TaxTMI 
TaxTMI 
2021 (6) TMI 161
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....f the Application are as follows:- a. The Petitioner/Applicant is the majority shareholder of Respondent No. 1 ("Company") holding 92% of the issued, (in the year 2016 he acquired 60% and after filing of this petition acquired 32% share from R-2 and R-3) subscribed and paid-up equity share capital of the Company. In addition, pursuant to the rights conferred upon it under the Shareholders Agreement, the Petitioner/Applicant has also nominated majority of the directors on the board of the Company. The Petitioner/Applicant has invested a sum of INR 600 crores (approx.) towards acquiring 92% majority shareholding and 100% Compulsorily Convertible Preference shares in the Company. In addition, the Petitioner/Applicant has committed a sum of INR 770 Crores (approx.) as financial support to the Company towards providing collaterals for securing the working capital and debt facilities availed by the Company. b. It is contended by the Applicant that as part of their sinister design to oppress the Petitioner/Applicant, the Respondent Nos. 2 to 8 have been constantly and deliberately obstructing the Petitioner/Applicant's attempts to manage the affairs of the Company in a smooth and ....
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....e Tower are being set off against Debit Note no. 1/2018-19 dated 10.10.2018 for INR 12,278,028 and Debit Note no. 1/2018-19 dated 10.10.2018 for INR 13,024,418 (aggregating to INR 25,302,446; collectively "Debit Notes") raised by the Company upon PCI Limited. These debit notes have been issued by the Company pursuant to invocation of bank guarantees in September, 2018, aggregating to INR 25,302,446 issued by the Company in favour of PCI Limited. f. It is an undisputed fact that the bank guarantees issued by the Company were invoked solely owing to PCI Limited's inability to timely renew the bank guarantees furnished by them in favour of DHBVN and UHBVN despite the Company having provided back-to-back guarantees in favour of Respondent No. 4 PCI Limited. The mechanism for set-off of the rentals for Prime Tower office has also been clarified by the Company to Respondent No. 4 PCI Limited on several occasions including vide e-mails dated October 26, 2018, January 24, 2020, March 16, 2020 and October 24, 2020. In addition to INR 25,302,446, further amounts are also due to the Company from Respondent No. 4 PCI Limited including an amount of INR 5 million that was paid to PCI Limit....
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....7, Company Case (AT) No. 21 of 2018 and Interlocutor Application No. 1032 filed in Company Appeals No. 397-399/2017. m. The Hon'ble Appellate Tribunal, vide order dated 20.12.2018, issued directions to both the parties to ensure that no hindrance is made by any of the parties or its officers and employees to ensure smooth functioning of the company and in case of any entry of outsider, it will be open to parties to inform the same to the Hon'ble Appellate Tribunal but will not make any obstruction/objection. n. It was contended by the Applicant that on 04.01.2019 and 04.02.2019, Respondent No. 3 Mr. Rohan Mehta had violated the order dated 20.12.2018 by obstructing the entry of the Company Secretary Mr. Rajnish Kumar and the HR Head Mr. Mazhar Hussain into the Company Prime Tower premises. o. The Hon'ble Appellate Tribunal, in Contempt Case (AT) No. 02 of 2019 in Company Appeal (AT) No. 397-399 of 2017, vide order dated 30.01.2019 allowed the counsel for the respondent- Mr. Surinder Mehta and Mr. Rohan Mehta to hand over the proposed "Terms of Settlement" to the counsel for the petitioners by 01.02.2019. Also, Petitioners will go through it and if so required may ....
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....dvisories issued by the concerned Governmental departments, the Company was constrained to take recourse to work from home for all its employees. However, the operations of the Company remained curtailed and many actions cannot be completed without access to physical and archival records of the Company, which remain at Prime Tower. With steady improvement in the COVID-19 situation, the Company's management is desirous to re-start its operations from its corporate office as normal with effect from 04.01.2021. It is contended by the Applicant that such re-start is necessary for normalization of the operations of the Company (which have been severely battered owing to the COVID-19 pandemic) and aids the completion of long pending work and compliances, as the employees of the Company will have access to all physical records of the Company. The Head HR of the Company Mr. Mazhar Hussain vide his email dated 01.01.2021 accordingly communicated the said decision to the employees of the Company. However, Mr. Shiv Sharma (Admin In-Charge), DGM PCI Limited once again acting at the behest of Respondent Nos. 2 to 4 has issued an e-mail dated 02.01.2021 thereby curtailing the efforts of the ....
