TaxTMI 
TaxTMI 
2020 (10) TMI 174
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....19 with connected actions, which are prejudicial to the interests of the Petitioner, granting all consequential reliefs. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) The Petitioners No. 1 is Public Limited Company, registered under the provisions of the Companies Act, 1956 with Registrar of Companies, Mumbai bearing CIN No. U65900MH1996PLC099704 and its registered office situated at 713, Raheja Centre, Free Press Journal Road, Nariman Point, Mumbai - 400021. It is also a Non-Banking Financial Company registered with the Reserve Bank of India. The Petitioners Nos.2to 4 are nominee the Directors of the Respondent No. land they are also Directors of the Petitioner No. 1 Company. (2) M/s. Ramsons Vikram Private Limited (hereinafter referred to as the 'Respondent No. 1) is incorporated on 10th November 2015 under the name and style of "VS Infra Private Limited" as private Limited Company with the Registrar of Companies, Bengaluru. On 15th April 2019, the name of the Respondent No. 1 was changed to the present name "RamsonsVikram Private Limited" with CIN No. U70101KA2015PTC0840....
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....e entire shareholding of 10,000 equity shares would be transferred to the Petitioner No. 1 at face value of Rs. 10/- each and the entire project would be taken over by the Petitioner No. l. Further, as the R1 Company was not in a position to comply with above term of payment, the Respondent Nos. 1 & 2 has sought extension of time to make the said payment. Further, the erstwhile shareholder Vikram Structures Private Limited (Respondent No. 7) executed a Pledge Agreement dated October 07, 2016 in favour of Petitioner No. 1 in respect of 5,100 shares representing 51% of the R 1 Company and the Respondent No. 1 is also a party to the said Pledge Agreement. (5) Despite the repeated assurances and promises, Respondent No. 1 was not able to pay the agreed sum to the Petitioner No. 1 till December 2016. Therefore, on the expiry of the specified period of 60 days, the entire shareholding of the R 1 Company was transferred to the Petitioner No. lfor consideration of Rs. 10/- each, details are as follows: Sr. No. Transferor No. of Shares Cheque No. Consideration Amount Paid Date of Transfer 1. Aishwarya G. Byrareddy 1 3288 Rs. 10/- 03.12.2016 2.....
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....knowledge of the Petitioners. Being aggrieved by the same, Petitioner No. 1 approached the Respondents vide letter dated 15.06.2019 requesting for inspection of the documents maintained by the R1 on 19.06.2019 at 11:00 am. Accordingly, the authorised representative of the Petitioner No. 1 visited the R1's registered office for inspection of the documents, however, the inspection of documents was denied to Petitioner No. 1's authorized representative and R2 assured the Petitioners that all the requisite information and documents will be directly sent to the Petitioners within seven (7) days as the same is not available with the Respondent No. l. Since no documents were received, the Petitioner No. 1 addressed another letter dated 12.07.2019 to the Respondents requesting them to provide inspection of all the documents and records when its representatives visit the office of R 1 Company. However, the R2 wrongfully and mischievously, by letter dated 17.07.2019 falsely contended that the representatives of the Petitioner No. 1 did not visit on scheduled date for taking inspection of the documents, therefore Petitioners are not entitled to any inspection of documents under law. ....
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....e Petitioners since Respondent No. 1 has potential to make profits if it is managed in the appropriate manner. Thus, the present petition is filed by the Petitioner in order to protect his right as a Shareholder of the Petitioner No. 1 and Director of the Respondent No. 1 and also to prevent continuous act of oppression and mismanagement by the Respondents, which if not prevented, would result in causing serious prejudice to the Petitioners and Respondent No. 1. The Petitioners have made out a prima facie case in their favour and against the Respondents. (9) Further, the conduct of the R1 Company is mismanaged by the Respondent Nos. 2 and 3, detrimental to the interests of the Petitioners. The Managing Director in charge of the day to day affairs of the R 1 Company are under the fiduciary duty to act for the benefit of the Company. Further to satisfy the requirement of Section 241, it is enough to establish that there was a likelihood of the affairs of the Company being conducted in a manner prejudicial to the interests of the R1 Company. 3. The Respondents No. 2 & 8, have filed the counter statement of objections dated 17.09.2019 by inter alia contending as follows: ....
