TaxTMI 
TaxTMI 
2008 (4) TMI 504
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....nction and rendition of accounts claiming that plaintiffs were engaged in the business of development of colonies in Punjab and Haryana. The plaintiffs had identified approximately 90 acres of land in village Rahon at Khanna, district Ludhiana (Punjab). The plaintiffs contacted the farmers/owners for purchase of the land for development of residential-cum-commercial colony at Khanna, district Ludhiana (Punjab). Defendant No. 1, a private limited company through its directors approached the plaintiffs and showed interest in the above land for developing the same into a colony. The directors of defendant No. 1 asked plaintiffs to become directors of defendant No. 1 company and work for development of the colony by the company, to be known as ....
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....e farmers were executed by plaintiff No. 2 and defendant No. 5 on behalf of defendant No. 1 company. It is further pleaded that from time to time various meetings of the board of directors of the company took place at Delhi and some meetings took place at the site office at Khanna (Punjab) and some at Rajpura (Punjab), The minutes book was retained under the control of defendant No. 2. The last meeting of the board of directors was held on August 30, 2006. The plaintiffs made repeated requests to defendants for holding board meetings after August 30, 2006, but no board meeting was called thereafter. Defendant No. 2 however, told the plaintiffs sometime in July end 2007 that the plaintiffs had been removed from the directorship of defenda....
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....s in the area where defendant No. 1 company was developing a project. The defendants never approached the plaintiffs for associating in the development of land, on the contrary the plaintiffs being property dealers/brokers approached defendant No. 1 to be associated with it as intermediary. Since the defendants were new to the area and the plaintiffs were aware of the local market conditions, they were co-opted as directors simpliciter without any investment in the share capital of the company or otherwise. The plaintiffs were appointed directors at the sole discretion of the shareholders without any obligation with a view to provide them adequate status so as to enable them to co-ordinate day-to-day local operations of the company respectf....
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....us board meetings of the company in the middle of the year 2006 and onwards, without seeking any leave of absence. The absenteeism of the plaintiffs rendered their offices as directors of the company vacant. The plaintiffs accordingly ceased to be directors of the company by operation of law and not by act of defendants. The plaintiffs for this reason never applied for director identification number, which had been made compulsory for every person intending to be appointed as director from the year 2006 onwards. Defendant No. 6 in a separate written statement has also taken the same stand. The plaintiffs along with the plaint have filed several documents including sale deeds executed by certain parties in favour of defendant No. 1 showin....
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....turns or profit and loss account showing that they had these funds available with them, in cash, which they paid to the farmers. It is also not disclosed by the plaintiffs whether these payments were accounted for in the books of account or not. In absence of any document showing that plaintiffs had available with them huge funds to the tune of several crores of rupees, which plaintiffs allege to have paid in cash, without any proof to the farmers, the court cannot consider this averment of the plaintiffs. Even otherwise, the court cannot recognize the claim of the plaintiffs that the plaintiffs invested 61 per cent, of the sale consideration. This claim of the plaintiffs is made only in the air without any basis, since plaintiffs were not ....