TaxTMI 
TaxTMI 
2021 (10) TMI 248
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....bly prayed that this Hon'ble Court may graciously be pleased to: (i) Issue a writ in the nature of "certiorari", mandamus" or any other writ(s), order(s)/ direction(s) quashing the proceeding in C.P.No.11/CB/2021 pending before the NCLT, Cuttack; (ii) Pass as such other or further order as this Hon'ble Court may deem fit and proper. And for such act of kindness, the petitioners as in duty bound shall ever pray." 3. Similarly, prayer made in W.P.(C). No.23128 of 2021 reads as follows: "It is, therefore, most humbly prayed that this Hon'ble Court may graciously be pleased to: i) Issue a writ in the nature of "certiorari", mandamus" or any other writ(s), order(s)/ direction(s) quashing the proceeding in C.P.No.11/CB/2021 pending before the NCLT, Cuttack; ii) pass as such other or further order as this Hon'ble Court may deem fit and proper. And for such act of kindness, the petitioners as in duty bound shall ever pray." Through both the writ petitions it is again observed that there is almost a common relief sought for. 4. Common background involved in both the cases is that both the cases appear to be aimin....
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....Company or intermeddling with the affairs of the Company or from operating the bank accounts of the Company in any form or manner whatsoever; (g) The Petitioners be permitted to solely and exclusively operate the bank accounts of the company; (h) Mandatory injunction upon the respondents to forthwith disclose upon oath books, records and accounts of the company; (i) Quash the election process held in pursuance to the Executive Committee dated 14.01.2021 for holding the election on and from 20.01.2021 to 22.01.2021, as well as the subsequent resolution passed, in consequence to the same; (j) Declare as illegal all such decisions taken by the Executive Committee against the interests of the Company; (k) A Special Officer/Administrator be appointed to take charge and custody of any records or accounts of the Company that may presently be in the custody of the Respondents and to make over the same to the Petitioners and ex-Directors consisting the Board of Directors as on 12.01.2021; (l) Direct an enquiry into the affairs of the Company as regarding the decisions taken by the Respondents for the acts of mismanagement and oppression;....
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....f the O.P.-1 & 2. C) For that Section 241 and 242 only concern with the issue of Oppression of mismanagement by majority share holders against the minority share holders. Here is a company having no share holder and hence, the question of majority or minority do not arise. The facts. issue, as alleged in the Company Petition by the OP.-1 & 2 do not pertain to any oppression or mismanagement by the majority against any minority./ No financial irregularity was ever noticed or agitated upon in any forum speaks of smooth running of the organization. D) For that entire allegations in the Company Petition pertain to the power/ jurisdiction/ authorities/ duties/ functions of directors, Executive Committee and office bearers, election, suspension of members, retirement of office bearers and directorial issues accordingly fall beyond the scope of Section 241 and 242 of the Company's Act, 203; E) For that the AGM/adjourned AGM, EC, Meeting, Directors Meeting and election of the petitioner Company are direct out come of the order in I.A. No.1 of 2020 in C.S.No.1182 of 2020 and cannot be questioned before NCLT, Cuttack,. Except the statutory appeal; F) For t....
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.... under the provisions of Section 241 and 242 of the Companies Act, 2013. It is further contended that for the clear provision in Sections 241 and 242 of the Companies Act, 2013 concerning with the issue of oppression and mismanagement by a majority share-holder against the minority shareholder, for the Company involved having no share-holder, it is claimed that there is no question of majority or minority. It is thus alleged that the Company Act Proceeding did not involve any oppression or mismanagement by the majority against any minority. Mr.Swain, learned counsel, therefore, contended that the entire allegation in the Company Petition is curtail to the power/ jurisdiction, authorities/ duties/ functioning of directors, Executive Committee and Office Bearers, election, suspension of members, retirement of Office Bearers and directorial issues, which undoubtedly fall beyond the scope of Section 241 and 241 of the Companies Act, 2013. Mr.Swain, learned counsel also pointed out that the AGM,/ adjourned AGM, E.C. Meeting, Directors Meeting and election of the petitioner Company are the direct outcome of the order in I.A.No.1 of 2020 arising out of Civil Suit No.1182 of 2020, which ca....
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..... Mr. M.K. Mishra, learned Senior Advocate being assisted by Mr. L. Mishra, learned counsel and Mr. S. Acharya, learned counsel for the contesting Opposite Party Nos.1 & 2 in both the writ petitions giving a common response involving both the writ petitions contended that the two Petitioners in the writ petition bearing W.P.(C) No.12645 of 2021 being elected as the Executive Members of the Company i.e. M/s. Utkal Chamber of Commerce and Industries Ltd. having no authorization on behalf of the Company to pursue such remedy, are not competent to pursue such litigation. Further, so far as the other writ petition bearing No.23128 of 2021 is concerned, Mr. Mishra, learned Senior Advocate contended that the person filing the writ petition one Brahmananda Mishra claiming to be the President of the Company has also no authorization of the Board of Directors of the Company to undertake such exercise. It is, in the premises, Mr. Mishra, learned Senior Advocate submitted that the authorization to pursue such litigation on behalf of the Company since is a mandatory requirement and in absence of such authorization as well as also required resolution of the Company, the W.P.(C) No.23128 of 2021 ....
