TaxTMI 
TaxTMI 
2019 (6) TMI 1032
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....s in the first meeting of its members to be held and further given the direction to Company to take fresh decision relating to transfer of 9040 shares. 2. The appeal gives particulars regarding the background as to how the company came to be acquired. In brief, it is stated that the appellants and family group ("appellant group") alongwith 4 other promotors (Respondent Nos.2,3,6 and 7) had set up a company called A.P. Solvex Pvt Ltd (APS/Ricela in short). The Respondent Nos.2,3,6 and 7 are "Respondent Promoters group" are contesting respondents, who are represented by Respondent No.2 to 8. Similar to APS/Ricela, the said promoter groups also set up another company called A.P. Organics Pvt Ltd (APO in short). The companies were engaged in the business of manufacturing extraction of rice bran oil. They were set up as quasi-partnership. The Appeal then refers to how the shareholdings changed making averments like "understanding", "oral understanding" "decided" etc. It appears that disputes arose between the parties somewhere around 2010 and as per the appeal, in 2010 the appellant group held 34.7% of the shareholding and the APS group hold 36.6% and other erstwhile promoters hold 28....
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...., 2013, the rules and regulations framed thereunder and to serve the notices of all the meetings in writing as required by law. iv) The respondents to hand over all the statutory record which may be in their possession in the Board meeting to be convened for this purpose. v) The newly constituted Board of Directors shall be competent to take the necessary decisions as may be required in view of the observations made in this judgement; and vi) The decision dated 14.08.2010 in transferring 9040 shares of erstwhile promoters/shareholders is set aside and R-1 company shall take fresh decision on the transfer of these 9040 shares keeping in view the observations made in the judgement that the transferors have not questioned the passing of consideration. vii) The petition to claim rest of the reliefs is dismissed. All the pending miscellaneous applications stand disposed of" 5. We have heard the learned counsel for the appellant as well as the contesting respondents and perused the record. The respondents have not filed the appeal against the impugned order although partly the observations were against the contesting respondents and certain directions were given to the r....
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....e to issue formal Notice of the Board Meeting at least agenda should be available. In Impugned Order para 113 it is observed:- "The authenticity of the minutes of the meeting dated 14.8.2010 would thus have to be determined on the basis of the prima facie evidence. The first circumstance is that Form No.32 with regard to the appointment of R-6 and R-7 as Additional Directors on the basis of meeting dated 14.8.2010 was filed on 22.3.2011 i.e. after a gap of about seven months of the date of meeting. Copy of Form No.32 is at Annexure P-10. Form No.32 of appointment of these respondents as Directors on the basis of AGM dated 30.9.2010 was filed on 18.4.2011 under the digital signatures of R-2." The above paragraph of the Learned NCLT shows that the NCLT found fault with the Respondents for not filing the Form 32 with ROC for a period of 7 months from the date of Meeting. However, the NCLT did not consider that if the appointment of R6 and R7 was in public domain on 22.3.2011, the same was never challenged by raising any grievance or filing a company petition till January, 2013 when present CP 84(ND)/2013 was filed that too after the contesting respondents had also filed anoth....
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....ated Articles of Association. The Respondents claimed before NCLT that these transfers related back to 1998 when the Respondent company Aar Kay was taken over. The impugned order records detail as were brought before NCLT to show that when the R1 company was taken over it had issued 34000 shares out of which 20850 shares were held by Sanjay Arora group, 3850 shares held by Kamal Arora group and 9300 shares by independent outsiders were there and out of these 20850 shares held by Sanjay Arora group, 2600 shares were transferred to original petitioners No.2, 6100 shares to appellant No.1 and 3050 shares to original respondent No.7 in the year 1998. The balance of 9040 shares (which are now disputed) were transferred to R2 to R6 for which the sale consideration had been paid in the year 1998 itself but the transfer deeds could not be executed and lodged with the company due to internal disputes. The Respondents brought on record before NCLT evidence to show payment of Rs. 5,00,800/- from the account of Original Respondent 4, Nirmal Sharma. The account statement was filed showing entries of withdrawal on 20.8.1998 and two drafts in the name of Original Respondent 10 Sanjay Arora and O....
