TaxTMI 
TaxTMI 
2020 (8) TMI 549
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.... that in 1950s, there was widespread epidemic of cholera and malaria in Guwahati and its surrounding areas and other parts of Assam. A large number of people suffered and died of such diseases mainly due to a dearth of proper medical facilities and the brother of Dr. Das was also one of such victims. He, therefore, decided to create certain medical facilities in Guwahati for the benefit of the people of Guwahati and its surrounding areas in particular and State of Assam in general. Accordingly, Dr. Das started a small nursing home in his house in the year 1953, on an experimental basis. 3. Subsequently, on July 13, 1960 respondent No. 1-company was incorporated under the name and style of Assam Medical Corporation P. Ltd., as a public limited company with the aim and objects which were being stated in the memorandum of association and articles of association. Respondent No. 1-company was incorporated in 1960 with a paid-up share capital of Rs. 5,00,000 (rupees five lakhs only) divided into 50,000 equity shares of Rs. 10 each. Subsequently, respondent No. 1-company was converted into a private limited company and the value of shares of respondent No. 1-company was changed from Rs. ....
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....y expired on March 29, 2001 and the shares owned by her were transferred to Mr. Balendra Choudhury, petitioner No. 1 herein. Over a long period of time, the affairs of respondent No. 1-company was conducted strictly in accordance with the aims and objectives stated in the memorandum of association and articles of association of respondent No. 1-company, which were sought to be reinforced further by creation of the trust aforesaid. 9. However, in course of time, respondent No. 1-company faced experiencing several difficulties in running its affairs. This was basically because of the reason that over the years, the area where the nursing home is situated today has become the hub of enormous commercial activities and, therefore, many unscrupulous people, more particularly the people having connections with the real estate business have been eyeing the sprawling plot of land which houses the said nursing home. The fact that such a plot of land itself would fetch a huge amount of money if the same is disposed of today, makes such a position very clear. 10. In course of time, petitioner No. 1 herein also came to know that there were some transactions in the name of respondent No. 1-com....
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....onvened to consider and approve the transfer of shares and appointment of Mr. Sunil Agarwal, chartered accountant, Mr. Bal Kishan Bansal and Mr. Anup Kumar Khemani as additional directors, who are accredited real estate developers. 15. The board meeting was convened in total disregard of the various arrangements made in the articles of association of respondent No. 1-company. It has been submitted in that connection that the bringing on board some real estate developers does not go hand-in-hand with various objects, specified in the memorandum of association since such induction of aforesaid persons as additional directors respondent No. 1-company was likely to dilute the aims and objectives, specified in the charters of respondent No. 1-company. Petitioner No. 1, therefore, vehemently objected to the above design of the board of directors of respondent No. 1-company, but his objections were neither considered nor recorded in the board meeting held on January 3, 2018. 16. In the meantime, another board meeting was also convened on January 24, 2018 but petitioner No. 1 was not served with a valid notice. Petitioner No. 1 came to know that in the said meeting, about 169 numbers of ....
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.... the fundamental requirements in the articles of association of respondent No. 1-company was callously violated. 20. In regard to appointment of three additional directors on January 3, 2018 they being Mr. Sunil Agarwal, CA, Mr. Bal Kishan Bansal and Mr. Anup Kumar Khemani, it has been stated that such appointment of those persons as additional directors of respondent No. 1-company was illegal and bad in law. In that connection, it has been pointed out that the articles of association of respondent No. 1-company did not confer on the board of directors any power to appoint any additional director and since such power was not conferred on the board, it was beyond the competence of the Board to appoint the aforesaid three persons as additional directors on January 3, 2018. 21. It has been further submitted that section 105(4) of the Companies Act, 2013 and the Secretarial Standard 2, paragraph 6.6 state that proxies shall be deposited with the company either in person or through post not less than forty-eight hours before the commencement of the meeting in relation to which they are deposited. Most interestingly, the articles of association of respondent No. 1-company has increased....
