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2017 (8) TMI 1144 - AT - Companies LawApplication under Sections 241 and 242 of the Companies Act, 2013 alleging ‘oppression and mismanagement’ - non adherence to provisions require the Nominee Directors to obtain consent of the Board of Directors before taking any decision on matters contemplated in the said provisions of the AoA - Held that:- It is pertinent to examine the wordings used in Article 60(d) of the AoA which are clear and unequivocal in stating that the ACL Directors (which includes the Appellants herein) are deemed to have a conflict of interest inter alia on all matters relating to OPCD Documents and that the Nominee Directors shall on such matters constitute a quorum and shall have the sole right make any decision, take any action, etc. in respect of the said matters. The Tribunal has correctly dealt with the said contentions in paragraph 23 of the Impugned Order in which paragraph it has been held that it is clear and unambiguous that the Nominee Directors have been given full liberty to give instructions to ITSL directly and therefore the Appellants’ contention that the instructions should be routed through the Board of Directors is untenable on the fulcrum of oppression and mismanagement. The Appellants have attempted to cause confusion between ‘Reserved Matters’ as per Article 63 of the AoA and ‘matters wherein the Appellants have a conflict of interest’ as per Article 60(d). The contentions raised by the Appellants which pertain to alleged unauthorized instructions given by the Nominee Directors to ITSL relate to matters concerning OPCD documents and thus fall within the ambit of Article 60(d) and not under Article 63. In fact, money is recoverable by ‘Vinca’ pursuant to legal proceeding initiated by ITSL on behalf of ‘Vinca’. It was pointed out by the Ld. Counsel for the Respondents that the present proceedings are fundamentally premised on the contention that the subject transaction is illegal and/or a colourable device to circumvent FEMA in order that FMO can secure for itself an assured return which it can repatriate out of the country. On this basis, the Appellants have contended that the actions of ITSL including of taking out legal proceedings for the enforcement of security given by or on behalf of ‘Amazia’ and ‘Rubix’ under the subject transaction are actually for the benefit of FMO. In this context, it is pertinent to note that in Summons for Judgment proceedings in the Summary Suit filed by ITSL against Hubtown before the Hon’ble Bombay High Court to enforce its rights under the Corporate Guarantee, the defence raised by Hubtown Ltd., i.e. Hubtown’s contentions in relation to the subject transaction are identical to the Appellants’ contentions in the present proceedings as set out above on which contentions the present proceedings are premised. The transaction is not violative of FEMA and that the funds realized by ‘Vinca’ upon enforcement of the security offered by and on behalf of ‘Amazia’ and ‘Rubix’ would remain with Vinca’ and is thus for the benefit of ‘Vinca’ and not FMO. Therefore, by way of the aforementioned relief sought in the Company Petition, it appears that the Appellants are attempting to obstruct receipt of funds by ‘Vinca’ upon enforcement and realization of its securities under the subject transaction and acting in a manner prejudicial to the interests of ‘Vinca’.
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