TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 459
X X X X Extracts X X X X
X X X X Extracts X X X X
....(Old). (The parties are same as arrayed in the impugned order). The Company Petition was filed under Section 397 and 398 of the Companies Act, 1956 ("old Act", in brief). The Respondent No.1 Company, M/s. Cima Shyam Springs Private Limited (hereinafter referred as Company) is private limited company. The Company has been incorporated on 26.09.2008 as private limited company with authorized share capital of 45,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid up share capital as per balance sheet for year ending 31st March, 2011 was 3,65,63,990 divided into 36,56,399 equity shares of Rs. 10/- each. The Appellant No.1 Company incorporated in Italy is shareholder initially holding 51.36% of the equity shares. Due to illegal allotments of additional equity shares by Respondents, the percentage of shareholding of Appellant No.1 is reduced to 39.87%. As Appellants are based in Italy, the Company at Vadodara was being managed by Respondents 2 and 3. The Appellants have filed chart Exhibit D regarding chronology of events. Charts E and F are filed to show illegal allotments and meetings. According to the Appellants, several Board Meetings as well as General Body Meetin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s the claim regarding the 3rd issue of shares dated 19th April, 2011. The 4th issue of shares dated 2nd July, 2011 was without consent of the Directors nominated by the Appellant No.1 namely, Appellants 2 and 3 who were illegally barred from attending the Board Meeting. The 5th issue of shares dated 18th September, 2011 was also without Notice to the Appellants. The Appellants did not receive any Notice of the Board Meeting/Extra Ordinary General Meeting. Similarly, the 6th issue of shares on 25.07.2012 was also without Notice to the Appellants. Thus, the Appellants claimed that these Board Meetings and all these issue of shares were illegal. The NCLT vide impugned order upheld the contentions of the Appellants relating to the 3rd issue of shares and 6th issue of shares accepting that the same was invalid. The Appellants have challenged the findings of the learned NCLT regarding issue of shares, in disputed Meetings. 7. According to the Appellants, the act of the Respondents of reducing the majority shareholding to minority is an act of oppression and mismanagement as there were either no Notices issued or very short Notices were issued. The act of not letting the Appellants parti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o provide any financial help although they knew about the financial difficulties of the Respondent Company. The Respondents claimed that the Appellants were informed about the Board Meeting to be held on 19.04.2011 vide e-mail Notice dated 12.04.2011. In Board Meeting dated 18.05.2011, Appellants 2 and 3 were removed from the Office of Director in accordance with Section 283(1)(g) of the old Act. However, Appellant No.3 filed Form - 32 with Registrar of Companies illegally claiming herself to be appointed as Director of the Respondent Company in July, 2011, that too after Respondents had filed Form of vacation of Office. Appellants suppressed material information regarding removal of Appellant No.3 from position of Director and filed illegally Form - 32 with Registrar of Companies. Respondents claimed that for Board Meeting dated 28.02.2011, Notice dated 22.02.2011 with Agenda relating to issue of equity shares and issue of debentures had been sent. In substance, the defence of the Respondents is that proper Notices had been sent. According to them, the reduction of Appellants' shareholding was inevitable as fresh funds were required for the business of Respondent No.1 Company as i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esolutions passed in the purported Board Meeting dated 18th May 2011 are invalid for want of notice to the Petitioners; (9) Whether the increase of Authorised Share Capital to Rs. 6,00,00,000 and issue of equity shares to the extent of 15,00,000 in more than one tranch in the purported EGM held on 18th June, 2011 is invalid on the ground that no notice was given to the Petitioners; (10) Whether Petitioners are prevented from attending the Board Meeting dated 2.7.2011 and whether the offer of Rights Issue of equity shares of Rs. 10 each to the extent of 15,00,000 is invalid; (11) Whether the issue of 3,83,334 equity shares allotted to Shyam Group (Respondent No.4) on 7th July, 2011 is invalid; (12) Whether the EGM dated 11th August, 2011 is invalid on the ground of short notice; (13) Whether the issue of 3,87,066 equity shares to Shyam Group (1,46,666 equity shares to Respondent No.4 and 2,40,400 equity shares to Respondent No.6) in the Board Meeting held on 18th September, 2011 is invalid for want of notice to the Petitioners; (14) Whether the AGM dated 27th September, 2011 is invalid on the ground of short notice; (15) Whether the issue of 80,010 equity shares....