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2020 (10) TMI 1272 - Tri - Insolvency and BankruptcyProposal to change the designation of Applicant from the Managing Director to Non-Executive Director in the proposed Board meeting - seeking to declare that Applicant No.1 cannot be threatened and/ or cannot be removed as a Managing Director of Respondent No.9 till a final decision is arrived in the Petition. Whether the Bench has any discretionary power under its fold, even if it wants to exercise, to interfere with the Corporate Governance process of Respondent No.9 (Cotmac Electronics Private Limited) by interfering in the wisdom of the Board of the Company? HELD THAT:- The appointment of any Director as Chairman or Managing Director is as per the Articles of the Company and the prerogative and the wisdom of the Board of the Company. It also clear that the Bench cannot interfere with the wisdom of the Board in such cases. Therefore, it becomes abundantly clear that this Bench cannot use its discretion for the wisdom of the Board of Respondent No.9. The issue of appointment of Director as Managing Director has to be in line with the Articles of the Company and the wisdom of the Board of the Company. This Bench places reliance on a similar Judgment given by Hon'ble High Court of Delhi in case of Ranjit Singh vs Sylvania & Laxman Ltd, [1978 (5) TMI 131 - DELHI HIGH COURT] where the Hon’ble Delhi High Court has observed that the holding of a meeting is only the first stage in the matter and the result of such a meeting is quite different from restraining the removal of the Managing Director. If a meeting is held and action taken at that meeting to remove the Managing Director or Joint Managing Director, then only can it be said that the action is either wrongful or contrary to contract which would led to damages or it can be said that such action is ultra vires leading to the Court's decision that the removal is nonest. Before such removal actually takes place, there is no occasion for the grant of an interim injunction. The above Judgment of High Court clearly again substantiates the view of the Bench that even if there is going to be change of designation of a Managing Director to Non-Executive Director as per proposed Agenda of the Board meeting of the Respondent no. 9, there is no occasion for the grant of an interim injunction. This Bench feels that it has no business to interfere in the Corporate Governance matter which is entirely in the purview of Articles of Associations and Board of the Company. Application dismissed.
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