Dismissed petition due to non-disclosure, litigation, and lack of clean hands. Director removal process followed. Fair defense opportunity provided.

The Tribunal dismissed C.P. No. 98/BB/2017 as the Petitioner failed to disclose material facts, engaged in litigation against the Company, and did not approach the Tribunal with clean hands. It was established that a lifetime Director can be removed following due process, which the Company adhered to in this case. The Petitioner was given a fair opportunity to defend but did not avail it. Consequently, the Petition was dismissed, and no costs were awarded.

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Issues Involved:
1. Whether the Petitioner has come to the Tribunal with clean hands by disclosing complete material facts.
2. Whether the Petitioner being appointed as Lifetime Director of the Company can be removed as per Law.
3. Whether due procedure was followed by the Company in removing the Petitioner from the position of Director of the Company.
4. Whether the Petitioner is entitled to any relief.

Issue-wise Detailed Analysis:

1. Clean Hands and Disclosure of Material Facts:
The Tribunal noted that the Petitioner failed to disclose significant material facts, such as the pendency of criminal cases filed by the Respondents against him. The Petitioner, being a substantial shareholder and a Permanent Director, has fiduciary duties towards the Company and its stakeholders. However, he engaged in litigation against the Company and its Directors, which undermines his position. The allegations of fraud and mismanagement by the Respondents were found to be unsubstantiated. The Petitioner approached other forums before coming to the Tribunal, indicating a lack of clean hands in seeking equitable relief.

2. Removal of Lifetime Director:
The Tribunal referred to established legal precedents which state that even a permanent or lifetime Director can be removed by following due process. The decision of the High Court of Delhi in Tarlok Chand Khanna v. Raj Kumar Kapoor clarified that a life Director could be removed if the requirements of Section 284 of the Companies Act, 1956, and a valid meeting were satisfied. Similarly, the High Court of Karnataka in Karnataka Bank Limited v. A.B. Datar held that no person has an inherent right to be a Director and can be removed if the majority of shareholders so decide.

3. Due Procedure for Removal:
The Tribunal scrutinized the procedure followed by the Company in removing the Petitioner. It was found that the 4th Respondent, holding 50% shareholding, issued a special notice under Section 169 read with Section 115 of the Companies Act, 2013, for the removal of the Petitioner. The Company duly sent notices for Board and Extraordinary General Meetings (EGM) to the Petitioner, who failed to attend these meetings or provide a written representation. The EGM was conducted as per law, and the resolution for the removal of the Petitioner was passed unanimously. The Tribunal concluded that the Company followed due procedure, and the Petitioner was given reasonable opportunity to defend his position, which he did not avail.

4. Entitlement to Relief:
Given the findings on the above issues, the Tribunal determined that the Petitioner was not entitled to any relief. The removal process was conducted in accordance with the Companies Act, 2013, and the Petitioner failed to make a case for intervention by the Tribunal. Consequently, the Petition was dismissed.

Conclusion:
The Tribunal dismissed C.P. No. 98/BB/2017, concluding that the Petitioner did not come with clean hands, the removal of a lifetime Director is permissible by law if due process is followed, the Company adhered to the required procedure in removing the Petitioner, and the Petitioner is not entitled to any relief. No order as to costs was made.

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