TaxTMI 
TaxTMI 
2018 (5) TMI 415
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....ri R.P. Singh i.e. Respondent No.5 in the Company Petition and Shri Upendra Shandilya (since deceased) for promoting and getting incorporated the Respondent No. l Company with the object and purpose of setting up educational institutions. In order to give effect to the mutually settled terms and conditions of the said agreement, Respondent No. l Company i.e. Gyan Ganga Educational Institute Pvt. Ltd. was incorporated on 28th November, 1991 as a private limited company. It was decided and agreed in the aforesaid agreement that the four signatories will have equal shares in the Company. It is stated that the Petitioner No.2 has contributed Rs. 4 lakhs and Petitioner No. l has contributed Rs. 2 lakhs towards the share subscription in the Company, but the persons in control of the affairs of the Company have not allotted shares to the Petitioners and the amount paid by the Petitioners was shown as "unsecured loan" in the balance sheet of the Company. This was done intentionally to keep the Petitioners to a minority holding while the persons in control of the affairs of the Company were allotted equity shares in the Company for their own contributions. It is further stated that the Peti....
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.... the Board of Directors of the Company. Petitioner No. 1 never received any Notice of the alleged Meeting in which the alleged Resolution u/s 284 of the Companies Act, 1956 was proposed to be moved. Later on, the Company addressed the communication to the Petitioner No. l stating that she has been removed from the directorship of the Company in the Annual General Meeting, which was convened on 25th September, 1998. The Petitioner No. l never received any Notice of the Meeting in which the alleged Resolution u/s 284 was passed for her removal from the directorship of the Company. (g) Petitioners' group is holding 1,500 equity shares of the Company. The paid-up capital of the Company, as per the Annual Accounts for the year 1996, was Rs. 1,08,000/- comprising of 10,800 equity shares. Petitioners' group holds 14% of the total paid-up share capital of the Company for the year 1996 and accordingly entitled to present this Petition u/s 399 of the Companies Act, 1956 since the Petitioners dispute and deny the legality of the increase of authorised capital and issue of further shares after the year 1996. The amount advanced by the Petitioners was shown in the Annual Accounts of the Compa....
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....resignation was found in RoC records. (k) Shri Upendra Shandilya and Shri R.P. Singh were getting the Director's remuneration of Rs. 5,000/- per month each while the Petitioner No. l and 3 were getting the said Director's remuneration of Rs. 3,000/- per month each. Petitioners came to know at a later stage from the correspondence of the Respondents that the remuneration being received by the other persons has gone much higher to the extent of Rs. 20,000/- per month in the year 1998. Non-payment of remuneration to the Petitioners No. 1 and 3 has been in violation of Article 14(a) of the Articles of Association apart from depriving Petitioners from the right to receive remuneration as similar to other Directors in the Respondent No. l Company. The Notices of Board or General Meetings of the Company were never given to the Petitioners and no Meeting was conducted by the Company, which is nothing but contravening Section 285 of the Companies Act, 1956 which requires convening of one Meeting in every three calendar months and four such Meetings in a year. Petitioners were deprived of their rights as shareholders, besides no Notices were served upon them for intimation of convening of ....
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....tc.; (iii) The defendants be directed by way of injunction to supply the documents to the plaintiffs without protest or demur and should not oust the plaintiffs other than by way of legal recourse." Subsequently, in the year 2007 the plaintiffs were permitted by the Hon'ble Court to amend the plaint and incorporate the following relief in the prayer: "The plaintiffs be declared as one of the directors of the Company, namely Gyan Ganga Educational Institute Pvt. Ltd." (o) Subsequent to the above, the Petitioners No. 1 and 3 instituted criminal complaint under Section 200 of the Cr. P.C, alleging commission of offence by the persons involved in the affairs of the Company, punishable under Sections 420, 409, 467, 468 of the IPC. As a counterblast to the aforesaid complaint, the Company filed a complaint against the Petitioners No. 1 and 3 and some newspaper owners under Section 417 and 500 of IPC alleging defamation. The Petitioner No.2 also instituted a Criminal Case u/s 200 Cr. P.C. against persons involved in the illegal control of the affairs of the Company alleging the acts of criminal breach of trust, fraud and forgery punishable u/s 420, 406, 466, 467, 468, 469 and 120-....
