TaxTMI 
TaxTMI 
2024 (8) TMI 1414
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....tes for R2. JUDGMENT ASHOK BHUSHAN, J. This Appeal has been filed challenging order dated 31.12.2019 passed by National Company Law Tribunal, Mumbai Bench in MA 1449 of 2019 in CP No. 47/NCLT/MB/MAH/2016 ("CP No. 47 of 2016") by which order, Application MA No. 1449 of 2019 filed by the Appellant in Company Petition No. 47 of 2016 has been dismissed. The Appellant aggrieved by the order has come up in this Appeal. 2. Background facts and sequence of events necessary to be noted for deciding this Appeal are: (i) The parties shall be referred herein with their first name. Pralhad P. Chhabria (hereinafter referred to as "Pralhad") came to India from Karachi in the year 1945. His brother Kishan P. Chhabria ("Kishan") joined him after two years. They entered into the business of manufacturing of cable and pipes fittings. (ii) The Appellant No. 1 - Deepak K. Chhabria ("Deepak") is son of Kishan and Appellant No. 2 - Vini Chhabria ("Vini") is wife of Deepak. Respondent No. 1 is Private Limited Company of Chhabria family. Respondent No. 2 in the Appeal, Prakash Pralhad Chhabria is son of Pralhad. Respondent No. 5 - Aruna Katara is daughter of Pralhad. Responden....
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....ares of Orbit each held by him to Prakash and Aruna, son and daughter of Pralhad. On 15.03.2012, Pralhad also transferred 10 shares of Orbit to PC Trust. On 20.08.2012, a Supplementary Trust Deed was executed. (vii) On 28.08.2012, Orbit passed a Board Resolution introducing Article 59 in Articles of Association (hereinafter referred to as "Ao A"), which stipulates authority to represent the Orbit after Pralhad ceases to be Director in various Finolex Group Companies. (viii) On 15.10.014, Pralhad executed a 'WILL'. The WILL contained arrangement of the family and also contemplated that all the properties will be bequeathed to the respective persons stated in the WILL, if and only they are not disposed of by Pralhad till his death and Pralhad continue to own them as on date of the WILL. In event Pralhad dispose of any of the properties before his death, the concerned legatee will not claim or have any right in respect of such property or on its sale proceeds. (ix) A Notice dated 26.03.2016 was received by Deepak regarding holding of Board Meeting of Respondent No. 1 on 31.03.2016. (x) On 28.03.2016, Pralhad executed a Gift Deed, gifting 100,300 sha....
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....the Plaintiff sought injunction against Defendant Nos. 1 to 3 from jointly and/or severally through Defendant No. 3 abstaining from voting or voting in any manner against re-appointment of Deepak as Executive Chairman of FCL. The Civil Judge, Sr. Division vide order dated 19.09.2018, rejected the interim injunction Application filed by Plaintiff - Deepak. Against the order dated 19.09.2018, rejecting the interim relief, Deepak filed an Appeal before the Bombay High Court. Bombay High Court vide its order dated 21.09.2018, held that 'let the Board Meeting take place on 22nd September, 2018 and it would be subject to the decision of this appeal'. (xx) AGM of Respondent No. 1 took place on 22.09.2018. The Board passed Resolution that Orbit would vote against Deepak's re- appointment at FCL's AGM, which is to be held on 25.09.2018. Deepak, despite the Board Resolution of Orbit to vote against re-appointment of Deepak as Executive Chairman of the FCL, voted in favour of re-appointment as Executive Chairman of FCL, despite Orbit i.e. a 30.7% shareholder of FCL. After the above requisition was given by Prakash, who is a shareholder, holding 74.52% of Orbit's equity share to requi....
