9 acre 12 guntas to develop a software park. Thereafter, a settlement was reached on 29.04.2008 in the said matter with Manyata whereby in consideration of a sum of Rs. 30 crores, the parties agreed to the acquisition of an extent of 9 acres and 12 guntas by Manyata. It is submitted that Manyata paid a sum of Rs. 10 crores only on 29.04.2008 by way of a cheque drawn on ING Vysya Bank. Bangalore, under the terms of settlement and the same is deposited in escrow with this respondent, for and on behalf of the parties. A sum of Rs. 7 crores only was paid by Manyata, by way of a cheque bearing No. 177867 drawn on HDFC Bank Ltd., Bangalore dated 29.12.2008 and a further sum of Rs. 4 crores by way of a cheque bearing No. 572087 drawn on HDFC Bank Ltd. Bangalore dated 14.11.2009 This respondent has not received any further monies from Manyata. This clearly denotes that the monies lying in the escrow account of this respondent are the monies received from Manyata, to be held in trust on behalf of the parties, due to the illegal encroachment of land and not money siphoned off from the account of R1 as alleged or at all. It is thus, apparent that the applicants have not made out a prima facie case for carrying out amendments to the company petition. The amendments sought to be carried out in relation to this respondent are wholly irrelevant to the company petition and therefore, the company petition ought to be dismissed.

4. Heard the learned counsel appeared for the respective parties. After analysing the contents of the application, the only issue is whether the proposed amendment to the main company petition as sought by the applicants herein is relevant for the adjudication of the main company petition. The applicants proposed the following amendments which are extracted hereunder:

Proposed amendment by way or additional paragraphs after paragraph 110(m) or the petition.

110(n) The petitioners have now stumbled upon two letter dated 26.10.2009 and 25.01.2011, which were circulated by Dr. C.R Ravikymar, the 3rd respondent herein, to various investors of Cauvery Medical International Inc. Copies of the letters dated 26.10.2009 and 25.01.2011 have been submitted as Annexures DU and DV respectively along with company application No. 49/2011 for the kind perusal of this Hon'ble Board. The said document helped in discovering several facts.

110(o) The petitioners submit that Dr. G.R Ravikumar, respondent No. 3 in the main petition, along with Mr. Satyanarayana, respondent No. 4, and his family members are also running a company called Nagavara Estates Pvt. Ltd. (NEPL). This company was incorporated on 13.10.1992 Copies of the certificate of incorporation, the Articles and Memorandum of Association of NEPL and the annual returns filed by them for year ending 31.03.2010 have been submitted as Annexures DW, DX and DY respectively along with company application No. 49/2011 for the kind perusal of this Hon'ble Board. As per the downloaded annual returns of NEPL, the Hoard of directors of the said NEPL is controlled by Dr. G.R Ravikumar and his family members who are also in control of the 1st respondent company. 110(p). The 3rd respondent Mr. G.R Rovikumar induced innocent dooms abroad to invest money in the 2nd respondent company and used Cauvery Medical Center Ltd. the 1st respondent company herein, as a conduit to invest in real estate. It is submitted that at the relevant point of time the then Foreign Exchange Regulation Act prohibited foreign citizens. Non-Resident Indians and overseas corporate bodies from investing in real estate, especially agricultural land. The land was acquired using benami names or fictitious names to acqutre agricultural lands in Nagawara to the extent of 20 acres and 30¼ guntas. Copy of the statement has been submitted as Annexures DZ alow with company application for the kind perusal of the Hon'ble Board.

110(q) The petitioners submit that the investor in 2nd respondent CMI enteral into an agreement titled as “Frame Work Agreement’, on 15.01.1992 with the 3rd respondent Dr. G.R Ravikumar. An addendum was made to this effect by adding the name of NEPL on 22.01.1994 Copies of the said documents have been submitted as Annexures EA and EB respectively along with company application No. 49/2011 for the kind perusal of this Hon'ble Hoard. These documents clearly reveal that several foreign citizens and or non-resident Indians were to invest in land in India, which is prohibited under law.

110(r) The said NEPL has bought large tracts of agricultural land in the name of individuals as stated above as the 2nd respondent Cauvery Medical International Inc. is an overseas corporate body and companies are prohibited from holding or buying agricultural land under the Karnataka Land Reform Act, 1961.

110(s) The petitioners understand that there were several disputes with respect to the development of the land among the said investors inter se or with the state or with developers. This resulted in discontent among the investors.

