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2013 (9) TMI 1191
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.... Rs. 35,00,000 divided into 35,000 shares of Rs. 100 each and the paid-up capital of the company is Rs. 34,00,000 divided into 34,000 equity shares of Rs. 10 each. (iv) The registered office of the company is lying and situated at Village and Post Office : Dakshin Rasulpur, Hooghly, West Bengal-712 413 and the principle object of the company is to set up cold storage and to store and sell the potato. (v) The petitioner Nos. 1 and 2 are directors of the respondent-company. Respondent Nos. 2 and 4 are also shown as directors of the respondent-company. Respondent No. 4 happens to be the wife of respondent No. 2 and respondent Nos. 3 and 5 are sons of respondent Nos. 2 and 4. Respondent Nos. 15 to 18 are either relative of respondent No. 2 or his nominee, holding the shares of the company for and on behalf of respondent No. 2 in trust. (vi) Even though respondent No. 2 was in control and management of the respondent-company having its cold storage at Dakshin Rasulpur, District -Hooghly, he was not in a position to run such unit profitably and the company was not in a position to pay its several creditors the outstanding dues. ....
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.... Smt. Kusum Agarwal, respondent No. 4, respectively. (ix) The petitioner took over management of the respondent-company with effect from 28th January, 2009 and the petitioner and his nominee were appointed in the Board of Directors of the company on 5th February, 2009 and they started operating the bank account of the company. The petitioner arranged payment to the secured creditor of the company, viz., Hooghly District Central Co-operative Bank Ltd. for a sum of Rs. 2.40 crore out of the total claim of Rs. 6.10 crore (approximately). The petitioner also arranged payment exceeding Rs. 1 crore for storing purpose in the cold storage unit. (x) respondent No. 2 did not present the cheques drawn by the petitioner aggregating to Rs. 5 lakh, but caused transfer of 6,050 shares of and in the company held by him in favour of petitioner No. 1. (xi) After arranging the fund, the petitioner No. 1 had discharged payment of Rs. 2.40 crore out of outstanding loan of Rs. 6.10 crore to Hooghly District Central Co-operative Bank Ltd. and the petitioner has stated to be in the process of arranging the balance payment. (xii) Respondent No. 2....
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....company has not filed annual return for the year ended 31st March, 2010. Similarly, the annual return for the year ended 31st March, 2011 is also not available with the Registrar of Companies ('RoC') and the accounts of the company have not been finalised deliberately and mischievously by the respondents. (xix) Respondent Nos. 2 to 18 are invading and threatening to invade the right and enjoyment of the property by the petitioners. The petitioners also apprehend that the respondents will deal with the assets and properties of the company in a manner which will make the same unavailable. Also, the respondent Nos. 2 to 18 are likely to change the shareholding ratio of and in the respondent-company. Respondent Nos. 2 to 18 are likely to either sell the shareholding to outsider or to issue and allot capital either to themselves or to outsiders and in any such eventuality, the petitioner will suffer irreparable loss and prejudice which may not be compensated in terms of the money alone. As against the above averments and challenges made by the petitioners, the respondents have submitted the following replies through affidavits which are briefly mentioned as und....
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....he respondent No. 4 did not sign the said MoU though she happens to be the director of the company. As per the terms and conditions of the said MoU, the transfer of the cold storage after due execution of the MoU was subject to approval and sanction of the said lending bank. Incidentally the said bank refused its sanction or approval for transfer of the cold storage of the respondent-company to petitioner No. 1 or Sk. Abdul Sabir & Associates. Respondent No. 2 came to know about this fact from the certified copy of the proceedings initiated by the said Hooghly District Central Co-operative Bank Ltd. against the respondent-company and Sk. Abdul Sabir & Associates. (ix) In the meantime, respondent No. 2 handed over 6,050 equity shares in the company out of 20,050 shares held by him to petitioner No. 1. The purported handing over of shares is prohibited by the AoA of the respondent-company. Due to ill health, respondent No. 2 could not understand the meaning of the terms and conditions of the said MoU. However, the purported transfer is illegal and violative of the AoA of the company and other shareholders are interested to purchase of shares of respondent No. 2 and ass....
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....e Board that the lending bank refused its approval for transfer of the cold storage in favour of the petitioners. It has also suppressed that in execution proceeding initiated by the bank against the cold storage, attachment order for sale of the cold storage would have been passed and the cold storage would have been sold, but because of the meeting of respondent No. 2 with the Chairman of the bank, further time was granted to repay the outstanding dues. The petitioners have stated that they paid Rs. 2.40 crore to bank out of the earnings of the cold storage, but as per the revelations in the accounts, the said amount of Rs. 2.40 crore has been paid out of withdrawal of Rs. 4,98,17,111 which, the petitioner withdrew from the cold storage. Thus, the petitioners siphoned away more than Rs. 2.50 crore out of the earnings of the cold storage till 13th July, 2011. In fact, the net liability of the bank was reduced by Rs. 22 lakh only although Rs. 2.40 crore were stated to have been paid. (xiii) 2 share certificates comprising 6,050 shares out of total 34,000 shares, were made over to the petitioner on his assurance to make payment of Rs. 5 lakh by two cheques, but such p....