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....een filed under Section 421 of the Companies Act, 2013. 3. In this Appeal pleadings were completed and order was reserved on 21.09.2023. While reserving the judgment, the earlier Bench directed the parties to maintain Status Quo as was available prior to EOGM dated 03.05.2019 till the judgment is delivered by the Tribunal. Against the order dated 21.09.2023, Civil Appeal No. 6108 of 2023 was filed by Respondent No. 1 - Orbit Electricals Pvt. Ltd. AGM of FCL was to take place on 29.09.2023, the Hon'ble Supreme Court vide its order dated 26.09.2023 vacated the interim order passed by this Tribunal while reserving the judgment on 21.09.2023. The Hon'ble Supreme Court noticed in the order dated 26.09.2023 that any action, which is to be taken on proposed Resolution No. 4 pertaining to the appointment of the Executive Chairman of FCL in the AGM, shall be subject to the outcome of the Appeal which is pending before this Tribunal. After 26.09.2023 order of the Hon'ble Supreme Court, the AGM of FCL took place on 29.09.2023 and voting was concluded, but the Scrutinizer, who has to submit a Report on e-voting conducted on 29.09.2023, did not declare the result. In Civil Appeal No. 6108 of....
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....roceedings was disposed of. 5. It was after the order of the Hon'ble Supreme Court dated 30.10.2023, this Appeal has been listed before this Bench for hearing. The hearing of the Appeal was fixed in post lunch sessions from 29.07.2023 to 02.08.2024. Hearing was completed on 02.08.2024, on which date judgment was reserved. 6. We have heard Shri Ramji Srinivasan, learned Senior Counsel appearing for the Appellants; Shri Janak Dwarkadas, learned Senior Counsel appearing for Respondent No. 1; and Shri S.N. Mukherjee, learned Senior Counsel appearing for Respondent No. 2. 7. Shri Ramji Srinivasan, learned Senior Counsel submits that Board Meeting dated 31.03.2016, in which it is clamed that 100,300 shares were transferred by Pralhad in favour of his son Prakash was never held. It is submitted that no Agenda Item for the Board meeting dated 31.03.2016 was received by the Appellant, which would have contained any Agenda Item pertaining to transfer of shares by Pralhad in favour of Prakash. It is submitted that as per AoA, no member of Pralhad family or Kishan family can transfer any shares without notice to the Board. It is submitted that the Appellant - Deepak went to the venue ....
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....n therein has no bearing on Company Petition No. 47 of 2016, which was filed for oppression and mismanagement and the reliance of Adjudicating Authority in the impugned order, on the order passed in the Civil Suit has no bearing. The observation of the Adjudicating Authority that transfer of shares in favour of Prakash was duly approved, is not in accordance with law. Transfer of shares is not in accordance with AoA. The Adjudicating Authority also failed to consider that Articles 59 and 60 could not have been amended. The observation of the Adjudicating Authority that there is no evidence to establish that Articles 59 and 60 are entrenched Articles is erroneous. The said amendments were carried by Pralhad in the Meeting headed by Pralhad himself, who amended the Articles to bring the same in accord with Section 5, sub-section (4) of the Companies Act, which Resolution was passed on 30.09.2014 unanimously by all the Members present. The Adjudicating Authority also committed error in holding that since, only because Resolution on 03.05.2019 was passed by majority of Members, who have attended the Meeting, the same is in accordance with law based on the norms of corporate democracy. ....
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....side and the Appeal be allowed. 8. Shri Janak Dwarkadas, learned Senior Counsel appearing for Respondent No. 1 contends that the submission of the Appellant that there was any family arrangement between the two Groups, i.e., Pralhad Group and Kishan Group that their shareholding has to be equal, is wholly incorrect. There was neither any understanding or family arrangement that both Group should have equal shareholding. Shri Janak Dwarkadas has referred to letters, which were written by Kishan to Pralhad, claiming that KPC family should get 50% benefit, which letters were immediately replied by Pralhad claiming on 21.07.2011 and 08.08.2011 denying any such existence of any family arrangement. It is submitted that the correspondence between Kishan and Pralhad are part of the pleadings in the suit No. 1418 of 2016, which has been filed by Deepak himself. It is submitted that MoU dated 11.10.2011 relied by the Appellant in no manner helps the Appellant in the present case. The MoU was executed on behalf of FCL by Deepak and by Prakash on behalf of FIL and at the time of execution of MoU, Deepak has only 0.06% shareholding in FCL and Prakash has 0.12% shares. Both FCL and FIL are no....
