Tribunal declares resolutions void, restores company structure, mandates legal compliance

The tribunal allowed the petition, declaring various resolutions and actions taken by the respondents as illegal, null, and void. It directed the restoration of the shareholding and management structure as it was on 14-11-2009 and mandated compliance with legal and procedural requirements in managing the company's affairs. The tribunal also directed the ROC, Shillong, to make necessary amendments in the records.

---

---

Issues Involved:
1. Fraudulent issuance of equity shares.
2. Fraudulent resolutions passed without shareholder approval.
3. Regulation of the company's future conduct.
4. Mismanagement and oppression allegations.
5. Legal validity of Extraordinary General Meeting (EOGM) resolutions.
6. Appointment and removal of directors.
7. Unauthorized alteration of company records.
8. Unauthorized issuance of shares to outsiders.
9. Legal implications of the death of a respondent during proceedings.
10. Maintainability of the petition in light of pending civil suits.

Detailed Analysis:

1. Fraudulent Issuance of Equity Shares:
The petitioners alleged that the respondent fraudulently issued 6,715 equity shares without proper authorization, violating the Articles of Association (AOA). The tribunal found that the issuance of shares on 20-02-2010 and 15-09-2010 was done in complete contravention of the provisions of the Companies Act, 1956, and the AOA, declaring these issuances illegal, null, and void.

2. Fraudulent Resolutions Passed Without Shareholder Approval:
The petitioners claimed that several resolutions were passed fraudulently without the approval of existing shareholders. The tribunal upheld this claim, noting that the resolutions adopted in the EOGM held on 02-03-2010, which removed the petitioner from the post of Director and Managing Director, were illegal and non-est in law.

3. Regulation of the Company's Future Conduct:
The tribunal directed the management of the respondent company to manage the affairs strictly in accordance with the prescriptions of laws/rules holding the field as well as the mandates in the MOA and AOA of the company. It also directed the company to hold EOGMs as required to ensure corporate democracy.

4. Mismanagement and Oppression Allegations:
The tribunal found that the respondents, particularly the Board of Directors (BOD) headed by the respondent No. 5, had conducted the affairs of the company in a manner that was oppressive and constituted mismanagement. This included unauthorized increase of authorized capital and issuance of shares, removal of directors without following legal procedures, and unauthorized alteration of company records.

5. Legal Validity of EOGM Resolutions:
The tribunal scrutinized the resolutions adopted in the EOGM held on 14-11-2009, which removed the respondent No. 5 from the post of Director and Managing Director. Despite an injunction order from the Civil Court restraining discussions on this agenda, the tribunal found that the removal was illegal but did not justify the respondents' subsequent actions to correct this illegality on their own.

6. Appointment and Removal of Directors:
The tribunal noted that the appointment of the petitioner No. 1 as Director and Managing Director on 14-11-2009 and 25-11-2009 respectively was illegal due to non-compliance with Section 284(5) of the Companies Act, 1956. However, the subsequent removal of the petitioner No. 1 and petitioner No. 2 on 02-03-2010 was also found to be illegal as it was done without proper legal procedures.

7. Unauthorized Alteration of Company Records:
The tribunal found that the respondents had tampered with the records in the office of the Registrar of Companies (ROC), Shillong, and illegally altered documents to remove the petitioners from their positions and issue shares without proper authorization.

8. Unauthorized Issuance of Shares to Outsiders:
The tribunal declared that the issuance of shares to outsiders on 20-02-2010 and 15-09-2010 was in violation of Article 28 of the AOA, which prohibits the issuance of shares to non-members without the consent of existing shareholders.

9. Legal Implications of the Death of a Respondent During Proceedings:
The tribunal held that the death of respondent No. 5 did not abate the proceedings as the allegations were also directed against other respondents who were still part of the case. The tribunal cited precedents where the proceedings under Sections 397 and 398 could continue against other respondents even after the death of one respondent.

10. Maintainability of the Petition in Light of Pending Civil Suits:
The tribunal found that the issues in the present petition were distinct from those in the pending civil suits, and thus, the pendency of civil suits did not affect the maintainability of the petition. The tribunal emphasized that the relief sought under Sections 397 and 398 of the Companies Act, 1956, could only be granted by the tribunal and not by the civil court.

Conclusion:
The tribunal allowed the petition, declaring various resolutions and actions taken by the respondents as illegal, null, and void. It directed the restoration of the shareholding and management structure as it was on 14-11-2009 and mandated compliance with legal and procedural requirements in managing the company's affairs. The tribunal also directed the ROC, Shillong, to make necessary amendments in the records.

---