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.... shows there was no meeting held on December 19, 2016. As per the alleged Board Resolution dated 19.12.2106 Mr.Sanjay Dangi has been authorized to make the endorsement on the reverse of the share certificates. However, in the share certificate produced by the Petitioner Mr.Vikram, i.e., Respondent No. 2's signature has been forged. This itself clearly shows the manipulation and fabrication on the part of the Petitioners which clearly an illegal and false attempt on part of Petitioners. (4) In continuation of a Facilitation Agreement dated 06.10.2016 in question, R1 entered into a Joint Development Agreement (JDA) with the owners of the property for developing the property. Since there was a dispute on the Kharab land and there was a claim on the property, the Joint Development Agreement could not be acted upon by the R 1 Company, as it was at a risk of being terminated. Further, the tenure of the Joint Development Agreement has also come to an end. It was the duty of the Petitioner No. 1 to resolve all contentious issues for the purpose of ensuring that the Joint Development Agreement is carried out. The Petitioner No. 1 has failed to perform its part of the contract. ....
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....ailure to make payment of Rs. 15,00,00,000/- under the Facilitation Agreement. Even otherwise, that the Petitioners herein miserably failed to perform its part of the Contract on account of which the Joint Development Agreement could not be acted upon. Further, the Joint Development Agreement could not be acted upon on account of land disputes and the problems were within the knowledge of the Petitioners and the petitioners did not do anything to resolve the problems. When the basic contract, JDA was at a risk of getting terminated, the question of enforcing or trying to enforce the Facilitation Agreement does not even arise. (8) It is further stated that behind the back of the Respondent No. 8, thePetitioners have credited Rs. 10/- to her Bank Account. Respondent No. 8 was not even aware of the receipt of Rs. 10/- in her bank account since she did not get any notification through SMS. The SMS message for crediting of amounts get reflected only if the transactions are above Rs. 500/-. The manipulation and crediting of Rs. 10/- came to her notice only after filing of the present petition by the petitioner. No share transfer deeds have been signed, no consent was given to tr....
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....nfavour of the Petitioner and the letter by R2 is without any basis or authority. Further the share Transfer Resolution and the Share Certificates submitted by the Petitioners are fabricated, forged and invalid on the following grounds: 1) There was no Board meeting held on 19th December 2016. It is evident from the Annual Return filed for the Financial year 2016-17 2) The fabrication and manipulation can be seen from the documents and analysing the same. The R1 Company incorporated on 10.11.2015 and the subscribers to MoA of the R 1 Company were R7 and R8. However, the share certificate produced by the Petitioner shows 6499 shares is not correct. Further the date of issuance of Share Certificate is left blank and it is without the authentication of Secretary or Authorised Persons. The table showing the detail of the share certificate after subscription of shares is mentioned below: Sl. Members Shareholding (Equity Shares) 1 Vikram Structures Private Limited 9,999 2 Aishwarya G. Byrareddy 1 TOTAL 10,000 It can be seen that the pledge agreement is franked and stamped on 07.10.2016 at Shivajinagar, Sub Registrar an....
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....ort of respective Financial Years. 7) Further the notice from ROC for non-filing of Annual Return for the Financial Year 2017-18 has been marked to Petitioners also. The R 1 Company has filed the Annual Returns after receiving the instructions from Petitioner No. 4 and all other petitioners are aware about the filings. The petitioners were misusing their powers as Directors. They have inappropriately and fraudulently used their position as Director and hampered the business of the Company by giving a public notice and informing the public not to deal with the Respondents.The Petitioners have misused the power and authority given to them by the Company in good faith. (3) Further, as per the provisions of Companies Act 2013, the Petitioners have been served notice of Board Meeting on 19.07.2019 to hold the Board Meeting on 27th July 2019 which is clear 7 days' notice as per the provisions of Companies Act 2013. Further the provisions of sub-rule (2) of Rule 23 of Companies, (Management and Administration) Rules, 2014, reads as follows: "The notice referred to in sub-rule (1) shall be sent by members to the company not earlier than three months but at least fourt....
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....slead this Hon'ble Tribunal and complicate the issues involved. The Respondents have illegally and arbitrarily removed the Petitioners No. 2 to 4 as Directors of the R 1 Company at an extraordinary general meeting held on 19.08.2019, on the other hand, had filed a collusive suit in O. S. No. 1017 / 2019 before the Hon'ble Principal Civil Judge, Bengaluru Rural, simultaneous with the filing of these present proceedings, to fraudulently secure the cancellation of the JDA and GPA to the detriment of the Petitioners and the First Respondent. The suit was disposed of on the first date of hearing i.e. 16.08.2019 pursuant to a compromise petition, the R 1 Company confirmed the cancellation of its JDA and GPA in relation to itsScheduled Property with effect from January 2018. (4) While the Rl, R2 and R8 have not disputed the existence of the Pledge Agreement, the Third and Seventh Respondents in their statement of objections stated that the Second Respondent has 'gone behind their back' and executed the Pledge Agreement without authorization. Such a stand of the R3 and R7 is merely an afterthought, and is completely untenable. The Third and Seventh Respondents have....