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....cheating. The efforts on the part of the Respondents to get anticipatory bail failed. The Respondents approached the Hon'ble Supreme Court vide SLP (Crl.) No. 5113/2009 and obtained interim stay on their arrest vide Order dated 31st July, 2009. (s) Petitioners submit that the Respondents have opened up other ventures at Bhopal and Jabalpur. The Respondents have indulged in wrongfully diverting funds and selling away immoveable properties of the Respondent No. l Company to other ventures in Bhopal and Jabalpur. (t) The Respondents have forged the Minutes of the Meetings dated 1st June, 1996 and 11th June, 1996 and also withheld the payments of remuneration to the Petitioners No. 1 and 3 as they were getting only Rs. 3,000/- as against Rs. 5,000/- received by Shri Upendra Shandilya and Shri R.P. Singh and subsequently the same was increased manifold. Further, the interest payable @ 15% p.a. on the contributions paid by the Petitioners was also withheld. No action has been taken by the Respondent No.7, the Registrar of Companies, Madhya Pradesh and Chhattisgarh. (u) In the aforementioned facts and circumstances, the Petitioner prays for the following reliefs:- "9. RELIEFS: ....
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....y a coercive conduct on the part of the Respondents towards stopping the Petitioner no. 1 from claiming her rights as shareholder, director and creditor of the Company. x. Declaration that petitioners have proprietary interest in all the properties (moveable and immovable) purchased/created out of the funds of the Respondent no. 1 Company as envisaged in Clause 11(e) of the Agreement dated 07.09.1991: xi. Injunction directing that one of the persons belonging to petitioners group be made a compulsory signatory with respect to all the bank account operations of Company; xii. Injunction directing the Respondents to pay to the petitioners no. 1 and 3 the amount of the remuneration due to them in their capacity as directors of the Company with pro-rata increment as compared to other directors, together with interest @ 18% with effect from the period the same fall due till the date of payment; xiii. Declare that the issuance and allotment of the equity shares of the Respondent no. 1 Company after the period from 31.03.1996, to be null and void and thereby direct that the position of the shareholding as on 31.03.1996 be restored. xiv. Injunction restraining the Respondents from....
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....Petitioners, in collusion with each other, have filed various Civil Suits, Criminal Proceedings against the Respondents in different permutations and combinations seeking relief based on the above agreement and the sole purpose of multi-litigation is to force the Respondents to yield to their lust for a compensation at their dictated terms. That the Petitioners were known to the Respondents since Shri B.K. Dheer, husband of Petitioner No. l and father of Petitioner No.3, Shri U.K. Shandilya, father of Respondent No.2 and husband of Respondent No.3, Shri R.P. Singh, the Respondent No.4 and the husband of Respondent No.5 were working in the Irrigation Department and all of them belong to Raipur at one or the other time. Due to the friendly relations, Petitioner No. l, Petitioner No.2 and Petitioner No.3 were inducted as Members of the Company and later appointed as Directors also. Due to the death of Shri U.K. Shandilya, father of Respondent No.2 and husband of Respondent No.3, Shri B.K. Dheer designed a well thought-out plan to force the successors of Shri U.K. Shandilya viz. his father Shri Laxmi Narayan Shandilya, his wife Respondent No.3 and his son Respondent No.2 and manipula....
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....l her on every meeting. On 15th November, 2003, C.P. No. 06/2003 is filed by Petitioner No. l before the High Court of Chhattisgarh for winding up of Respondent No. l Company on the grounds stated in the Notice. Eventually, the C.P. is withdrawn by the Petitioners on 13th July, 2010 with liberty to approach CLB, if permissible. On 10th September, 2007, the Hon'ble High Court passes an Order for verification of the accounts through the Superintendent of Police with the help of a Chartered Accountant. The Petitioners have wrongly stated in the chronological list that the High Court order also directed for the verification of the affairs of the Company. The Petitioners are guilty of misleading the Company Law Board by concealing the material information. A Complaint was filed against Respondent No.6 for professional misconduct, which the Institute of Chartered Accountants of India held "Not guilty". On 24th September, 2012, Fifth Upper District Judge, Raipur, dismissed the Civil Suit filed by the Petitioners with costs. Thus, taking into consideration the above, the Company Petition is time barred. (c) The cause of actions mentioned in the Petition are already pending before the Leg....
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....s been dismissed with costs on 24th September, 2012 by the Hon'ble Fifth Upper District Judge, Raipur, as the Suit was not found fit for any kind of Injunction or Declaration in favour of the Petitioners. On 8th May, 2000, Petitioner No. 2 filed a Suit for Declaration and Injunction against the Respondent No. l Company and others seeking following reliefs:- i. Declaration regarding late Shri Laxmi Narayan Shandilya and Respondent No.2 are not validly appointed directors of Respondent No. l Company and the Petitioner No.2 is entitled to dividend and interest on the amount of shares. ii. Status quo order on the properties of late Shri Laxmi Narayan Shandilya, Respondent No.2 and Respondent No.5. iii. Costs, and iv. Any other relief. That the said Suit was unconditionally withdrawn by Petitioner No. 2. Thus, a number of Suits and Complaints have been filed by the Petitioners either jointly or severally and in different permutations and combinations against the Respondents. Since all the pending Suits are based on the same cause of action as prayed in the present Petition, the present Petition deserved to be struck down and dismissed with costs on the ground of res judica....
