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2024 (9) TMI 1612
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....rd, Chennai with the same number, viz. C.P. No.27 of 2009, on 10.12.2010. 2. Consequent on abolition of the Company Law Board and establishment of the National Company Law Tribunal, the case has been transferred to this Tribunal and the petition got re-numbered as TP No. 37/HDB/2017. The prayers made in the Amended Petition dated 10.12.2010 are as under: MAIN PRAYERS: "(a) Declare that the acts of the respondents 2 and 3 are prejudicial to the interest of the respondent no.1 Company and are oppressive against the petitioners. (b) Declare that the respondents 2 and 3 have failed in their fiduciary duties towards the respondent no.1 company and direct them to reimburse to the company the amount siphoned by them. (c) Declare the sale of land admeasuring 9 acres 39 guntas (equivalent to 48,279 square yards or 40,367 square yards) at Survey No.146/E and 147/E situated at Thimmapur Village, Kothur Gram Panchayat & Mandal, Mahaboobnagar District, Andhra Pradesh by respondent no.2 and 3 is illegal and without authority and is against the interest of the respondent no.1 company and is oppressive against these petitioners and set aside the sale deed dated 7th....
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....ave violated the provisions of Articles of Association inasmuch as allotment of shares made on 19th May 2008, 10th September 2008 and 13th October 2008./;; (n) Direct immediate recovery of siphoned money together with interest at the rate of 15% p.a. in respect of respondent no.2 and 3 or in the alternative immediately invoke the lien on the shares held by them immediately and forfeit the shares held by the respondents. (o) Order respondents 2, 3 and 4 not to interfere in the affairs of the company, declare that they are oppressors and they mismanaged the affairs of the company; and permanently injunct them from interfering in the day-to-day affairs and management of the company and pass appropriate orders to punish them invoking Schedule XI and section 539 to 544 of the Companies Act, 1956. (p) Punish respondents no.2, 3 and 4 for their continued illegal acts and being accessory to production of fraudulent documents as per provisions of Criminal Procedure Code and also prohibit them from holding any post of Directorship or any office in the respondent no.1 company. (q) To protect the petitioners group, to have at least equal representation in th....
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....isions of section 297 of the Companies Act, 1956." INTERIM PRAYERS: "(a) Direct the respondent no.29 not to alienate or create any encumbrance and not to create any third party interest in the land admeasuring acres 9-39 guntas (equivalent to 48,279 square yards or 40,367 square yards) at Survey No.146/E and 147/E situated at Thimmapur Village, Kothur Gram Panchayat & Mandal, Mahaboobnagar District, Andhra Pradesh. (b) Direct the respondent no.29 not to alienate or create any encumbrance and not to create any third party interest in the land admeasuring ac. 9-39 guntas (equivalent to 48,279 square yards or 40,367 square yards) at Survey No.146/A, 146/AA, 146/EE, 147/A, 147/AA, 147/EE and 147/U situated at Thimmapur Village, Kothur Village, Kothur Gram Panchayat & Mandal, Mahaboobnagar District, Andhra Pradesh. (c) Freezing the voting rights of illegal allotments of 17,29,000 equity shares made on 19th May 2008 (4,56,000 shares) 10th September 2008 (9,39,000 shares) and 13th October 2008 (3,34,000 shares) and not to create any charge, lien or alienate in any manner in respect of these shares till the disposal of this petition. (d) Order that no....
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....y through its resolution dated 26.09.2006. Ultimately, the company acquired the present nomenclature, viz. "Om Shiv Shakti Alloys Iron Industries Private Limited" on 06.05.2008. 3.2 Petitioner no.1 is Shri Arun Kumar Kedia in his individual capacity. Petitioner no.2 is Shri Arun Kumar Kedia in the capacity of HUF. Petitioner no.3 is wife of petitioner no.1. 3.3 The petitioners together are holding 13,42,200 (thirteen lakhs forty two thousand and two hundred) equity shares of Rs.10/- each amounting to 29.57% shares of total unchallenged paid up share capital of 45,41,200 equity shares of Rs.10/- each of the respondent-company held by 25 members. A copy of the Annual Returns evidencing the shareholding of the petitioners herein is annexed as ANNEXUE-A2. 3.4 Respondent no.1 is the company in question. Respondents no.2 and 3 are the Directors of the respondent-1 company. Respondents no.4 to 29 are the beneficiaries of the impugned sale transaction. Respondent no.30 is the Registrar of Companies, Hyderabad and respondent no.31 is the Regional Director, Chennai. 3.5 Respondent no.2 (in his individual capacity as well as HUF) and respondent no.3 are holding 25.63% of total pai....