110(t) The petitioners submit that at a purported Board meeting of the 2nd respondent CMI, if is seen that 4 condominiums are to be given to the 1st respondent company, which in turn should be sold to those who have rendered services to the 1st respondent company. This document is signed by the 3rd respondent and copy of the same has been submitted as Annexure EC along with company application No. 49/2011 for she kind perusal of this Hon'ble Board.

110(u) The petitioners submit that pursuant to the said meeting on October 26, 2009 the 3rd respondent Dr. G.R Ravikumar wrote a letter to the investors of Cauvery offer them condominium to some of the investors in the 1st and 2nd respondent company.

110(v) The petitioners submit that it appears that there arose serious difference of opinion between the 3rd respondent group and his family members on one side and various persons who were made to invest in CMI/CMC/NEPL on the other side, and the said dispute was referred for conciliation under the Arbitration and Conciliation Act, 1996 before Sri Ajesh Kumar and Mr. Radhakrishna and accordingly a settlement was reached on 6th December 2010. Copy of the said award has been submitted as Anneuxure ED along with company application No. 49/2011 for the kind perusal of this Hon'ble Board.

110(w) The petitioners submit that it appears that the 3rd respondent Dr. G.R Ravikumar has not accepted the award. Instead, he has circulated a letter dated 25.01.2011 wherein he has admitted that the resources of the 1st respondent company have been used in the Nagawara project and has demanded a sum of Rs. 15 crores as gift in lieu of CMC's contribution to the said project. Copy of the said letter has been submitted along with company application No. 49/2011 as Annexure DV for the kind perusal of this Hon'ble Board.

110(x) The petitioners submit that as per the balance sheet of NEPL admittedly, several crores of rupees has been parked with NEPI, and the property is to be allotted to various people. It is obvious and clear that the funds and resources of the 1st respondent company has been used to develop the real estate project in Nagavara and all other minority shareholders have been taken for a ride.

110(y) The petitioners submit that the 3rd respondent is guilty of interlacing of funds and lack of transparency and is also guilty of violating Foreign Exchange Regulation Act. Foreign Exchange Management Act, and the Karnataka Land Reforms Act.

110(z) The petitioners submit that most of the investors in NEPL ore either directly or indirectly interested in the affairs at the 1st respondent company.

110(aa) The 3rd respondent Dr. G.R Ravikumar has played fraud not only on the minority shareholders, the petitioners of the 1st respondent company but also against several innocent doctors living abroad.

110(ab) The petitioners do not wish any harm or prejudice to the interest of the minority shareholders and individual investors in NEPL or those who have innocently invested in the real estate project unless some of them are found to have actively colluded with the 3rd respondent who is directly and primarily accountable for all the misdeeds, omissions and commissions committed by him and his family members and should be personally liable to account for the money collected from the investors and make good the loss of investment and return on income suffered by all of them due to his selfish, self-centered and greedy approach.

110(ac) The petitioners during the first week of January discovered that as recent as on 17.10.2011, a complaint was filed against the 3rd respondent before the United States District Court, Central District of California. Southern Division which is numbered as SACV11-01602-JST (JPRx) by CMI/CMC/NRP Investor Group LLC, which is a limited liability company based out of Delaware. USA and the said complaint has been amended on 15.11.2011 Copies of the said complaints and the orders passed by the U.S Court in the said matter were downloaded and are submitted herewith as Annexures EP, EQ and ER respectively for the kind perusal of this Hon'ble Board. The said complaint has been filed under section 1962(a) to (d) of Racketeer Influenced and Corrupt Organization Act of 1970 (RICO). Securities Act of 1933. Securities Exchange Act of 1934, California Business and Professional Code, Rescission of Security Transaction pursuant to California Corporations Code, etc., alleging breach of fiduciary duty negligent misrepresentation, intentional misrepresentation, alter ego, fraud, constructive fraud. A perusal of the said document would reveal that the Plaintiff therein has acquired right, title and interest of 64 members who have invested in 1st respondent company through 2nd respondent company to invest in the residential/land project (NEPL).

Para 5 and 6 of the amended complaint at Annexure EQ supra is extracted herein below:

Para 5 @ line 6 of the amended complaint:

“Defendant Gadasalli Ravikumar (“Ravikumar”) required, us a pre-condition to invest in the residential land project, a previous investment in Defendant Cauvery Medical International. Inc. (“CMI”) which was represented to be utilized to build the hospital project”.