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith regard to POD 1 to 4 and 16. We have seen the reasons and findings recorded by NCLT with regard to POD 1 to 4 and find no reason to interfere in these aspects. As regards other aspects, we have heard learned counsel for both sides. Arguments in brief for Appellants 12.1 In short, the learned counsel for Appellants submitted that the Appellants who were 51% have been reduced to 39.89% in shareholding by the acts of Respondents. She stated that the Respondents either sent no Notice or sent short Notices for the Board Meetings or EOGM or AGM. It is argued by the learned counsel for the Appellants with reference to Point of Determination (POD) 5 that while dealing with POD 8, NCLT came to conclusion that there was no material placed on record to show that Notice of Board Meeting held on 18.05.2011 was sent to the Petitioners/Appellants and that the same was received by them and in spite of this, no clear finding was recorded against POD 5 and POD 8. The learned counsel argued with reference to POD 6 and Board Meeting dated 28th February, 2011 that on that date the Respondents issued shares of the Company without Respondents showing as to how there were applications received for i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tice to Petitioners. 14. The learned counsel for Appellants further criticized the Impugned Order for the reasonings recorded in para - 35 of the Impugned Order where NCLT accepted that Petitioners being residents of Italy, Notice of one week is short Notice for AGM dated 27.09.2011 but still upheld the meeting observing that in the AGM no major decision was taken except approval of accounts of the Financial Year ending 30th March, 2011 and appointment of Statutory Auditors. According to her, the right of the Appellants to look into the accounts and for a voice regarding appointment of Statutory Auditors cannot be taken away by giving short Notice. According to the counsel, the point for determination held against the Appellants should have been held in favour of the Appellants. Arguments in brief for all Respondents 15. Against this, learned counsel for Respondents argued that reduction in the shareholding of the Appellants from 50.02% to 39.87% was inevitable as funds were required to be infused in the business for existence of Respondent No.1 Company which was incurring losses since date of incorporation. It has been submitted that the Appellants invested Rs. 1.82 crore as in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Springs and Fasteners India Pvt. Ltd. where Mr. Alessandro Cuomo the representatives of the Appellants in Respondent Company was the Director of the other Company at Goa. Even that Company was engaged in manufacturing springs for washing machines which was the main object of Respondent Company. The learned counsel submitted that Unimatic URL and Cabe SRL, sister concerns of Appellants supplied degraded machinery to Respondents and to harass Respondents filed summary suit in Civil Court at Vadodara to claim cost of machinery. It was dismissed by the Civil Court and appeal was filed at High Court which was also dismissed on 18.07.2017. Thus, the Appellants were working against the interest of Respondent Company. 16. It has been argued by the learned counsel for Respondents that the appeal deserves to be dismissed. 17. Having considered the matter as was brought before the learned NCLT and the Impugned Order and having heard counsel for both sides we now proceed to discuss the points raised. Board Meeting dated 28.02.2011 18. The minutes of this Board Meeting are at page - 298 in Volume - II of the Appeal. It was held by Respondent Nos.2 and 3 as Managing Director and Director. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arly, there were no meeting papers circulated nor sufficient particulars in the Agenda to know as to what business would actually be conducted in the Meeting. The learned counsel for Appellants has rightly argued referring to Para - 29 of the Impugned Order that the learned NCLT while dealing with E-mail Notice and the Agenda relating to Board Meeting dated 19th April, 2011 found that Agenda to be vague relating to allotment of 80010 equity shares to Shyam Group by way of conversion, but the learned NCLT did not consider vagueness of the Agenda of Meeting dated 28th February, 2011 while dealing with POD 6. We reject the argument of counsel for Respondents that law does not require and so agenda itself is not required. When law requires holding of meeting eyes cannot be closed to the basics. 20. The learned counsel for the Appellant has drawn our attention to the Notice dated 22nd February, 2011. (copy of which is at Page- 295). She stated that in this, the Notice is purported to be sent to "Rita Bellazzi", "Bellazzi Sergio". While, the CC has been marked to "Hemal Patel", giving complete address - "[email protected]". The argument of the learned counsel is that if this document....