TaxTMI 
TaxTMI 
2018 (1) TMI 8
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....d on 09.02.2005 and consequently declare that the Respondents 2 & 3 are not the Directors of the Company since 09.04.2004. (3) To declare sale deed executed by the Respondent No. 2 in favour of Respondent Nos. 4,6 to 8 vide registered document Nos. 3440 of 2006, 6722 and 6723 of 2006 and un-registered sale deed executed by the respondent No. 2, which was subsequently validated vide file No. 791/AR/08 dated 07.01.2008 as void, illegal etc. 2. The brief facts, leading to the filing of present Company Petition, as stated in the Company petition are as follows: (1) M/s. Shruti Agro Farms Limited (which is hereinafter referred to as Company) is a closely held Public Limited Company incorporated at Andhra Pradesh under the provisions of the Indian Companies Act, 1956 having its Registered Office at 19-2-226, Miramlam Tank Road, Bahadurpura, Hyderabad, and its authorized share capital is Rs. 2,15,00,000/- divided into 21,50,000 equity shares of Rs. 10/- each paid up capital is Rs. 2,12,40,000/- The objects of the Company is to carry on the business of estate owner, cultivators, planters, growers and manufactures of sellers, etc.; as vegetable growers and cultivators, ....
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....y selling away the properties of the Company. On enquiry, the following illegal actions came to light: (a) The Respondent Nos. 2 to 5 have executed several transfer sale deeds by the 2nd respondent posing himself as the Director of the Company and executed a registered sale deed bearing Doc. No. 3440 of 2006 before Sub-Registrar Office, Rejendranagar by way of transferring agricultural land admeasuring Ac. 6-00 situated at Manchirevula Village and Gram Panchayat, Rajendranagar Mandal, R.R. District in favour of none other than his son and ex-director of the Company namely Ajay Kumar Kedia; (b) The 2nd respondent has executed another two separate sale deeds dated 12.05.2006 before the Sub-Registrar Office, Shamshabad vide Registered Document Nos.6722 & 6723 in favour of Pankaj Kedia who is relative of 2nd respondent, transferring agricultural land admeasuring Ac.3 and Ac.4-25 Gts respectively situated at Pedashapur, Shamshabad Mandal, R.R. District. (c) Mr. Shailesh Agarwal, who is Brother-in-law of the 2nd respondent had executed one registered Gift Sale Deed vide Doc. No. 3640 of 2008 dated 18.09.2008 transferring the agricultural land admeasuring Ac.5-2....
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.... dated 18.09.2008 in favour of Respondent No.6, who is the wife of Respondent No.2 before the Sub-Registrar, Gandipet, which is a fraudulent Gift Settlement Deed executed by the Respondent No.2 with other Respondents, and the said illegal and fraudulent acts are clearly borne out by fraudulent documents executed by them without authority of law. (4) It is denied that any resolution was ever passed authorizing Respondent No.2 to execute any Sale Deed in favour of Anil Kumar Jhunjhunwala. The purported documents created are clearly fake and fabricated as at the time of so called sale deed in the year 2003-2004, the properties of the document are charged for the Borrowing Arrangement of working capital with State Bank of Mysore vide letter dated 14.07.2003 till 18.06.2004 which was further renewed till 2005. The 1st Respondent Company shall continue to be the legal owner of these properties by any reckoning and the fraudsters are liable for penal action under provisions of the Companies Act, 1956/2013 and also under the Indian Penal Code, 1860. The 1st Respondent Company reserves its rights to launch appropriate criminal proceedings against the said Respondents as per law. ....
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....ompany for the year 2003- 2004 and 2005-2006 in which period the alleged illegal alienations are done unauthorizedly would reflect the fact that no such sale transaction were ever taken place with the approval of the Company and no sale consideration allegedly derived under such fraudulent transactions were ever credited and shown in the Balance Sheets of the Petitioner Company. It is further added that Company is an Income Tax Assessee having been allotted PAN No. AAECS5501P and in the Income Tax returns, the Company should disclose all its financial transactions done by the Company in that particular year. That having receipt of every years returns and after scrutiny the Income Tax Department will pass an assessment order and perusal of such assessment order passed by the Income Tax Department would clearly establish that in that particular financial year absolutely there was no capital gains in the Respondent No.1 Company's accounts which would make it clear that no sale consideration was ever credited in the account of the Company and the transactions done by the Respondent No.2 alienating the properties of the Company in favour of other Respondents are fraudulent transactions ....
