Tribunal deems Respondents' actions prejudicial, orders management takeover, forensic audit, and fund refund.

The Tribunal found the Respondents' actions oppressive and prejudicial to the Petitioners. It declared the increase in authorized share capital, allotment of shares to an outsider, notice violations, director appointments/removals, and alteration of Articles invalid. The Tribunal ordered P1 to take over management, directed a forensic audit, mandated fair valuation for exiting directors, and required refund of funds infused by R5. The Company Petition was disposed of with these directives.

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Issues Involved:
1. Increase of authorized share capital.
2. Bringing an outsider as a shareholder.
3. Notice and effective service of notice.
4. Allotment of shares to R-2, R-3, and R-5.
5. Removal of P2 as director.
6. Appointment of R5 as director.
7. Alteration of Articles of Association.
8. Jurisdiction of the Tribunal under the Companies Act, 1956 or 2013.

Detailed Analysis:

1. Increase of Authorized Share Capital:
The Tribunal examined whether the increase of authorized share capital was prejudicial to the Petitioners. It was found that the Board Meeting held on 04.10.2013 to resolve the holding of an EOGM on 28.11.2013 for the increase of authorized share capital was conducted without proper notice to the Petitioners. The Respondents failed to provide proof of notice, and sending a calendar of events was deemed insufficient. The Tribunal held that the Board Meeting and subsequent EOGM were invalid due to the lack of proper notice, making the increase in authorized share capital invalid.

2. Bringing an Outsider as a Shareholder:
The Tribunal discussed the violation of the Articles of Association and the constitution of a Private Limited Company by allotting shares to an outsider (R5). Section 81(1A) of the Companies Act, 1956, requires a special resolution for such allotment, which was not passed. The Tribunal declared the allotment of shares to R5 as invalid and prejudicial to the Petitioners' interests.

3. Notice and Effective Service of Notice:
The Tribunal examined whether notices were served upon the Petitioners as prescribed under law. It was found that the Respondents did not provide proper notice for the Board Meeting on 04.10.2013 and the EOGM on 28.11.2013. The Tribunal held that sending a calendar of events did not meet the legal requirements for notice, and the meetings held without proper notice were invalid.

4. Allotment of Shares to R-2, R-3, and R-5:
The Tribunal found that the allotment of shares to R2, R3, and R5 was done without proper notice to the Petitioners and at par value, which was prejudicial to the Petitioners. The necessity of funds was not a valid ground to bypass the requirement of notice. The Tribunal declared the allotment of shares as invalid and prejudicial to the Petitioners' interests.

5. Removal of P2 as Director:
The removal of P2 as director was examined under Section 283(1)(g) of the Companies Act, 1956. The Tribunal found inconsistencies in the Respondents' documentation regarding the dates of meetings and resolutions. The Tribunal held that the removal of P2 was not conducted properly and was invalid. The Tribunal declared the removal of P2 as director as fraudulent and invalid.

6. Appointment of R5 as Director:
The Tribunal held that the appointment of R5 as director was invalid because the allotment of shares to R5 was already declared invalid. The appointment was made without proper notice to the Petitioners, especially to P2. The Tribunal declared the appointment of R5 as director as invalid.

7. Alteration of Articles of Association:
The Tribunal found that the alteration of the Memorandum of Association and Articles of Association in the EOGM held on 28.11.2013 was invalid due to the lack of proper notice to the Petitioners. The Tribunal declared the alteration of the Articles of Association as invalid and prejudicial to the Petitioners' interests.

8. Jurisdiction of the Tribunal:
The Tribunal discussed whether the Companies Act, 1956, or the Companies Act, 2013, was applicable. It was held that the proceedings were bound by the Companies Act, 1956, as the acts and offenses occurred before the advent of the Companies Act, 2013. The Tribunal cited legal principles and precedents to support this conclusion.

Conclusion:
The Tribunal concluded that the conduct of the Respondents was oppressive and prejudicial to the Petitioners. The Tribunal directed the following:
1. P1, through P2, shall take over the management of the Company, and R2-R4 shall not continue as directors after 15 days from the date of the order.
2. A forensic audit from 01.04.2013 till date shall be conducted by M/s. Shah & Gutka.
3. Petitioners shall provide an exit to R2-R4 on fair valuation as of 31.03.2017.
4. R1 Company shall refund the funds infused by R5 within three months from the date of the forensic audit report.

The Company Petition was disposed of accordingly.

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