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.... the Board and shareholders of respondent no.1-company. A copy of said lease deed is placed at ANNEXURE A-7. It is alleged that even the labourers were threatened at the leased out premises in presence of respondent no.2 and a criminal complaint is filed in this regard. Copies of criminal proceedings are at ANNEXURE A-8. 3.10 ALLEGED EXTRAORDINARY GENERAL MEETING DATED 24.03.2008 It is further averred in the petition that respondent no.4 was appointed as Director arbitrary and removed the name of petitioner no.1 as Director of the company without following due process under sections 260 and 284 of the Act. Such move was taken by respondents no.2 and 3 with intent to usurp the properties of the respondent-company and to run the affairs of the respondent-company at their whims. Said respondents have filed Form No.23 (ANNEXURE-A9) stating that an extraordinary general meeting was held on 24.03.2008 for various purposes, such as, to remove petitioner no.1 as Director u/s 284, to appoint respondent no.4 as Director and to amend the Articles of Association of the company. However, in fact, no such extraordinary general meeting was held or even if it is assumed that it was held it w....
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.... applications money vide Cheque No. 901889 dated 26th October, 2006 out of which Rs. 7,00,000/- was returned back to the Petitioner on 23rd November, 2006 vide Cheque No. 306214. An amount of Rs.18,00,000/- was lying as share application money, no shares were offered to Petitioners. 3.17 The petitioners contend that the alleged meetings of the Board dated 19.05.2008, 10.09.2008 and 13.10.2008 were held sans notice and such meetings are liable to be declared as void. Consequently all the resolutions allegedly passed are of no consequence and without authority of law. 3.18 It is further alleged that neither balance sheets nor Annual Returns have been filed in time, with an oblique motive to hide the illegal allotment of shares, illegal removal of petitioner no.1 as Director. It is further averred that respondents no.2 and 3 have filed Balance Sheet (ANNEXURE A-12) and Annual Return (ANNEXURE A-2, page 67) for the year ended on 31.03.2007 giving an illusion that Annual General Meeting was held on 29.09.2007 and the accounts and the accounts were adopted at the Board Meeting held on 01.09.2007. It is contended that as a matter of fact the petitioners have never received notice ca....
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....e decision taken in the said Board Meeting dated 21.10.2006. 4.5 In para 7 of the counter it is submitted that the land in question was purchased for respondent no.1-company out of the funds invested by promoters and that the petitioners were nowhere in the arena at the time of acquisition of the property in question. In para 7 it is further submitted that the land admeasuring 55.14 acres was purchased for respondent no.1-company, which was owned by father and brother of respondent no.2. The consideration for such acquisition of land has not been paid so far. It is claimed in the counter that it was respondent no.2 who promoted respondent no.1- company and he along with his associates established the industry, arranged loan, contributed capital, gave personal guarantees in addition to their personal properties including residential building of respondent no.2 as collateral securities in favour of Bank loan borrowed by respondent no.1- company. 4.6 It is submitted in para 8 of the counter that respondent no.3 too gave similar contributions for establishment of respondent no.1-company. In this para the deponent was critical of petitioner no.1 failing to revive personal guarante....