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....e-appointment. However, contrary to the Board's Resolution, Deepak has proceeded to vote in favour of himself for re-appointment as Executive Chairman in FCL and succeeded his re-appointment for five years from 01.07.2018 to 30.062023. The decision of Board, is a decision of Board of Respondent No. 1. When the Board has resolved that Deepak should vote against re-appointment, Deepak had no jurisdiction to vote in favour of his re-appointment. Deepak has erroneously perpetuate his position in FCL, despite Orbit 30.7% shareholder not wanting him to remain its whole time Director/ Executive Chairman. The requisition Notice was given by Prakash, who was holding 74.52% of Orbit equity shares, to convene an EOGM to amend the Article 59 and delete Article 60. Notice of the EOGM was issued on 09.04.2019, which was challenged by MA No. 1449 of 2019. EOGM was convened on 03.05.2019 where two special business Resolutions were passed with requisite majority for amendment of Article 59 and deletion of Article 60. 9. Shri S. N. Mukherjee, learned Senior Counsel appearing for Respondent No. 2 has advanced submissions with regard to amendment of AoA as was approved on 03.05.2019. Shri Mukherjee....
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.... in the Appeal and the scope of the Appeal. In the Appeal, following reliefs have been prayed: "(a) Set aside the Impugned Order dated 31st December 2019; (b) To pass necessary orders and/or directions to stay the implementation of resolutions purportedly passed at the EoGM dated 3rd May 2019, till the final hearing of the Company Petition, and also the votes cast contrary to the provisions of Article 59 and in furtherance of the resolution passed by the Board of Respondent No. 1 on 14th September 2019, at the AGM of FCL; (c) Interim and ad-interim reliefs in respect of prayers clauses (a) to (b) here in above; (d) Any other appropriate order(s) as this Hon'ble Appellate Tribunal deems fit and proper, to protect the interests of Appellants and in the interest of justice, equity and good conscience." 12. From the prayers made in the Appeal, it is clear that the Appellant prayed to set aside order dated 31.12.2019 and to stay the implementation of the Resolution passed in EOGM dated 03.05.2019 till the final hearing of the Company Petition. The Adjudicating Authority in the impugned order has also observed that MA No. 1449 of 2019 has a limited ....
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....with regard to reappointment of Deepak as Executive Chairman of the FCL need to be interfered with in this Appeal? (VI) The relief, if any, to which the Appellant is entitled to in this Appeal? Question No.(I) 15. The subject matter of the Appeal is the Resolution passed in EOGM of Respondent No. 1 held on 03.05.2019. IA No. 1449 of 2019 was filed by the Appellant before the NCLT on 12.04.2019 after the Notice dated 09.04.2019 was issued convening the AGM of the Orbit Electricals Pvt. Ltd. on 03.05.2019. Before we come to the Notice dated 09.04.2019 and the Resolution taken on 03.05.2019, it is useful to notice the prayers made in IA No. 1449 of 2019 by the Applicant, which are as follows: "a) That this Hon'ble Tribunal be pleased to pass necessary orders or direction to restrain the Respondents from acting in furtherance to the Requisition Notice dated 18th March 2019 issued by Respondent No. 2. the illegal Board Resolution passed on 3rd April 2019 and the Notice dated 9th April, 2019 calling for Extra-ordinary General Meeting of Respondent No. 1; b) That this Hon'ble Tribunal be pleased to pass necessary orders or directions deferrin....
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....d the Petition shall be heard on 07.05.2019 at 10.30 AM. To be placed FIRST ON BOARD." 17. A Notice for EOGM of Orbit Electricals was issued on 09.04.2019, where under Special Business, Item No. 1 and Item No. 2 mentions following: "SPECIAL BUSINESS: Item No. 1 Amendment of Article 59 of the Articles of Association of the Company To consider, and, if thought fit, to pass the following resolution(s) as a Special Resolution: "RESOLVED THAT pursuant to the provisions of Sections 5, 14 and other applicable provisions, if any, of the Companies Act, 2013, including any statutory modification or re- enactment thereof for the time being in force and Rules framed there under, as amended from time to time, the existing Article 59 of the Company's Articles of Association be and is hereby amended to delete the existing Article 59 and to substitute the following Article 59 in place thereof: *59. The Board of Directors shell: (a) if it is a member of a company within the meaning of this Act, by resolution of its Board of Directors, authorize such person as it thinks fit to act as its representative at any meeting of the compan....