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....spondent No. 1 Company adopted the "Need Based Use" policy for functioning from the Premises. Specifically, Mr. Rajnish Kumar, one of the representatives of the Respondent No. 1 Company as per their request, was allowed to enter the Premises on 4.11.2020 to collect various documents while the complete building was closed due to Covid-19 related renovation work. h. Ever since the lockdown restrictions were eased by the Government, the Respondent No. 4 decided to take appropriate measures in the central air-conditioning system installed at Prime Tower to contain the spread of Covid-19 for the safety of all employees working in Prime Towers, which includes the Premises. The measures to be undertaken included upgradation work of its Heating, Ventilation and Air Conditioning System ('HVAC System'). Thus, restrictions were imposed on entering Prime Towers on account of these measures and not to create obstructions for the Petitioner/Applicant or the representatives of the Respondent No. 1 Company. i. Respondent No. 1 Company has already started functioning from the abovementioned premises since October 2020, evident from the Circular Resolution dated 23.09.2020 allegedly appr....
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....ith prior arrangement with the facility head of the Premises, Mr. Rajnish Kumar, who is employed as Respondent No. 1 Company's Company Secretary, visited Prime Tower to remove certain records and documents from the Premises. The following documents/files were removed: i. File of Share Transfer document; ii. Register of Members; iii. Statutory Register (Share transfer register); and iv. Share split Register. To this extent, Mr. Rajnish Kumar provided an acknowledgement to the security officers of Respondent No. 4 Company, thanking them for their cooperation. It is explained that on this day, 04.11.2020, Mr. Rajnish Kumar was provided full access to the Premises as per requirement of the Respondent No. 1 Company. The abovementioned documents were removed by Mr. Rajnish Kumar from his office almirah without any impediment from the Answering Respondents. r. No force was used by any person employed by Respondent No. 4 Company to restrain the representatives of Respondent No. 1 Company from entering Prime Towers or the Premises on 18.12.2020. There are "Boom Barriers" installed after the main gates of Prime Tower for security purposes to check the vehicles entering the sa....
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....ents being created by and at the behest of Respondent Nos. 2, 3 and 4 in the smooth functioning of the Company inter-alia by preventing the personnel of the Company from accessing the Company's corporate office in Prime Tower Plot No. 287-288 Udyog Vihar Phase II, Gurugram-122016 ("Prime Tower"), and the corporate and statutory records lying therein. It is clarified that the present Company Application filed by the Petitioner/Applicant is squarely "in relation to" the affairs of the Company. It has not been filed "on behalf of the Company, as was wrongly argued by the Respondent Nos. 2 to 8. The language of the Power of Attorney dated March 26, 2020 (authorising the Petitioner/Applicant's authorised representative to act on its behalf) is clear and unambiguous. 1. Further, the minority shareholders (Respondent Nos. 2 to 4) are misusing their ownership of the Prime Tower Building to harass and oppress the Petitioner/Applicant and Respondent No. 1 Company. The Company personnel as well as representatives of the Petitioner/Applicant have been specifically conferred the rights to access the corporate office premises under the AoA of Respondent No. 1 Company, more particularly....
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.... at pages 59 to 60 of the instant Company Application). At times, Respondent No. 4 PCI Limited has wrongly asserted nonpayment of rent despite the same having been set-off against amounts due from PCI to Respondent No. 1 PML while on other occasions, access has been denied under the garb of maintenance work being carried out at the Prime Tower premises. It is incomprehensible why Prime Tower has still not been able to meet the prescribed safety and sanitization measures for tackling the COVID-19 pandemic when offices across India including Delhi NCR are operational and more than 10 months have elapsed since the onset of the pandemic. In relation to the false allegations regarding non-payment of rent, it is relevant to mention that the Respondent No. 4 has already invoked the remedy of arbitration (as stipulated under the Agreement) and hence, ought not to be even taken into consideration by this Tribunal. Further, there is no merit in the submission made by Respondent Nos. 2 to 8 that the Petitioner/Applicant is attempting to enforce the Agreement by way of the present Application. At the expense of repetition, the Petitioner/Applicant respectfully submits that the incessant and ....
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....;ble National Company Law Appellate Tribunal ("NCLAT"). Both the Hon'ble NCLT and the Hon'ble NCLAT have passed several orders to safeguard the interests of the Company and the Petitioner/Applicant, however, the Respondent Nos. 2 to 4 and others at their behest unabashedly continue to obstruct the Company's operations to coerce the Petitioner/Applicant to succumb to their unlawful demands. Even after passage of various orders, the Respondent Nos. 2 to 4 by utilising their muscle power prevented duly appointed employees of the Company (including the HR-Head Mr. Mazhar Hussain and Company Secretary Mr. Rajnish Kumar) from entering the corporate office of the Company. Despite warnings and in clear abuse of the orders passed by the Hon'ble NCLT, the Respondent Nos. 2, 3 and 4 prevented the corporate and statutory records of the Company from being handed over to duly appointed Company employees, thereby hindering the Company's operations. It was only pursuant to the Hon'ble NCLAT's orders dated February 06, March 04 and 12, 2020, and the fear of being pulled up for contempt of court that the said employees were allowed to enter the office premises and records....
