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2025 (5) TMI 942
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....and order an investigation into the affairs of the Respondent No. 1 Company as per the provisions of Section 213 of the Companies Act, 2013. ii. That this Hon'ble Tribunal may be pleased to direct the Respondents jointly/severally to pay the outstanding amount of the Director's remuneration being Rs. 1,80,00,000/- (Rupees One Crore and Eighty Lakhs Only) with interest at the rate of 18% from the date on which the said amounts were payable to the Petitioner. iii. That this Hon'ble Tribunal may be pleased to direct the Respondents jointly/severally to pay an amount of Rs. 5,00,00,000/- (Rupees Five Crores Only) to the Petitioner for having committed acts of oppression and mismanagement qua the Respondent No 1 Company and the Petitioner. iv. That this Hon'ble Tribunal may be pleased to pass an order under Section 242(2)(h) of the Companies Act, 2013 thereby remove the Respondent Nos 2 to 6 as Directors of the Respondent No 1 Company and appoint an administrator to conduct and govern the management of the Respondent No 1 Company till as such time as this Hon'ble Tribunal deems fit. v. That this Hon'ble Tribunal may be pleased ....
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....itioner and the Respondent No. 2, the Respondent Nos. 2 to 6 reduced the paid up share capital from 60,00,000 shares to 49,50,000 shares without informing the Petitioner and the Respondent No. 2 only transferred 8,91,050 equity shares of the total 49,50,000 equity shares to the Petitioner, i.e. 18% of the shareholding in the Respondent No. 1 Company. 2.5 Subsequently, the Petitioner was denied access into the premises of the Respondent No. 1 Company, denied his outstanding remuneration as a Director and access to documents and information of the Respondent No. 1 Company. Submissions advanced by the Ld. Counsel on behalf of the Petitioner 3.1 Change in Directors without shareholder's approval and no notice of AGM or EOGM given to the Petitioner. 3.1.1 The Petitioner submits that he has not received any notice of AGM or EOGM where ratification of persons to be appointed, re-appointed or removed as Directors of the Respondent No. 1 Company has been confirmed, which is in violation of the Companies Act, 2013 and the Articles of Association of the Respondent No. 1 Company. It is submitted that even after the Petitioner ceased to be a Director in 2016, he continued to be a sh....
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....ed to receive remuneration from the Respondent No. 1 Company amounting to Rs. 1,80,00,000/-. The said amount is reflected in the Respondent No. 1 Company's Balance Sheets as being payable to the Petitioner, however, the Petitioner never received the said amounts, as evidenced by the Petitioner's Bank Statements. The Petitioner has also shown the said amounts in his income tax returns as "receivable", i.e. the amounts are yet to be received from the Respondent No. 1 Company and has therefore been taxed by the Income Tax Authorities as well. 3.5 Withholding transfer of balance shares of the Petitioner. 3.5.1 The Petitioner held 30% of the total shareholding of the Respondent No. 1 Company, i.e. 18,00,000 equity shares out of 60,00,000 equity shares, for the period between 2008 and 2016. However, since the Petitioner was going through divorce proceedings during the period from 01.04.2015 to 31.03.2016 with his then wife, the Petitioner transferred 18,00,000 equity shares to the Respondent No. 2 for safe keeping, on his advice, as a gift on the condition that the Respondent No. 2 shall restore the Petitioner to his original shareholding once the divorce decree gets passed. 3.5....
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....wards their respective shareholding. Instead, it was agreed that the Respondent No. 1 Company would park all profits in the reserves and thereby would look after the needs of the Mehra family members by making provisions for monthly expenses, personal expenses, vehicles and residential accommodations. It is submitted that till 2020, the Petitioner received these benefits, but from 2020 onwards, the Petitioner has been ostracised by the Respondent Nos. 1 to 6 collectively and has been deprived of the benefits that continue to be made available to the other Mehra family members. 3.9 Sanction of inter corporate loan to Dishti Vishal without approval of the shareholders. 3.9.1 The Petitioner submits that he moved to Karnataka upon Respondent No. 2's instructions as a Director of an Associate Company. i.e. Dishti Vishal Private Limited ("Associate Company"), which was incorporated on 16.01.2020. The shareholding of the Associate Company is as follows - Sr. No. Name of Shareholder No. of Shares 1. Dishti Industries Private Limited 88,496 equity shares of R. 10/- each. 2. Suryakant Shantaram Dhamne 92,108 equity shares of Rs. 10/- each. 3.9.2 Upon inspe....