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.... by reiterating the averments of Respondent No.2 as briefly mentioned supra. 7. Mr. Ajay Kumar Kedia (R-4) has filed a separate counter dated 30th November, 2009 by inter alia contending that the petitioner is not holding any shares, and the same are holding fraudulently. It is stated that he is one of the Directors of M/s. Kedia Overseas Limited, in which respondent No.2 is also the Director. M/s. Kedia Overseas Limited were offered with a proposal of sale by the respondent No.2 of the property admeasuring Ac.6-00 situated at Manchirevula Village, in Sy.No.476, Rajendranagar Mandal. Accordingly, M/s. Kedia Overseas Limited purchased the said property through the registered document No.2490 dated 21.02.2006. M/s. Kedia Overseas Limited being a separate organization is not prohibited from purchasing the properties of the Company irrespective relations with other Directors of the Company. It is further stated that the concerned MRO had also granted the mutation of the said property bearing proceeding No.B/96/2006 dated 02.05.2006 by issuing patta pass book and title books. However, the same property was alienated by sale by one Mr. Rajesh Agarwal alleging to be a Director in favou....
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.... that her share capital had been fraudulently credited to their personal accounts and that they are enjoying the profit out of it without giving proper explanations. She has also filed a criminal complaint U/s 420 & 463 of IPC and the same were pending. She has contended that the gift deed in question executed by her brother, under any circumstances come under the purview of the present Company Petition. 10. Smt Komal Kedia (Respondent No. 7) W/o Ajay Kumar Kedia (Respondent No. 4) has also filed a counter dated 30th November, 2009 by inter alia contending that gift deed executed by her father Mr. Anil Kukar Jhunjhunwala in question cannot be questioned before this Tribunal and all the allegations made against her are strongly denied. 11. Mr.Pankaj Kedia (Respondent No. 8) has filed a counter dated 30th November, 2009 by inter alia stating that he was unwarrantedly dragged in to this case merely because he is a shareholder in the company. He is only interested to safeguard his investment made in the Company by way of equity shares. The investment made by her husband had fraudulently credited to their personal accounts and they are enjoying the profit out of it without giving ....
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.... arrayed as applicants but also add some third parties. The petitioner is holding 12,92,162 of shares out of total 21,24,000 equity shares of the Company as on the AGM dated 29-09-2007 and further the petitioner shareholding is increased to 17,40,159 equity shares as on the AGM dated 30-09-2008. Therefore the petition is very well maintainable. (2) The Respondent No. 2 to 5 were the erstwhile Directors of the Company, Respondent No. 6 (Smt. Anitha Kedia) is the wife of the Respondent No. 2 (Mr. Mahesh Kumar Kedia), Respondent No. 7 (Smt. Komal Kedia) is the wife of Respondent No. 4 (Mr. Ajay Kumar Kedia) and the daughter-in-law of the Respondent Nos. 2 & -6 and Respondent No. 8 (Mr.Pankaj Kedia) is the son of Respondent No.10 (Smt. Aruna Kedia) & R-11 (Mr.Vijender Kedia). (3) The Respondent Nos. 2 to 5 have not only resigned from the directorship on 09-04-2004. But they have also disinvested their shareholding in the Company by duly executing the share transfer forms as required under law and the Respondent No.5, who was inducted as director on 09-04-2004 has also resigned his directorship on 18-12-2004. Therefore the Respondent No.2 to 5 do not have any right, en....
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....ral. And there is no other equally efficacious and remedy available to the petitioner except to approach this Tribunal under the provisions of Companies act as stated supra. And though the facts of case justify the winding up of the Company but it would unfairly prejudice all stake holders of the Company, and thus the Tribunal should have interfered in the matter as to put an end the affairs of Company as alleged in the petition by passing appropriate orders by exercising powers conferred on it by various provisions of the Companies Act 1956/2013 and law on the subject. (8) Even if the Respondent No. 2 & 3 were appointed as Additional Directors on 07-02-2005 as falsely claimed, their tenure would be till next AGM which in the present case is on 30-09- 2005 and after 30-09-2005 they ceased to be the Additional Directors of the Company and as such the documents executed by the Respondent No. 2 claiming himself as the Director of the Company are absolutely false and fabricated documents and the same are not binding on the Company and the Company cannot be deprived of its properties in any manner. (9) Purported unregistered sale deed is dated 07-10-2003 and its valida....