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....n, Including agreeing the Registrar of Companies and /or any statutory/regulatory authority, or to authorise any official of the company to give effect to the foregoing resolution."" 18. Article 59 was introduced by Minutes of the Meeting of the Board of Directors by Resolution dated 28.09.2012, where one of the Agenda Item No. 3 was "to consider the approve alterations in Articles of Association of the Company". Under Item No. 3, where the Chairman informed the Board that in order to make appropriate regulations to enable the smooth functioning of the Company, it was proposed to amend Articles of Association of the Company. At Item No. 3, following was recorded: "3. The Chairman informed the Board that in order to make appropriate regulations to enable the smooth functioning of the Company it was proposed to amend Articles of Association of the Company. "RESOLVED THAT pursuant to Section 31 and other applicable provisions, if any, of the Companies Act, 1956, or subject to such modification and re-enactment thereof and subject to the approval of shareholders in General Meeting, new set of Articles of Association as tabled before the Meeting be and is hereby rea....
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....the following resolution as an Special Resolution: "RESOLVED THAT subject to the provisions of section 203, Articles of Association of the Company and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification or re- enactment thereof) subject to the consent of the Members in General Meeting Ms. Aruna Mukesh Katara (DIN: 00043607) be and is hereby appointed as Vice-Chairman of the Company not liable to retire by rotation and without any monetary remuneration from the Company." 4. To consider and, if thought fit, to pass, with or without modification, the following resolution as a Special Resolution: "RESOLVED THAT pursuant to Section 14 and other applicable provisions, if any, of the Companies Act, 2013 including any statutory modification or re-enactment thereof for the time being in force, and Rules made thereunder and subject to necessary statutory approvals and modifications if any consent of the members be and is hereby accorded to alter the regulations contained in the existing Articles of Association by incorporating the new regulations in line with the applicable provisions o....
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....ought on the Appeal are as follows: "MINUTES OF THE ANNUAL GENERAL MEETING OF ORBIT ELECTRICALS PRIVATE LIMITED HELD AT THE REGISTERED OFFICE OF THE COMPANY AT 'HARMONY' 5, ICS COLONY, GANESHKHIND ROAD, PUNE 411 007 ON TUESDAY THE SEPTEMBER 30, 2014 AT 4.00 P.M. MEMBERS PRESENT: Mr. Pralhad P. Chhabria Member of Authorised Representative of Pralhad Chhabria Trust Ms. Aruna Kumesh Katara Member Mr. Deepak Kishan Chhabria Member Ms. Vini Deepak Chhabria Member The required quorum being present, the proceedings of the Meeting were commenced. Mr. P. P. Chhabria, Chairman took the chair. 1. The Notice convening the meeting was taken as read with the consent of the members. 2. The Auditor's Report was read out in the Meeting. 3. The Chairman then placed for the consideration of the meeting the adoption of Directors' Report and Audited Accounts for the year ended March 31, 2014 along with the Auditors' Report thereon. The Chairman briefly described the financial performance of the Company and invited comments/ queries, if any, from the members on the accounts. As no member had any query, Mr.....
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....iation of the Company to bring it in Consonance with the provisions of Companies Act, 2013 and the Rules made thereunder as notified by the Ministry of Corporate Affairs. In terms of Section 14 and other applicable provisions of the Companies Act, 2013, it requires approval of members of the Company by Special Resolution, the following resolution was proposed by Mr. P.P Chhabria, and seconded by Mr. Deepak Kishan Chhabria Katara, which when put to vote was passed unanimously. "RESOLVED THAT pursuant to Section 14 and other applicable provisions, if any, of the Companies Act, 2013 including any statutory modification or re-enactment thereof for the time being in force, and Rules made thereunder and subject to necessary statutory approvals and modifications if any consent of the members be and is hereby accorded to alter the regulations contained in the existing Articles of Association by incorporating the new regulations in line with the applicable provisions of Companies Act, 2013 and the Rules made there under and accordingly to adopt the new regulations in the Articles of Association as per the amended Articles of Association." "AND RESOLVED FURTHER THAT any of ....