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts that Respondents 2 and 3 were interested Directors in the allotment of shares and debentures in the Meeting on 28th February, 2011 by observing (in Para 28.2) that the provisions of Sections 295 to 302 nowhere specifically state that shares shall not be allotted to a Company wherein one of the Directors of the Company has got the interest. The learned NCLT did not consider the Articles of Association (copy at Page - 110 of Appeal Volume I) which in Article - 3 placed restriction on transfer and number of Members. Sub-clauses c and d of Article 3 reads restrictions as under:- "[c] Prohibits any invitation to the public to subscribe for any shares in or debentures of the Company. [d] Prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives." Article 6 reads as under:- "Shares at the disposal of Directors 6. The shares shall be under the control of the Directors who may allot or otherwise dispose off the same or any of them to such persons, in such proportions and on such terms and conditions and at par, at premium or at discount [subject to the provisions of the Act] as they may from time to time think prop....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ants pointed out the Minutes of Meeting dated 16th March, 2011 (Page - 266 of the Appeal). Mr. Alessandro Cuomo participated on behalf of the Cima and Mr. Girish Patel and Mr. Devang Patel participated for Shyam party The relevant part of the Minutes is reproduced below:- "During the meeting both parties analized data coming from company consultants about the financial situation. Both parties already were aware about the financial stress the company is passing through due to the starting of mass production. After that myself, Mr. Alessandro Cuomo, appointed by Mr. Emilio Bellazzi, communicated to Shyam party the will of Cima party to wind out the JV CimaShyam Pvt. Ltd. The Three solutions available are: - Shyam party buyout Cima shares - Bankruptcy of CimaShyam - Cima party buyout Shyam shares According to this list Mr. Girish asked as first option to investigate about the possibility Shyam party to buyout all Cima shares. Cima party is available to discuss this option as first if the matter regarding the payment of machineries arrived from Italy has a special priority on the discussion that will follow. Both party agreed to go ahead on this solution after inves....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a dated 20.05.2009 which is at Page - 237 to show as to what was the state of business and what were the plans regarding expansion and for what specific purpose how much funds were necessary. On the basis of a letter of 2009 from the Bank, suddenly on 28th February, 2011 large numbers of equity shares were issued and convertible debentures were issued without there being material to show that majority shareholders, i.e. the Appellants were involved in the decision making. The Appellants 2 and 3 were Directors and proof of service of Notice of Board Meeting to them was necessary. What is shown by the Respondents, we find as not reliable. If things were in order, Respondents would have referred in correspondence to the change of shareholding. NCLT accepted defence on this count of need of funds without seeking documents. Merely showing terms laid by bank for credit limit or loan is not enough. 23. For such reasons, we find that the reasonings recorded by the learned NCLT in upholding allotment of 95,500 equity shares to Respondents 4 and 5 cannot be upheld by us. NCLT did not also look into the correctness of issue of convertible debentures on 28.02.2011. The debentures issued were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ive meetings, it would be case of vacating of Office. Reference was then made to the Form - 32 and the claim of Respondents that Appellant No.3 had subsequently filed Form - 32 without authority. In Para - 27.1, NCLT observed as under:- "27.1 The question of vacation of office of Directorship by the Petitioners under Section 283(1)(g) cannot be solely attributed to the Respondents. At the same time, it has to be seen whether the absence from three consecutive meetings of the Board of directors is on account of want of notice or on account of short notice. Therefore, this issue also relates to the notice to the Respondents regarding the Board Meeting." (In the last sentence, there is clerical error as the issue related to Notice to Petitioners and not Respondents.) 26. Thus, the NCLT did not record any finding as such whether the Appellants 2 and 3 were illegally removed when on 18.05.2011 they got Form 32 filed (as at Page 339). Respondents have argued that the Appellants 2 and 3 as Directors representing the Appellant No.1 did not attend Board Meetings on 28.02.2011, 19.04.2011 and 18.05.2011 and so there was deemed vacating of office of Director and that is why E Form - 32....