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....espondents have sought to illegally deny the Petitioners their legitimate rights. Therefore, the EGM held on 19.08.2019 ought to also be declared illegal, and the Second to Fourth Petitioners must be reinstated as directors of the First Respondent Company. (6) The present petition was filed seeking various reliefs, on 26.07.2019. Thereafter, the subsidiary of the First Petitioner i.e. CLN Properties Private Limited was shocked to receive a letter dated 08.10.2019 from the Fourth and Fifth Respondents and their parents, stating that "there was" a joint development agreement dated 07.10.2016 and that the Fourth and Fifth Respondents and their parents, revoked the said JDA as well as the general power of attorney dated 07.10.2016, by way of their letter dated 22.01.2018. 6. Heard Shri C.K. Nanda Kumar, learned Counsel for the Petitioners. Mr. Vivekananada B.S, Learned Counsel for the Respondents No. 1, 2 & 8 and Mr. Naman.G.Joshi, Learned PCS for the Respondent Nos. 3 & 7through Video Conference. We have carefully perused the pleadings of all the Parties and the extant provisions of the Companies Act, 2013, and the Rules made thereunder and the Law on the issue. 7. Shri....
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....ggrieved by a delay in his name being entered into the register of members, may approach this Hon'ble Tribunal. Therefore, there can be no challenge to the maintainability of the present petition. (4) The Petitioners No. 2 to 4, now as Ex-Directors of the R 1 Company, are concerned with the opaque and brazenly illegal manner in which the affairs of the Company are being of business on the part of the Respondents. (5) The contention of the Respondents that the Petitioners No. 2 to 4 are not abiding the duties mentioned in Section 166 of the Act on account of which there is a compulsion to remove the petitioners from directorship of the R 1 Company is false and vague. (6) On a perusal of the minutes of the meeting of the Board of directors of Respondent No. 1 held on 27.07.2019, it may be observed that Respondent Nos. 2, 3, 5 and 6 were present at the said meeting. As per Agenda Item No. 7.1, the Company has taken on record the progress report in relation to the Scheduled Property. (7) Article 42(iii) of the Articles of Association of the First Respondent clearly provides that notices to general meetings have to be issued 'either in writing....
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.....2020 by inter alia contending as follows: (1) It is alleged that the Petitioner by virtue of fabricated and forged documents tried to camouflage the material facts and misused the provision of law. As per section 241 of the Companies Act, 2013, only a "member" of the company has a right to make an application. But petitioner No. 1 is not a member of the company. Neither the register of members nor any other document evidences or gives ownership/membership to the Petitioner. From the Annual Returns i.e., Form MGT-7 for financial year 2016-17 produced by Respondents, it is clear that no Board meeting whatsoever was held on 19/12/2016. As such its Prima facie indicates that shares were not transferred as is being claimed by the petitioners. When there is no share transfer, there can be no question of petitioner claiming to be member/shareholder of R1 Company. Further, after a gap of more than 2 Va years the petitioners have approached this Hon'ble tribunal acting as if they were not aware of the Annual returns. Further when authenticity of the document is in question, evidence needs to be taken and trial has to be conducted, which is not permissible before the Tribunal. ....
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....el for the Respondents No. 3 & 7, has also filed his objections for rejoinder and written submissions by inter alia contending as follows: 1) It is stated that the audited and filed accounts of the Petitioner No. 1 has not recognize allegedly claimed shares as their assets in their balance sheet since 2016-17 till 2018-19, it proves the facts of creation of forged documents. 2) Transfer deed attached to rejoinder are not verified by the Company and to misguide the Hon'ble Bench fabricated documents does not have columns required to be verified by the Company as prescribed under SH4 of Companies Act, 2013. Further the initial objection filed on 16.08.2019 by R3 8B R7, they have denied the transfer of shares and share certificate is fabricated and forged because share certificates are not belonging to those persons, who transferred as per Company records and the alleged transfer was never recorded in the registered.The case laws produced by the Petitioner are not relevant to the instant case. 10. By perusal of the pleadings of all the Parties involved, the following broad issues arise for consideration: a) Whether the Petitioner No. 1 deemed to be a ....
