TaxTMI 
TaxTMI 
2017 (10) TMI 33
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....s of the Respondent No. 1 Company which is a private limited company and is like quasi-partnership between the petitioners and the respondent No. 2 and other family members. The Petitioner No. 1 and Respondent No. 2 are the Promoter and Director of the Respondent No. 1 Company. 3. The object of the Respondent No. l Company was to manufacture and sale of Kraft Paper, Straw Board, Mill Board, Paste Board, Card Boards, etc. Both the Petitioner No. 1 and the Respondent No. 2 are 50:50 shareholders of the Respondent No. l Company. Due to ill health and on financial grounds the Petitioner No. l could not attend the day to day affairs of the Company and was entirely dependent upon his son, the Respondent No. 2. Due to mismanagement by the Respondent No. 2, the Respondent No. l Company ran into a great financial crisis. The Respondent No. l Company borrowed term loan from BICICO (Bihar State Financial & Investment Corporation Ltd. and SBI (State Bank of India) wherein the Petitioner No. l became the guarantor of the Respondent Company. 4. Due to mismanagement of the Company by the Respondent No. 2, the Company was shut down for 2 ½ years under the order of the Hon'ble Supr....
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....se of the assets of the Respondent Company and siphon off the funds of the Respondent Company. The Respondent No. 2 further submitted "No Due Certificate" of the secured creditors before the Hon'ble High Court at Patna which passed an order on 28/8/2008 that the Respondent No. 2 has settled the entire dues of the Company and gave direction to the Official Liquidator to hand over the possession of respondent No 1 Company to the Respondent No. 2. Under the said direction, the Official Liquidator on 8/9/2008 handed over the factory, plant and machinery and other assets of the R-1 Company to the Respondent No. 2 without any information to the Petitioner. It is the further contended by the Petitioner that in October 201 1, the Petitioner came to know that factory premises and other assets of the Respondent Company are free from liquidation proceedings from the OL as well as THE Hon'ble High Court. 13. On 21/11/2011 the Petitioner No. 2 visited the factory premises and came to know that the Respondent No. 2 has changed the nature and character of the same. The Petitioner believes that the Respondent No. 2 disposed of all the assets of the Respondent Company without proper auth....
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....the application and this petition is filed after more than three years. It is the case of the Respondents that the Petitioners are fighting the case only to grab money from the Respondents and the Petitioners have not contributed any amount from 1995 till 2009, and it is the Respondents who have incurred huge expenses in litigation and in discharging the Company's debt liability. 20. It is a fact that the Petitioner No. l died during the pendency of the proceedings leaving behind the Petitioner No. 2 and three who are claiming to be the shareholders by a Will which is still not probated. It is the mandatory provision of law under sections 397 & 398 that shareholders alone can file the company petition. As such, the name of the Petitioner No. 1 needs expunged. 21. In the rejoinder tabled by the Petitioner No. 3, he has denied the allegations submitted by the Respondents in his written statement. It is the case of the petitioner that as legal heirs they have bequeathed the right and ownership of shares held by the deceased Petitioner No. l. The Petitioner No. 3 further submitted that the probate of Will of the Petitioner No. 1 is not at all a legal pre-requisite for its enf....
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....o the R-l company not only against the mortgage of the company's assets but also on the personal guarantee given by the petitioner No. 1 and R-2. By the year 2007-08 the company became liable to pay about Rs. 23 crore to the secured creditors. Respondents contend that the R-3 appointed as director of R-l Company by board resolution dated 29/9/1995 and the petitioner never questioned his appointment as director. 25. It is also important to point out that petitioner No. l remained a silent spectator during his life time particularly during the period when the report under Sec. 15 of SICA was submitted, and the proceeding before BIFR and the Patna High Court was pending. During this time the litigations were looked after and managed by R-2 alone, but the petitioner No. l or any of the petitioners never participated in the litigation before the BIFR, AAIFR or the Hon'ble High Court, Patna. 26. It is also important to mention that R-l had debt liability of Rs. 23 crore and apart from the company's assets, petitioner No. l and respondent No. 2 personal properties were also given as collateral security. As per guarantee agreement, the liability of petitioner and Responde....
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....eetings the petitioner ceased to be the director of the R-l company. 29. Respondents have further submitted that according to law minimum 2 directors are required. R-2 and R-3 continued to be directors. R-2 had taken a loan on the personal guarantee from a private financier at a hefty rate of interest. Therefore, he was compelled to pay the amount of loan. Respondents got the valuation of the company assets and ultimately sold the property of the R-l and paid off the debt liability. All the transfer took place in the year 2009. 30. Respondents have further alleged that respondent No. 3 was appointed in the year 1995 and Form 32 was filed. Therefore, after 20 years, the objection regarding the appointment of respondent No. 3 cannot be questioned. 31. Respondents have further alleged that the alleged board resolution passed in the year 2008-09 cannot be tested at this stage, because in pursuance of the board resolution sale of assets took place in July to November 2009. 32. Respondents have further alleged that challenge to the sale of property including land in favour of the persons, who are not a party to the proceedings, is also barred by limitation and the appropriate....