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....verments made in this rejoinder are reiteration of the contents of the memo of the petition. The rejoinder has broadly answered the counter as under: 5.2 Respondents no.2 and 3 have attributed sale transactions, other acts, omissions or commissions to respondent no.1-company, not to respondents no.2 and 3. (PARA 7 of the rejoinder). Entering into an understanding with respondent no.29 on 15.12.2006 is disowned by the deponent (PARA 7 of the rejoinder). 5.3 In para 9 of the rejoinder the petitioners have assailed the allegation of the respondents that petitioner no.1 has failed sign revival letter. It is submitted that the petitioners have filed application with the Hon'ble DRT (ANNEXURE A- 5, page 120, paras 5.15 and 5.16 of their petition). Relevant portion of the Bank's application was reproduced in this rejoinder. 5.4 In para 9 of the rejoinder the petitioners have vehemently denied the allegation of the respondents that the company was leased out to M/s Padmavathi Ispat at the instance of petitioner no.1. It is alleged in this para that it was respondent no.2, who has unilaterally and without knowledge of the petitioners given respondent no.1- copmany on lease to said ....
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.... and respondent no.2 were required to sign cheques as per resolutions of the company, petitioner no.1 has signed for himself and forged the signature of respondent no.2 on the said cheques. An F.I.R. has been filed for fraud and forgery. A copy of said F.I.R is annexed to the counter dated 09.93.211. For such misconduct petitioner no.1 has been removed from the Board of Directors. 6.5 It is further alleged in the counter that when the respondent- company has received a sum of Rs.25 lacs for allotment of shares and the company unable to allot shares has refunded Rs.7 lacs and retained the remaining sum without allotting required shares to him. It is alleged that cheque No.306214 dated 23.11.2-006 drawn of SBI, Hyderabad, Mahabubgunj Branch has been signed by petitioner no.1 himself as Director and has misutilised the amount. 6.6 Certain property disputes between the families of petitioner no.1 and respondent no.2 were referred to in the counter in para 3(h). Petitioner no.1 has filed Partition Suit being OS No.262 of 2008 before the Rangareddy District Court in March 2008. It is believed by the deponent in the counter that the said institution of the said partition suit led to....
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.... honestly and siphoned off the funds of the company and committed fraud against the company. The averments made in counter dated 15.06.2009 about M/s Binju Metal and Alloy Industries Pvt Ltd and dealt with here in above are reiterated in this para of the counter. 6.11 In para 18 of the counter it is submitted that a Board meeting was held on 22.02.208 for removal of petitioner no.1 as director and notice under section 294 read with section 190 of the Companies Act, 1956 was issued to him. Postal acknowledgment receipts are annexed at pages no.276 to 283 of the counter filed to the main petition. The petitioners chose not to attend the meeting and resolution dated 24.03.2008 removing petitioner no.1 as director was passed in accordance with law after due compliance of procedure. 7. REJOINDER DATED 16.07.2011: The petitioners filed rejoinder to the reply/counter and submitted that: 7.1 That by wilful disobedience of order of the Hon'ble Company Law Board dated 31.03.2009, 15.04.2009 and 20.04.2009 the respondents have gained time for fabricating and manipulating the minutes and the other statutory records to suit their requirements in order to defend their illegal and ....
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....s are at Annexure R11). This proves that no notice calling Annual General Meetings was sent to the petitioners. The respondents have filed neither Annual Return nor Balance Sheet for the Year ended on 31.03.2008. It thus, becomes evident that no Annual General Meeting was held. (Para 25) 7.9 On 04.01.2008 the respondents fabricated minutes of the Board Meeting to show that shares of Mr. Kailash Narayan Bhanagdiya were transferred to Respondent No.2. The Petitioners have not been given opportunity to acquire these shares as per the Articles of Association of the Company. The Respondents have neither filed any transfer notice nor documents qua determination of fair price.(Para 29) 7.10 It is further averred that the Petitioners have already stated to the Hon'ble Company Law Board the illegal, fraudulent and oppressive acts of the Respondents with all the necessary evidence, hence the Hon'ble Company Law Board may be please to grant the reliefs as prayed for in the Company Petition. 8. Memo for additional relief and written submission filed by petitioner on 02.05.2023 The petitioners have recapitulated all the allegations and submissions already made in the petition, howev....