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....d Senior Advocate contended that there is complete distinction between both the disputes aiming for completely different outcome. On reading both the plaints involving the civil suit and the Company Petition under the Act, 2013, Mr. Mishra, learned Senior Advocate attempted to demonstrate his contention through the same that there is clear distinction between both the proceedings and submitted that there is no overlapping and/or overstepping of one proceeding over the other. Further, on the submission of Mr. Swain, learned counsel that for the dispute already involved in the civil suit and the issue raised in the Company proceeding since are available to be considered in the Company Petition by the "NCLT", Mr. Mishra, learned Senior Advocate here in clear objection to the submission of Mr. Swain, learned counsel, contended that not only there is factual difference, but for the difference in the claim in both the proceedings, it is wrong to claim that for pendency of the civil suit, the proceeding under the Act, 2013 is not maintainable. Mr. Mishra, learned Senior Advocate further taking this Court to the plea and the relief sought, argued that for the dispute involving the Company ....
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....Shukla, who described himself as the Chief Executive Officer of the company, was nothing but a scrap of paper because no resolution was passed by the Board of Directors delegating its powers to Shri Raj K. Shukla to authorize another person to file a suit on behalf of the Company. 15. In the result, the appeal is allowed, the impugned judgment is set aside and the one passed by the trial court dismissing the suit of the respondent is restored. The appellant shall be free to withdraw the amount deposited by it in the trial court in terms of this Court's order dated 24.07.2009. Since the respondent has not appeared to contest the appeal, the costs are made easy." 11. In another case decided by a Division Bench of this Court, in the case of Eimco Elecon (India) Ltd. (supra), this Court finds, in deciding similar issue the Division Bench of this Court in paragraph nos.6 & 7 has come to hold as follows: "6. This writ petition has been filed by a company being represented by its sales manager on the basis of a power of attorney given by the director. The board of directors of the petitioner-company passed a resolution authorizing the director to represent the company....
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....3, this Court here takes note of both the above provisions, which read as follows: Section 241. Application to Tribunal for relief in cases of oppression, etc. - (1) Any member of a company who complains that - (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or (b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the Company's share, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interest or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under section 244, for....
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.... therein. It is, at this stage of the matter, this Court going through the provision at the Companies Act, 2013 and on reading through the company petition appended to W.P.(C) No. 12645 of 2021 at Annexure-8 and on reading through the document at page 146 therein finds, the Petitioner has the following : "The concerned members of the Executive Committee in connivance with the respondent No.2 (Ex-President) deliberately did not amend the Articles of Association to bring it in compliance with the Companies Act, even though the Executive Committee has the power to amend the same." Similarly on reading of the document at page 148 internal page 27 this Court finds as follows "Election held during 20.01.2021 to 22.01.2021 is not as per the Articles of Association nor as per the Companies Act, 2013 and thus the result of the said Election is void-ab-Initio." Further in paragraph Nos.64, 66 & 69 of the C.P. proceeding, this Court finds as follows: "64. That without prejudice to the aforesaid, it is pertinent to mention herein that as per the Section 179 (4) r/w Section 180 of the Companies Act, 2013 even the Board of Directors of a Company have restrictions....
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....ex Court in the case of Shashi Prakash Khemka (Dead) through Legal representatives and another Vrs. NEPC MICON (Now NEPC India Limited) and others reported in (2019) 18 SCC 569, in which case the Hon'ble Apex Court in paragraph nos.4, 5, 6 & 7 has observed and held as follows: "4. The learned counsel for the appellants has drawn our attention to the view expressed in Ammonia Supplies Corpn. (P) Ltd. V. Modern Plastic Containers (P) Ltd., to canvass the proposition that while examining the scope of Section 155 (the predecessor to Section 111), a view was taken that the power was fairly wide, but in case of a serious dispute as to title, the matter could be relegated to a civil suit. The submission of the learned counsel is that the subsequent legal developments to the impugned order have a direct effect on the present case as the Companies Act, 2013 has been amended which provides for the power of rectification of the Register under Section 59 of the said Act. 5. The learned counsel has also drawn our attention to Section 430 of the Act, which reads as under: "430. Civil court not to have jurisdiction. - No civil court shall have jurisdiction to entertain ....