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2020 (11) TMI 125
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....e shares. The Petition has been filed against the Respondents on account of severe acts of oppression and mismanagement being conducted by them which are detrimental to the 1st Respondent Company as well as its shareholders 2. The Petitioners along with the other shareholders who have given consent in writing to make the application on their behalf under Section 244(2) of the Companies Act, 2013 constitute 68 numbers i.e. 7.2% of the total shareholders of the 1st Respondent company being 951 as per the latest Annual Return of the company filed with the Registrar of Companies, Kerala as on the date of signing the application, i.e. the Annual Return of the 1st Respondent Company for the financial year 2017-2018. 3. Respondent No. 1 company viz M/s Sea Blue Shipyard Limited (hereinafter referred to as the Respondent Company) was incorporated on 08.12.2003 under the provisions of the Companies Act, 1956 as a Company limited by shares. 4. The registered office of the Respondent Company is situated at 1/212, V.P.Road, Azheekal P. O., Vypin, Kochi 682508. The Authorised Share Capital of the Petitioners is Rs.40,00,00,000 (Rupees Forty Crores) divided into Rs.4,00,00,000 (Rupees F....
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....many of the legal provisions of the Companies Act, 2013, in scant disregard to the principles of proper company management and administration. 9. It is their further contention that the applicants along with other shareholders do not have the threshold number or percentage as mandated by Section 244 of the Companies Act, 2013 to prefer application under Section 241. (The applicants along with the other shareholders constitute 93 numbers which is only 9.8% of the total shareholders of the respondent company. The required threshold is 10%). Hence their submission in such a situation is that under the provisions of Section 244 of the Companies Act,2013, this Tribunal has the power to waive the requirements enabling the aggrieved shareholder/members to prefer an application under Section 241. 10. Section 244 of the Companies Act, 2013 is reproduced hereunder; 244. "Right to Apply under Section 241 244.(1) The following members of a company shall have the right to apply under Section 241, namely: - (a) in the case of a company having a share capital, not less than one hundred members of the company or not less than one-tenth of the total number of its me....
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....rs regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 are not available and hence the details of amount unpaid if any have not been given 4). Inventories have been taken as valued and certified by the management. 2014-2015 1). Confirmation of balances under Trade payables has been obtained in some cases. No confirmation of balances has been obtained in respect of Trade Receivables and Loans & Advances. There are long outstanding balances under Trade Receivables mostly of which are from Government Departments. Adequate provision may be made for Bad and Doubtful Debts, if there is any irrecoverable portion. 2). ********* 3). The details of Suppliers regarding their status under Micro, Small and Medium Enterprises Development Act 2006 are not available and hence the details of amount unpaid, if any, have not been given. 4). Inventories have been taken as Valued and Certified by the management. 5). There is much delay in remitting the Service Tax payable and Tax Deducted at Source. No provision for interest and penalty payable has been made. 2015-2016 1). Confirmation of....
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....tements, if any, at present. 2017-2018 7) Trade Receivables Rs. 11,35,86,619.00 includes the receivables in respect of the income recognized on Percentage completion basis as at the end of the year amounting to Rs. 4,30,51,267.38 of which Rs. 2,19,41,221.00 is recognized in the reporting year balance Rs. 2,11,10,046.00 Pertaining to periods prior to 2017-2018 financial, year for which progress invoices are not submitted by the company till 31.3. 2018.Confirmation of Balances has not been received in respect of Trade Receivables. There are long outstanding balances under trade receivable and we are not able to ascertain the recoverability of debts or whether any provision is required in this regard Management has clarified that they do not expect any bad debts and therefore no Provision is required in this regard. 8) ************* 9) ************* 10) Advance to suppliers for materials and services include an amount of Rs. 83,19,390/ due for more than one year paid to various suppliers against which expenses are not booked by the company and it's explained that these are relating to services supplies in Progress for which bills are ye....
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....change in shareholders fund in figures are as under: - Year Share Capital Rs. Reserves and Surplus Rs. Total shareholder's funds Rs. 2014 35,00,00,000 55,26,773.68 35,55,26,773.68 2015 35,00,00,000 96,69,022.10 35,96,69,022.10 2016 35,00,00,000 50,07,003.30 35,50,07,003.30 2017 35,00,00,000 4,31,909.07 35,04,31,909 2018 35,00,00,000 -2,12,81,370.00 32,87,18,630 2019 35,69,89,470 -8,58,81,079.00 27,11,08,391 13. The 1st Respondent Company is seen not complying with many of the legal provisions of the Companies Act, 2013, in scant disregard to the principles of proper company management and administration. 14. The learned counsel further stated that as per the Form MGT-8 attached along with the annual return of the company for the financial year 2017-2018, according to the provisions of Section 92(2) of the Companies Act, 2013 and Rule 11(2) of Companies (Management and Administration) Rules, 2014, the following lapses on the part of the company: I. The company has not complied with Section 173 of the Companies Act, 2013. II. The Annual General Meeting for the year ending 31.03....
