TaxTMI 
TaxTMI 
2020 (5) TMI 131
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....inafter referred to as the "respondents") by, inter alia, seeking to declare that the affairs of respondent No. 1-company are conducted in such a manner by respondents Nos. 2, 3 and 5, that there is an oppression and mismanagement of the affairs of the company ; to direct that the status of the management committee be restored status ante quo as on September 27, 2012 and also direct that no quorum for any meeting of management committee be considered as complete, in the absence of the petitioners unless the petitioners give a written waiver of attendance of the meeting ; to appoint an inspector or any other competent person as inspector to investigate the affairs of the company under section 235 of the Companies Act, 1956 and to report thereon, etc. 2. Initially, Mr. Subhash Bhosle and 4 others have filed IND/735/2014 before the then Company Law Board, and the same was rejected by granting at liberty to redress their grievances in the affairs of the company in accordance with law and rules and regulations by order dated November 27, 2014. Accordingly, the instant company petition is filed on April 9, 2015 before the then Company Law Board under sections 235, 237, 397, 398, 402, ....
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....yment of the association, were members of the association, while in that employment and have continued to be members after the employment ceased. The company shall issue no invitation to the public to subscribe for any share in, or debentures. The subscribers to the memorandum and such other persons as the committee shall admit to membership, shall be the members of the association. (3) It is contended that petitioner No. 1 was inducted as member on August 7, 1998 ; petitioner No. 2 was inducted as member on June 28, 2008 ; and petitioner No. 3 was inducted as a member on September 27, 2012 and attended various meetings as members, thereafter, which seems to be now shown in a different light, after being ousted as members which act is illegal. Respondent No. 2, as the chairman of the company was in complete control of the operations and using this dominant position as chairman of the management committee for several years, and has misused his position in connivance with respondents Nos. 3 and 5, and mismanaged the affairs of the company. Not only have the respondents siphoned off the funds but also tried to remove the petitioners from their positions on the management comm....
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....re after on November 12, 2012 respondent No. 2 issued the notice postponing the adjourned meeting on November 21, 2012. The reason alleged by respondent No. 2 for the issuance of notice by himself was that respondent No. 4 had submitted his resignation in the meeting dated September 27, 2012 and the same was accepted. Hence, respondent No. 4 has no right to issue the annual general meeting notice. But the resignation of respondent No. 4 was placed before the annual general meeting held on September 27, 2012 but was kept pending in view of reporting in the special purpose audit. But against his statement, respondent No. 2 wrote a letter dated November 21, 2012 to respondent No. 4 accepting his resignation, when the same was rejected by the members in the annual general meeting. (6) It is also stated that respondent No. 2 had filed the e-Forms as late as March, 2013 with respect to the concocted minutes of meeting of September 27, 2012. These minutes filed with the Registrar of Companies with respect to the meeting held on September 27, 2012 mentions that the meeting was adjourned for want of quorum. This was done ostensibly to show another adjourned annual general meeting o....
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....meeting held on November 21, 2012. That at paragraph 11 of the written statement in O. S. No. 2168 of 2013 averred that "No meeting much less any meeting as per minutes dated November 21, 2012 was held and it is all bogus and created and has no sanctity of law. It apparent and clear that the so called minutes dated November 21, 2012 is prepared as an afterthought only after receipt of notice dated February 28, 2013". When this being the case how could the respondents state that various resolutions were passed in that meeting. By the above statement of respondent No. 4, it is clear that respondents Nos. 2, 3 and 5 have colluded together and misappropriated the monies of the company. To conceal this, they have kept the petitioners away from the affairs of the company and also have shown the petitioners as non-members, and which in turn currently is being asked even by the registry. (9) It is stated that the acts, being committed by respondent No. 2 in collation to respondents Nos. 3 and 5 ; constitute oppression and mis management and is directly affecting the interest of the minority share holders, the company and also to the directors and their relatives, who have mortgage....
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....arles Prabhakar, Mr. Michael Srinivasan, Mr. Simon Jothi, Mr. Subash Bhosle, Mr. Samit Mishra, Mr. C. P. Raju and Mr. David K. Sharma are members of the company. (3) Further, the order dated November 27, 2014 of Company Law Board in unnumbered IND/735/2014, states that the membership of the petitioners is doubtful and that there is a serious question of maintain ability of the petition. Such an observation has not been challenged by way of an appeal till this date. This clearly shows that Mr. Charles Prabhakar, petitioner No. 1 has no locus to maintain the above petition as he has ceased to be a member with effect from September 30, 2013. This order has reached a finality. (4) After considering the issue in its entirety, the earlier petition, IND/ 735/2014 filed by five members, which includes the present petitioners, got rejected by the Company Law Board, reserving liberty to the petitioners therein to file fresh case in accordance with law. In other words, liberty was given to the said petitioners to cure the defects as far as affidavits are concerned and to establish their qualification under section 399. Such a liberty is a composite one and the above petition....