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....ate in the management of the affairs of the R-1 company. 35. Undisputedly on account of the accumulated losses of R-l company, winding up process was initiated by secured creditors. Wherein the Hon'ble High Court has passed an order, and the company was declared sick under SICA. Hon'ble High Court has further given the order to take into possession of the movable and immovable assets of the company by OL. Admittedly, the petitioner has never raised any objection either before the BIFR, AAIFR or before the Hon'ble High Court, Patna. Petitioner remained a silent spectator even during the sale of the company property. 36. It is apparent from the record that possession was with the OL by order of the Hon'ble High Court, Patna and further liquidation proceedings were going on. At the very moment R-2 approached the secured creditors of the company and entered into a one-time settlement, and it agreed upon that on payment of Rs. 1,99,93,797/- to the secured creditors, the liability of Rs. 23 crore will be discharged. On arriving at a settlement with the secured creditors, R-2 approached the Hon'ble High Court and moved an application for accepting the proposal. T....
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....rrive in ordinary course of post, and it is on those who dispute that inference to show the contrary." 42. On the above basis, it appears that general presumption may be taken that letters which are sent through the ordinary course of post do arrive and delivered but this presumption is rebuttable and those who dispute that inference to show the contrary. 43. In this case, respondent is claiming that notice of Board meeting was sent under certificate of posting. Respondent no. 2 further contends that he also informed petitioner in person about the proposed board meeting, but the petitioner no. l did not turn up at the Board meeting. R-2 has further alleged that he again issued notice dated 1st December 2008 under Certificate of Posting addressed to the petitioner no. l, but he did not join the Board meeting nor sent application for leave of absence. Respondents have filed the Certificate of Posting to prove the service of notices to petitioner no. l. It is pertinent to mention that in case of that M.S. Madhusoodhanan v. Kerala Kaumudi (P.) Ltd. [2003] 46 SCL 695 Hon'ble Supreme Court has held that: "As far as the certificate of posting is concerned, it i....
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....ed or inferred (ibid.). Sometimes discretion is left with the court either to raise a presumption or not as in Section 114 of the Evidence Act. On other occasions, no such discretion is given to the court so that when a certain set of facts is proved, the court is bound to raise the prescribed presumption. But that is all. The presumption may be rebutted." 44. By the law laid down by the Hon'ble Supreme Court, it is evident that Under Certificate of Posting is a fragile kind of evidence and anyone can get such postal seals at any point in time. Hon'ble Supreme Court has further held that distinction is there between "presumption" and "proof." By sending a notice through Under Certificate of Posting, the presumption may be drawn that notice has been sent. The Hon'ble Supreme Court has held that discretion is always left with the Court either to raise a presumption or not. Court has further held that when the relation between the parties is so embittered, the proof of service of notice by a certificate of posting must be viewed with suspicion. 45. In this case, parties are not having good relations, and respondent has alleged that he has sent notices of all the Boar....
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....e ordinary course of post." Presumption of service of the letter under General Clauses Act is also provided for the letter which has been sent through registered post. 47. By law laid down by the Hon'ble Supreme Court in M.S. Madhusoodhan (supra), it is clear that when a letter is sent under certificate of posting, then it is the discretion of the court to draw a presumption of service or not, which depends on the case to case basis scrutiny. 48. It is also necessary to point out that if after sending of one notice Under Certificate of Posting, the petitioner did not attend the board meeting, and important decisions regarding that company's assets were to be taken at the Board meeting then in such circumstances, it was necessary to send further notices through Speed Post or Registered Post. It appears that postal seals which were easily available, have been obtained to create a proof of sending the notices. So, it cannot be considered that petitioner intentionally absented in three consecutive Board Meeting dated 06.09.2008, 08.12.2008 and further 10.06.2009. Therefore, in the circumstances mentioned above, it cannot be said that on account of absence in three cons....
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....any proper Board resolution and any information to the petitioner. Therefore, petitioner is claiming 50% of the shareholding in the company. But if the assets have been sold illegally without any information to the applicant, then petitioner can raise this issues before appropriate forum for cancellation of sale deeds. In the said circumstances, the petitioner may also claim his share out of the sale proceeds, in proportion to his shareholding, after getting investigation report and audited accounts of the company. The alleged disposal of assets of the company without the petitioner's approval, even though he is a director and has 50% shareholding in the company is an act of violation of his rights, and he is till date has been deprived of any information relating to sale of the assets of the company, which has been disposed. In the said circumstances, it cannot be said that petition is time-barred. Petitioner is still a Director of the company and his rights as Director is continuously being deprived. So, the said Act comes within the purview of continuing breach of the right of the petitioner. Therefore, it cannot be said that the petition is barred by limitation. 55. As f....