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....ed. As on date the original link document is in possession of the Respondent No. 1 Company and the physical possession of the land covered under the purported sale deed is with the Company. Validation of unregistered sale deed. Dated 07-01-2008 The above referred sale deed is validated by the Respondent No.2 on 07-01-2008 and as on the said date the Respondent No.2 was not the Director of the Company since he resigned Iong back on 09-04-2004. Validation of an unregistered document and payment of stamp duty cannot confer any valid title and as on date the original link document is in possession of the Respondent No.1 Company and the physical possession of the land covered under the purported sale deed is with the Company. 15. Mr. Jitender Kumar Kedia, Managing Director of the Company in person representing the R-1 Company along with his counsel Dr. S.V. Ramakrishna had confirmed the various material averments made by the petitioner in the CP. And he also denied the actions of the Respondent No. 2 to 5 and those actions are not only violated Articles of Association of the Company but also against the law, therefore the CP is to be allow....
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....s misrepresenting before this Tribunal. Therefore the petition is liable to be dismissed. 17. After considering various contentions raised by all the parties as briefly stated supra, the following main issues, apart from other issues, arise for consideration in the case: 1. Whether the Company petition is maintainable under section 397/398 of the Companies Act, 1956 in the light of allegation that the petitioner is not holding minimum 10 % shareholding of the Company, as prescribed under Company law; 2. Whether Respondent No. 2 to 4 have resigned as Directors of the Company and again re- appointed as additional Director as contended by the them; 3. Whether the responded No. 5 as resigned as contended by the petitioner and the Company; 4. If the resignations are validly made and accepted by the Company, what is validity of impugned transactions made by them ; 5. Whether the Form 32 filed by Respondent No. 5 on 09-02-2005 is valid or not, in the light of his resignation as Director/Chairman made as early as on 18-12-2004; 6. If so, what is the relief, the petitioner is entitled for. 18. It is not in dispute that the Company ....
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....nd thus requested the ROC to remove his name from the records with immediate effect from 18-12-2004. He has further filed an affidavit dated 08-08-2013 duly notarized (Page 47 Annexure R-11 with reply of R-1) by inter alia stating that his sons namely Mahesh Kumar Kedia, Umesh Kumar Kedia & Jitender Kumar Kedia have been involved in some litigations regard to certain properties and Mahesh Kumar Kedia and Umesh Kumar Kedia continued as Directors for some time, and there after resigned as Directors and also sold away their shares/interest in the Company. He further stated that he was inducted into Board on 09-04-2004 and he was continued to be as such till he resigned on 18-12-2004. And the said changes duly communicate to the ROC in prescribed form 32 and he further stated that he came to know that fresh form 32 filed on 05-02-2005 stating that they were re-nominated as Directors on 05-02-2005 and Form 32 with his signature. 20. It is not in dispute that the respondent Nos. 2 to 5 have resigned their Directorship, and the question involves in the petition is whether respondent Nos.2 to 4 have been re-appointed as Addl. Directors. For appointment of Addl. Directors, there is presc....
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....gned position of Director of the Company. Therefore, the contentions raised by the respondent contrary to their resignations are baseless and un-tenable and they are liable to be rejected. Hence, they are hereby rejected. 22. So far as the transfer of shares in question is concerned, the Company has filed share transfer applications duly signed by Mahesh Kumar Kedia, Umesh Kumar Kedia & Ajay Kumar Kedia, Pankaj Kedia, and Vijender Kumar Kedia along with reply of Respondent No. 1 as Annexure R3/ R9/Page 17 to 44. It is also relevant to point out here that, as stated by the respondent Nos 2 to 5, the execution of share transfer forms are not disputed by them. Mr.Arun Kumar Malani, the learned counsel has also admitted that share transfer forms in question were executed. But only allegation is that those forms were signed blank and given them to the Jitender Kumar Kedia, Managing Director of the R-1 Company to use them in case of any exigency as the Company is a joint family run concern. And this contention is not at all tenable and the same is baseless and it is liable to be rejected. I have carefully examined the respective resignations letters and share transfer forms in questio....
