AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 548
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 1, i.e., Hussaini Lakada Bazar Pvt. Ltd., is a company incorporated as per the provisions of the Companies Act in the year 1931-32 or early 1930 whereby all the owners/ occupants of their respective galas/shops/premises at Hussaini Lakada Bazar Pvt. Ltd. formed themselves into a private limited company. The Respondent No. 2 is the present President of the Respondent No. 1 and the Respondents No. 3 to 7 are the present Directors of the Company. Facts: 3. The Petition reveals that in the year 1935, the Respondent No. 1 Company acquired lease hold rights from the one Tehnima Farrokah Barucha for the period of 999 years on payment of lease rent of Rs. 620/- per month for property being 242/244 Bellasis Road, Jahangir Boman Behram Marg Mum-08, situated on land bearing C.S. No. 2/229 of Byculla Division admeasuring 11,176 Sq. Yards and two the then foras tenure bearing C.S. No. 1575 of Byculla division admeasuring 1451 Sq. Yard and C.S. No. 1/229 being part of C.S. No. 229 of Byculla division admeasuring 1890 Sq. Yard as per collector record. 4. The Counsel for the Petitioner submits that the Respondents above named in connivance with each other and with common intention and agreeme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was sought to be shown for acquiring ownership rights from the lesser but not even a whisper was made for the same in the notice for 82nd AGM of 2014. This was done with malafide intention of the Respondents so that most of the shareholder does not remain present by keeping shareholders in dark about the entire process of acquisition of ownership rights of the property. The Respondents were acting as if they were the owner of the Company and without even informing the Petitioner, who was the Director of the Company and the then President Late Mr. Haiderali Fakhruddin Changi who was also the Director and the father of Petitioner. 6. The Counsel for the Petitioner then submitted that Respondents used to hold unofficial board meetings regarding the acquisition of the ownership rights of the property and the Petitioner was never informed by the Respondents regarding any meeting nor about the process of the acquisition even though he was the Director of the Respondent No. 1 Company to which he even wrote the letters and raised his grievances letters dated which are marked as Exhibit-F in the Petition. 7. The Counsel for the Petitioner then submits that the Respondents strategically c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rsion dated 31.12.2014 mentioned about an alleged Resolution dated 30.12.2014 passed by the Respondent No. 1 Company in Board of Directors meeting dated 30.12.2014 whereby they had allegedly authorized Respondent Nos. 2, 3 and Mr. Tayab Potia, a shareholder, to represent on behalf of the Respondent No. 1 Company. The Petitioner then submits that no such Resolution was passed neither by the Board of Directors nor any notice/intimate/circular was given to the Petitioner who was the Director of the Company. 11. The Counsel for the Petitioner further submits that notices of Board Meetings with false agendas were circulated to the Petitioner on 07.11.2014 by hand delivery for meeting on 08.11.2014 and on the other hand some other notice for the same meeting with some other agenda was put on record of Registrar of Companies and again same act was repeated once again and false notice with false agenda was served upon Petitioner for Board Meeting on 10.09.2015 (by speed post) and some other notice for the same meeting with some other agenda was put on record of Register of Companies once again, which clearly shows the mala fide actions/ intentions and an arbitrary attitude of the Respond....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cate for the Applicant by letter bearing Ref. No.: CC/6553/2018-38 dated 22ndJune 2018. Till date, neither received any reply nor any inspection was offered. Hence, the Counsel for the Respondent submits that the Applicant should be restrained from relying upon the said documents. c. It is then submitted by the Counsel for the Respondent that the Applicant has already filed before the Hon'ble Bombay City Civil Court at Bombay Suit No.2240 of 2014 against these Respondents and Others inter alia seeking a declaration that the Deed of Conveyance of reversion dated 31st December 2014 to the extent of 49% in name of Respondent No. I Company is illegal, null, void and not binding on Respondent No. 1 and its shareholders and Respondent Nos.2 to 8 (of the said suit) had no right and authority to execute the same, for a permanent order and injunction restraining these Respondents from in any manner selling, transferring, mortgaging, disposing of and or creating third party rights of any nature whatsoever and/ or from acting in furtherance of the Deed of Conveyance of the Reversion dated 31/12/2014 and injunction restraining Respondent