TaxTMI 
TaxTMI 
2026 (5) TMI 930
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....tone Age Granite Pvt. Ltd. i.e. the Respondent No. 1 Company was incorporated as a Private Limited Company under the aegis of the Companies Act, 1956, wherein the Appellant was involved in the business activities; iii) considering her contribution in the Respondent No. 1 Company, the Appellant was appointed as a Director in the Respondent Company on 16.09.1994; iv) pertinently, the Appellant has a degree of Masters in Business Administration, whereas the Respondent No. 2 is only a Bachelor in Commerce. Therefore, even in terms of educational qualification, the Appellant is more qualified than Respondent No. 2 to handle the business of the Respondent No. 1 Company; v) in 2004, the Respondent No. 1 Company was changed from Private Limited Company to Public Limited Company under the name of M/s Stone Age Limited; vi) on 31.03.2004, 10,000 shares belonging to the Respondent No. 2 were transferred to the Appellant herein, making her shareholding 20% of the total shareholding of the Respondent No. 1 Company; vi) in the year 2005, the Appellant and the Respondent No. 2 moved to the United Kingdom as a couple. More particularly, the Respondent N....
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.... 31% of the shareholding of the Respondent No. 1 Company; xiv) it is alleged even the relevant Articles of Association of the Respondent No. 1 Company did not mandate that Whole Time Directors had to offer themselves for reappointment; xv) naturally, the Appellant pursued the Respondent No.1 for information and documents related to her removal from directorship, but the Respondent(s) did not respond to the Appellant's request for documents; xvi) on 05.01.2013, the Appellant issued a Notice to the Respondent No. 1 Company stating inter-alia the removal from the Directorship by rotation was an illegal act and no notice of the meeting of the Board of Directors or of the Annual General Meetings was circulated to the Appellant being a Director and a Shareholder in the Respondent No. 1 Company. It was pointed out no dividends were also being paid to the Appellant and the Appellant sought documents from the Respondent No. 1 Company with respect to this; xvii) the Respondent No.1 Company did not provide details. Instead, the Respondent No. 1 Company replied to the said Notice of the Appellant vide a notice dated 20.02.2013 and denied all allegations leve....
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....ssion of the learned counsel for the appellant the appellant was illegally removed from the directorship of the Company. It was argued she was appointed as a whole time director on 06.02.2012 for a period of five years but was illegally removed on 27.05.2012 on the plea she did not offer herself to be reappointed. The appellant submits no notice/intimation of the Meeting dated 25.07.2012 was ever given to her and she was removed without any intimation, which is an act of oppression and mismanagement. It is also the case of the appellant no document/postal receipt of service of appellant has been placed on record and any meeting, held without issuance of a notice of said meeting to the Director is to be treated as bad, hence her removal as a whole time director be declared as illegal. 4. The appellant referred to Article 110 of the Articles of Association as under: Article 110 - Special Position of Managing Director Subject to the provisions of Act the Managing Director or whole-time Director shall not, while he or they continue to hold that office, be subject to retirement by rotation. 5. It is the argument of the learned counsel for the appellant Article 11....
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....and Ors Vs Ruby General Hospital Ltd & Ors MANU/SC/8408/2006 where it is held as under: "7. Xxxxxxx In respect of the appellant No.1, the notices are addressed to a local address notwithstanding the fact that the company itself has attached various documents indicating that the Appellant No.1 used to stay in some hotel or guest house during his visit to Calcutta. It was observed that adequate time was not given and notices were not sent to proper addresses. The CLB observed that the action of the company to have posted notices for the meetings to the local addresses of the NRI directors lacked in probity and fair play as the appellants being not only the first directors of the company but also substantial holders of the shares, they should have been given notices to their address in the USA. 10. In Parmeshwari Prasad Gupta vs. The Union of India (UOI) (02.08.1973 - SC): MANU/SC/0395/1973, it is held as under: 10. Now, it cannot be disputed that notice to all the Directors of a meeting of the Board of Directors was essential for the validity of any resolution passed at the meeting and that as, admittedly, no notice was given to Mr. Khaitan, one of the Directors ....
