2018 (9) TMI 1838 - Tri - Companies Law

Removal of petitioner as the Director of the Company - HELD THAT - There is a prima facie case in favour of the petitioner and balance of convenience is also in favour of the petitioner and if interim orders are not passed the petitioner will suffer irreparable loss which cannot be compensated in terms of money for the reason that in the event the company which runs the hospital suffers bad name being the director and substantial THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI DIVISION II MUMBAI 4 shareholder of the company the petitioner has to bear the negative image apart from losing valuable investments made in to the company. Therefore in this background of the matter we hereby direct the respondent not to alter the shareholding pattern of the company and also not to give effect to resolution if any removing the petitioner as director of the company until further orders. The respondent had uploaded the resolution removing the petitioner as a director of the company respondents are directed to immediately remove/ delete the said resolution from the MCA postal the DIR-12 must be cancelled and take appropriate steps to restore the name of the petitioner as a director of the company.

Summary

Issues:
1. Ad interim orders requested by the petitioner.
2. Transfer of shares and removal of petitioner as director.
3. Urgent motion before the Tribunal due to rejection of Writ Petition by High Court.
4. Prima facie case in favor of the petitioner and balance of convenience.
5. Directions to respondent regarding shareholding pattern and directorship.

Analysis:
1. The professional representing the petitioner requested ad interim orders, but due to the matter being likely heard by the High Court the same day, the Tribunal decided to list it for further consideration on 03.10.2018.
2. The petitioner, holding 33% shares and having advanced unsecured loans, transferred 17% shares to Respondent No. 2 for betterment of the company. The de-empanelment of the hospital from a government scheme led to the petitioner's concern over irregularities and attempts to safeguard investments. Notices for removal as director were issued without substantial reasons, leading to the petitioner approaching the Tribunal for relief.
3. After the rejection of the Writ Petition by the High Court, an urgent motion was presented to the Tribunal for ad-interim orders, highlighting the urgency and importance of the matter.
4. The Tribunal found a prima facie case in favor of the petitioner, emphasizing the potential irreparable loss and negative impact on investments if interim orders were not passed. The balance of convenience favored the petitioner, leading to the directive to maintain the status quo regarding shareholding and directorship until further orders.
5. The respondents were directed to refrain from altering the shareholding pattern or implementing any resolution removing the petitioner as director. In case of any such actions already taken, they were instructed to rectify and restore the petitioner's position. Counter filings were mandated within four weeks for further proceedings on 15th November 2018.