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....ociation of Orbit Electricals Pvt. Ltd. approved by the Company in its General Meeting heled on September 8, 2012 and as altered and amended in general meeting held on November 23, 2013 and as further altered and amended in general meeting held on September 30, 2014, shall hereinafter not be amended through alteration, addition or deletion of any clauses herein, during the life of 60 years of the Pralhad Chhabria Trust or any further extension of 60 years or such longer period as may be permitted under the laws then prevailing in the country. For this purpose, the present Chairman of the Company, Mr. Pralhad Parsram Chhabria, has deposited copy of the Memorandum of Association and Articles of Association duly signed/ initialed by him in original and as updated from time to time, for identification with four members of the Company i.e. Mr. Prakash P. Chhabria, Mr. Deepak K. Chhabria, Mr. Vijay K. Chhabria and Mrs. Aruna M. Katara." 25. The first question, which needs to be considered as to whether by Resolution dated 30.09.2014, Articles 59 and 60 shall be considered as entrenched Articles within the meaning of Companies Act under Section 4, sub-section (4). 26. In Co....
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....any". Thus, AoA can be treated to be entrenched Article when it is agreed to by all the Members of the Company. The key question to be answered is as to whether Resolution dated 30.09.2014, which is claimed to be Resolution for amending the Articles of Association, shall be the decision agreed by all the Member of the Company. The Notice of the Meeting though 03.09.2014 was issued to all the shareholders and at the time of issuance of Notice on 03.09.2014, there were thirteen Members. When we look into the Minutes of the AGM held on 30.09.2014, it is clear that there were only four Members present including Pralhad P. Chhabria, Aruna Mukesh Katara, Deepak Kishan Chhabria and Vini Deeapk Chhabria. The Resolution passed on 30.09.2014, cannot be said to be a Resolution, which was agreed to by all the Members of the Company. In the Meeting held on 30.09.2014, neither Prakash, nor Vijay the brother of Deepak were present. Thus, the Resolution dated 30.09.2014, cannot be said to be agreed to by all the Members of the Company. Hence, the statutory requirement to treat the Articles as entrenched Articles cannot be accepted. The statutory scheme of Section 5, sub-section (4) provides that a....
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....istered Office of the Company at 'Harmony, 5, ICS Colony, Ganeshkhind Road, Pune 411 007 on 3rd May, 2019, Friday, at 11:00 am to transact the following business: SPECIAL BUSINESS: Item No. 1 Amendment of Article 59 of the Articles of Association of the Company To consider, and, if thought fit, to pass the following resolution(s) as a Special Resolution: "RESOLVED THAT pursuant to the provisions of Sections 5, 14 and other applicable provisions, if any, of the Companies Act, 2013, including any statutory modification or re-enactment thereof for the time being in force and Rules framed there under, as amended from time to time, the existing Article 59 of the Company's Articles of Association be and is hereby amended to delete the existing Article 59 and to substitute the following Article 59 in place thereof: "59. The Board of Directors shall: (a) if it is a member of a company within the meaning of this Act, by resolution of its Board of Directors, authorize such person as it thinks fit to act as its representative at any meeting of the company, or at any meeting of any class of members of the company in which t....
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....statutory / regulatory authority, or to authorise any official of the company to give effect to the foregoing resolution."" 31. It is also relevant to notice the Statement pursuant to Section 102 of the Companies Act, 2013 with regard to Special Business at Item No. 1 and 2. The Statement pursuant to Section 102 of the Companies Act, 2013 at Item No. 1 after quoting the existing Article 59, at sub-item (ii), following was stated: "(ii) At a meeting of the Board of Directors of the company held on 22nd September 2018, the Board of Directors, in respect of its shareholding in Finolex Cables Limited resolved and authorized Mr. Deepak K. Chhabria to act as a representative of the Company at the 50th Annual General Meeting of the shareholders of Finolex Cables Limited to be held on September 25th, 2018 or any adjournment thereof and to attend and vote for and on behalf of the Company at the said Annual General Meeting or any adjournment thereof and to exercise all the rights and powers of a member on behalf of the Company in the same manner as the Company would exercise them if it were an individual member, in the manner set out below on each resolution placed at the said An....