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.... outcome of inspection (page 255 of annexure to petition) * Directors' attendance register not maintained (see page 17 to annexure to petition). Company has adopted table `A' in which regulation of 71 of Table A reads as under: "Every director present at any meeting of the Board or of a committee thereof shall sign his name in a book to be kept for the purpose." * The company deliberately destroyed the attendance register so that it can be fabricate minutes of the Board Meeting to suit its ill motive. * See page 15 of annexure to rejoinder, Company do maintain attendance register but fails to produce the same at the time of inspection. vi. Several serious discrepancies in the statutory records are pointed out: * Board meeting notices claimed have been hand delivered a single person from the year 10.05.2003 to 09.03.2009. In none of the delivery proof of recipient's signature was obtained. This clearly proves all these hand delivery is cooked up story to defend the petition. One could see on the following dates notices have been issued on the same date on that of the board meeting, 26.05.2008 and 29.03.2008. ....
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....ure to petition), whereas the government value is Rs. 6,78,500/- (page 83 and 101 of annexure to petition). The consideration seems to have been paid on the date of execution of sale deed i.e., 07.02.2007. There is no agreement of sale mentioned, there seems to be no advance received against the sale. Kindly note at page 92 of annexure to petition stamp duty, has been paid on 15.12.2006, 15.12.2006, 15.12.2006, 15.12.2006 and 07.02.2007 in five installments similarly in other sale deed also on 15.12.2006 and 07.02.20117 in two installments at page 76 of annexure to petition. c. The fabricated resolution dated 21.10.2006 it is recorded the market price is Rs. 40,000 per acre whereas even the government value as mentioned above is Rs. 68,000 per acre as mentioned supra page 83 and 101 of the petition. d. The Petitioner never attended the alleged meeting but shown to have been present (see page 265 of annexure to petition) the fact the said lands were sold to R29 who is the nephew of R2 not even mentioned in the resolution. It is important to note this land is mortgaged to State Bank of India without taking prior permission from State Bank of India the land was sold ....
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....e 138 of annexure to petition executed on 08.12.2007). Lease from 01.01.2008 to 31.12.2012 page 142 of annexure to petition, lease rent Rs. 18,50,000/- P.M. `14. The lessor has delivered a peaceful possession of the schedule property to the lessee on 01.01.2008 in running condition.' ii. Advance received Rs. 2,00,00,000/- for lease but not part of the registered lease agreement. Though the factory handed over on 01.01.2008 to the lessee (page 199 of annexure to petition the statement of R2 before police authority is given below), "...on 01.01.2008 I had handed over my factory to Mr. Bharath Kumar in a running condition. Mr. Bharath Kumar has appointed his own employees. In the recent times I had decided to sell my factory since the factory is in possession of Mr. Bharath Kumar. On 30.03.2008 in the evening at about 6.00 PM. I along with co accused persons who worked as security guards in the past with me.... ... have gathered in shadnagar and according the plan we drove in AP 12E/7029 Scorpio and AP AD 9000 Skoda Car along with sticks and iron rods trespassed in the said factory leased out by me and threatened security personal, labourers and....
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....osses of Rs. 74 Lakhs plus Rs. 70 lakhs is equal to Rs. 144 Lakhs (kindly see page 123 of the counter) profit and loss account for the year 2008 do not reflect lease income) 8.4. Illegal removal of 1st Petitioner as Director: a. Para 8, page 23 an illegal form 23 was filed page 204 to 208 of annexure to petition. On the search with MCA the said form 23 reveals the following: Serious irregularities including removal of director and appointing Respondent No. 4 as director and amended the articles of Respondent No. I company to facilitate issue of 3 days' notice for calling of General Meeting, crucial amendment of articles. The existing article 14 sought to be replaced. The said existing article 14 at page 25 reads as under: "Article 14 - The new shares shall issued upon such terms and conditions and with such rights and privileges attached thereto as the general meeting resolving upon the creation thereof shall direct, and if on such directions be given, as the Directors may deem fit and in particular to qualified rights to dividends to and in the distribution of the assets of the Company." This article was replaced with unknown set of artic....
