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2018 (7) TMI 1985 - THE NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH, CHENNAIOppression and Mis-management - Section 241 & 242 of the Companies Act, 2013 - whether the FCA is binding on the company and the other shareholders or not? - HELD THAT:- The company could not have been made a party to the FCA as it is a pre-incorporation contract. Anyhow, the name of the company has been mentioned in the said FCA referring to the quorum in Sections 1 & 5. It is a fact that all the shareholders of the company are the signatories to the said FCA and the Section 111 deals with shares to be allotted in the company. It is a fact that the signatories to the FCA are the shareholders and the directors of the company and everyone is liable to take action to incorporate the FCA in the Articles of Association - Since the name of the company is mentioned in the FCA and all the signatories are shareholders and even the shareholding of the company is fixed in the FCA, it is in our considered view, the FCA is binding on the company. The first issue is answered in favour of the Petitioner. Whether the removal of the Petitioner from the post Of Managing Director and Director is valid or not? - HELD THAT:- The removal of the Petitioner from the post of office of the Director has not been done in consonance with the provisions Of the Companies Act and, therefore, it is held that the removal of the Petitioner as a Director is not valid. Whether the Petitioner is entitled to get 25% of share in the company or not? - HELD THAT:- As per the FCA also, as seen in the pattern of shareholding of the company, only 10% was fixed and decided to be allotted to the Petitioner. There is no evidence that the Petitioner is entitled to get 15% of the shares from R2. Therefore, the claim of the Petitioner for 25% of the shares in the company should fail and this issue is answered in negative to the petitioner. Whether the Petitioner besides his terminal benefits and salary is entitled for exemplary costs or not? - HELD THAT:- In terms of Section 202(3) of the Companies Act, upon removal, the Managing Director of a company would be entitled to receive remuneration which he would have earned if had been in office for the remainder of his term or for three years, whichever is shorter. Accordingly, we deem it fit to order a compensation of ₹ 105 lakhs (calculated at the rate of ₹ 35 lakhs p.a. for three years) together with interest @ 10% from the date of removal of the petitioner from the Office of Managing Director, plus other benefits as already offered, till the date of payment to the Petitioner by the RI company/other respondents. Since the petitioner has expressed his intention to exit from the Company, which has been agreed to by the Respondents, the Respondents shall purchase the shares of the petitioner at mutually agreed rates by both the parties. Petition disposed off.
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