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.... Company to continue to purchase optical fibre from Corning Finolex Optical Fibre Private Limited, being related Party Transaction(s). For Mr. Deepak K. Chhabria, however, did not follow all the instructions given by the Board of Directors and voted against the instructions in respect to some of the resolutions." 32. The aforesaid clearly notices that Board Resolution was against reappointment of Deepak K. Chhabria as Executive Chairman of the Company, however, Deepak did not follow the instructions of the Board and voted against the instructions. With regard to Item No.2, following is the Statement: "Item No. 2 DELETION OF ARTICLE 60 OF THE ARTICLES OF ASSOCIATION OF THE COMPANY: (xiv) Article 60 inter alia provides that the Memorandum of Association and Articles of Association of the company as approved in the latest general meeting held on September 30, 2014, shall hereafter not be amended through alteration, addition or deletion of any clauses herein, during the life of 60 years of the Pralhad Chhabria Trust or any further extension of 60 years or such longer period as may be permitted under the laws then prevailing in the country. ....
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....the requisition of Mr. Prakash P. Chhabria, who holds 74.52% of the paid-up share capital of the Company, held on Friday, May 3rd 2019 at 11.00 A.M. at Registered Office of the Company situated at Harmony, 5, ICS Colony, Ganeshkhind Road, Pune 411007. Dear Sir, We, CS Vinayak S. Khanvalkar, Partner of M/s KANJ & Co., LLP Pune and Mrs. Ritu P. Chhabria, member, appointed as Scrutinizers at the Extra- Ordinary General Meeting of the Equity Shareholders of Orbit Electricals Private Limited, on the requisition of Mr. Prakash P. Chhabria, who holds 74.52% of the paid-up share capital of the Company held on Friday, 3rd May 2019 at 11.00 A.M. at Harmony 5, ICS Colony, Ganeshkhind Road, Pune 411007 submit our report as under: 1. After the time fixed for closing of the poll by the Chairman, ballot box kept for polling was locked in our presence. 2. The locked ballot box was subsequently opened in our presence and poll papers were reconciled with the records maintained by the Company. 3. The Result of the poll is as under: a) Resolution No. 1 (Special Resolution) To consider and approve alterations in Articles of Association of t....
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....embers of the Company. The submissions, which have been advanced on behalf of the Appellant is that the Resolution dated 03.05.2019 for altering Article 59 and deleting Article 60 were required to be passed by all the Members of the Company need to be answered. Section 14 of the Companies Act, 2013 provides for alteration of Articles. Section 114 of the Companies Act provides for Ordinary and Special Resolution. Section 114, sub-section (2), which deals with the Special Resolution provides as follows: "114.(2) A resolution shall be a special resolution when- (a) the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution; (b) the notice required under this Act has been duly given; and (c) the votes cast in favour of the resolution, whether on a show of hands, or electronically or on a poll, as the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so enti....
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....t on the statutory intendment. Sub-section (2) provides that a person authorised by resolution under sub-section (1) shall be entitled to exercise the same rights and powers, including the right to vote on behalf of the body corporate, which he represents as that body could exercise if it were an individual member. What is manner and exercise of a representative of the Corporation at the meeting of Companies is, as per the decision of the Body, which has authorized individual Member to cast his vote. Authorised representative is merely an Agent of the Company and is bound to act as per directions of the Board or Board of Directors. The learned Counsel for the Respondent has referred to and relied on the judgment of the Hon'ble Supreme Court in the matter of Life Insurance Corporation of India vs. Escorts Ltd. and Ors. - (1986) 1 SCC 264. The Hon'ble Supreme Court in paragraph 84 of the judgment enumerated the rights of the shareholder. The rights enumerated of shareholders, does not include right to represent the Company. The right of representation of Company is not an individual right of shareholder. 38. The Hon'ble Supreme Court in Bacha F. Guzdar vs. Commissioner of In....
