TaxTMI 
TaxTMI 
2024 (9) TMI 1500
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....as passed allowing the CA No.147/2024 filed by Respondent No.1 for taking on record the amended petition on the basis of an order dated 07.06.2024 which records "on the last occasion the petitioner has sought time for amending the petition and leave was granted for amending the petition." 3. It is argued a bare perusal of the order dated 10.05.2024 would reveal no such time was sought and no such liberty was granted to Respondent No.1. 4. CA No.147/2024 was thus filed by Respondent No.1 seeking to directly place on record an amended petition on the basis of order dated 07.06.2024 without even filing any application seeking liberty to amend the petition, which appears to be in the teeth of a valid legal position pertaining to amendment of pleadings and principles of natural justice which require that for amending a petition detailing of the changes proposed to be made and the grounds on which such amendment has been necessitated, be known to the opposite party. 5. It is the case of the appellant the amended petition was filed by Respondent No.1 by completely redrafting the original petition with additional grounds and thus it was a fresh petition in the guise of an amendmen....
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....erver to attend all board meetings and general meetings of the Company and report compliance with corporate governance norms to the Tribunal" [Para 68(1) of Amended Petition /Pg. 207, 208/Appeal] 2 Addition of new final reliefs N/A "2. Declare that the affairs of the Company have been and are being conducted in a manner oppressive to the Petitioner and prejudicial to the interests of the Company 3. Direct the rectification of the Company's registers, including the register of members, to reflect the true and correct shareholding as of November 10, 2019, nullifying any unauthorized transfers thereafter; b) Appointing two independent directors as per Section 149 of the Companies Act, 2013; c) Constituting proper Audit, Nomination and Remuneration, and other statutory committees as required by law 5. Order a comprehensive special audit of the Company's accounts from November 10, 2019, to date, by an independent auditor appointed by the Tribunal; 6. Direct the Respondents to repay to the Company any sums found to have been misappropriated or improperly withdrawn, with interest at 18% per annum 7. Declare n....
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....'s success story. His contributions have been pivotal in the Company's growth trajectory: a) As a member and director, the Petitioner has been involved in key strategic decisions that have shaped the Company's direction and success. b) The Petitioner has played a crucial role in expanding the Company's market reach, undertaking extensive business trips both within India and abroad to secure new clients and partnerships. c) Leveraging his expertise in design and market trends, the Petitioner has been instrumental in developing the 'Signature Blankets' brand, contributing significantly to product development and marketing strategies. d) The Petitioner has also been handling a paramount duty of handling and managing the employees, labour and security personnels along with overseeing and managing minutely all the construction activity on the properties of the Company. e) The Petitioner's efforts have directly contributed to the Company's financial growth, as evidenced by the increasing turnover and profitability during his active involvement in the Company's affairs." [Para 14 of Amended Petition /Pg. 1....
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....mmittee's recommendation." [Para 50(c) & 55(c), (o) of Amended Petition / Pg. 193 & 197/Appeal] "Non-Compliance with Cost Audit Requirements (Section 148): Despite meeting the turnover threshold requiring a cost audit, the Company has failed to appoint a cost auditor or conduct the mandatory cost audit. This omission not only violates statutory requirements but also deprives the Company of valuable insights into cost efficiency and financial management." [Para 50(d) & 55(d) of Amended Petition / Pg. 194 & 198/Appeal] "Failure to Appoint Internal Auditor (Section 138): The Company, having exceeded the turnover threshold of Rs. 200 crore, has neglected to appoint an internal auditor. This violation exposes the Company to increased risk of financial irregularities and weakens internal control mechanisms." [Para 50(e) & 55(e) of Amended Petition / Pg. 194 & 198/Appeal] "Non-Filing of Critical Statutory Forms: * MGT-14 for adoption of financial statements and directors' report not filed (Section 179(3)). * BEN-2 forms for reporting significant beneficial ownership no....
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....and file mandatory returns creates an environment of financial opacity. This lack of transparency raises serious concerns about the accuracy and reliability of the Company's financial reporting." [Para 55(u) of Amended Petition /Pg. 201/Appeal] "v. Regulatory Exposure: The systematic failure to comply with multiple statutory requirements exposes the Company to significant regulatory risks, potential penalties, and legal actions. This non- compliance jeopardizes the Company's legal standing and operational stability" [Para 55(v) of Amended Petition /Pg. 201/Appeal] "w. Compromised Corporate Governance: The cumulative effect of these violations demonstrates a severe breakdown in corporate governance structures. This systemic failure not only facilitates the oppression of minority shareholders but also threatens the Company's long-term viability and stakeholder interests." [Para 55(w) of Amended Petition /Pg. 202/Appeal] "x. Potential Invalidation of Corporate Actions: Given the irregular board composition and the absence of key committees, there is a risk that sig....
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....cial irregularities and non-compliance with statutory requirements. c) The duty not to involve in a situation where there is a direct or indirect conflict of interest with the company (Section 166(4)) has been breached through actions such as booking personal expenses to the Company's account." [Para 59 of Amended Petition /Pg. 204/Appeal] 9. The above chart would reveal that the amendments were substantial in nature though the learned counsel for the Respondent alleges it to be mere explanatory. Admittedly new reliefs have been added in the amended petition as also a new party being impleaded. Further the additional acts of oppression have also been added for which, of course, an opportunity ought to have been granted to the appellant to rebut such a move. 10. We have perused the impugned order dated 21.08.2024 which refers to order dated 07.06.2024 wherein it is noted on the last occasion the Respondent had sought time for amending the petition and leave was granted for amending the petition. We have also perused the order dated 10.05.2024 i.e. prior to 07.06.2024 and we find on that day neither any time was sought for amending the petition nor any such ....