TaxTMI 
TaxTMI 
2018 (5) TMI 415
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...., Smt. Rajkumari Kanda i.e. Petitioner No.3 and Shri 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....
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....y the Company that a Resolution was proposed u/s 284 of the Companies Act, 1956 proposing her removal from 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....
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....esigned from the directorship of the Company on 3rd March, 1995. No resignation letter nor any resolution for accepting the purported 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 i....
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.... are entitled to; (ii) The plaintiffs are entitled for all Actual documents, accounts, vouchers, balance sheets and detailed accounts of expenses, payments/receipts, etc.; (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 ....
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.... 30th January, 2009 bearing No. 127 of 2010 was also filed by Petitioners No. 1 and 3 against Respondent No.4 Smt. Munish Singh and Respondent No. 6 Shri Deepak Batra, Chartered Accountant of the Company alleging forgery and 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 w....
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....s director on the board of directors of the Company continues to subsist as she had never tendered any resignation from her post; ix. Declaration that the resolution of the Company dated 25.09.1998 with respect to removal of the Petitioner no. 1 from directorship of the Company as null and void, since, the same was only 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 fr....
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....led in any Legal Forum and thus its existence is sub-judice and the Company Law Board cannot and should not grant any relief in respect of the said agreement. The Respondent No. l Company, Respondent No.2 and Respondent No.3 who are in control of the affairs of the Company are not a party to the said agreement and the Company has not adopted nor confirmed the said agreement after its incorporation on 20th November, 1991. The 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, Pet....
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....LB with dean hands. On 29th March, 2001, Petitioners' group filed another Civil Suit seeking declarations based on the said agreement. The said Suit has been dismissed with costs on 24 September, 2012. On 3rd October, 2003, Petitioner No. l serviced a Notice u/s 434 of the Companies Act, 1956 without claiming a specific amount and demanding bonus, dividends, shares, remuneration and interest on the said amount besides accepting as a Creditor of the Company and to call 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 conc....
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.... winding up and praying for reliefs as under:- i. Appointment of a Receiver, ii. Order for winding up, iii. Appointment of Official Liquidator, iv. Provisional liquidation, v. Cost and other relief, if any. In the Petition, no specific amount was mentioned as due from the Respondent No. l Company but a number of monetary claims were mentioned and the High Court instead of dismissing the Petition, allowed it to be withdrawn by the Petitioners. On 29.03.2001, Petitioners' group filed another Civil Suit seeking declarations based on the above said agreement. The said Suit has 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....
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....e Petitioners in the said Reply except a bald denial. Certain new documents have been filed along with the said Reply, which have already been pleaded earlier in the pleadings. 4. The Respondents had filed a Rejoinder reiterating their stand that the Company Petition be dismissed as the same is not maintainable. 5. Respondent No.6 also filed a Rejoinder to the Reply of the Petitioners more or less on the same lines as that of the other Respondents. 6. We have heard the Counsel appearing on both the sides and upon the perusal of the pleadings and the material on record, the following points are to be considered for adjudicating this Application questioning the maintainability of the Company Petition: (a) Whether the Petition is hopelessly time barred and whether 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, whic....
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....d Another. The point that has been decided in the above said Civil Appeal is as follows: "Res judicata - Applicability of, in case parties in the former and subsequent proceedings are not identical - Party in subsequent proceeding though not a party in the former proceeding, litigating the subsequent proceeding on the basis of title acquired through a party in the former proceeding - If bound by the result of the former proceeding - Held, in such a case the successor-in-title would be bound by the result of the earlier proceeding in the subsequent proceeding to the extent the predecessor- in-title would have been bound." 9. The Respondents also relied upon the case law as contained in P.K. Rama Chandram v. State of kerala [1997] 7 SCC 556. The point that has been decided in the above said Civil Appeal is as follows:- "A. Limitation - 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 S....
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.... must be continuous acts constituting oppression up to the date of the petition; (3) the events have to be considered not in isolation but as a part of a continuous story; (4) it must be shown as a preliminary to the application of section 397 that there is just and equitable ground for winding up of the company; and (5) the conduct complained of can be said to be 'oppression' only when it could be said that it is burdensome, harsh and wrongful; oppression involves at least an element of lack of probity and fair dealing to a member in matters of his proprietary right as a shareholder." ' 11. The Respondents also relied upon the case law as contained in Between Koran v. Kamala Shetty AIR 1978 Ker. 172 (FB). The point that has been decided in the above said Revision Petition is as follows: "5. The Supreme Court decision was concerned with the question of the applicability of the general 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 ....
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....The Petitioners, one after the other, have invoked the jurisdiction of various Forums at the relevant point of time. By the time this Company Petition came to be filed u/s 397, 398, 399, 402, 403, 406, 235, 237 and 247 r/w Section 211 of the Companies Act, 1956, there was hardly any latest or fresh issue that was required to be agitated. Since the acts complained of in the Petition have not occurred at a time when the Petitioners would have been eligible to invoke the jurisdiction of the Hon'ble Company Law Board and the delay in coming to the Company Law Board in the year 2013 clearly debars the right to the Petitioners to invoke the jurisdiction u/s 397 and 398. The view taken by the Hon'ble National Company Law Tribunal in the matter of M/s. Esquire Electronics Inc. . v. Netherlands India Communications Enterprises Ltd. is squarely applicable to the present case also. Thus, we hold that the Company Petition is 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 attribut....
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....in the assets of the Company and hence they are entitled for certain benefits and dividends which have not been paid to them, etc. Further, at every stage of litigation in every Forum, Petitioners have contended more or less the same points and seeking the same reliefs whether in a direct or in an indirect manner. Looking at the pleadings made in the Company Petition, it is clear that the Petitioners have made all the possible efforts by dressing up the Company Petition to see that their case somehow falls under Section 397 and 398 of the Companies Act. It is also pertinent to mention that the invocation of jurisdiction u/s 433 and 434 of the Companies Act before the Hon'ble High Court can well be taken as an admission on the part of the Petitioners that they are the Creditors of the Company, but not shareholders. It can also be seen that the prayers made in the said Company Petition i.e. C.P. 06 of 2003 before the Hon'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....