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....Act, 12th Edn., p. 894, where the etymological meaning of "dividend" is given as dividendum, the total divisible sum but in its ordinary sense it means the sum paid and received as the quotient forming the share of the divisible sum payable to the recipient. This statement does not justify the contention that shareholders are owners of a divisible sum or that they are owners of the property of the company. The proper approach to the solution of the question is to concentrate on the plain words of the definition of agricultural income which connects in no uncertain language revenue with the land from which it directly springs and a stray observation in a case which has no bearing upon the present question does not advance the solution of the question. There is nothing in the Indian law to warrant the assumption that a shareholder who buys shares buys any interest in the property of the company which is a juristic person entirely distinct from the shareholders. The true position of a shareholder is that on buying shares an investor becomes entitled to participate in the profits of the company in which he holds the shares if and when the company declares, subject to the articles of as....
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....ar with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy or, where one or more proxies are allowed, to attend and vote instead of himself and that the proxy need not be a member of the Company." In the notice for the meeting held on 21-9-1985, there was no mention whatsoever, let alone a statement, relating to the transfer of the 3417 and 93 shares to the Pawars. At the same meeting, Respondents 5 and 10, were appointed as Additional Directors although their shares were not yet entered in the Company's Register of Members." 40. Learned Counsel appearing for the Respondent has also placed reliance on judgment of the Hon'ble Supreme Court in (2021) 9 SCC 449 - Tata Consultancy Services Ltd. vs. Cyrus Investments Pvt. Ltd. & Ors. in support of his submission that even in cases where the Tribunal finds that the removal of a Director was not in accordance with law or was not justified on the facts, the Tribunal cannot grant relief under Section 242, unless the removal is found to be oppressive or prejudicial. The Hon'ble Supreme Court in the above case has also laid that that there may be cases where the removal o....
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.....09.2023 vacated the interim directions and directed as follows: "1 The National Company Law Tribunal1 dismissed the application filed by the first respondent for the grant of interim relief by an order dated 31 December 2019. The first respondent is in appeal before the National Company Law Appellate Tribunal. 2 Admittedly, no interim relief operated in favour of the first respondent during the pendency of the appeal. 2 The appeal has been heard and orders were reserved by the NCLAT on 21 September 2023. However, while reserving orders, the NCLAT has directed the parties "to maintain status quo as was available prior to EOGM dated 03.05.2019" till the judgement is delivered. No reasons have been indicated by the NCLAT even prima facie for issuing the interim order, particularly in the context of the fact that there was no interim relief operating since the dismissal of the application for interim relief on 31 December 2019. It is admitted that no relief was obtained by the first respondent in the proceedings before the Bombay High Court, as well. 3 In the circumstances, we vacate the interim direction as noted above. The Annual General Meeting (AGM) of t....
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....e answer Question No.(V) as follows: Ans. to Question No.(V) : The result of AGM held on 29.09.2023 on Resolution No.4 with regard to re-appointment of Mr. Deepak Chhabria as Executive Chairman of the FCL, need no interference in this Appeal. Question No. (VI) 47. Now we come to the last question as to relief, to which the Appellant may be entitled in this Appeal. 48. We have noticed above that Company Petition was filed by the Appellant under Section 241 and 242 of the Companies Act, 2013 on 16.11.2016. The challenge to the maintainability of the Company Petition was repelled by the Adjudicating Authority as well as this Tribunal. We have noticed above that Application MA No. 645 of 2017 filed by Prakash Pralhad Chhabria, questioning the maintainability of Company Petition No. 47 of 2016 was rejected on 05.12.2018, against which order Company Appeal (AT) No. 39 of 2019 was filed by Prakash Pralhad Chhabria and Orbit, which Appeal was disposed of by this Tribunal on 13.03.2019, directing the parties to appear before the Tribunal for early hearing of the Company Petition. It is relevant to notice that Company Petition, which was filed on 16.11.2016, is sti....