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a question of non-performance of machines "as per customers' product requirement". Learned counsel for the Appellants has submitted that the Order (Page 254) itself was for a second hand machine. We do not think that the contractual dispute regarding machine should be allowed to cloud the issues regarding oppression and mismanagement. 28. The Minutes dated 18th May, 2011 further show Respondents taking decision on one hand that there is need to increase the share capital and on the other decision was being taken that the Company would not require the vast land that Company had purchased and hence, decision was taken to dispose of land. We are aware that these factors are internal management of the Company but they are relevant facts for appreciating the conduct of the parties as the Respondents in subsequent EOGM dated 18.06.2011 proceeded to get the authorised share capital increased from 4,50,00,000 to 6 crores, Minutes of which are at Page - 353. Coming back to the Resolution dated 18th May, 2011, the Minutes dated 18th May, 2011 must be held as not binding on the Appellants as no Notice of the same was given to the Appellants. To recall, NCLT has held the Resolutions passed i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... days for the Appellants to attend the meeting and it was clearly a short Notice. The Appellants claimed that it was necessary to give 21 days' Notice as per law. The Respondents have argued that as per Articles of Association, Article 25 for General Meeting, 7 days' clear Notice is the only requirement. According to us, it would be necessary for the Respondents to prove not only the issue of Notice but service of Notice on the Appellants. Looking to the documents discussed above relating to the EOGM dated 18.06.2011, we find that for Appellants who are resident at Italy, when Notice was received on 13.06.2011 there was clearly short Notice for the EOGM. We find no reason to suspect the reaction of the Appellants as recorded in their letter dated 15th June, 2011. 30. The learned NCLT while dealing with POD 9 with regard to EOGM dated 18th June, 2011 discussed the rival cases which were put up by the parties and while dealing with the letter dated 15.06.2011 discussed above and the e-mail dated 13.06.2011 concluded as under:- "Therefore, the letter dated 15.6.2011 and the E-mail dated 13th June, 2011 sent by Belfin Spa to the 2nd Respondent clearly show that they have got knowled....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the extent of 15 lacs shares be offered to all the existing shareholders of the Company on right basis. There is further Resolution regarding sending information and calling willingness of the members and the Respondents 2 and 3 were authorised to accept the applications to the extent existing entitlement of a particular member etc. It is then further resolved as under: "RESOLVED FURTHER THAT the time period for making application @ Rs. 4 per share is upto 15.07.2011 and on or after 15th July, 2011 the committee of the Board of Directors may allot the shares that are not taken up by any other shareholders and upon the payment of Rs. 6/- per share, the allotment by the committee of the board be finalize the allotment in accordance with the above resolution." 33. Thus, as per this Resolution, the time period given for making applications was up to 15.07.2011. This we are observing because soon after this meeting dated 02.07.2011, on 07.07.2011, the Respondents appear to have held Board Meeting and issued 3,83,334 shares to Shyam Group. 34. Coming back to the Board Meeting Minutes dated 02.07.2011, the Respondents 2 and 3 recorded that the Appellants 2 and 3 had been absent from....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the flight available from Delhi which arrives at 11.30 a.m. We requested you to postpone the board meeting from 11:00 a.m. to 12:00 noon and to organize the car and driver to pick up Mrs. Viswanathan. You had replied to our earlier text message but did not reply to this one. In the evening, we were invited for dinner at your residence. While at your residence, Ms. Rita Bellazzi confirmed with you verbally that the meeting from 11:00 a.m. to 12:00 noon and you replied "no problem". On Saturday, July 2, 2011 at 11:05 a.m., the undersigned two directors of the Company, along with Mr. Alessandro Cuomo, arrived at the registered office of the Company and were seated in one of the rooms of the registered office next to the entry to the office. We were greeted by your wife, Mrs. Amrita Patel and we provided the name of our lawyer who was arriving at 11:30 a.m. on the first flight from Delhi so that your driver could pick her up at the airport. Your driver then picked up our lawyer at the airport. At 11:40 a.m., you personally came into the waiting room at where we were seated and asked us to be seated in the office of your father, Mr. Girish Patel. We note that, in addition to yours....