TaxTMI 
TaxTMI 
2022 (5) TMI 1366
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....9 & 20 of 2022 by inter alia seeking to pass an order of 'Interim Stay' of the impugned order dated 31.12.2021 in CP/114/KOB/2019, CP/119/KOB/2019 & CP/125/KOB/2019 passed by the 'National Company Law Tribunal', Kochi Bench (for short 'the Tribunal'). 2. The Ld. Sr. Counsel for the Appellants have stated that the full facts have been stated in the accompanying Company Appeal and seek to refer and rely upon the same for the purposes of this application. 3. The three Company Appeals are being considered, are of M/s.RBG Group Company which is an engaged in the business of commodity trading, warehousing, logistics, commodity broking & real estate. The first Appellant is the company and the 2nd Appellant is Rajkumar Gupta. The Respondent No.1 are 2nd Appellant's mother & 2nd Appellant's youngest sister-in-law who is the spouse of the 3rd Respondent, Mahesh Kumar Gupta, the youngest brother. The 3rd Appellant is Vishnukant Gupta, another brother of the 2nd Appellant. 4. It is not in dispute that all the parties in the present appeal were living together as a 'Hindu Undivided Family' (HUF) long back. There is a family understanding in writing on 15.09.2016 although not signed by ....
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....fore dealing with prima facie case. It was also stated by the Ld. Sr. Counsel for the Appellant that stay in all the three appeals are related to the impugned order and the matter is relating to the family members who are 'Shareholders' and 'Directors' of the company. 8. Ld. Sr. Counsel for the Appellant has also submitted that the Company has not violated the AoA and have conducted the AGM and accordingly have filed the reports and statements with the RoC and the same are in public domain. The impugned order has not given any finding or quantification for such siphoning off funds. The Ld. Sr. Counsel for the Appellant further stated that the related party transactions were purely commercial transactions and were at arm's length and hence Section 188 of the Act is not applicable and moreover there is a notification dated 05.06.2015 vide Notification No.464E of MCA, the private company has got the exemption from complying with the provisions related to the related party transactions by the private company. For brevity and clarity, the same is depicted below: 9. It was also stated by the Ld. Sr. Counsel for the Appellant that the Tribunal has failed to consider the proviso to S....
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....ing Corporation Pvt Ltd. 51.- It is evident from the records that there are various transactions between Ritu Gupta (wife of Respondent No. 2) and Anika Gupta (wife of Respondent No. 3). This was done without the consent of the Board of Directors of the Respondent Company. 52. A company typically enters into various transactions with different parties, including related parties. Any contract or arrangement with the related party(ies) falls within the ambit of Section 188 of the Act, if it relates to, inter alia, the sale, purchase or supply of goods or materials; selling, buying or leasing property of any kind; and availing or rendering any services beyond the ordinary course of business or as an arm's length transaction. 53. When a company enters into a related party transaction, covered under Section 188 of the act, this requires the consent of the company's Board of directors. Also, if such a transaction exceeds the monetary thresholds prescribed under Rule 15(3) of the Companies (Meeting of Board and its Powers) Rules, 2014, approval of the shareholders will also be required by way of an ordinary resolution. Such consent can be obtained prior ....
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....ough this means they were enriching themselves instead of serving the interest of the Company. They have also stated that the Tribunal has concluded that the petition was maintainable, allowed holding of AGM for the said three years and established related party transactions in violation of the Act and accordingly have granted relief in accordance with the provisions of Section 242 of the Act. 14. The Ld. Sr. Counsel for the Respondent has stated that the Directors have ipso jure vacated their office w.e.f. 31.12.2021 under Section 167(1)(c) of the Act and are accordingly disqualified to be the Directors in any company. They have also stated that the Review Application of 16.03.2022 was in continuation in the earlier impugned order. It is a settled law that no party should be allowed to approbate and reprobate in a matter. (Premlata alia Sunita Vs. Naseeb Bee & Ors. 2022 SCC Online SC 351. They have also stated that the 2nd & 3rd Appellant are guilty of suppressing important event that have occurred after 31.12.2021 in the Appeal. It is also stated by Ld. Counsel for the Respondent that the same 2nd and 3rd Appellant challenged the Review Application before the Hon'ble Kerala Hi....
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....nd hence consequential action is to follow. Similarly, on holding 'Annual General Meeting' cannot be stayed by this Appellate Tribunal as it is a routine business activity. f) At this juncture, we are not in a position to recast the AoA of the 1st Appellant Company in line with the MOU which has not been signed by all the required signatory to the MOU who are members of the Company. The Notification No. 464(E) of MCA dated 05.06.2016 is extracted below for brevity and clarity: g) This notification provides for subject to certain exceptions, modifications and adaptation which are enumerated therein limited to non-application of second proviso to sub-section(1) of Section 188 which is a matter of examining a full case and thereafter, to consider whether the interest of the shareholders are protected or not. h) All the above suggests that it is not a fit case to consider interim relief for grant of stay when the matter even travelled to the Hon'ble High Court of Kerala upto its Division Bench and effect of stay of the impugned order dated 31.12.2021 will cause irreparable harm to the Company and accordingly we are of the view that the case is not a fit case ....
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....ly Provided that notwithstanding anything contained in this sub- clause and sub-section (2) of this section, in case ninety per cent of the members of a private company have given their consent in writing or in electronic mode, the periods lesser than those specified is the said sub-clause or sub-section shall apply. subs clause for the words "special resolution", the words "endinary resolution" shall be substituted Chapter V, clause (a) to (4) of sub-section (2) of section 73. Shall not apply to private companies (a) in whose shore capital no other body corporate has invested asy money the borrowings of such a company from banks or fancial institutions or any body corporate is less than twice its paid up share capital or fifty crore rupes, whichever is lower, (c) such a company is not in default in repayment of such howings subsiding at the time of making transactions under this section Shall not apply to a private company which accepts from its members monies not exceeding one hundred per cent of aggregate of the paid up share capital and free reserves, and Document 3 7. 9. Chapter VII, THE GAZETTE OF IN....
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....n exercise of the powers coeformed by clauses (a) and (b) of sab-section (1) of section 462 and in pursuance of sub-section (2) of said section of the Companies Act, 2013 (18 of 2013), the Central Government, in the interest of public, hereby directs that certain provisions of the Companies Act 2013, as specified in column (2) of the Table, shall not apply or shall apply with such exceptions modifications and adaptations, as specified in cola de said Table, to a private company, namely Serial number (1) L 2 Chapter Section number Sub-section(s) in the Companies Act, 2013 02) Exception/Modifications/Adapt (3) Chapter 1, sab-clause (vis) of Shall act apply with respect to section 188. clause (76) of section 2. Chapter IV, section 43 and Shall not apply where memorandum or articles of action of section 47. the private company so provides Chapter IV, sab-clause (i) of classe (a) of sub-section (1) and sub-section (2) of sectio 62. Chapter IV, clause (b) of section (1) of section 62. Chapter IV, section 67. Shall apply with following modifications- In clause (x), in sub-clause (i), the following promi....