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.... been observed in the Directors' Report that our client had not sought/confirmed her re-appointment as a director and resultantly she stands retired from the Board of Directors of the Company and such purported retirement besides being contrary to the provisions of Companies Act, 1956 has also been subversive and prejudicial to her rights as director as well member of the company." 15. The said notice was duly replied by the Respondent No.2 vide his reply dated 20.01.2013 as under: - 4. That the contents of Para No.2.5 of the notice are vehemently denied. It is stated that your client no more holds the office as Director *as she has not opted for the directorship in the Annual General Meeting (AGM) held on 25-07-2012 and in 'absence of her willingness to continue as Director, she stands retired from the Board of Directors of the company. It is further stated that your client was the Director of the company till 25'" July-2012 and she being in the fiduciary capacity cannot allege that she was not informed of the meeting of Board of Directors or Annual General Meeting pertaining to the year 2011-12. It is also pertinent to note that as per the provisions of the Co....
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....y her as a conduit to get maximum alimony. Qua M/s Orvi Design Studio, reference was made to para 49.1 of the impugned order as under: - 49.1. The Respondent Company shall appoint a Registered Valuer, within 7 days from the date of this order for valuation of the shares of the Respondent Company as on 12.10.2023. For the purpose of valuation, the Registered Valuer shall not consider the acquisition of M/s Orvi Design Studio as the decision undertaken in the EOGM dated 18.11.2021 has not been implemented. Among other things, the valuation report shall include the price per share. The Registered Valuer shall provide a soft copy of the valuation report to respective parties and their counsels within a period of 10 days from the date of this Order. The same shall be placed before this Tribunal also. The fees of the Registered Valuer shall be borne by the Respondent Company in addition to any incidental expenses. The parties, if required, may make their respective submissions before the Registered Valuer, who shall make such independent enquiry. The Registered Valuer, as necessary for the limited purposes of valuation, shall have the liberty to use the requisite information fro....
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....18 of Respondent No.8. 22. In the present case the appellant was very well aware of the facts since the year 2013, as is demonstrated by his own legal notice dated 05.01.2013. The reliance of the appellant upon M. Nandana Reddy (Supra) is misplaced considering the fact in the said case the appellant had no knowledge of the allotment of shares at all but whereas in the present case the appellant herself admitted of her retirement in her letter dated 05.01.2013. 23. It makes it apparent the Appellant was all along being aware of her retirement and thus, the present litigation is nothing but an afterthought. In Khatri Hotels Pvt Ltd. Vs Union of India, the Hon'ble Supreme Court held as follows: "30. While enacting Article 58 of the 1963 Act, the legislature has designedly made a departure from the language of Article 120 of the 1908 Act. The word 'first' has been used between the words 'sue' and 'accrued'. This would mean that if a suit is based on multiple causes of action, the period of limitation will begin to run from the date when the right to sue first accrues. To put it differently, successive violation of the right will not give rise to fresh cause a....
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....tegorically asserted the notice of meeting of 2013 was issued to appellant but the appellant in her rejoinder gave an evasive denial and rather required proof thereof. Hence, we are of the considered view, the Ld. NCLT has correctly decided the issue of allotment of shares in 2013. Incidentally, at relevant time, Section 81 of the Companies Act, 1956 never applied to Respondent No.1 company viz a private company. 27. It is also pertinent to mention the notices were sent at the address of the appellant which was in the record of Respondent No.1 and she sent a correspondence only in the year 2017 intimating change of her address. Qua the argument the Article of Association of Respondent No.1 nor the provisions of Companies Act, 1956 contemplate any requirement for a director to offer herself or himself for reappointment and, therefore, the removal of the appellant from the directorship was illegal has been raised for the first time before us and was neither urged or argued before Ld. NCLT and this Tribunal in Appellate jurisdiction cannot sit as the Court of first instance to adjudicate the issues beyond the impugned order. 28. In State of Maharashtra Vs Hindustan Construction ....