TaxTMI 
TaxTMI 
2021 (5) TMI 396
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.... Companies Act, 2013, alleging acts of oppression and mismanagement against the respondents herein. The petitioners hold in aggregate 18.15% of the paid-up share capital of the company and as such are eligible to maintain the present petition in terms of section 244 of the Companies Act, 2013. Arguments of Mr. Joy Saha, learned Sr. Counsel for the petitioners 2. Mr. Joy Saha, learned Senior Counsel appearing for the petitioners, submits that Petitioner No. 1, Mr. Bimal Kumar Goenka, was one of the promoter-directors of the Respondent No. 1 Company. Mr. Pankaj Goenka, Petitioner No. 2 and Mr. Varun Saraf, Petitioner No. 3, became directors some time in 2012. The company is a completely family-owned company (except for a paltry five sha....
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....n given. Page 437 of the Petition The alleged acts of mismanagement have been set out in the notice dated 01.03.2021 given by the shareholders. 8. Mr. Joy Saha invited our attention to these alleged acts of mismanagement and submitted that the same has been set out in the said notice as follows: Pages 413-414 of the Petition (1) Mr. Rahul Modi, director of the company, was intentionally not invited for the board meeting of 20.12.2020, so that the other three directors are in a position to pass various resolutions; (2) At that meeting, the three directors passed resolutions to increase their salary without the knowledge of Mr. Rahul Modi. (3) The financial statements for the year 2019-20 have been signed by Mr. ....
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....rights of the parties will have to be weighed on the scale of equities. In other words, the acts of directors of family-owned companies or companies that are in the nature of quasi-partnerships are required to be held to a standard much higher than that applied for normal companies. 13. Mr. Joy Saha, therefore, prayed for ad interim ex parte reliefs by way of stay of the resolutions passed at the EGM held on 14.04.2021, at which the petitioners were removed from office, and Mr. Bharat Goenka, Ms. Prakriti Goenka and Mr. Subramanian Venkateswaran were approved as directors. Arguments of Mr. Ratnanko Banerji, learned Sr. Counsel for R2 & R3 14. The primary plank of Mr. Ratnanko Banerji's arguments is that there is no cause of act....
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....sis of a section 241 petition. 18. Lastly, Mr. Banerji submitted that the petition shows absolutely no cause of action. There is complete acquiescence of the petitioners who called for the EGM in the first place. 19. Mr. Ratnanko Banerji sought to rely on the judgment of the Hon'ble Supreme Court in Life Insurance Corporation of India v. Escorts Ltd. & others (1986) 1 SCC 264, (para 95) and in Hanuman Prasad Bagri & others v. Bagress Cereals Pvt. Ltd. & others (2001) 4 SCC 420, (paras 10 & 11) in support of his contention that directorial complaints cannot be the subject matter of a s. 241 petition. He further submitted that no injunction can be granted to restrain the holding of a general meeting to remove a director and appoint ....
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....he petitioners must be looked into: Mr. Rahul Modi, based in Chennai, was not allowed to attend one board meeting. Mr. Saha queried whether this solitary instance would be enough to upset the applecart, resulting in three out of the four board members being voted of office, and three others - all representing the respondent group - be allowed to assume office just because they have a majority of the shareholding. The sudden move to disturb an arrangement that has been in force for almost 21 years must have a reason behind it. 25. Mr. Joy Saha further submitted that even after the Supreme Court judgment in Escorts (supra), there are hundreds of cases where the voting pattern of general meetings have been overturned. It is now fairly clear....
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....In a family-owned company or companies in the nature of a quasi-partnership, the principles of equity shrined since Ebrahimi (supra) must be applied to test the actions of the group whose activities are complained of. 30. In the present case, we find merit in the contention of Mr. Joy Saha, learned Senior Counsel for the petitioners, that there must be good reason to overturn an arrangement which appears to have worked satisfactorily for about twenty-one years. The primary reason given - though not the only reason - is the alleged omission to invite the sole representative of the respondent group for one solitary meeting of the board. This is not enough. The complete exclusion of the petitioner group from the board cannot be justified me....