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....e of the Board meeting and, thus, the respondents have acted in breach of their fiduciary duties and such action meted out to the petitioner is oppressive and harsh. A director can only be removed under section 284 of the Act which requires a meeting of the shareholders. In absence of notice to the petitioner for removal as director, the said action is illegal and reference has been invited to the authority - AIR 1973 SC 2389. (iv) The respondent No. 2 started violating the terms and conditions of the MoU and even though the petitioner is entitled to balance 82 per cent of shares in terms of the MoU, the said transfer has not been made in clear violation of the terms of the MoU. (v) The respondents have contended that the petitioner has filed title suit and so no relief can be granted in a company petition as the same are parallel proceedings. However, the relief sought as per the title suit is different from the relief prayed for in the instant proceeding and the parties to the two proceedings are not the same and the issues in such proceedings are also different. In view of the same, the company petition cannot be stayed - AIR 1982 Cal. 1984. ....
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....igibility criteria of section 399 of the Act, it has been submitted that the petitioners hold 18 per cent shares and the share certificates have been disclosed in the petition and the respondents have also admitted that the petitioners are holder of 18 per cent shares and, therefore, the share qualification of the petitioners becomes a total non-issue. (xi) As regards the failure of the petitioners to make payment of Rs. 5 lakh as per the MoU, it has been stated that the cheques were issued in the name of respondent Nos. 2 and 4, but these have not been encashed by the respondents. The petitioners have shown their willingness to revalidate the cheques in order to issue fresh cheques for the said amount. Therefore, it has been submitted that the ratio of the case relied upon in AIR 1956 (Bom.) 111 has no manner of application to the facts of the case. To sum up, the petition has been stated to be maintainable and the petitioners are entitled to relief as sought for in the petition. 3. Learned counsel of the respondents during the course of the proceedings has made the following submissions and pleadings which are mentioned, in brief, as under: (i)....
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....ondent No. 2 from entering into the cold storage. The petitioner No. 1 has also got other ex parte order confirmed on 13th September, 2011. The respondent-company preferred an appeal before the Additional District Judge, Arambagh, against the said order dated 13th September, 2011 and the Additional District Judge in Misc. Appeal No. 13 of 2011, has set aside the order of the trial court and observed that respondent No. 2 is the founder-director of the respondent-company and his entry in the cold storage cannot be denied. (iv) The purported MoU dated 27th January, 2009 is under stamped and is required to be impounded under sections 32 and 33 of the Indian Stamp Act, as applicable to West Bengal. Article 5 of the Stamp Act provides that any agreement for transfer of immovable property has to be by way of registered conveyance of stamp, as provided in article 23 being 6 per cent of the market value of the cold storage which is not less than Rs. 10 crore. 4. Learned counsel of the respondents has raised the following proposition of law arising out in the company petition being CP No. 751/2011: (a) The petition under sections 397, 398 and 401 of the Comp....
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.... allowed to maintain the company petition on the same cause of action when section 9 of the CPC provides that all disputes between the parties can be tried by a civil court excepting which are specifically barred and section 10 of the Act, provides that excepting application under sections 237, 391, 394, 395, 397 and 407 of the Act, all other disputes between the parties can be tried by a civil court. In the light of the above propositions of law and the authorities relied upon, it has been submitted that the company petition being CP No,751/2011 should be dismissed and all interim orders be vacated. 5. I have considered the above submissions, the pleadings and arguments made on behalf of the petitioners and the respondents. The main challenge brought out in the petition is in respect of non-compliance to the terms and conditions of MoU dated 27th January, 2009 entered into between the petitioner No. 1 and respondent No. 2 in relation to the transfer of the balance shares of 82 per cent of the paid-up capital of the company to petitioner No. 1 after all the obligations cast on the petitioner No. 1 are discharged as per the terms of the MoU like, payment of outstanding liabili....
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....s have been raised which can constitute oppression or mismanagement as required under section 397/398 of the Act. There are no pleadings whatsoever in the company petition to the effect that the facts of the present case would justify the making of a winding up order on just and equitable ground, but such winding up of a company would unfairly prejudice the petitioners as stipulated in section 397(2)(b) or that it is likely that the affairs of the company are conducted in a manner prejudicial-to public interest or prejudicial to the interest of the company due to a material change that has taken place in the management or control of the respondent-company on account any alteration in the company's Board of directors or manager or in ownership of its shares or membership or in any other manner whatsoever satisfying the requirements of section 398(l)(b) of the Act. In fact, the main purpose of the petition is to enforce specific performance of the MoU dated 27th January, 2009 entered into between the petitioner No. 1 and respondent No. 2, which is already a subject-matter of a civil suit filed by petitioner No. 1. 8. Learned counsel of the respondents has raised the preliminar....
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....t is not binding upon the respondent-company. Further, the procedure for execution of any document by a company is provided under section 48 of the Act and the purported MoU does not appear to have been executed by the respondent-company complying with the said provision and respondent No. 2 did not have any authority to execute such MoU on behalf of respondent-company because no resolution in any Board meeting has been passed authorising respondent No. 2 to execute the said MoU on behalf of the respondent-company. Therefore, the dispute arising out of the non-performance of the terms of the MoU between the involved parties is purely a private dispute and the same cannot be entertained in a petition under section 397/398 of the Act. In this regard, the decision in Chatterjee Petrochemical (supra), has been relied upon by the learned counsel of the respondents which is squarely applicable to' the facts of the present case. Therefore, the petition cannot be entertained on this ground also. 10. The only worthwhile ground raised by the petitioners is removal of the petitioners from directorship of the company vide Board meeting dated 4th July, 2011 for which neither any notice a....