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....pril 14, 2018 of the board meeting scheduled to be held on April 19, 2018. Petitioner No. 1 objected to the process of calling of the meeting without following the process of law. The said board meeting was again called vide notice dated April 23, 2018 scheduled to be held on May 3, 2018. The only two agenda in the aforesaid meeting were (a) to consider and approve proposal for appointment of CA Saloni Bansal as director in the company in place of Dr. R. P. Hansaria and (b) to convene an extraordinary general meeting of the company for removal of petitioner No. 1. Mr. Balendra Choudhury from the directorship of the company and confirmation of appointment of new directors. 25. The aforesaid meeting scheduled to be convened on May 3, 2018 was not concluded and was adjourned to May 5, 2018 at 11 a.m. Petitioner No. 1 was present on May 5, 2018 at 11 a.m. to attend the postponed board meeting of May 3, 2018 but nobody turned up and the said meeting was subsequently adjourned to May 17, 2018 in the meantime respondent No. 1-company issued notice of extraordinary general meeting to be held on June 1, 2018. Petitioner No. 1 requested for a copy of the minutes of the aforesaid board meeti....
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....earned Additional District Judge, Kamrup in case No. S/c 492 and not in case No. SC 98/92, which is nonest and legally invalid inasmuch as the said certificate was applied for by petitioner No. 1 in respect of the estate of late Kiran Bala Choudhury, but in effect the succession was granted for 55 shares which were in the name of Divya Prabha Das and not Kiran Bala Choudhury. However, due to over-sight the said discrepancy was not noticed by respondent No. 1-company and the shares of Smt. Divya Prabha Das were transferred in the name of petitioner No. 1. However, the succession certificate being nonest and void, the said transfer of share to petitioner No. 1 is also invalid, void and non est and therefore, petitioner No. 1 cannot file the present petition on the strength of such invalid shareholding and on this ground itself the present petition needs to be dismissed as not maintainable. 29. It has been submitted that in 2009, petitioner No. 1 was named as a director of respondent No. 1-company. However, his appointment as director was never approved in any subsequent meeting of the board. 30. That respondent No. 1-company was on July 13, 1960 incorporated under the name and styl....
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....on May 12, 2017 and subsequently, the balance-sheet for the year ending March 31, 2017 was presented and approved by all the directors present including petitioner No. 1 in the board meeting held on August 12, 2017. The same was also placed before the annual general meeting held on September 23, 2017 which was approved without any objection and petitioner No. 1 is now for making false and malicious allegations caused to prejudice to the respondents has referred to the meeting dated August 25, 2017 which had never taken place. 33. It is also the submission of the respondents that respondent No. 1-company and the nursing home and polyclinic has been running for the past more than 50 years. However, in the recent times the company has been facing financial recession due to lesser footfalls of patients and rising maintenance cost. To overcome the situation the company attempted renovation and modernization of the nursing home. But due to coming up several big private hospitals and nursing home in the Gauhati City, the business of respondent No. 1-company has affected severely and this was discussed in various board meetings. Further, problems were created due to the fact that Dr. Raje....
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....arwal, CA Bal Kishan Bansal and Mr. Anup Kumar Khemani as directors of respondent No. 1-company in the said meeting held on January 24, 2018. 36. Petitioner No. 1 subsequently, for the reasons best known to him objected to transfer of shares to the new shareholders and appointment of new directors and on April 12, 2018 he wrote a letter to respondent No. 15 stating his objections. However, he failed to provide any valid reasons for objecting to transfer of shares and appointment of new directors. 37. The respondents further submit that on March 16, 2018 the petitioners most illegally acting against respondent No. 1-company with male fide intention against respondent No. 1-company complained to the DC, Kamrup (Metro) and Sub-Registrar, Kamrup (Metro) without any material evidence that there are various anomalies in the affairs of respondent No. 1-company and requested them not to register any document with regard to the company and due to such actions of petitioner No. 1, respondent No. 1-company received notices from three members requesting for holding extraordinary general meeting for removal of petitioner No. 1 from the directorship of the company. Therefore, respondent No. 1-....