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....Therefore, all the impugned transactions made by Respondent No. 2 to 4, and their family members interest with respect to the properties of the Company mentioned supra are declared to be illegal and they are liable to be set- aside. Since all the concerned parties, in whose favour the impugned sale deed were executed have already made a party to the present CP, there is no further notice required to be issued to them before setting aside the impugned sale deeds. When the respondent No. 5 ceased to be Director of the Company, he cannot file Form No. 32 on 09.02.2005 with Registrar of Company. Therefore, the same is liable to be seaside with directions to the Registrar of Companies (Respondent No. 9) not recognise the same. It is also relevant to point here as stated supra, the resignation of Respondent No. 5, transfer of shares in question etc are affirmed by way evidence given by the second respondent before a court of law in OS No.931 of 2006. The contention of the respondent the evidence given in a suit cannot be relied upon in other proceedings like in the present proceedings cannot be accepted. 26. When the respondent No. 2 to ceased to be Directors and also shareholders, th....
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....11 before the Hon'ble High court of judicature of AP Hyderabad and the Hon'ble High court granted interim suspension as prayed for vide its order dated 7th March, 2011 passed in WP MP No. 6752 of 2011, and the writ petition is stated to be pending adjudication. Therefore, the Tribunal can proceed with the matter and decide it. So far as the other CP No. 43 of 2009 filed by said Narayan Bhangadiya is concerned, the Hon'ble High courts vide its order dated 25th August, 2010 passed in WP M.P.No. 26908 of 2010, has stayed all further proceedings in CP No. 43 of 2009, and the same is stated to be pending. 29. Mr.Ajay Kumar Kedia and 10 others have filed CA No. 94 of 2017 by seeking a direction to keep pending the present Company Petition until shareholding information of the Applicant (Mrs. Anitha Kedia) is established. It is contended in the petition that CP is filed in August 2009 by seeking not to take cognizance of Form No.32 filed on 08.02.2005. So the petition was filed after lapse of more than 4½ years. And the said Form 32 was filed another Director of the Company namely Mr. Gulzarilal Kedia (R-5) and his name appearing in the Board of Directors in the annual returns d....
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.... time of the hearing and not what was appropriate at the time the petition was presented. In fashioning the appropriate relief, the Court must take account of facts which arose between the date of presentation of the petition and a finding by the court that the petition was well-founded. The Court has a general power to make such order as it thinks fit for giving relief in respect of the matter complained of, including the making of an order forbidding the Company from making any alterations, (either at all or of a specified kind), to the memorandum or articles of association without the leave of the Court. (Palmer's Company Law: Sweet & Maxwell). 32. The powers under section 402 are residuary in nature and are in addition to the powers available to the Company Law Board under Sections 397 and 398 of the Companies Act. (Manish Mohan Sharma v. Ram Bahadur Thakur Ltd. [AIR 2006 Supreme Court 1690]). The powers of the Court under Section 402 of the Companies Act are wide and, there under, the Court may make any order for the regulation of the conduct of the Company's affairs upon such terms and conditions as may, in the opinion of the Court, be just and equitable in the circumstanc....
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....uld be in charge of the affairs of the Company. The court could even have a truncated from of corporate management if the exigencies of the case required it and any truncated form of corporate management can never conform to all the provisions dealing with corporate management. While acting under section 398, read with Section 402 of the Companies Act, the Court has ample jurisdiction and very vide powers to pass such orders and give such directions as it thinks fit to achieve the object and there can be no limitation or restriction on such power as requiring it to be exercised subject to the other provisions of the Act dealing with normal corporate management or that such orders and directions should be in accordance with such provisions of the Act. (Pramod Kumar Mittal v. Andhra Steel Corpn. Ltd. [Vol.58 (1985) CC 772 (Cal.)]). No cannon of construction would permit an interpretation in which the statutory power of the Court for its exercise depends upon the vote of the members of the Company. (Cosmosteels Private Limited). The court, under section 398 read with Section 402 of the Act, can give appropriate directions which are contrary to the provisions of the Articles of the Com....