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....issions for ease of reference. 11. As is apparent from the above, the Respondent Nos. 2 to 4 have been systematically and repeatedly hindering the smooth functioning of the Company to serve their vested interests. At the behest of Respondent Nos. 2 to 4, Mr. Shiv Sharma (Admin in-charge) continues to further their unlawful objectives by harassing the Petitioner/Applicant and the Company. 12. Apart from the aforesaid, the Respondent Nos. 2 and 3 are obstructing (Annexure 14 (Colly.) at Pages 131-137 of the instant Company Application) shifting of PML's corporate office despite resolutions (Annexure 12 (Colly.) at Pages 80-83 of the instant Company Application) to that effect having been passed by the Board of Directors of the Company. Pertinently. Respondent Nos. 2 to 8 admit the said resolution and the authority delegated to the Managing Director of the Company to negotiate the terms of the lease deed with DLF. However, to block shifting of the Company's corporate office, the Respondent Nos. 2 and 3 also approached the officials of DLF Limited (i.e., the lessor of the alternate premises at Cyber City, Gurugram to which the Company intends to relocate its corporate office)....
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....dent No. 4 entered into a Service Facility Agreement ('the Agreement') in terms whereof the Respondent No. 4 licensed an area of 5892 sq. ft. out of the total leasable area of approx. 1.40 lac sq. ft. spread over 9 floors of the Premises for use by the Respondent No. 1. [Refer Annexure 1 at page 23-29 of the captioned Application] 17. Pertinently, the Agreement provides that the Respondent No. 1 would be allowed to use the Premises upon payment of the monthly service charges to Respondent No. 4. 18. The Respondent No. 1 has however failed and defaulted in payment of the monthly service charges from the month of October 2018, which is almost for 28 months with unpaid rent accumulating to over Rs. 2.90 Crore. The Respondent No. 1 is therefore in gross breach of its contractual obligations under the Agreement with Respondent No. 4. 19. In this regard, the Agreement specifically provides as under: "That if the service charges or any part thereof shall remain unpaid for more than one month after the same becomes due and payable, and in case of any breach of any one terms & conditions, the Licensee be adjudged insolvent, it shall be lawful for the Licensor notwithstanding an....
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....cessing the records therein: (ii) In case of any further obstructions being perpetrated by or at the behest of Respondent Nos. 2 to 4, direct for police assistance to prevent the Respondent Nos. 2 to 4 from continuing to block the entry of Company personnel into the corporate office at Prime Tower: and (iii) Pass such other or further order(s) or direction(s) as this Hon'ble Tribunal may deem just and proper in the prevailing facts and circumstances." 25. The above prayers and reliefs as per the captioned Application cannot be granted as the Petitioner/Applicant has no locus standi, either in law or under the contract, to prefer an application of such nature. The Petitioner has no right, title, or interest in the Premises, either in law or in contract whatsoever. The Petitioner/Applicant cannot, and in fact do not, claim any such right in the captioned Application. 26. Despite the fact that the Petitioner/Applicant is an alien/a third party outside the four corners of the Agreement, and that the right to use the Premises vests solely with the Respondent No. 1, the Petitioner/Applicant has surreptitiously filed the captioned Application in contravention of the basic princi....
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....Ors. - AIR 2012 SC 2753, that when a grievance made in the petition relates to breach of agreement between two members, since the same is not in the affairs of the company, CLB has no jurisdiction to deal with the matter. 33. The Petitioner/Applicant's claims of set off are not only absurd but also against the legal principles under the law of contract. The Code of Civil Procedure, under Order VIII, Rule 6 provides for the claim of set-off, exercised by one party against another, only if the following conditions, as enumerated within Order VIII Rule 6, are satisfied: a. That it must be a suit for recovery of money; b. That the amount sought to be set-off must be a certain sum; and c. The right of set-off exists not only in case of mutual debits and credits but also where cross-demands arise out of the same transaction. [Refer Jitendra Kumar Khan and Ors. vs. Peerless General Finance and Investment Company Ltd. and Ors. - (2013) 8 SCC 769]. 34. Applying the abovementioned principles to the present facts, the principle of set-off cannot be allowed since the debit notes have not been issued in respect of the same transaction. Under the Agreement neither the Respondent No....