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of validity or otherwise of Board Meeting held by the Appellants at the Hotel. Reference has been made because it shows that the Appellants 2 and 3 did in fact travel down to India for the Board Meeting which had been called by the Respondents on 02.07.2011. There was no reason for them not to participate at the address of the Company in the Board meeting which had been called by the Respondents. They had reached the Company Office at 11.05 a.m. They were representing the Appellant No.1 which was major shareholder of the Company and they had come down as Directors. They were almost in equal strength with Respondents 2 and 3 and had no reason to be afraid of or to shy away from the Meeting called by the Respondents. We are thus, inclined to accept the case of the Appellants that when they did come down for the Meeting dated 02.07.2011, the Respondents 2 and 3 assured and indirectly prevented them from attending the Meeting. As discussed, while the Appellants 2 and 3 were kept out waiting, the Respondents 2 and 3 were resolving inside that Appellants 2 and 3 are absent and cessation under Section 283(1)(a) is attracted. This is shocking behaviour. The Meeting has to be held to be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to India. In Para - 32.1 of the Impugned Order, the learned NCLT without discussion upheld the issue of 3,83,334 shares to Shyam Group on 7th July, 2011 because of its finding regarding the Board Meeting held on 02.07.2011. We have held that the removal of Appellants 2 and 3 as recorded by the Respondents in the Board Meeting Minutes at Page - 305 cannot be upheld. We recall here the observation made by us (Supra) that in spite of Resolution in the Minutes dated 02.07.2011 by the Respondents giving time for applications up to 15.07.2011, the Respondents without waiting for 15.07.2011 proceeded to issue 3,83,334 shares to Shyam Group on 7th July, 2011. The Respondents have not placed before us material as to how the issue of shares to Shyam Group on 07.07.2011 could be justified, especially when we are finding the Meeting dated 02.07.2011 of Respondents as illegal because Respondents wrongfully prevented Appellants 2 and 3 from participating in the Board Meeting dated 02.07.2011. EOGM dated 11.08.2011 38. It appears that the Appellants had given requisition for calling EOGM vide requisition dated 28.06.2011. Respondents 2 and 3 in view of the requisition appear to have issued Not....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Respondents 2 and 3 in alleged Board Meeting dated 18.09.2011 allotting 3,87,066 shares to Respondents 4 and 6 need to be set aside. AGM dated 27.09.2011 40. Regarding this AGM, the Appellants appear to have claimed that they were sent Notice of the Meeting on 16.09.2011. This can be seen from the discussion of the learned NCLT. If the AGM was on 27.09.2011 and Notice had been received on 16.09.2011, recalling Article No.25 of the Articles of Association referred above, we do not interfere with the dispute raised regarding EOGM dated 27.09.2011. Board Meeting dated 25.07.2012 41. In this Board Meeting, it appears 80010 equity shares were allotted to Respondent No.4. The learned NCLT dealt with this aspect in Point No.15 and found that no document had been filed to show whether the shares were allotted on 25.07.2012 on the basis of Resolution passed in Board Meeting or in EGM and no Notice of such Meeting had been filed before the Tribunal. NCLT concluded that the allotment could not be held as valid. It set aside the allotment in Para - 38 of the Impugned Order which we have reproduced earlier. There is no appeal on this count and we need not discuss this aspect any further. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....res are issued in the larger interest of the company, the decision cannot be struck down on the ground that it has incidentally benefited the Directors in their capacity as shareholders. So if the Directors succeed, also or incidentally, in maintaining their control over the company or in newly acquiring it, it does not amount to an abuse of their fiduciary power. What is objectionable is the use of such power simply or solely for the benefit of Directors or merely for an extraneous purpose like maintenance or acquisition of control over the affairs of the company. Where the Directors seek, by entering into an agreement to issue new shares, to prevent a majority shareholder from exercising control of the company, they will not be held to have failed in their fiduciary duty to the company if they act in good faith in what they believe, on reasonable grounds, to be the interests of the company. But if the power to issue shares is exercised from an improper motive, the issue is liable to be set aside and it is immaterial that the issue is made in a bona fide belief that it is in the interest of the company." 