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....nt and the Petitioner had no say in the same. Submissions advanced by the Ld. Counsel on behalf of the Respondent No. 1 4.1 It is submitted that due to the vacancy on account of the demise of Respondent No. 2's father and to comply with the minimum requirement of directors in the company, the Petitioner was appointed as an Additional Director on 09.03.2008. He was later regularized and appointed as a Non-Executive Independent Director of the company. 4.2 The Respondent No. 1 submits that on 24.04.2015, the Petitioner duly transferred 17,99,900 equity shares he held in the Respondent No. 1 Company to the Respondent No. 2 of his own will by way of gift. The process of transfer of shares was completed as per the provisions of the Companies Act, 2013 and stood valid. The other circumstances alleged by the Petitioner are not on record of the Respondent No. 1 Company. Further, the ex-wife of the Petitioner was appointed as an Additional Director on 02.03.2015 in the Respondent No. 1 Company. On 01.04.2016, one year after transferring his shareholding to the Respondent No. 2, the Petitioner resigned from Directorship of the Company and has not been involved in the business and af....
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....residential premises at Forum House. Thereafter, Respondent Nos. 2,3,5 and 6 were forced to leave the residential premises at Forum House where the Petitioner is currently residing. It is submitted that the Respondent No. 2 requested the Petitioner to hand over the records of the company lying at Forum House, as they are required to be updated, but the Petitioner refused such request. 4.6 It is submitted that Respondent Nos. 4,5 and 6 along with the ex-wife of the Petitioner were appointed as Additional Directors of the Respondent No. 1 Company on 02.03.2015 to hold office as Directors up to the AGM to be held for the financial year ended 31.03.2015. On the recommendation of the Board, the shareholders of the company passed the necessary resolution to appoint these persons as Directors of the Respondent No. 1 Company at the AGM held on 30.09.2015. Further, during this meeting held in September 2015, the Petitioner was a Director of the Respondent No. 1 Company and was at all times aware of the appointment of the aforesaid persons. Additionally, the Annual Financial Report of the Respondent No. 1 Company for the financial years 2008-09, 2009-10, 2013-14 and 2014- 15 have been sig....
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....ciate companies or subsidiaries either in open market i.e. stock exchange or other arrangements in name of the company. The Board of Directors approved this vide Resolution passed at meeting on 18.02.2020, where it was resolved that by consent of the Board of Directors, the advance be given to the Petitioner. The Petitioner submitted details of the Demat Account for the year 2020-2021, but thereafter, the Petitioner stopped giving details of Demat Account. It is apprehended that the Petitioner has liquidated the advance given by the Respondent No.1 for personal use by selling off the shares which were purchased on behalf of Respondent No.1. Submissions advanced by the Ld. Counsel on behalf of the Respondent Nos. 2, 3, 5, 6, 7 and 8 5.1 Some of the submissions made by the Respondent No. 1 have been re-stated by the Respondent Nos. 2, 3, 5, 6, 7 and 8. However, since they have already been reproduced in the foregoing paragraphs, we refrain from repeating them unless needed. Other submissions by the Respondent Nos. 2, 3, 5, 6, 7 and 8 are clubbed and reproduced herein. 5.2 It is submitted that Respondent Nos. 2,3,5 and 6 have filed various police complaints against the Petiti....
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.... the same amount to Byerly Stud Farm for buying land from Byerly Stud Farm. It is submitted that the said Byerly Stud Farm is owned by the Respondent Nos. 1 and 2 as evidenced by the Sale Deed, thereby amounting to siphoning of the Respondent No. 1 Company's money by Respondent No. 2 to evade taxes payable by the Respondent No. 1 Company. 6.3 It is also submitted that the Respondent No. 2's admission that the documents are being maintained at a place other than the registered office of the company is a clear indication of mismanagement. 6.4 The Petitioner denies the alleged incident of 14.12.2020 and submits that no complaints in that regard were ever made by the Respondents to the police. Submissions advanced by the Ld. Counsel on behalf of the Petitioner in vide Additional Affidavit dated 13.09.2024 7.1 The Respondents have alleged that the Petitioner is in unauthorized possession of the residential flat, Forum House. It is submitted that Forum House was bought as an asset of the Respondent No. 1as a family home with the understanding that the family members would be entitled to live there and have a joint and undivided interest in proportion to their shareholding in ....