Para 6 @ line 10 of the amended complaint:

“Contrary to their representation, Defendants utilized the funds solicited from members of Plaintiff for a variety of unauthorized purposes designed to benefit Defendant Ravikumar individually, us weft as members of Defendant Ravikumar's family in India, Defendant Ravikumar collected money for these separate investments and comingled the funds in a single account. Later, Defendant Ravikumar transferred, without investors' approval, the same funds into his personal bunk account. He has continued to refuse to provide investors with audited accounting for these funds. Defendants have failed to actually acquire title to residential plots in Bangalore, India, as represented to investors at the time the funds were solicited. Defendant Ravikumar has registered title to land in the NRP to his relatives, Mr. Bhaskar and Mr. Shankar even though these relatives did not pay for land. This has been done even though atleast 38 genuine investors, who provided actual funds, have never had any land in the NRP registered in their names”.

110(ad) the above allegations very clearly show that the funds purportedly given in two separate accounts were comingled in one single account. They also allege that the funds were transferred to the personal bank account of the 3rd respondent. Para 40 and 44 of the amended complaint are given herein below:

Para 40 @ line 2 of the amended complaint:

“Based on information and belief Ravikumar also was improperly compensated in connection with the purchase, sale and development of the hospital project to the detriment of Plaintiff; and the hospital has been mismanaged from the very beginning by Dr. Ravikumar for his personal benefits to his family members”

Para 41 @ line 6 of the amended complaint:

“Based on information and belief, Defendants have improperly comingled the investor funds with their own fund.”

Pura 42 @ line it of the amended complaint:

“Based on information and belief, Defendants have diverted funds from the hospital project to their own personal use to the detriment of Plaintiff”.

Para 43 @ line 10 of the amended complaint:

“Based on information and belief Defendants Ravikumar has mismanaged the operations of the CMI/CMC from the very beginning. Defendant Ravikumar has manipulated, orchestrated and meticulously planned to dilute investors' shares and make him a majority shareholder of the CMI; seems to be intentionally running the hospital into current financial disaster and planning to capitalize on the escalated value of the real estate for personal gains at the expenses of all CMI investors”.

Para 44 @, line 16 of the amended complaint:

“Based on information and belief, as recent as 2007/2008, that Defendant Ravikumar was trying to acquire an apartment worth Rs. 1 crore for his personal benefit using the CMC money. Defendant Ravikumar was stopped by then CEO Mr. Subramanian Arumugam. Otherwise, he would have acquired an apartment at the expenses of the investor's funds illegally”.

110(ae) The allegations made in para 44 of the amended complaint very clearly specify that 10th respondent Mr. Subramanian Arumugam stopped the 3rd respondent Dr. G. Ravikumar from diverting a sum of Rs. 1 crore to buy an apartment in his own name.

110(af) The said amended complaint at Annexure EQ supra, clearly accuses the 3rd respondent of breach of fiduciary duty, negligent misrepresentation, intentional misrepresentation, alter ego, fraud and constructive fraud towards the constituents of CMI.

110(ag) The petitioners submit that the above said complaints referred to as Annexures EP and EQ supra support the cause of the petitioners. The above facts have been discovered recently, i.e since January 2011 till January 2012. The discoveries made were, immediately brought to the notice of this Hon'ble Board through company application 49/2011, and the latest discoveries have compelled the petitioners to file a company application seeking direction from this Hon'ble Board to order an investigation into the affairs of the 1st respondent company and this Hon'ble Board be pleased to order investigation by Serious Fraud Investigation Office.

110(ah) The petitioners submit that the scum is multinational in nature and involves directly the 3rd respondent and it is seen that several innocent investors abroad have also been taken for a ride and that the funds that have been brought in as an investment by CMI, the 2nd respondent herein, into the 1st respondent company, have been diverted to real estate project which would ennure to the benefit select group of sharehlders, which is per se illegal and the same is detrimental to the interest of the other shareholders including the petitioners.

110(ai) The petitioners submit that the complaint filed in the U.S is a case where NRI/Foreigners have made investments to acquire real estate in India. They have alleged that there has been intermingling of funds by the 2nd respondent and that the money has been brought into the 1st respondent company. The 3rd respondent, who is also NRI/Foreigner, as well as those foreign investors who have invested in CMI, were not qualified to acquire real estate under the then FERA and presently FEMA. The petitioner further impresses upon this Hon'ble Board, that the said foreign investors, including the 3rd respondent, are not qualified to acquire agricultural land especially in Karnataka, as the same is prohibited under FERA/FEMA and Karnataka Land Reforms Act, 1961. That being the case, the said complaint and amended complaint referred to in Annexures EP and EQ supra clearly indicate that the money was brought into the 1st respondent company with a clandestine objective to acquire real estate in India for foreign citizens and NRIs who were not eligible to acquire land, especially agriculture land, in India and more specifically in Karnataka. This fact is also proved by the settlement deed, which is marked as Annexure ED supra, which is also cited in the complaint. It is also clear that land in the said Nagawara Project, has been acquired and registered in benami names, as is evident from the settlement deed, for the benefit of certain persons, who were certain non resident Indians/foreign citizens. Hence, the said acquisition amounts to benami transaction, which is prohibited under the Benami Transaction (Prohibition) Act, 1988.