Nos. l to 7 (therein) from using the Bank Account ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned by Respondent No. I were submitted before the Hon'ble Company Registrar. The date of hearing was fixed before the Company Dispute Resolution Forum on 31st March 2016. A copy of the reply, along with documents submitted by Respondent No. 1, were forwarded to the Applicant by the Hon'ble Assistant Company Registrar by their letter bearing Reference No. ROC/IPC/MP/01793/2016-144 dated 11th May 2016. By the said letter, the Applicant was called upon to give the status of the pending proceedings and inform about the final order/ outcome of the pending suit. Thereafter, the Applicant addressed further correspondence dated 28th May 2016 to the Hon'ble Company Registrar and made a false complaint that he was removed as a Director without following proper procedure/ without giving notice and without following the due process of law. f. It is further submitted by the Counsel for the Respondent that the Applicant has made identical allegations in the Plaint of the suit mentioned herein above and filed before the Hon'ble Bombay City Civil Court regarding the actions taken by a Respondent No. 1 Company being violative of the rights and interests of the shareholders of Resp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Company were served by hand delivery by one Mr. Fakruddin Master who is in employment of Respondent No. 1, as an accountant/clerk and does other miscellaneous work also. After the acceptance of the resignation of Mr. Haider Changi (the father of the Applicant, now deceased), the Applicant refused to accept the notices of the Board Meetings and of the Annual General Body Meeting by hand delivery. Hence, the same were served by Speed Post AID. The notices of the Meetings were duly served on the Applicant and to prove service of notices of the Meetings of Respondent No. 1 Company upon the Applicant, Respondent No. 1 Company had filed a notarized Affidavit of Mr. Fakruddin Master dated 7th April, 2016 before the Hon'ble Company Registrar. h. It is further submitted by the Counsel for the Respondent that the Applicant had not attended the Board Meetings since or about 27th August 2014 and therefore the Applicant was informed by Respondent No. 1 Company in advance that if the Applicant did not attend the Board Meeting of the Company to be held on 10th September 2015, his post of the Director of the Company would be vacated. Despite the same, the Applicant did not attend the Boar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No. 2 to 7 acted in collusion with one another as alleged or that they executed and registered the Deed of conveyance of Reversion dated 31st December 2014 on behalf of Respondent No. 1 gravely prejudicing the rights and interests of Respondent No. 1 Company and its members. The Counsel for the Respondent deny that the alleged transaction was carried out illegally or without the consent of the members of Respondent No. 1 Company. The Counsel for the Respondent submits that since long members of Respondent No. 1 Company were trying to purchase the lease-hold rights of the subject property from the Lessors. Prior to the resignation tendered by the late Mr. Haider Changi (the father of the Applicant), several Meetings were held between the Lessors and the Directors of Respondent No. 1 (which included the late Mr. Haider Changi, who was the Chairman at that relevant time, but the Lessors were then not interested in selling their rights, title and interest in the subject leased property. But suddenly around March-April 2014, the Lessors contacted these Respondents intimating that they were willing to sell their right, title and interest in the subject property. I say that to find out th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llows: " To discuss and pass the resolution whether tp purchase the lease right from the lessor of the Husseini Lakda Bazar Pvt.Ltd. "To discuss about how to raise the fund for the same within limited period of around 15 days and consider the mode/condition of repayment. The entire transaction was with the consent of the majority members and all requisite procedures were followed and the same was approved by the Members in the Annual General Body Meeting dated 22nd September 2014. Even the Deed of Conveyance of Reversion was circulated in Board Meeting dated 31/12/2014 and the Applicant purposely avoided to attend the Board Meeting. On 28thJuly 2014 at 6.00 p.m. when the Board Meeting was held, the late Mr. Haider Changi, father of the Applicant tendered his resignation letter dated 24th July 2014 from his post as the Chairman and Director of the company making some false accusations against the other members of the Board of Directors. The resignation of the late Mr. Haider Changi was accepted unanimously by the Board of Directors. On 28th July 2014, when the extra ordinary General Meeting was held, out of 50 shareholders 33 members were present and in the same Meeting Respon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her the waiver application under Section 244 of the Companies Act 2014 filed by the Petitioner holding four equity shares of Rs. 250/- shareholding of Respondent No. 1 Company can be allowed? 