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....registered post to the petitioner weights 20 grams only. The respondents claim several documents were attached in these 20 grams i.e., notice, altered MOA & AOA, Special Notice from shareholders, it will consist at least 200 grams weight. Hence it is clear that the notice has not been sent by registered post, just one or two papers could be sent in 20 grams. What is actually sent by the company be Registered post are annexed at page 89 to 93 of Rejoinder. Some innocuous communication regarding some confirmation to be submitted to Income tax department was received but not the EGM notice dated 22.02.2008. e. Please refer page 51 and 52 of the rejoinder, the petitioner has refuted the allegations made in para 17 of their counter by respondents. No form 32 for alleged removal filed (page 290 to 294) R-2 claims to have filed form 32 with ROC in physical mode. Right from 2006, September all documents should be filed by Electronic means. Hence their claim is false. Please find page 55 of the rejoinder at para 19 last para "...The respondents have changed the allegation in this revised counter wherein they claim that the Form 32 was not filed because the Petitioner No. 1....
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.... Turnover from Sale of Sponge Iron 6,47,21,355 3,50,59,325 10,25,52,055 60,04,456 Iron Ore Consumed 51,44,848 45,97,413 1,35,07,483 18,76,251 % Iron Ore Consumption to Turnover from sale of Sponge Iron (Rounded 8% 13% 13% 31% Coal Consumed 3,67,62,345 4,04,32,361 3,78,99,490 20,63,497 Percentage of Coal Consumption to Turnover from Sale of Sponge Iron (Rounded 57% 115% 37% 34% Total Expenditure 6,61,26,042 9,14,93,564 11,90,27,113 59,40,973 Percentage of Total Expenditure to Turnover from Sale of Sponge Iron (Rounded off) 102% 261% 116% 99% iii. The above table demonstrates that coal consumed during 2004-05 and 200506 relatively is only about 34 to 37% of the sale value. But strangely in the year 2006-7 the Coal consumed had dramatically increased to 115% and again in the year 2007-08 it has come down to 57%. The cost of Coal consumed during the year 2006-07 is itself more than the revenue generated. No prudent person would incur towards consumption of raw material without matching revenue. It is further submitted that the above table also dep....
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....a necessity to divert company's money to the group company of Respondents 2 and 3. What are the terms of lending is not known. The reason for not charging interest is quite obvious and against the interest of the other shareholders. Whether the loan has been recovered so far is also not known. The Respondents 2 and 3 have completely failed to discharge their onerous fiduciary responsibility. Their actions lacks probity, fair play and burdensome on the petitioner and other shareholders. They have misused their powers for their personal benefit. So far this amount is lying outstanding. There is no Board's approval for this transaction, hence it is not only illegal but clear case of mismanagement. vi. The Respondents claimed that they along with associates have pumped in an amount of Rs. 1.24 crores till 31-03-2007 and further amount of Rs. 8.60 crores after that till date without providing the proof of investments made. Even for a moment assuming but not admitting the same to be true the fd Respondent routed the monies siphoned from the Respondent No. 1 Company again as his investment. vii. Further the Respondents claim that they have brought in Rs. 9 crores....
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....ies who made this investment in this company. The list of third party investors in the company includes the following: a. Dhanvidya Impex (P) Ltd - Rs. 25,00,000/- received on 05.03.2009 b. Yanke Management Services (P) Ltd - Rs. 25,00,000/- received on 20.03.2009. ii. In order to become investors, it is mandatory for investors to make their request in writing pursuant to Section 41(2) of Companies Act, 1956. If a person does not agree to become member in writing he cannot be allotted shares in the company. Since the CA 20 of 2010 does not contain the written agreement to become members of the company no shares could be allotted to them. iii. In case of corporate entities there is an additional requirement that those corporate entities should necessarily authorize through a board resolution for committing investments and also authorize officers of the company to sign on behalf of Company for applying for shares of the Company. iv. It is important to point out that neither the board resolution of those two companies nor share application form duly filled by those two entities were provided by the Respondent No. 1 Company. This not only de....
