TaxTMI 
TaxTMI 
2020 (9) TMI 847
X X X X Extracts X X X X
X X X X Extracts X X X X
....) To grant appropriate reliefs in terms of section 241 of the Companies Act, 2013 ; (iii) As an interim measure pending the investigation, to suspend the Board and appoint a Commissioner ; (iv) To freeze all assets of the company pending investigation and resolution of the cases referred to in the petition. (v) To pass such order as deemed fit in the interest of better working of the company and in the interest of justice. 2. In brief the averments made in the petition are as follows : (a) That the respondent-company was incorporated in the year 2002 under the provisions of section 25 of the Companies Act, 1956 (hereinafter called "Act, 1956") under the name and style of M/s. Operation Mobilization of India and subsequently the name of the company was changed to M/s. Operation Mercy India Foundation in the year 2006. That the petitioner herein is the founder member of the company herein and also authorized by the other petitioners. (b) That the main object of the company is to establish adult literacy centers, balwadis, educational institutions, schools and other such institutes to impart education free of cost or at subsidized fee, e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r a number of years, several directors and company officers including the first petitioner were unilaterally removed from office without following due course of law and in contravention of company laws, Trust and Society Regulations. All the termination letters were issued under the signature of one Mr. A. E. Franks, who is the managing trustee and director of almost all the sister concerns and who is involved in serious Pedophilia, especially with the girls who were/are under his care and authority. A massive protest erupted by the staff and instead of redressing their reasonable and lawful concerns, they have been displaced by issuing termination letters and discharge letters within a span of 72 hours. Some of the expelled staff have also approached the Labour Commissioner. (h) The second respondent had also appointed his own family members as directors, office bearers and officers in contravention of company law, Trust and Society Regulations by providing exorbitant salaries and allowances to them. The company has paid money for a flat purchased by the son of the second respondent without passing any resolution. The amount paid by the company was paid back to the compan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ides raising donation, one child was connected to one donor, who will pay $28 to $33 per month. However, the situation is completely changed and the management under the second respondent is forcing school staff to collect admission fee, monthly fee, cost of books and uniform, etc., from parents. The fee received from parents is diverted to Good Shepherd Society which runs Churches. (n) No board meetings of the company were called for even after repeated requests by the first petitioner. All the decisions are being taken by the second respondent without following any protocol. Before appointing anybody as directors, the second respondent collects pre-signed letters of resignation. If anybody questions the dubious deals, the second respondent immediately used the resignation letter and removed them from the post of the directors. The company has not called for any board meeting for the last five years. The second respondent had also appointed his son, daughter and family members to the highest position in the organizations. In order to pay the allowances and salaries, the second respondent incorporated a private limited company, viz., Kadwell Consultancy which generates fic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....counter and their averments in brief are as follows : (a) The company was incorporated on April 8, 2002 under section 25 of the Act, 1956 and the first petitioner does not hold any position in the first respondent-company. The petitioners are also not the directors of the company. The first petitioner has not been authorized by the other petitioners and no such authorization is filed along with the petition. (b) The first petitioner was suspended from the services of Operation Mobilization India Trust during the year 2010 due to gross misconduct, sexual harassment, wife abuse and breach of other organizational policies. Subsequently during the year 2011 the first petitioner was removed from the directorship of the company and thereafter the first petitioner and his accomplices filed one compliant after another against the respondents. (c) One Mr. K. Ratnakar, an accomplice of the first petitioner at the instance of the first petitioner filed a complaint under section 190 of the Criminal Procedure Code on July 12, 2012 to register a FIR under section 156(3) of the Criminal Procedure Code against the Operation Mobilization India Trust, third, sixth and eigh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onations not to the beneficiaries but to the personal benefit of the second respondent and his family. In cases where donations are received for education of children, a nominal fee is collected from students. The allegations that the money received for Dalit upliftment and emancipation was squandered and removal of 100 staff members are baseless and incorrect. (g) The company is entirely a different legal entity from Operation Mobilisation of India Trust. The Operation Mobilisation India is a trust and it is governed by the laws of India and not bound by