16. The Petitioner is aggrieved by the decision of the Board in convening the board meeting to acquire the ownership rights of his property and therefore executed a conveyance deed in the company. The original lease was acquired by the Company from Tehnima Farrokah Barucha for a period of 990 years for a lease rent of Rs. 620 pm. For the property bearing 246-A, Jahangir Boman Behram Marg, Bellasis Road, Mumbai-400008. The Respondents are allegedly seeking to sell the rights of the lease hold property to 3rd party builders and hence 82nd AGM was called on 22.09.2014 by giving a 5 day's notice to the shareholder without mentioning agenda regarding requiring ownership rights in the said property. The Petitioner sought to cancel such a board meeting vide letter dated 20.09.2014. The board meeting was not attended by many of the shareholder. The Petitioner also submitted that huge amount of funds was going to be passed to the hands of board of directors and at the cost of the shareholders. 17. In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was arranged by Members, Bai Ramji Harami Sarabji, Hirabai Bahramji Sarabji. It was decided that a perpetual lease will be executed in the favor of Company for the benefit of its members. 22. Therefore, the purchasing of subject property was always an object to the Company and it was apprehended that the lessor was exploring the possibility of the selling said plot to third party builders, the Petitioner's Father and the Petitioner have actively initiated the process acquiring the said rights. 23. Around April-May, 2014, lessor agreed to release the said property to the Company. The EOGM was filed on 28.07.2014 and the same was attended by the Petitioner. A decision was made regarding payment of Rs. 21 crores to be paid within 10-15 days as per the condition imposed by the lessors. 24. The Respondent further submitted that a board of directors meeting was due to be conducted and notice was given for holding a meeting of board of directors of the Company was given on 08.11.2014 with agenda of passing resolution concerning the lease rights of the lessor. The Petitioner and his father were special invitees. 25. In the board meeting of 27.07.2014, the letter of resignation of late ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n and reply it can be said that there are two grounds of challenge: 1) The first ground of challenge being acquisition of Reversionary rights in the leased property by the Respondent Company. 2) The second ground that he was removed as a director of the company without notice. 30. As can be seen from the records, the late father Mr. Haiderali Fakhruddin Changi had of the petitioner participated in the entire process of acquisition of revisionary rights of the leased property. He addressed a letter to Dawat-e-Hadiya Trust (Community) for a loan to the extent of Rs. 21 Crores. The property is valued at Rs. 100 Crores, but with great efforts, the property was negotiated to be purchased at Rs. 21 Crores. Under the circumstances that the lessors warranted payment of monies within 10 to 15 days, the EOGM was called on 28th July, 2014 and only three days' notice dated 25th July, 2014 was given to shareholders. The said notice dated 25.07.2014 was signed by Late Mr. Haider Changi, as the chairman on the letter head of Respondent No. 1. The agenda was as follows: "To discuss and pass the Resolution whether to purchase the lease rights from the lessor of Hudseini Lakda Bazar Pvt. Ltd.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and whether it binds all its members? The Respondent No. 1 Company evidently states that 33 shareholders have been attending the meeting and thereby it resolved to acquire the revisionary rights in the leased property of the Company. The Petitioner and his late father were also part of the said acquisition process. No other objector/shareholder has come forward to object the acquisition of the said property post acquisition in the Year-2014. The shareholders and the board of directors in their collective wisdom have sort to acquire the leased property as there was an apprehension that the leased property will be taken over by unscrupulous builders. 34. Be that as it may, the Company and its Shareholders has passed a resolution to acquire such revisionary rights in the leased property of the Company. The Petitioner and his late father were actively involved in such acquisition. The minority cannot question the decision of the majority on frivolous grounds and it is necessary for corporate governance that Corporate Democracy of the shareholders to be protected and safeguarded qua the rights of one individual minority shareholder. The decision of the majority would prevail in the in....