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2014 (3) TMI 1070 - Board - Companies LawIllegal appointment of Respondent Nos. 2 and 3 as Directors of the Respondent No.1 Company made at the EOGM - oppression and mismanagement - Held that:- From the bare perusal of the notice and the minutes, they appear false and concocted and it is proved that the said documents were prepared as an afterthought, to cook-up a false defence by the Respondents in their favour. The Respondent No.3 failed to satisfy me as to what was the necessity to appoint the new Directors, particularly when a Company was not carrying any activity for the last many years and the Respondent No. 4 had even applied for cancellation of Tax Registration etc. The contention of the Respondent No. 3 that the new Directors were appointed to strengthen the Board of Directors of the Company is without any basis and lacks merit. Therefore, it is rejected. Furthermore, from the perusal of the Form No.32 relating to appointment of the Respondent Nos. 2 and 3, it is noted that it does not contain their Consent Letters and the Resolutions etc. Even Sr. No. of Board Resolution is shown as '00'. This all support the case of the Petitioner that the said documents are cooked-up documents and cannot be relied upon. We therefore come to the conclusion that the Respondents have made an unsuccessful attempt to rely upon false and concocted evidence which is the result of an afterthought. The Respondents 3 has no convincing answer to the Petitioner's contention that any valid Board Meeting could he held as she was the only other Director of the Company to approve the notice to convene the impugned EOGM, therefore, find the appointments of the Respondent Nos. 2 and 3 as Directors of Respondent No. l Company as non-est, illegal and liable to be set aside. Act of oppression - Held that:- Upon a critical analysis of the facts stated and the documents filed in support thereof by the Answering Respondents, they do not seem worthy to relay upon. Therefore, inclined to accept the contention of the Petitioner that the Board Meeting held on 22/02/2010 whereat the resolution for shifting of the registered office of the company was passed at the back of the petition is null and void and amounts to an act of oppression as defined in the provisions contained in Section 397 of the Companies Act, 1956. Validity of the Extraordinary General Meeting held on 24/4/2010, whereat the Petitioner was removed under Section 284 of the Indian Companies Act, 1956 - Held that:- The Petitioner has been illegally removed from the Directorship without following the due procedure of law and without giving any proper convincing and cogent reason for her removal. The case of the Petitioner regarding non-receipt of notice for any Board Meeting is Found to be correct. The statement of the Petitioner that due to apprehension and threat to her life she did not attend the EOGM in my view appears true. Petitioner has succeeded in making out a case of illegal removal from the Directorship of the Company, with malafide motive to gain entire control over the management and affairs of the Company, As indicated hereinbefore, the Company was not carrying any activity or business for a going time and in September 2007, even the assets of the Company were sold off. Tax Registration certificate were cancelled. It is the case of both, the Petitioner as well as the Respondents, that in future there was no possibility of carrying on any business by the company. In such a situation, the appointment of the Respondent Nos.2 and 3 as the Directors and removal of the Petitioner as Director who was 40% shareholder seems without any convincing and cogent reason, but for gaining control over the entire affairs of the Company. Mismanagement committed by the Respondents in the affairs of the company by way of siphoning of its funds - Held that:- Looking into the allegations and counter-allegations, it would be just and proper to leave it to the Board of Directors of the Company to get the accounts of the Company audited to ascertain the siphoned of alleged diverted funds and on the basis of such report the company will be entitled to get back such amounts to its own account from the person responsible for it. Maintainability of the petition - Held that:- Though, it is apparent that the Petitioner in her petition has not specifically pleaded that the affairs of the Company are being conducted in a manner oppressive to any member and that to wind up the company could unfairly prejudice such member, but otherwise the facts would justify the making up of a winding up order on the ground that it was just and equitable that the Company should be wound up, however, in my opinion, the charges levelled by the Petitioner against the answering Respondents alleging them to be acts of oppression and mismanagement clearly prove that the affairs of the company are being conducted in a manner oppressive to its members but it would not be just and equitable to wind up the company, would unfairly prejudice such member, but that otherwise the facts would justify the making up of winding up order on the order it was just and equitable that the company should be wound up. The sequence of events narrated above, thus go to prove that the conduct of the Respondents towards the Petitioner has been consistently harsh, burdensome, unfair and lacks in probity. The Petitioner has therefore, succeeded to prove the allegations relating to acts of oppression and mismanagement in the affairs of the Respondent No.l Company as defined under section 397/398 of the Act, and the petition therefore, deserve to be allowed.
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