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....er the Limitation Act is applicable to the present case? (b) Whether the acts complained of in the Petition are continuous in nature and the provisions of Section 397 and 398 of the Companies Act, 1956 are applicable or whether the Petition is dressed up to suit the requirements of Sections 397 and 398 of the Companies Act, 1956? (c) Whether a private agreement dated 7th September, 1991, which is purportedly entered between the parties before the incorporation of the Respondent Company, binds the Respondent Company? (d) Whether the Company Petition is barred by the principle of res judicata? (e) Whether the Petitioners approached the Company Law Board with clean hands and whether there was forum shopping to somehow get the desired relief? 7. The Petitioners mainly relied upon the case law as contained in Esquire Electronics Inc. v. Netherlands India Communications Enterprises Ltd. & Ors. The point that has been decided in the above said Company Appeal is as follows:- "12. We agree with the finding of Tribunal that Section 433 of the Companies Act, 2013 (hereinafter referred to as Act of 2013) makes it clear that the provisions of Limitation Act, 1963 (36 of 1963) apply t....
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....mitation - Appeal - Delay in filing appeal - Condonation of delay - Essential prerequisite for exercise of discretion to condone the delay - Court must record its satisfaction that the explanation for the delay was either reasonable or satisfactory - Delay of 565 days in filing first appeal by respondent-State against judgment and decree of Sub-Judge in an arbitration application - No explanation much less a reasonable or satisfactory explanation offered by the respondent-State for condonation of the delay - Application for condonation of delay, though seriously opposed, allowed by High Court merely observing that taking into consideration the averments contained in the affidavit filed in support of the petition to condone the delay, we are inclined to allow the petition" - Held, High Court was not justified in exercising its discretion to condone the delay - Arbitration Act, 1940, S. 39 - Appeal - Limitation." 10. The Respondents also relied upon the case law as contained in Rajinder Sehrawat v. Noida Fabricators & Engg. (P.) Ltd. [2008] 144 comp case 266 (Delhi). The point that has been decided in the above said Company Petition is as follows: "14...... (a) The petition does....
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.... principle of res judicata to courts and not to Tribunals. The applicability of the principle of res judicata to Tribunals fell to be considered by the Supreme Court in Burn and Co. v. Their Employee (AIR 1957 SC 38). The question arose whether an award given by an Industrial Tribunal on a matter in controversy between the parties after hearing, was to have no force if repudiated by either of them, and the matter comes up for consideration again before that Tribunal. Venkatarama Ayyar J. who spoke for the Court observed thus (at P. 43):- "What then is the position? Are we to hold that an award given on a matter in controversy between the parties after full hearing ceases to have any force if either of them repudiates it under Section 19(6), and that the Tribunal has no option when the matter is again referred to it for adjudication, but to proceed to try it de novo, traverse the entire ground once again, and come to a fresh decision. That would be contrary to the well-recognised principle that a decision once rendered by a competent authority on a matter in issue between the parties after a full enquiry should not be permitted to be reagitated. It is on this principle that the ru....
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....s hopelessly time barred and the Petitioners have not explained any reason as to why there has been lot of delay in filing the Company Petition at the relevant point of time. The acts complained of in the Company Petition are not continuous in nature or which can be attributable to the period that would have enabled the Petitioners to invoke its jurisdiction of the Company Law Board under Section 397 and 398 of the Companies Act, 1956. Therefore, the issue (a) is decided in favour of the Respondents. 13. Apart from the above, the acts complained of in the Company Petition are not continuous in nature nor does it relate to the period when the Company Petition is filed. The Petitioners have not made out any case u/s 397 and 398 of the Companies Act. The pleadings in various cases before other Courts are more or less same or similar in nature. But the Petitioners have taken all the possible care and exercised caution to dress up this Petition in such a way that it attracts the provisions of Sections 397 and 398 of the Companies Act, 1956. A careful reading of the entire material on record alone reveals the whole game plan of the Petitioners to invoke the jurisdiction of Hon'ble Compa....
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....n'ble High Court, in addition to the prayer for winding up, are based on the very same agreement dated 7th September, 1991. It can also be seen some proceedings before the Civil Courts have been dismissed against the Petitioners or some of them pending at the Appellate stage. We are of the view that the parties to this Company Petition and the parties in the other litigations, either before Civil Court or High Court, are more or less or at least partially the same. The underlying principle of res judicata is that a decision once rendered by a competent authority on a matter in issue between the parties after a full enquiry should not be permitted to be re-agitated. We, therefore, hold that the principle of res judicata is squarely applicable to the present case and the issue (d) is decided against the Petitioners. 16. It is needless to say that the entire pleadings put forth by the Petitioners are the repetition of the very same incidents at every stage. It is also clear from the pleadings, particularly the main Company Petition, that the Petitioners have made the best efforts to maliciously corner the Respondents to get the best out of them in an unacceptable manner. The contenti....