Tribunal grants petition partially, validates rights issue, board meetings, but invalidates director appointments. Release of mortgaged property ordered.

The tribunal partially allowed the petition, validating the rights issue and board meetings, but invalidated the appointment of R-4 and R-5 as directors. The tribunal directed the release of the petitioner's mortgaged property and allowed the respondent company to proceed with appointing a new auditor following the resignation of the previous one.

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Issues Involved:
1. Oppression and mismanagement under Sections 241-242 of the Companies Act, 2013.
2. Validity of Board Meetings and resolutions passed therein.
3. Validity of share allotment and rights issue.
4. Validity of the appointment of directors.
5. Sale of company assets without shareholder consent.
6. Personal property mortgage release.
7. Interim reliefs and status quo maintenance.

Detailed Analysis:

1. Oppression and Mismanagement:
The petitioner, a shareholder holding 50% of the company shares, filed a petition under Sections 241-242 of the Companies Act, 2013, alleging acts of oppression and mismanagement by the respondents. The petitioner sought various reliefs, including the appointment of an administrator, preventing the sale of company assets, and declaring certain board and general meetings illegal.

2. Validity of Board Meetings and Resolutions:
The petitioner claimed that he did not receive notices for several board meetings held in 2017-18, and that the statutory records were falsified to show his attendance. The tribunal noted that the petitioner did receive notices for some meetings but did not attend them. The tribunal emphasized that as per Section 167(1)(b) of the Companies Act, a director's office becomes vacant if they are absent from all board meetings for 12 months. The tribunal found that the petitioner had knowledge of the meetings and the rights issue but did not participate, indicating that the board meetings and resolutions were valid.

3. Validity of Share Allotment and Rights Issue:
The petitioner alleged that the rights issue conducted in October 2017 was illegal as he was not properly notified. The tribunal found that the petitioner received the offer letters but chose not to subscribe, and filed the petition only after a year, indicating an afterthought. The tribunal upheld the validity of the rights issue and share allotment.

4. Validity of the Appointment of Directors:
The petitioner challenged the appointment of R-4 and R-5 as directors, claiming the EOGM held on 26.12.2017 was illegal. The tribunal found that the DIN numbers for R-4 and R-5 were allotted on 03.01.2018, after their purported appointment, violating Section 152(3) of the Companies Act. Hence, the appointment of R-4 and R-5 was declared invalid.

5. Sale of Company Assets Without Shareholder Consent:
The petitioner opposed the sale of GIDC plots, alleging it was done without proper shareholder consent. The tribunal noted that the respondent agreed not to proceed with the sale as the purchaser was no longer interested. Thus, the issue of asset sale was resolved.

6. Personal Property Mortgage Release:
The petitioner sought the release of his personal property mortgaged to the bank. The tribunal directed the respondent company to cooperate and furnish necessary documents to release the petitioner's mortgaged property, as the bank loan had been repaid.

7. Interim Reliefs and Status Quo Maintenance:
The petitioner sought interim reliefs to maintain the status quo of company assets and prevent the execution of sale deeds. The tribunal's order to maintain the status quo was upheld until the disposal of the petition.

Conclusion:
The tribunal partially allowed the petition, validating the rights issue and board meetings, but invalidated the appointment of R-4 and R-5 as directors. The tribunal directed the release of the petitioner's mortgaged property and allowed the respondent company to proceed with appointing a new auditor following the resignation of the previous one.

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