the Joint Ministries Agreement which was registered or filed with the International Court of Justice in Canada. (h) The initial trustees were not forced to resign and the incorporation of trusts is done as per law. It is not illegal to incorporate trust and companies. The name of the company was mentioned in passing without making allegations thereto. A false FIR was lodged by the petitioner and his accomplices. The CID, Telangana State has not completed the investigation yet. The CID, Telangana State has not found prima facie case of fraud and series of economic offences and the charge sheet on the FIR is yet to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts despite getting donations was investigated by the police in FIR No. 92 of 2017 and the said FIR was eventually closed. The company is providing education at much subsidized cost and the same is in the public interest. (l) No prima facie case was found against the respondents in any of the frivolous criminal complaints filed by the first petitioner and his accomplices. The dismissal of the petition seeking quashing the FIR does not mean that the respondents are convicted. The charge sheet in FIR in 22 of 2016 is not filed so far. The order of the bail was obtained legally and it is confirmed by the hon'ble High Court and Supreme Court. (m) The Enforcement Directorate conducted a thorough investigation and found no inculpating evidence against the respondents. The present petition is filed in a gross abuse of the process of this Tribunal and the petitioners are trying their best to use the order dated August 17, 2018 of the hon'ble Supreme Court in a way which is prejudicial to respondents Nos. 2 to 8. By the order dated August 17, 2018 the hon'ble Supreme Court dis missed the SLP filed by the first petitioner whereby the order dated December 12, 2017....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vestigation by the CID of Telangana State. (c) The oppression is evident on its face where the four members out of seven members concerned in the formation of company by subscribing to the memorandum of association and three out of seven in the other companies are the present petitioner alleging the same. The fraudulent conduct of the management of the company can be visibly seen from the returns filed by the company in compliance with the provisions of the Act. There is no suppression of any material facts by the petitioners. In fact, the respondents are resorting to the same and trying to mislead the Bench with colourable interpretations and fanciful explanations. (d) The fraudulent conduct of business to defraud the beneficiaries, the oppression and mismanagement being carried out continuously, there fore, the petition is not barred by limitation. (e) The second respondent unnecessarily interfered with the family affairs of the first petitioner and instigated his wife to rebel against him to settle the scores with him as the first petitioner as chief financial officer dis charging his duties as custodian, controllership functions of the funds and prope....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ey mismanage the affairs of the company and also oppressed the other stake holders since incorporation. It is also contended that they have filed complaints before the CID, Telangana State and it is under investigation. Whereas the respondents contended that the affairs of the company are being conducted in a manner envisaged under the provisions of the Act, 2013 and the filing of present petition is nothing but abuse of process of law. They have also contended that the petitioners failed to submit any material evidence for invoking the provisions of sections 213 and 241 of the Act. 8. It could be seen from the pleadings that the petitioners have made allegations such as oppression and mismanagement and fraudulent conduct of company business, misappropriation of Rs. 80 lakhs, embezzlement of Rs. 4 to 5 crores in Tsunami Relief Fund embezzlement of Rs. 4 crores by sale of property at Jubilee Hills diversion of donations of US $400,000 meant for Dalit Education Centres in India through hawala which is contrary to the FERA/FEMA and public trust acts/laws, diversion of embezzled funds into private investments in the name of the members of family, and charging exorbitant fees and acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d out that the petitioners have not filed any documents in support of invoking the provisions of sections 213 and 241 of the Act, 2013. Subsequently, the petitioners have come up with an application bearing I. A. No. 566 of 2019 with a prayer to take on record the additional documents which cannot be considered as the respondents have already filed their counter and vehemently submitted that there are no supporting documents. It is a fact that the allegations made in the complaint on which FIR No. 22 of 2016 was registered and the allegations made in the company petition are one and the same. It is also a fact that the respondents filed SLP to quash the FIR wherein the hon'ble Supreme Court was pleased to direct the authorities to expedite the process of investigation in respect of same allegations which are enumerated in the instant petition. As per the directions of the hon'ble Supreme Court, the investigation in this regard by CID is in progress and no final report/charge sheet has been filed against any of the accused/respondent in this case. In these circumstances, any interference by this Tribunal at this stage by ordering investigation under section 213 of the Act as....