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....ber of double counts is 2. Hence, the total number of consents is reduced to 66. 18. It is further submitted that the place of execution of authorizations provided by the members were outside India and were not authenticated by a notary public of the respective country or by the Indian consulate. Hence, they are not valid authorizations in accordance with the Indian Evidence Act and established judicial pronouncements. Therefore, the 35 consents, which are either defective or invalid. In view of the above, the total number of consents which may be accepted is 55 and not 90 as contended by the Petitioners. 19. It is their further contention that the Petitioner No. 1 has furnished an affidavit stating that he is swearing this affidavit on behalf of the other Petitioners. In the event Petitioner No.1 is swearing the affidavit on behalf of Petitioners 2 and 3 also, Petitioner No. 1 ought to have proper authorization from Petitioners 2 and 3 authorizing him to swear the affidavit on their behalf also. However, Petitioner No. 1 has failed to submit the said authorization. Even though Petitioners 2 and 3 have signed the petition, they have not furnished any affidavit. Therefore, in ....
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....Petitioners have clearly established that there are no exceptional circumstances which may prevent them from achieving the threshold of 10%. Therefore, the Respondents prayed for dismissal of the Company Petition. Supplementary submissions made by the Petitioners 23. The Petitioners submitted that the Respondents are relying solely on the technicalities of the Petition. If the leave application filed under Section 244 is disallowed on technical grounds, the Petitioners grievances will remain unaddressed forever. The consent letters are the consent as prescribed by Section 244(2) to make a Petition under Section 241 of the Companies Act, 2013. The counsel further stated that even if some of the consent letters are defective on technical or legal aspects, they are factually 'the consent of the aggrieved shareholders' of the 1st Respondent Company. This aspect may be taken into consideration while deciding the leave application filed by the Petitioners. 24. The learned counsel further stated that the law does not prescribe any lower or upper limit within the statutorily prescribed threshold of 10% for submitting the leave application. This can be anywhere in the range of 0.00....
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.... Mr. Jacob Zacharia (at Serial No. 33 of Page No. 38 of the Company Petition, whereas, Folio.382 relates to Mr. Philip K. K., the consent of whom is reproduced at Page No. 301 of the Company Petition. Therefore, based on paragraphs 5 and 6, it is seen that the number of double counts is 2 thereby the total number of consents is reduced to 66. The place of execution of authorizations provided by the members were outside India and were not authenticated by a notary public of the respective country or by the Indian consulate, hence they are not valid authorizations. This Tribunal therefore, cannot accept the argument advanced by the Petitioners in this regard. Point no (ii). In the light of the above discussion in point no (i) the members whom the Petitioners claim to have authorized the Petitioners to file the Company Petition under Section 241, ought to have authorized the Petitioners to file for waiver under proviso to Section 244(1) of the Act. In the instant case none of the members (apart from the three Petitioners) have authorized (which authorization itself is not proper) the Petitioners to file the instant Petition under proviso to Section 244. It is seen that the consents....
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.... of (proposed) application under Section 241, but required to record grounds to suggest that the applicants have made out some exceptional case for waiver of all or of any of the requirements specified in clauses (a) and (b) of sub-section (1) of Section 244. Such opinion required to be formed on the basis of the (proposed) application under Section 241 and to form opinion whether allegation pertains to 'oppression and mismanagement' of the company or its members. The merit cannot be decided till the Tribunal waives the requirement and enable the members to file application under Section 241". 28. Paragraph 150 of the Judgment in Cyrus (supra) clearly lays down that merits of the case cannot be decided at the stage of waiver. The Hon'ble Appellate Tribunal has arrived at this conclusion on the ground that if the merits are decided at this juncture, then the Tribunal would be adjudicating a Petition under Section 241 which is still in the proposed application stage at the juncture of grant of waiver. The petitioners have also agreed in the rejoinder filed by them that the merits of the case cannot be discussed at this juncture, stating that "there are no issues to be decided in t....