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....o the Facilitator. 3. Security Deposit: 3.1 For the due delivery of the consideration agreed under Clause 2.1 hereabove to Facilitator herein, the Developer shall deposit the sum of Rs. 25,00,00,000/ - (Rupees Twenty Five Crore only) towards interest free refundable Security Deposit with the Facilitator in the following manner: (a) Rs. 15,00,00,000/- (Rupees Fifteen Crores only) paid this day, vide Cheque Nos.016110 to 016112 dated 07.10.2016 drawn on Axis Bank, New BEL Road Branch, favoring the Facilitator, the receipt of which the Facilitator hereby admits and acknowledges; and (b) Rs. 10,00,00,000/- (Rupees Ten Crores only) shall be paid on the date of execution of release of finance facilities to Developer vide Cheque No. 016113 and 016114 dated 07.07.2017, drawn on Axis Bank, New BEL Road Branch. 3.2 The refundable Security Deposit will be refunded by the Facilitator to the Developer without any interest thereon within fifteen (1') days of receiving written intimation from the Developer that the 5% of the total saleable super built area allotted to the Facilitator is complete in all respects and its readiness to deliver the same....
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....egulations. 4.4 The Facilitator and purchasers of its share of built up are shall also be entitled to use and enjoy the common areas, amenities and facilities to be provided in the development in schedule property by the developers. 4.5 The Developers may also explore the possibility of utilizing the Transferable Development Right (TDR) in the proposed development to secure sanction of higher super built up area. In such event, the Facilitator shall not require to pay the cost of purchase of TDR. In addition, the Developer shall hear the expenses of putting up construction regarding additional TDR with respect to Facilitator share also. 4.6 The entire cost of construction of the building/s to be built in the Schedule Property shall be borne solely by the Developer. The Facilitator shall not be required to pay any amount for the development and construction in the Schedule Property for its 5% shares. 6. Specific Performance: 6.1 If the Developer fails to perform its part of the contract in spite of the Facilitator complying with and performing the terms of this Agreement, the Facilitator shall be entitled to enforce Specific performance. ....
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....r of the Pledgee on an events of default taking place. All such further acts, deeds, matters and things shall be done by the Pledgor and the Company immediately on being so called upon by the Pledgee. ii. The Company will mark a pledge in respect of the said Pledged Shares in the name of the Pledgee, in the Register of Shareholders maintained by the Company. In the event of default, the Pledgor and the Company agrees, declares and confirms that it will do all acts, deeds, matters and things to give effect to the transfer of the Pledged Shares to the Pledgee. In the event of part payment of the Deposit Amount the Pledgee agrees declares and confirms that it will do all acts, deeds, matters and things to give effect to the return of proportionate Pledged Shares to the Pledgor. VII. Appointment of Directors: In order to further secure the payment of the Deposit Amount, the Pledgee shall be entitled to nominate three (3) of its nominees to be appointed as additional Directors in the Company. Thereafter the Company shall do all such acts deeds and things required, including filing of necessary forms with the Registrar of Companies to facilita....
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....er of share transfer and to do all other necessary act in this regard to give effect to the above resolution." For and on behalf of vs. Infra Private Limited Vikram Prabhakar Deepu Vijaya Nath Sanjay Dangi Amit Dangi Managing Director Director Director Director DIN-02086814 DIN-06679734 DIN-00012833 DIN-06527044" 14. In the light of the above Agreements, Mr. Vikram Prabhakar, Managing Director of the Respondent No. 1 Company, has addressed a letter to Mr. Sanjay Dangi (Petitioner No. 2 and Director of the Petitioner No. 1 Company), by inter alia stating as follows: "07th October, 2016 To, Mr. Sanjay Dangi Mentor Capital Limited 713, Raheja Center, Nariman Point, Mumbai - 400021. Subject: Transferring of Equity Stake. This is with reference to facilitation agreement and Joint Development Agreement dated 7th October, 2016 executed between us regarding Development of Property situated at bearing Survey Nos.96, 96/1, and 96/2, measuring 11 acres 37 guntas, situated at Kodathi Village, VarthurHobli, Bengaluru. Since you have facilitated this transaction we are suppose to make y....
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.... Agreement, Pledge Agreement, with naked eye, there is no doubt in our mind that those signatures are not all forged and those documents binds on the Respondents. 18. So far as procedure for Transfer of Share are concerned, Articles 20, 21 & 22 of Articles of Association of the R 1 Company deals with the Transfer of Shares, which reads as under: "Transfer of Shares 20 (i)The instrument of transfer of any share in the Company shall be executed by or on behalf of both the transferor and transferee. (ii) The transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect thereof. 21. TheBoard may, subject to the right of appeal conferred by section 58 declines to register- (a) the transfer of a share, not being a fully paid share, to a person of whom they do not approve; or (b) any transfer of shares on which the Company has a lien. 22. The Board may decline to recognize any instrument of transfer unless- (a) the instrument of transfer is in the form as prescribed in rules made under sub-section (1) of Section 56; (b) the inst....