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....hat the said memo contains false hood and is entirely misleading. (8) It is stated that the clarificatory note dated August 21, 2018 is mis leading and false, which has filed belatedly. (9) It is stated that none of the petitioners and not even Mr. Michael Srinivasan, respondent No. 4 herein, are members of the company. The petitioners, merely to get a foothold to file the above petition, are falsely claiming to be members of respondent No. 1-company. Consequently, they have no locus whatsoever to maintain the above said petition. The hon'ble High Court of Karnataka in Srikanta Datta Narasimharaja Wadi yar v. Sri Venkateswara Real Estate Enterprises P. Ltd. [1991] 72 Comp Cas 211 (Karn) has held that an equitable relief under sections 397 and 398 should be denied to a person, who not only approaches the court with unclean hands but also if his conduct outside the court and in any other proceedings is bad. In this regard, it is stated that O. S. No. 2168 of 2013 was filed by respondent No. 1-company against respondent No. 4-Mr. Michael Srinivasan for a suit for injunction restraining him from convening any general meeting since he ceased to be the secretary of ....
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....s evident from the fact that as the order sheet clearly states that vakalathnama was filed for defendants Nos. 1 and 5 but this has been altered to show that learned counsel represents defendants Nos. 1 to 5. (12) The above facts clearly show that the petitioners conduct not only before this forum but also outside must be deprecated and thus they are disentitled to maintain the petition as it clearly demonstrates that there has been deliberate laches on the part of the petitioners for not having complied with the office objections, chiefly on maintainability as none of them are members of the company, since the filing of petition on April 4, 2015. 5. Heard Shri B. M. Arun with Shri Suraj Naik, learned counsel for petitioners Nos. 1 and 2, and Shri B. C. Thiruvengadum along with Shri Manik B. T. Ms. Amrutha B. R., learned counsel for respondents Nos. 1, 2, 5 and 6 and Shri Maniunath S., learned counsel for respondent No. 3. We have carefully perused the pleadings of the parties and extant provisions of the law. 6. Mr. Michael Srinivasan, respondent No. 4, who is alleged to be secretary of the management committee of the company, instrumental for all the litigation for....
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.... questioning the status of petitioners apart the actions of respondent No. 4 in conducting impugned actions is pending before civil court and thus the Tribunal cannot decide the civil matter, etc. 10. So far as the issue whether the petitioner are members of the company or not, it is necessary to refer extant provisions in the light of facts instant case. Persons, who are eligible to file application/petition under sections 397 and 398 of the Companies Act, 1956 read with sections 241 and 242 of the Companies Act, 2013 are dealt with under section 399 read with section 244 of the Companies Act, 1956/2013. It says in the case of a company not having a share capital, not less than one-fifty of the total number of its members are eligible to file petition under the above sections. Section 2(55) of the Companies Act, defines who is member and it say a member, in relation to a company mean-the subscriber to the memorandum of the company, who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members ; every other person, who agrees in writing to become a member of the company, and whose name is entere....
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....hese institutions are only constituent members and were never admitted as members of ETASI. As per the agreement entered into between the ETASI and the constituent members, ETASI is empowered to take control of the management of these organizations and institution in case of mismanagement or if their properties are not used for the attainment of the main objects of the company. It is therefore necessary for representatives of these constituent organizations and institutions to be informed of their rights and responsibilities. It is also discussed about the conduct of Charles Prabakar for his misinterpreting the terms of members of the company and constituent member and had misled the representatives of the institutions and organizations to believe that they were the members of ETASI (company). During detailed discussion of the issue in the light of extant articles of association of the company, Dr. Prabakar walked out of the meeting. Dr. Michanel Srinivasan, secretary, who had submitted his resignation to ETASI also joined Dr. Charles Prabhakar and his associates. The constituent members, seeing that they were only representative of organizations/institutions, also left the meeting....
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....l general meeting. One of the items on the agenda for the adjourned annual general meeting dated November 21, 2012 was to accept the resignation of Mr. Michael Srinivasan with effect from September 27, 2012. Mr. Srinivasan was the secretary of the committee of management working under the instructions of the chairman and the committee of management and submitted his resignation letter. The members of ETASI duly accepted the resignation. Mr. Michael Srinivasan received the intimation and thereafter stopped attending office. Another item on the agenda for the meeting was the reappointment of Mr. Charles Prabakar, vice chairman, who retired by rotation from the committee of management. Since he left the meeting without showing interest in being reappointed, the members of ETASI have unanimously turned down his reappointment. Further, members also took note of his misconduct and misleading the constituent members, which is not only against the ETASI/company by laws but also goes against Christian spirit. Necessary compliance with regard to the aforesaid resignation and cessation were completed as per the requirement of law. Despite the above decisions Mr. Michael Srinivasan and Mr. Cha....
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....es Act, 1956 or the Companies Act, 2013 as applicable, consent of the members be and is hereby accorded to remove Mr. Charles Prabhakar from the membership of the company, i. e., member by guarantee of the company with effect from September 7, 2013 at accepted and approved by the committee of management. Resolved further that the committee of management of the company be and are hereby authorized to do such acts and deeds as may be required to remove Mr. Charles Prabhakar from the membership of the company with immediate effect." Therefore, Mr. Charles Prabhakar, ceased to be a member of the company. 15. Accordingly, the respondents have filed Form 21A, dated November 21, 2012, September 30, 2013, September 30, 2014, June 16, 2015, September 2, 2016 with the Registrar of Companies by duly enclosing list of members of the company. By perusal of the lists of members enclosed, we found that the names of petitioners are not found in these lists. It is also relevant to point out here that the minutes of the annual general meeting held on November 21, 2012 shows that there are 8 (eight) constituent/invitees attended, which included the second and third petitioners ap....