TaxTMI 
TaxTMI 
2005 (6) TMI 565
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....they had decided to split the ownership management and control of the companies and assets in equal share and to allot each share to the 3 units of the family. This MOU elaborately deals with the companies and assets of the family. It also contains an arbitration clause enabling the parties to submit to the arbitration of Shri Justice A.M. Ahmedi, former Chief Justice of the Supreme Court of India in case of any difference of opinion on any matter covered in the MOU. Differences having arisen, the arbitration proceeding was initiated which, it is learnt has been stayed by the High court. 2. In this petition, the allegations of the petitioners are that the 2nd respondent being the Chairman of Limrose had made unilateral changes in the structure of Limrose including its directorship and shareholding pattern by forging documents, fabricating the minutes books and by filing fake returns before the Registrar of Companies (ROC). By these acts, according to the petitioners, the 2nd respondent has gained control of Limrose both in terms of shareholding and also on the Board and these acts are oppressive to the petitioners. 3. Shri Choudhary, Sr. Advocate appearing for the petitioners....
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....st the petitioner directors from the Board, the 2nd respondent has fabricated the Board minutes dated 14th August 2000. In the Annual Return for the year ended 31.3.2000 which has been signed by one of the petitioner directors, and filed on 21.11.2000, both of them have been shown as directors. This Annual Return also shows the authorized capital as Rs. 1 crore. Even the minutes of the board meeting on 1st Dec. 2000 signed by the 2nd respondent indicates the attendance of the 1st and 2nd petitioners. If according to the 2nd respondent, these two directors had attended a board meeting in Dec. 2000, he cannot claim that the)' had ceased to be directors effective from August, 2000. In terms of Section 164 of the Act, the Annual Return is the prima facie evidence of its contents. Therefore, having shown the 1st and 2nd petitioners as directors in the Annual Report, the 2nd respondent cannot rely on the certificates of postings and Form No. 32. The company being a family company in the nature of quasi partnership, the petitioners have legitimate expectation to continue as directors and could not have been declared to have ceased to be directors on the false ground of not attending r....
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....hey would have not hesitation in restoring the management of Palampur unit to the 2nd respondent. Since this Board exercises equitable jurisdiction, once the status quo is restored in respect of Limrose, the petitioners should be directed to entrust the management of Palampur unit to the 2nd respondent. As a waiter of fact, if the petitioners agree for this, the 2nd respondent is even prepared to go for a global settlement of all the disputes. 5. Shri Makkar appearing for the petitioners, in rejoinder, submitted that Palampur unit is under the control of Atlas Cycle Company Ltd. and this company is not before the CLB. Further the Board of Directors of Atlas Cycle Co. Ltd. removed the 2nd respondent as a director and since the petitioners do not represent the Board of Atlas, they cannot make any commitment as sought for by learned counsel for the respondents. As a matter of feet, the learned arbitrator himself in his order dated 4.4.2001 declined to grant this prayer on the ground that the Board of Atlas was not before him. Further the petitioners holding only 24% shares in Atlas cannot give any commitment on behalf of Atlas. 6. I have considered the pleadings and arguments of....
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.... have been present in a board meeting held on 1st September, 2000. A copy of the minutes of this meeting signed by the 2nd respondent has been annexed with the petition. In this meeting, the Board if found to have approved the Profit & Loss Account for the year ended 31st March, 2000 and the Balance Sheet as on that date and had also resolved payment of 20% dividend. It is also seen that the Board resolved convening the AGM for the year on 30th September. 2000. Further, the petitioners have also filed a copy of the minutes signed by the 2nd respondent of a Board Meeting held on 1st December, 2000 showing the presence of the 1st and 3rd petitioners. There is no denial by the respondents of the veracity of these minutes. In addition, the Annual Report filed with the Registrar of Companies as on 30th September, 2000 indicates that the 1st and 3rd petitioners were in office on that date and this Annual Return has been signed by the 2nd respondent and the 1st petitioner. Thus, the contemporaneous records signed by the 2nd respondent himself indicate that the 1st and 3rd petitioners were directors on 30th September, 2000 and as such they could not have been declared to have ceased as dir....