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....p share capital in respondent No. 1-company. 42. Respondent No. 1 is Assam Medical Corporation P. Ltd., a private limited company. Respondent No. 2, Sunil Agarwal is director and share-holder of respondent No. 1-company holding 1 per cent. of the issued, subscribed and fully paid-up share capital of respondent No. 1-company. 43. Respondent No. 3-CA Bal Kishan Bansal is also director and share-holder of respondent No. 1-company holding 1 per cent. of the issued, subscribed and fully paid-up share capital of respondent No. 1-company. 44. Respondent No. 4, Mr. Anup Kumar Khemani is director and share-holder of respondent No. 1-company holding 16.66 per cent. of the issued, subscribed and fully paid-up share capital of respondent No. 1-company. 45. Respondent No. 5, Mr. Shanky Agarwal is shareholder of respondent No. 1-company holding 2 per cent. of the issued, subscribed and fully paidup share capital of respondent No. 1-company. 46. Respondent No. 6, Ms. Sangita Khemani, is director and shareholder of respondent No. 1-company holding 2 per cent. of the issued, subscribed and fully paid-up share capital of respondent No. 1-company. Respondent No. 7, Mr. Anil Agarwal, is sharehold....
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....written arguments. 57. The petitioners claimed interim reliefs covered by prayer clauses (A)-(I) to (XXXIX) and final reliefs covered by prayer clauses (B)-(I) to (XXXIII) of paragraph (V) in the petition. 58. In so far as the relief of an order declaring the extraordinary general meeting scheduled to be held on June 1, 2018 and the decisions taken therein are illegal and void covered by prayer clause III is concerned, the learned advocate appearing for respondent No. 1-company clearly pleaded in their reply and also confirmed during the course of arguments that no such extraordinary general meeting was held on June 1, 2018 and, there-fore, the said relief has become infructuous and no order needs to be passed in this regard. 59. The main grievance of the petitioners in the pleadings as well as at the time of argument is that respondent No. 1-company has illegally transferred its shares of the promoter trust M/s. Kalicharan Das Trust to respondents Nos. 4, 6, 12, 13 and 14 in the minutes of meeting dated January 24, 2018 without considering his objections only with an intention to convert the land of respondent No. 1 for construction of real estate project against the aims and o....
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....s Nos. 15 and 16. Thus counsels appearing for all the parties made very brief submissions. In the light of the above background, the issues that fall for consideration are : (1) Whether the transfer of 117 shares of M/s. Kalicharan Das Trust in board meeting held on January 24, 2018 is legal and in accordance with the articles of association ? (2) Whether the petitioners are entitled to numerous reliefs claimed in the petition ? (3) To what relief ? 61. In order to answer the above issue No. 1, it is important to read article 15 of the articles of association and also the minutes of the meeting dated January 24, 2018 which are extracted hereunder for ready reference as follows : "15. Notice of transfer.-Every member or the legal representative of a deceased member who intends to transfer shares (hereinafter called 'the vendor') shall give in writing to the Board notice of his intention. That notice shall constitute the Board his agent for the sale of the said shares, in one or more lots at the discretion of the Board, to members of the company at a price to be agreed upon by the vendor and the Board or in default of agreement at a price which the auditor of the com....
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.... Kishan Bansal and Mr. Anup Kumar Khemani were appointed as directors in the board meeting held on January 24, 2018. It is very clear from article 15 of the articles of association that a procedure for transfer of shares is provided under the articles of association. Respondent No. 1-company except making the above statement in their reply did not place any evidence before this Tribunal regarding the procedure adopted by them in transferring the shares of the Trust. It is interesting to note that in the minutes dated January 24, 2018 respondent No. 1-company having recorded the objections of the petitioners with regard to transfer of 117 shares of the Trust, miserably failed to record the explanation under which the petitioner was satisfied about his objections. It is very hard to believe that the petitioners having satisfied, filed the present petition in the absence of the recording of the explanations in the minutes nor evidence to that effect. As rightly contended by the petitioners those 117 shares were held by M/s. Kalicharan Das Trust and they cannot be transferred in a routine manner like transfer of shares of other members, as the said shares belongs to a Trust created by....