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....ould not have received from two different corporate entities as fraudulently claimed by Respondent no. 2 in his application. These instruments are probably from a single entity. 8.8 Inconsistent stand taken by R2 in Original Counter versus Amended Counter: a. In Sangramsinh P. Gaekwad and Ors. Vs. Shantadevi P. Gaekwad and ors (MANU/SC/0052/2005), (Para 229 and 232) the Apex court held that Respondents are not allowed taking inconsistent stand. b. Please refer Rejoinder page 7 in penultimate para, the respondents have changed their original stand and filed the revised counter which is inconsistent with the counter filed already with this bench. c. Page 11, para 2 of the rejoinder, petitioner has received board meeting notice on 02.09.2009 and attended the board meeting and made suggestions sought clarifications and raised objections on certain agenda items but the same was ignored by the 2nd Respondent, after coming out of the meeting a telegram was sent to the respondent company, for which no response was received so far, copy of the telegram at page 4 to 7 of annexure to rejoinder. d. In order to stop petitioner from attending future board m....
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....nies Act, 1956 and is oppressive against the Petitioners. E. Amendment of Memorandum and Articles of Association as against the Provisions of the Companies Act,1956 and against the interest of Respondent no.1 Company and oppressive against the Petitioners. F. Extra-ordinary General Meetings held and resolutions passed thereon are illegal and to set aside the same. G. Recovery of syphoned money with interest. 9.2 Defence of the Respondents; 1. The Petitioner No.1 appointed as director in the year, 2004 i.e. after 9 years of incorporation of the Company. He was neither a promoter nor a first Director of the Company. He was not diligent to perform his functioning as a director of the Company rather acted against the interest of the Company which necessitated his removal as the director of the Company with in a period of 4 years of his joining in the Company. 2. Shareholders have filed written affidavits before the Tribunal supporting the decisions taken with respect to the functioning of the Respondent No.1 Company and these affidavits are filed at Page Nos. 317 to 352 of the main counter. 3. Notices as required were duly served....
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....ly sent to the Petitioners by way of Registered Post Acknowledgment due as is evident from the perusal of the postal receipt and acknowledgment cards filed at Page No. 276 to 283. The Petitioners failed to attend the meeting. As per the decision taken by the majority of shareholders the Petitioner No.1 was removed as a Director by considering the facts that the Petitioner did not sign the documents as is required by the bank which resulted in the bank declaring the account of Company as NPA and initiated recovery proceedings before the Hon'ble DRT, the Petitioner No.1 has filed an application in IA No. 1056 of 2007 before the Hon'ble DRT and the averments made therein are in the nature of effecting the survival of the Company wherein he stated in the affidavit on oath to alienate the entire Company by calling for tenders. Page No.42 of the Counter filed in CA No. 195/2010. 8. Further, the Petitioner No.1 has deposited 25 lacs towards unsecured advance to the company. Out of which he has withdrawn 7 lacs from the current account maintained with state bank of Hyderabad where the signatures can be done individually / severally. The sales proceeds were got deposited by the Pet....
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....said CA was disposed of on 17-11-2016 observing that the PCS appearing for the Respondents/Petitioners not opposed the prayer sought in the application and expressed willingness to produce the relevant records available with his client and accordingly the Tribunal directed the Petitioners to produce the relevant records at the time of hearing of main Company Petition. However, the Petitioners have not submitted any records with respect to the notices as directed by this Tribunal. 10. In view of the the contest as aforementioned following main points arise for our consideration : Point 1: " Whether the acts or conduct of respondents are prejudicial and oppressive to the petitioners or /and whether the affairs of the Company are being conducted in a manner prejudicial to the interests of the Company as alleged by the petitioners ?" Point 2: " Whether the alleged allotment of 17,29,000 equity shares made on 19th May 2008, 10th September 2008 and 13th October 2008 to the respondents is illegal and void ab initio and thus necessitate the need for rectification of Register of Members?" 11. Before we proceed to decide the point, we feel it proper to refer Sections 111, 397 and....
