TaxTMI 
TaxTMI 
2018 (2) TMI 1452
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....he Original Respondent No. 2 (present Appellant No. 1). By the impugned order, it was also held that the removal of Original Petitioners Nos.1 and 2 (present Respondents) as Directors was bad and their position was restored. 3. Aggrieved by the impugned order, present appeal has been filed. We will refer to the parties in the manner in which they were arrayed before the NCLT. 4. Original Respondent No. 1 - Freyaship Services Private Limited (FSPL) is a private limited company; Original Petitioner No. 1 - Jagat Singh Chopra, Original Petitioner No. 2 - Vikram Singh Chopra; Original Respondent No. 2- Raj Singh Chopra and Original Respondent No. 3- Narpat Singh Surana, incorporated the company. Original Petitioner No. 1 is father of Petitioner No.2 and Respondent No. 2. Original Petitioners Nos. 1 and 2 were holding 50.51% equity stake in the company. The Chopra family had other businesses and companies also. Their business was of dealing in freight forwarding and brokering. The business was running smoothly till the end of December, when disputes arose. The Petitioners and the Original Respondent No. 2 agreed to refer to the disputes for settlement in presence of independent pe....
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.... that the NCLT failed to appreciate the binding arbitral award on the Original Petitioners and that they had no right and interest in the affairs of the present Company. For such reasons, the appeal has been filed to set aside the impugned judgment and order. 6. In this matter, notice was issued to the Respondents. It is stated that notice has been served on the respondents. The Respondent No.1 of the appeal (Original Petitioner No. 1) sent a few letters to the Registry in this Tribunal seeking time. This matter was adjourned on couple of dates but the Respondents did not cause representation on their behalf nor have appeared. We have kept in view Section 422 of the New Act also which requires time-bound disposal of such appeal(s). We have thus proceeded to hear the learned counsel for the Appellants. 7. Learned counsel for the Appellants referred to the copy of the Company Petition as was filed before the learned NCLT where in the Synopsis, Original Petitioners pleaded as under : "(2) The Respondent Company was carrying on it's business smoothly till December, 2015. Thereafter family disputes arose. The Petitioners and the Respondent No. 2 agreed to refer the disput....
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....should have asked both the parties to go for execution. The counsel submitted that in the face of the award, even if the acts of Appellants with regard to the Company were to be questioned, the Original Petitioners cannot claim legal injury. The counsel further referred to the additional Paper-Book filed where at Annexure-A12-Copy of the Execution Petition No. 2 of 2017 has been filed. It is submitted that the Original Petitioners have filed the said Petition before the High Court of Calcutta for execution of the same award. The Paper-Book shows that even the Appellant No. 1(Original Respondent No. 2) had filed application under Section 17 of the Arbitration and Conciliation Act, 1996 ('Arbitration Act' in brief) before the Arbitrators seeking interim measures till the award is enforced. 10. It has been argued by the learned counsel for the Appellants that in the order of the NCLT, it is not a finding of 'mismanagement' and if 'oppression' has to be held under Section 242, it would require series of acts. It is stated that only because Respondents (Original Petitioners) have extended unsecured loans in the Company to recover that the Company Petition under Section 242 could not ....
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....me of raising the money, the company had not passed special resolution. It answered the question on this count observing that if the company had passed said special resolution at the time of raising of money then the Company can convert such loan into paid up capital of the company. Learned NCLT referred to the reply of the present appellants to observe that there was nothing to show that such resolution had been passed at the time of raising of loan and the requirement to file Form - MGT-14 for submission of special resolution with ROC had been followed, prior to the raising of the loan. NCLT thus invoked Section 62(3) of the New Act. It was found that the purported allotment of 26,000 equity shares in favour of the Original Respondent No. 2 was required to be cancelled. 14. The learned counsel for the Appellants has questioned this invoking Section 62(3) of the New Act. Section 62 of the New Act deals with 'Further issue of share capital'. There is provision how Company having a share capital, can increase its subscribed capital by issue of further shares. Such shares are to be offered to persons, in the manner stated in sub-Section (1) of Section 62. Sub-Section (2) deals wit....
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....company in General Meeting which granted option as a term attached to the loan raised by the Company permitting conversion of such loan into shares of the company. 16. As regards the other issue regarding removal of the Petitioners as Directors, the observations of the learned NCLT are as under :- "On perusal of the record the respondent not submitted a single document so as to show that statutory notice are issued to the petitioners of the Board meeting which were held before removing them from the office and / or not able to produce the notice of removal with effect from 19.10.2016. The burden of proof lies upon the respondent to show that the notice was served upon the petitioner. Section 167(1)(b) of the Companies Act, 2013 mandates that : "..... He absents himself from all the meetings of the Board of Directors held during the period 12 months with or without seeking the leave of absence of the Board....." Thus, for the vacation of the Office of the Director under Section 167(1)(b), notices of the meeting which the Director is alleged to have not attended, is a must, vacation on the ground that the Director has failed to attend three consecutive m....