110(aj) The petitioners submit that several investors in India were not aware of this clandestine transactions and were made to invest in India by representing that the entire investment would meet the establishment of hospital project. By this representation, the Indian shareholders have been deceived as they would not have invested huge sums of money had they known the reality.

110(ak) In the light of the above said facts, the lands which are held by various entities and NEPL, namely 18 acres 18¼ guntas of land and whatever purported compensation that has been received from Manyata Tech Park, which had acquired certain portion of land and parked in NEPL, should lawfully belong to the 1st respondent company, together with land that are in the possession of the said NEPL or its constituents. To enable this, the petitioners seek a thorough investigation by the Serious Fraud Investigation Office (SFIO). As NEPL has unfairly opposed its impleadment, they don't deserve any notice and moreover, it is only an escrow agent for an illegal transaction.

The applicants sought the following reliefs by way of additional prayers to the main petition in addition to the reliefs sought by the applicants.

Amendment by way of Additional Prayers after Prayer (n)

o) To declare the lands acquired pursuant to Framework Agreement 15.01.1992, along with addendum to Framework Agreement 22.01/1994, in various survey Nos. at Nagawara, as mentioned in Annexure-DZ of the company application No. 49 of 2011, are properties belonging to the 1st respondent company.

p) Further to direct the revenue authorities in Bangalore including the Deputy Commissioner to ensure that possession of the said land being illegally held by NEFL or its agent or its men to be delivered to the 1st respondent company.

q) To declare that a sum of Rs. 19,17,24,942/- lying in escrow account of NEFL, along with the interest thereon are funds belonging to the 1st respondent company, and with further direction that the same he transferred to the account of the 1st respondent company.

5. The 15 respondent contended that the applicants are attempting to change the nature and character of the company petition by introducing new cause of action. From the perusal of original petition filed by these applicants in the year 2008 there were 10 respondents and subsequently the applicants have impleaded respondents 11 to 14 to the main company petition by an order dated 24.09.2008 The grievance of the applicants in the main petition is that the 1 applicant initially invested an amount of Rs. 2 crores and contended that the affairs of the R1 Company had not been managed in a professional manner and lacked transparency and no proper meetings of Board of directors and shareholders were held. It is an admitted fact that the 1 petitioner was allotted 1,45,434 shares of Rs. 100/- each. It is contended that the 3 respondent promised to allot 54,546 shares to the 1 petitioner and thus the 1 petitioner will have 2,00,000 shares in the R1 Company. The other allegations are that the petitioner was not received any notice for the Board meetings. The applicants/petitioners also averred that the 2 petitioner discovered that the company was grossly mismanaged by the 3 respondent and his relatives and the project was 20 years behind schedule. The main grievance of the applicants/petitioners in the company petition are that the 1 petitioner was induced to invest money in the R1 Company by suppressing material facts, non allotment of shares 10 an extent of 54,546 to the 1 petitioner despite the money received from the 1 petitioner, non sending of notices for the meeting to Dr. Mohan Chellappa who was inducted as director of the company, non sending of notices to the shareholders, non furnishing of financial statement, directors reports to the 1 petitioner, non maintaining the accounts of R1 Company in accordance with law, non maintaining statutory registers, filing fabricated returns with the ROC, removing Dr. Mohan Chellappa and several other directors from the Board of R1 Company, allotment of shares at par to the 2 and 3rd respondents, violation of FKRA and FEMA and non allotting the stock options to the 2 petitioner. There are certain allegations with regard to mismanagement as made out by the applicants/petitioners in the petition.

6. However, at this point of time, I am not going into the details of the merits of the case and I am not giving any finding with regard to the oppression and mismanagement in the affairs of the company by the respondents. The above narration of facts only with an intend to justify whether the proposed amendment to the petition is relevant to the facts and the reliefs prayed by the applicants/petitioners in the main petition. The applicants in their petition have sought the following main reliefs which are reproduced:

(a) Declare the purported allotment of 9,55,448 equity shares of Rs. 100/- each at par to the 2 respondent and the 3 respondent as illegal and bad in law.