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.... registered by the company and the company shall comply with such order within ten days of the receipt of the order ; or (b) direct rectification of the register and also direct the company to pay damages, if any, sustained by any party aggrieved. (6) The 3 [Tribunal], while acting under sub-section (5), may, at its discretion, make - (a) such interim orders, including any orders as to injunction or stay, as it may deem fit and just ; (b) such orders as to costs as it thinks fit ; and (c) incidental or consequential orders regarding payment of dividend or the allotment of bonus or rights shares. (7) On any application under this section, the 3 [Tribunal] - (a) may decide any question relating to the title of any person who is a party to the application to have his name entered in, or omitted from, the register ; (b) generally, may decide any question which it is necessary or expedient to decide in connection with the application for rectification. (8) The provisions of sub-sections (4) to (7) shall apply in relation to the rectification of the register of debenture holders as they apply in relation to ....
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....111 of this Act. (2) Subject to the provisions of this section, the shares or debentures and any interest therein of a company shall be freely transferable : [Provided that if a company without sufficient cause refuses to register transfer of shares within two months from the date on which the instrument of transfer or the intimation of transfer, as the case may be, is delivered to the company, the transferee may appeal to the 3 [Tribunal] and it shall direct such company to register the transfer of shares]. (3) The 3 [Tribunal] may, on an application made by a depository, company, participant or investor or the Securities and Exchange Board of India, if the transfer of shares or debentures is in contravention of any of the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992), or regulations made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), or any other law for the time being in force, within two months from the date of transfer of any shares or debentures held by a depository or from the date on which the instrument of transfer or the intimation of the transmission was delivered to the....
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....he company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company ; or (b) that a 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 its Board of directors 2 [***] or manager 3 [***] or in the ownership of the company's shares, 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 public interest or in a manner prejudicial to the interests of the company ; may apply to the [Tribunal] for an order under this section, provided such members have a right so to apply in virtue of section 399. (2) If, on any application under sub-section (1), the [Tribunal] is of opinion that the affairs of the company are being conducted as aforesaid or that by reason of any material change as aforesaid in the management or control of the company, it is likely t....
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....rned Counsel referred to the valuation report of M/s.Dhanpathi Rao & Associates filed by Applicant through the rejoinder, in which the valuation is shown as Rs,30,00,000/- to Rs.35,00,000/- per acre. The Learned Counsel for the petitioner finally contended that this act of selling land parcels of the Company below market price is prejudicial to the interest of the Company and to give benefit to the Respondent No.29. 15. The Learned Counsel for Petitioner would further submit that in Extra- Ordinary General Meeting (EGM) held on 24.03.2008 resolutions were passed illegally to remove Petitioner No.1 as Director, to appoint respondent no 4 as director, to change the name of the company and to amend Articles of Association of the Respondent No.1 Company . The petitioners submit that AOA was amended to facilitate the board to issue further shares of Respondent No.1 Company . The Petitioner contends that no notice of this meeting was given to the Petitioner and Respondent No.2 and 3 have arbitrarily passed these resolutions without actually holding the Extra-Ordinary General Meeting (EGM). Therefore, the Petitioner contended that this Extra-Ordinary General Meeting (EGM) dated 24.03.2....
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....rnment records was Rs.30,300/- per acre at that time . To prove his contention about valuation ,Learned Counsel referred to the letter issued by Sub-Registrar, Shadnagar dated 18.04.2009 filed at page 214 of the Counter . The Respondent did not offer any comment on the valuation report submitted by the Petitioner contending that it was an additional document submitted with the rejoinder without obtaining leave of the Tribunal . The respondents also submitted that the property was sold subject to mortgage and the purchaser was aware of this fact. 20. The counsel for the Respondent summarily rejected the arguments put forth by Petitioners and submitted that EGM was called in accordance with law and no illegality is involved in calling as well as in passing the resolutions in the said meeting . The Ld Counsel further submitted that notice dated 22.02.2008 for the said Extra-Ordinary General Meeting (EGM) was sent to all petitioners and proof of dispatch for the same along with proof of acknowledgment of notice has been filed in the counter. Further, Respondent submitted that notice for Extra-Ordinary General Meeting (EGM) also includes a special notice under Section 190 of the Comp....