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.... July 2020, in the matter of "Surinder Mehta & Ors. vs. Prime Meiden Limited and Ors.", Civil Appeal Nos. 2748/2020, directed this Tribunal to decide the main Petition, being Company Petition No. 369 (ND) of 2017 within 6 months. But the Petitioner/Applicant's act of filing such applications on false, frivolous, baseless, specious, and unsubstantiated grounds has significantly and intentionally delayed the hearings in the main Company Petition. The Applicant intends to misuse the judicial process and powers of this Hon'ble Tribunal to harass the Respondents by filing such baseless and meaningless Applications. This Tribunal should reject such frivolous Applications and proceed with the adjudication of the main Company Petition. 40. The Petitioner/Applicant have alleged that the Respondent Nos. 2 to 4 are using muscle power to prevent the entry of the Respondent No. 1's employees into Premises, which is blatantly false and baseless. The falsity of these claims can be substantiated through the CCTV footage from the cameras placed upon the gate of Prime Tower. 41. The Respondent Nos. 2 to 4 submit that if this claim of the Petitioner/Applicant had any credibility, they w....
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....ions which have to be observed, it will be hard to provide access to the Premises on such a short notice. c. On 18th December 2020, 10 days after Mr. Shiv Sharma's reply, an email was issued by the Respondent No. 1 stating that its Managing Director (Mr. Kazumi Ikarashi) will be visiting the Premises. Then, within 2 hours of the email, Mr. Kazumi Ikarashi presented himself at the gates of the Prime Tower. It is explained that the Wicket Gate was opened for him and he entered through it. The Boom Barriers which are situated immediately after main gate were closed. Resultantly, Mr. Kazumi Ikarashi stopped before the Boom Barrier and ascertained that Prime Tower was indeed closed. Then after 5 mins, Mr. Kazumi Ikarashi left Prime Tower. 44. The Petitioner/Applicant has wrongly alleged that physical force was used by Respondent Nos. 2 to 8. They never filed a police complaint. This in itself shows that the claims of use of physical force are baseless, frivolous, unsubstantiated and should be disregarded by this Tribunal. 45. We have heard the Ld. Counsels for both the parties and perused the averments made in the application, rejoinder and the written submissions filed by the r....
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....he same is quoted below: "That if the service charge or any part thereof shall remain unpaid for more than one month after the same becomes due and payable, and in case of any breach of any terms and conditions, the Licensee be adjusted insolvent, it shall be lawful for the licensor notwithstanding any earlier waiver in respect of the same to enter the said portion of space and immediately thereupon revoke this agreement without any prejudice to recover any due or claim antecedent of the terms and conditions herein contained". 51. Further, the term and condition is "That if the conditions mentioned herein before is violated by the Licensee, the Licensor shall have right to cancel this agreement and evict the Licensee provided that any such violation is not cured by the Licensee within one month of receipt of prior written notice from the licensor requiring the licensee to cure such violation". 52. Apart from these two conditions, there are other conditions also but since these two conditions are relevant to consider the submissions made on behalf of the parties, we have quoted only these two conditions herein above. 53. When we consider these two conditions together, we notice....
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.... be a suit for recovery of money and the amount sought to be set off must be a certain sum". 56. In the light of aforesaid decision and provision, we consider the contention of the applicant on the point of set off, and we are of the considered view that a defence of set off can be claimed by the defendant in a suit for the recovery of money and set off must be a certain sum but herein the case in hand, of course by filing the written submissions, the respondent claimed set off of the service charge but nowhere it is mentioned in the application that any suit for the recovery of money is pending in which the applicant has claimed set off. Of course, amount of claim is certain. Therefore, in our considered view the first condition is lacking. Hence defense of set off claim by the applicant is not liable to be accepted. 57. For the reason discussed above, we further notice that service charge for more than one month has become due and payable, therefore, it comes under the purview of breach of terms and conditions of the service facility agreement, on the basis of which, the respondent no. 1 company had/has been using the premises of respondent no. 4. Therefore, we agree with the s....
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....Ordered accordingly. In view of this, all the interim orders stand vacated." 60. In the light of the aforesaid decision, when we consider the case in hand, we notice that agreement was also subject matter of consideration in that proceeding too. Similarly, herein also the grievance is based on the agreement and the violation of that would be decided by the competent court and not under the proceeding under Section 241-242 of the Companies Act, 2013. 61. Arbitration Proceedings are also between the respondent no. 1 and 4 and the applicant is not a party to the same. 62. It is also true that the agreement was between the respondent no. 1 and 4. The applicant is of course the shareholder but since the dispute is in respect of the payment of rent on the basis of the said agreement which was entered between the respondent no. 1 and 4, we are of the considered view that the aggrieved person would be the respondent no. 1 and not the applicant, who is only the individual shareholder of the respondent no. 1 Company. 63. Since the applicant in its application has admitted that there is a rent dispute due to which this situation arose. Admittedly, while exercising powers under Section 241....