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....ishal by the Respondent No. 1 Company for the said loan. Hence, the Respondent No. 1 Company has extended an interest free loan to Dishti Vishal, thereby violating Section 186(7) of the Companies Act, 2013, and this can be ascertained from the Profit and Loss Statement of Dishti Vishal for the FY 2021-22, wherein the Finance Cost is 0. On the other hand, the Respondent No. 1 Company has accounted for payment of interest on borrowings of Rs. 9,00,000/- each towards two of its Directors, i.e. Respondent Nos. 5 and 6. 7.6 It is submitted that the Auditors of the Respondent No. 1 Company have observed that certain funds have been advanced, loaned or invested by Dishti industries in certain intermediaries with the understanding that such intermediary shall lend or invest in any person identified by Dishti Industries. It is submitted that these transactions are a way of diverting funds away from the Respondent No. 1 Company at the instance of Respondent No. 2. 7.7 There are discrepancies in the reporting of various figures in ROC filings, such as the gross turnover, the profit after tax indicating that false statements have been made in the reporting of financial statements. 7.8....
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....ollected from Air BNB to the Respondent No. 1 Company. The Counsel for the Petitioner contended that the said Premises is occupied by Petitioner, his wife and their minor child and the Petitioner's wife is occupying the same as her matrimony home and cannot be directed to vacate the same. Undisputedly, the said Premises is owned by the Respondent No. 1 Company, which is owned by the Respondent No. 2 (Petitioner's father), his wife, his daughters and the Petitioner. 11. Section 213 of the Companies Act, 2013 empowers this Tribunal to order an investigation into the affairs of the company if, inter-alia, the business of the company is being conducted with intent to defraud its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose. 12. In the case of Ram Parshottam Mittal vs. Hotel Queen Road Pvt. Ltd. (2019) 20 SCC 326, the Hon'ble Supreme Court held that the oppression would be made out - (a) Where the conduct is harsh, burdensome and wrong. (b) Where the conduct is mala fide and is for a collateral purpose ....
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....hat he "was shocked and aghast to learnt that the Respondent No. 1 Company had made transferred certain amounts to the said Associate Company as a loan when, in fact, the Petitioner was informed by the Respondent No. 2 that the monies sent to the said Associate Company were the outstanding amounts derived from the Respondent No. 1 Company towards the Petitioner's remuneration as a Director and the benefits being a shareholder of the Respondent No. 1 Company" looks like an afterthought story to lend weight to the allegation of oppression, as the Petitioner was a director of Dishti Vishal Private Limited when the said loan transaction took place and the treatment of transaction between Respondent No. 1 Company and Dishti Vishal Private Limited must be evident from audited financial statements for the year ended 31.3.2023 of Respondent No. 1 Company and Dishti Vishal Private Limited. Further, an act of advancing loan to an Associate Company cannot tantamount to an act of oppression, more so when such loan is stated to be recoverable and there is no allegation that by advancing such loan, permanent alienation of funds has taken place. The Petitioner has also contended that grant of int....
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....elationship with the conduct of company's affairs as the company and its shareholders are two distinct entities and any breach in the promise, even if there was one, by one shareholder to another shareholder in relation to shares of the Company cannot concern the company. Accordingly, this act is not an oppressive act qua affairs of the company and this Tribunal can not exercise any power in relation to same. 17. The Statutory Auditor, Respondent No. 8 and the Company Secretary, Respondent No. 7 of the Respondent No. 1 Company have also filed a reply. In our considered view, they are independent professionals, whose acts/conduct in rendition of their professional services are subjected to code of conduct, and they are bound to discharge their duties independent of their long association with the client. From the pleadings, we could not find any substantive material on record to demonstrate any mis-statement in the financial statements or non-observance of disclosure or procedural requirements. It is relevant to note that the Respondent No. 1 Company is a family owned company and in a fight between two factions of the family, the professionals are being dragged to make the allega....
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.... investigation in terms of Section 213 of the Companies Act, 2013. The mere non-payment of the money lying to the credit of the Petitioners in the books of the Respondent No. 1 Company cannot be held to be an act of oppression and the Petitioner has remedies available under the civil law in relation to recovery of those amounts. 21. The Petitioner has also alleged that the Respondent No. 1 Company's funds were paid to Dishti Vishal Private Limited as advances, which were in turn utilised by Dishti Vishal Private Limited for funding the purchase of large land parcels in the name of Mr. Suryakant Shantaram Dhamne, who was working as a land labourer in the farm and later on appointed as a director of Dishti Vishal Private Limited. It is an undisputed fact that the amounts paid to Dishti Vishal Private Limited have been accounted as advances to Associate Company in the books of the Respondent No. 1 Company and the Petitioner was also a director of Dishti Vishal Private Limited when such payments were made, hence, all these transactions had taken place in complete knowledge of the Petitioner. The Petitioner has placed on record the Audited Financial Statements of Dishti Vishal Privat....