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....of Rs. 37,54,133 (after deducting a TDS of Rs. 1,22,280/-). 22. The respondents rejected the allegation of petitioners and submitted that the respondent- company was leased out to Messrs Padmavatahi Ispat at the instance of petitioner no.1, whose brother in law, Shri Bharat Kumar Sontholia was one of the partners of the said firm. Petitioner entered into conspiracy with the said firm and misappropriated assets of respondent no.1-company. The respondents further submitted that advance amount of Rs 2.00 crores was returned to the lessee, since the lessee failed to act as per terms and conditions of the lease. Respondents clarified that lease deed 15.12.2007 registered as Doc No 1961 of 2007 was canceled by means of a cancellation deed dated 17.05.2008 registered as doc no 3464 of 2008 . Respondents emphatically submitted that lease was not acted upon for a single day and the factory was and has been in operation of Respondent no 1 Company . 23. The respondents contended that no EGM was held on 19.05.2008 and it was a Board meeting and petitioner no 1 was not given any notice for the said meeting as he was removed and ceased to be director of the company on the said date. In the....
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....eport filed by petitioner in view of the facts that first of all the valuation report was filed without seeking any permission from the Tribunal , secondly the valuation report contains many caveats in it and also it is not exactly for the same properties under dispute. We have also perused the resolution dated 21.10.2006 which is regarding authorization to dispose of the said land of the Company and find that this resolution authorizes Mr. Jitendra Kumar Kedia, Managing Director to negotiate and sell the above mentioned lands, execute and register the documents in favour of the prospective buyer for a price not below the market price of Rs.40,000/- per acre. We do not find any objection raised by petitioner no 1 about this alleged sale in the resolution or in any other form till his removal from the Board in 2008. Therefore, we find merit in the submission of respondent that board resolution passed for fixing minimum sale price and sale of land has consent of the petitioner no 1. 28. In the light of the facts as discussed above, and considering the rival contentions, we find that the Petitioners have failed to point out any irregularity in the sale of land assets but for the....
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....rantee revival letters which resulted in the bank filing recovery application before the DRT. 31. We perused proof of dispatch dated 23.02.2008 of notices of Extra- Ordinary General Meeting (EGM) to the petitioners and proof of acknowledgment dated 27.02.2008 of serving the notice of Extra- Ordinary General Meeting (EGM) and observe that the notice of meeting dated 22.02.2008 was dispatched on 23.02.2008 and acknowledged by petitioners on 27.02.2008. From this record, we can clearly make out that the notices for Extra-Ordinary General Meeting (EGM) was very much served on the petitioners and the contention of the petitioners that the acknowledgement filed pertains to some other letter pertaining to income tax issue cannot be accepted. 32. The main contention of the petitioner for declaring this Extra-Ordinary General Meeting (EGM) dated 24.03.2008 as illegal has been solely on account of Petitioners not being given a due notice and thus keeping them away from opportunity of putting up their views in the Extra- Ordinary General Meeting (EGM) but we find that this allegation is not maintainable in the light of facts produced before us by the respondents. On perusal of the recor....
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....th May 2008, 10th September 2008 and 13th October 2008 to the respondents is illegal and void ab initio and thus necessitate the need for rectification of Register of Members? 36. The petitioner further submitted that respondents on 19.05.2008, 10.09.2008 and 13.10.2008 by passing Board resolutions on the said dates have irregularly allotted 466000, 939000 and 334000 shares respectively to themselves without offering shares to petitioners . The petitioners further submits that share application money of Rs 18.00 lacs is still lying with the Company. 37. The respondents counsel agreed that in total 1729000 shares were allotted to various respondents on 19.05.2008, 10.09.2008 and 13.10.2008 after following due process of law . Since, first petitioner was not director on any of the above dates as such he was not given notices of these meetings. The respondents contended that Company was in huge losses of Rs 69292403.00 as on 31.03.2008 and was in dire need of funds to pay OTS amount of Rs 7.75 crores . The second and third respondents put their properties including their residential house at stake for the company and arranged funds to the tune of Rs 9.84 crores but the petitione....