42.2 Hon'ble Supreme Court observed in Para - 20 of the Judgement in the mat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....27-3-1996 but the notice was sent on 22-3-1996. Apart from this, it was known to the respondent Sajal Dutta who is the brother of Appellant 1 that whenever his brother comes to Calcutta he does not stay in his house yet the notices were sent to Jodhpur Park, Calcutta. This shows lack of probity on the part of Respondent 2 to somehow or the other oust his brother from the majority shareholding. Similarly, on the basis of such resolution, Dr. Binod Prasad Sinha, Appellant 2 was ousted from the Directorship under Section 283(1)(g) of the Act on the ground that he has not attended the meeting and he has no interest whatsoever. Similarly, Appellant 1 was also ousted in the meeting which was held on 7-2-1996 when another meeting scheduled to be held on 16-2-1996 and it was within the knowledge of Sajal Dutta that his brother was likely to attend the meeting to be held on 16-2-1996. But suddenly the meeting was held on 7-2-1996 and Appellant 1 was stripped off his chair as the Managing Director of the company. Hence, Sajal Dutta became the Managing Director in place of Dr. Kamal Kumar Dutta and the minutes of the said meeting dated 7-2-1996 were not brought forward in the meeting of 16-2-....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ordinary General Meeting of the Company is going to be called. We have already discussed as to how for EOGM dated 18.06.2011, short Notice was sent and when the Appellants came down for Board Meeting on 02.07.2011, they were prevented from attending. Thus, it cannot be said that the Appellants had acquiesced to the Respondents increasing the share capital in the EOGM dated 18.06.2011 and their subsequent acts of shutting out the Appellants and issuing shares to their sister concerns. 44. Before parting, one other argument of the Respondents needs to be answered. The learned counsel for the Respondents referred the document at Page - 280 of the paper book which relates to "Cabe Springs and Fasteners India Pvt. Ltd." incorporated on 7th September, 2011 (this would be after the EOGM dated 11th August, 2011). The learned counsel for Respondents submitted that Mr. Alessandro Cuomo who was sent down to India by the Appellants admittedly as their Representative set up this Company in Goa. On the basis of this document, the argument raised is that this Company set up in Goa also was for the purpose of manufacturing springs for machines which was similar to the business of the Respondents....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te 28.02.2011. 47. At the time of submissions regarding the reliefs to be granted, the learned counsel for Respondents took up the issue that the Appellants had at one stage offered winding up, the learned counsel for the Appellants submitted that the Appellants were still open for the parties to buy out each other if status quo ante February, 2011 is restored. Referring to the documents at Page - 266 relating to the meeting between the representative of the Appellants with Respondents 2 and 3, the learned counsel submitted that the offer of Appellants was still open to buy the shares of each other. She submitted that the Appellants were, however, not willing for buy out if the additional shares issued to the other Respondents was to be upheld. 47.1 The Impugned Order shows that the learned NCLT has on setting aside the debentures which were converted into equity shares on 19.04.2011 and set aside the 80010 shares which were allotted to Respondents 4 and 7 on 25th July, 2012, discussed that the situation in the Company was such that the possibility of Belfin Spa and Respondents working together was not possible. NCLT considered the dispute between the parties regarding amounts ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... one of the basis for determining the fair value of shares for Respondent No.1 Company. 48.2 As directed by NCLT, M/s. ACHR & Associates (now SARC & Associates) at 308, Shail Complex, Opp. Madhusudan House, Off.C.G. Road, Navrangpura, Ahmedabad is appointed as "Auditors" to audit the accounts of first Respondent Company from the date of incorporation of the Company till the date of Order of NCLT. As we have set aside the allotment of shares, the auditor while auditing shall also check if the money for all allotments illegally done was actually received by the company and its utilisation. The Chartered Accountant shall file his Audit Report before NLCT on 2nd July, 2018 serving copies of the same on the Appellants and Respondents 1 to 3. The fee of the Chartered Accountant is initially fixed at Rs. 50,000/- payable by 1st Respondent Company but later on to be shared by the parties in proportion to their shareholding. The Chartered Accountant is at liberty to claim further amount in the same proportion from the parties after his work is completed and before filing of the Report. The 1st Respondent Company shall bear all the necessary expenses of the Chartered Accountant for the purp....