(b) Direct the respondents to allot 54,546 shares

(c) Direct the respondent to allot 10% of the paid up capital as stock option to the 2 petitioner.

(d) Order forfeiture all the shares standing in the names of respondents 2 to 10.

(e) Impose penalty of Rs. 1 crore each on the respondents 2 to 10 respectively.

(f) Permanently restrain respondents 2 to 10 from participating in the affairs of the company holding office of the directors of the company.

(g) Order to grant such other relief or reliefs as this Hon'ble Board deems fit.

(h) Appoint the petitioners as the directors of the company.

(i) Declare that the minutes and statutory records relied by the respondent in company are got up documents.

(j) Prosecute respondents 1 to 10 for perjury and fraud played on the court.

(k) Declare the 2 petitioner is the owner of not less than 88,000 of equity shares of the company amounting to 10% paid up capital of the company.

(l) To regulate the affairs of the company as the Hon'ble Board may deem fit.

From the perusal of main reliefs it is clear that the applicants/petitioners seeking declaration of allotment of 9,55,448 equity shares to the 2 and 3 respondents and seeking directions to the respondents to allot 54.546 shares and to allot 10% of the paid up capital as stock option to the 2 petitioner etc. However the applicants wanted to bring certain facts by way of proposed amendments that the 3 respondent circulated letters to various investors of R2 and the 3 and 4 respondents running a company called Nagavara Estates Pvt. Ltd. (NEPL) Most of the averments made in the proposed amendment are relates to NEPL and the framework agreement dated 15.01.1992 The applicants also averred in the proposed amendment that the 3 respondent is guilty of interlacing of funds and lack of transparency and is also guilty of violating FFRA, FEMA and the Karnataka Land Reforms Act. One of the allegations in the proposed amendment is with regard to a complaint filed against 3 respondent before the United States District Court. Central District of California, Southern Division by a group of investors. The applicants set out the averments made in the plaint filed before the United States District Court to bring the same by way of proposed amendment. The applicants mostly set out the allegations with regard to the FEMA and FERA and the complaint filed before the United District Court.

7. By seeking the above proposed amendment to the main petition, the applicants sought the additional prayers seeking declaration that the lands acquired pursuant to framework agreement dated 15.01.1992 along with addendum to framework agreement dated 22.01.1994 in various survey numbers in Nagawara, are properties belonging to the R1 Company. The applicants prayed this Bench to direct the revenue authorities in Bangalore including the Deputy Commissioner to ensure that the possession of the said land being illegally held by NEPL, to be delivered to the R1 Company. The applicants sought declaration that a sum or Rs. 19,37,24,942.00/- lying in escrow account of NEPL along with the interest thereon are funds belonging to the R1 Company. As stated supra whether the proposed amendments and the additional prayers as detailed out supra are relevant to the main company petition is concerned that I am of the considered opinion that the facts by way of proposed amendment by way of additional paragraphs and additional prayers are not at all relevant to the facts and reliefs as made out in the main company petition. The proposed amendments are irrelevant on the ground that the applicants wanted to bring the third parties and the suit filed outside country. Even going by the additional prayers this Bench does not have the jurisdiction to grant reliefs. The respondents contended that 92 doctors entered in to a framework agreement dated 15.01.1992 to purchase an extent of 85 acres of land in Bangalore for development of a residential complex. The said framework agreement, the addendum and the other agreements to which the R1 Company is not a party and the applicants have not established any prima facte case and the applicants are not at all concerned with the affairs and the activities of the third parties. The proposed amendment in my view is an attempt to exceed the scope of section 397 and 398 and 402 and other applicable provisions of the Companies Act, 1956. The respondents have categorically detailed out the facts relating to the averments and allegations made in the proposed amendment. It is reiterated that the allegations and averments made by the applicants/petitioners with regard to non allotment of shares, non sending of notices and non compliance of statutory requirements by the R1 Company. There are certain allegations with regard to the mismanagement against the individuals in the main company petition. The proposed amendment and the additional prayers are completely distinct and different from the facts and the main reliefs made out by the applicants/petitioners in the main company petition. Accordingly, I reiterate that the proposed amendments are irrelevant to the company petition and it is a futile exercise attempting to change the nature and character of the company petition. Accordingly, the CA No. 7/2012 in CP No. 46/2008 is dismissed.