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....tself NCLT observed that aspect can not be affirmatively determined in the summary proceedings, but fact of the matter is that no resolution accepting the resignation was passed. It also observed in para 128 that the issue of authenticity of resignation letter of R-20 could be determined by production of original letter which the respondents have not been able to do. In para 129 NCLT noted the statement of counsel for respondents made before Company Law Board on 11.3.2015 that on 27.11.2013, P2 and R20 continued to be directors of the company. NCLT also referred to judgements of High Court of Punjab & Haryana in CADP No.22/2015 that R20 had been recognised as Director in the order dated 21.8.2015. It concluded that it could not be accepted that original petitioner No.2 and R20 ceased to be Director in terms of Section 283(1)(g) of the Companies Act. From what NCLT discussed, we find it interesting to see that the original petitioners claimed that the original respondent No.20 had not signed Annexure 5 filed with Form 32. Original Respondent 20 did not file petition questioning the contesting Respondents. What the original respondent No.20 wanted to say in this regard is nowhere c....
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....can be brought to a standstill in a case where the aggrieved persons choose to remain silent for a period of more than two years of alleged commencement of the acts of oppression and mis-management. If the petitioners have chosen to file the petition in June 2013 by alleging that they were kept away from the management of the company from the middle of the year 2010, all the acts done by the company in the interregunum cannot be set at naught. The only course available may be to restore the position of petitioner No.2 and R-20 as the Directors, who are said to be illegally removed or deemed to have vacated the office. This, however, cannot undo various other acts which the petitioners have been silently watching. The continuity in the business and management of a company has to be upheld as it involves various statutory compliances and answerable for tax compliances. In view of the above only the other acts relating to internal decisions may be put to challenge and set as naught." Considering such facts arising from the record, NCLT, gave directions (i) and (ii) in the final operative order and in direction (iii) asked the company to follow the various provisions specially re....
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....peration and there was no need for fresh infusion of equity funds. According to the appellants without prejudice to their objection, in such discussions, the appellants group in family mediation requested Respondent Group to release the unsecured loan of approximately Rs. 1.5 crores which stood in their favour in the books of APS and APO so that they can subscribe to the rights issue. The appellant states that the respondents group precluded the appellant group from subscribing to the rights issue by blocking their funds which was lying in APS/Ricela as unsecured loans and subsequently made rights issue allotting shares to Respondent No.2 to 7 as detailed in the appeal para 26(vi). The appellants claim that as illegal transfer of 9040 shares to Respondent No.2 to 6 has been set aside they could not have been given benefit to rights issue. According to the appellants after such rights issues on 13.10.2012 the respondents being in majority filed CP 131/ND/2012 on behalf of the Respondent No.1 company against A.P. Refinery Pvt Ltd which came up for hearing on 16.10.2012. According to the appellants the rights issue was illegally executed and there was no need for raising such funds an....
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....Rs. 2,78,66,088/- on the modernization and expansion of Solvent and Extraction Plant of R1 company. NCLT also noticed that R15 company to whom the lease was give of R1 company had contributed Rs. 62,57,218/- per annum which was many times higher than the lease amount from the earlier R21 company in 2007-10. In fact NCLT considering these aspects decided the other grievance also made by the appellants alleging loss on account of lease amount which was discussed in para 144 of the impugned order. NCLT concluded "So, it cannot be said that additional equity share was not required by the company. The petitioners having been admittedly received with the notices of the Board Meetings dated 16.8.2012, the offer letter for the rights issue and also the notice of the Board Meeting, having not participated or brought any proof of having made any offer to purchase additional equity shares, are now estopped from challenging this decision having delayed so such to challenge this decision." Although the appellants are trying to show us that the funds raised were utilised for litigation, considering these observations of the Learned NCLT and also taking note of the observations of the NC....