TaxTMI 
TaxTMI 
2015 (2) TMI 1413
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....irection to the defendants to comply with the requirements of the Companies Act, 2013 and the Companies (Administration and Management) Rules, 2014 so as to enable the plaintiffs to convene and hold Extraordinary General Meeting to consider the matters indicated / contained in the requisition notice dated 18.12.2014, more particularly, to comply with the requirement of Rule 17 (7) of the Companies (Administration and Management) Rules, 2014. 2. Mr. Sanjanwala, learned senior advocate for the plaintiffs/ appellants has submitted that the Trial Court has committed error by not granting the interim injunction as prayed for, and the interim relief as prayed for ought to have been granted. It is submitted that, not only the appellants were entitled to the reliefs as prayed for, but even the provisions of the Companies Act, 1956 & 2013 and Rules made thereunder also obliges the respondent Company to do, what was prayed for by the plaintiffs by way of an interim order. It is further submitted that no written statement was filed by the defendants. It is submitted that, only a list of documents, along with copies of those documents, was placed on record, which according to plaintiffs....
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....ore than one counts, the suit is not maintainable. 3.2 Without prejudice to above, Mr. Pahwa, learned advocate for the respondents has further submitted that the plaintiffs, with support of, and in collusion with other persons of their group, are taking out the proceedings against the defendants one after another. Reference is made to the proceedings before the the Company Law Board initiated by one Mr. Vanraj Shah. Attention of the Court is also invited to the proceedings initiated by one Mr. Atul Shah, and the Civil Suits filed by Mr. Bharat Patel being Special Civil Suit No.578 of 2014 and 347 of 2014. It is submitted that, thus this is an abuse of process of law by the plaintiffs. It is contended that, this would also amount to suppression of material facts by the plaintiffs, and this is an additional ground which would dis-entitle them from claiming any relief. 3.3 Without prejudice to the above, it is further submitted that the impugned Resolution of the Board of Directors dated 10.11.2014, inter alia reads as under. "RESOLVED FURTHER THAT all the rights, entitlements and privileges, arising from Shareholders' Agreement dated 14th September, 2010 stand termina....
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....e prayers made in the suit are as under. "29. The plaintiffs, therefore pray : (a) that it may be declared that the acts of the defendants of removing the plaintiff No.1 and SN Rajan is illegal and unauthorized, it may be further declared that the defendants had no right to reverse the decision of the share holders, taken at the 70th General Meeting held on 22nd September, 2014 to reappoint the 1st plaintiff and Mr. S.N. Rajan to appoint him as the director in the 69th General Meeting in a board meeting; (b) that this Hon'ble Court be pleased to restrain defendant Nos. 2 to 9 by a permanent order and injunction from convening and/ or holding and/ or attending any meeting of the Board of Directors of the defendant company, and/ or from voting threat and/ or pass any resolution by circulation, so as to frustrate and/ or prevent the holding of the EGM requisition by the plaintiff pursuant to the notice dated 18th December, 2014 (Ext. H and I) (c) that this Hon'ble Court be pleased to order and direct the defendants by themselves, their servant, agents, officers and subordinates by a mandatory order and injunction to take all steps and do all things necessary and required....
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....ncillary or consequential directions as the Tribunal thinks expedient including directions modifying or supplementing in relation to the calling, holding and conducting of the meeting, the operation of the provisions of this Act and of the company's articles. Explanation - The directions that may be given under this sub-section may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting." 4.5 While asking the plaintiffs to be relegated to the Company Law Board, the respondents also rely on the resolution dated 10.11.2014 passed by the Board of Directors, the relevant part of which is quoted in para:3.3 above. It is not in dispute that the shares held by the plaintiffs, pursuant to the shareholders' agreement in question, answers the eligibility criteria stipulated under Section 100 of the Companies Act, regarding holding of not less than one tenth of paid up share capital of the company. The said holding along with voting right attached thereto, but for the impugned decision of the Company, entitles the plaintiffs to take recourse to Section 100 of the Act, 2013. The said Section reads as under. "Calling of e....
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.... aspect that, the provision of Section 186 of the Companies Act, prima facie can not be read to be meant for the circumstances like the present one, however no final opinion needs to be expressed with regard to the scope and ambit of the said section, since that is not the controversy before this Court. Suffice it to hold that, in the facts of this case, considering the material on record and the chequered history between the contesting parties, and the chronology of the actions taken by the respondents, as borne out from record, the suit in question can not be termed to be not maintainable. The suit is therefore held to be maintainable. The contention of the respondents in this regard, is rejected. 5.1 Having held that the suit is maintainable, the next question would be whether the plaintiffs have prima facie case, where the balance of convenience lies and who would suffer irreparable loss, if the injunction as prayed for is not granted. 5.2 Considering the material on record and the chequered history between the contesting parties, and the chronology of the actions taken by the respondents, as borne out from record, this Court finds that the plaintiffs have strong prima facie ....
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....ng by all other requisitionists on their behalf or by sending an electronic request attaching therewith a scanned copy of such duly signed requisition. (5) No explanatory statement as required under section 102 need be annexed to the notice of an extraordinary general meeting convened by the requisitionists and the requistionists may disclose the reasons for the resolution (s) which they propose to move at the meeting. (6) The notice of the meeting shall be given to those members whose names appear in the Register of members of the company within three days on which the requisitionists deposit with the Company a valid requisition for calling an extraordinary general meeting. (7) Where the meeting is not convened, the requisitionists shall have a right to receive list of members together with their registered address and number of shares held and the company concerned is bound to give a list of members together with their registered address made as on twenty first day from the date of receipt of valid requisition together with such changes, if any, before the expiry of the forty-five days from the date of receipt of a valid requisition. (8) The notice of the meeting shall be....
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....hree months from the date of the deposit of the requisition. (7) Any reasonable expenses incurred by the requisitionists by reason of the failure of the Board duly to call a meeting shall be repaid to the requisitionists by the Company; and any sum so repaid shall be retained by the Company out of any sums due or to become due from the Company by way of fees or other remuneration for their services to such of the Directors as were in default." 5.5 If the stand of the respondents is weighed keeping in view the above quoted provisions, this Court finds that, refusal by this Court to grant interim relief as prayed for by the plaintiffs, would not only make the civil suit infructuous but would have effect of giving premium to the respondents for the impugned actions/in actions, if ultimately it turns out to be unsustainable. Thus judging from any angle this Court finds that, the balance of convenience is in favour of the plaintiffs and the grant of interim relief would not be against the respondents but refusal to do so, would result in irreparable loss to the plaintiffs. For this reason, the plaintiffs need to be protected by appropriate interim relief. 6. The argument of learned ....