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2018 (9) TMI 940 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHIBreach of trust by trustee by selling the assets of the Company - oppression and mismanagement - sale of immovable property - value of the property and the buildings of the R1 company when it was sold to the R7 Company - Held that:- Respondents 2 to 6 have sold their entire shareholding to the R7 Company. They have also sold the properties shown in the last available balance sheet for the year 31.03.2001 of the 1st Respondent Company. The admitted facts of the present matter show not only oppression on the part of original Respondents 2 to 6 but also mismanagement as in the name of clearing loans, the whole Company itself has been transferred without letting the other shareholders know. The present appeal being continuation of the original Company Petition, we can exercise powers which were required to be exercised by the learned NCLT under Sections 241 and 242 of the Companies Act, 2013 read with Rule 11 of the National Company Law Tribunal Rules, 2016 as well as Rule 11 of National Company Law Appellate Tribunal Rules, 2016. At present, passing of Orders of winding up the Company would unfairly prejudice members, but otherwise the facts justify the making of a winding up order considering the acts committed by the Appellants. If in spite of the efforts as per Order we propose to pass don’t succeed, NCLT may consider directing steps for winding up. The ends of justice require this Appellate Tribunal to pass necessary orders although these orders are required to be passed against the Appellants who have come up in the appeal as we find that this is necessary in the interest of the Company which was established by late Shri M.A. Shanmugam. Order: - We maintain direction 1 issued by the learned NCLT in the Impugned Order that an Independent Auditor should be appointed to carry out audit as proposed by the learned NCLT. The fees of the Auditor to be appointed by NCLT shall be borne by the original Respondent No.1 Company. The other directions 2 to 6 of the Impugned Order are quashed and set aside. We quash and set aside the shares transferred by original Respondents 2 to 6 in favour of three persons - 1) Kumaravel Varatha Rajan, 2) Jayanthi Kumaravel and 3) Manikandan Kumaravel. We restore the shareholding of the Company as on 29.09.2011. We declare that the sale deed dated 31.10.2011 executed by original Respondents 2 to 6 in favour of original Respondent No.7 as not binding on the Respondent No.1 Company. The NCLT shall immediately appoint an Administrator to take over the land and structure of the Respondent No.1 Company and to manage the affairs of the Company. The NCLT is requested, under Section 242(2)(k) of the Companies Act, 2013, to appoint such number of persons as Directors of the Respondent No.1 Company as it finds appropriate to manage the affairs of the Company under supervision of the Administrator and to ensure holding of free and fair EOGM for the shareholders to decide future course of action for the Company. It would be open for learned NCLT to later consider, if necessary, if Orders of winding up need to be passed.
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