2021 (2) TMI 308 - Tri - Companies Law

Seeking a direction to the Respondents to maintain STATUS QUO with regard to the constitution of the 3rd Respondent Company its Directions and Bankers in the interest of justice and equity - Rule 11 of NCLT Rules 2016 - HELD THAT - The Tribunal after considering the issue has already passed exparte Interim Orders on 26.06.2020 in I.A. Nos. 197 200/2020 by directing the Respondents to issue prior notice if any proposal is there to remove the Applicant/Petitioner as Directress and to follow the extant provisions of the Companies Act 2013 etc. However none appears for the Respondents so far. Since the Applicant/Petitioner is stated to be holding 38% of the shares of the Company apart from position of Directorship she is entitled to participate in the affairs of the Company and she is also entitled to receive perks on par with other Directors. Since the Tribunal is not in a position to hear the Respondents till now we cannot pass further exparte interim orders at present as prayed for. However the Respondent No. 3 in the meanwhile cannot force the Applicant to subscribe to Rights issue as offered to her vide letter dated 07th July 2020 until further orders. Application is hereby disposed of by directing the Respondents not to force the Applicant/Petitioner to accept on the Right Issue offered vide letter dated 07th July 2020 until further orders.

Summary

Issues:
1. Application filed seeking direction to maintain 'STATUS QUO' regarding a company's constitution and activities.
2. Allegations of misappropriation of funds and unilateral actions affecting company's operations.
3. Request for appointment of an Administrator and external auditor to oversee company's affairs.
4. Dispute regarding shareholding and attempts to remove a director.
5. Failure to respond to notices and emails, leading to a request for interim orders.

Analysis:
1. The application (I.A.No. 269/2020) sought a direction under Rule 11 of NCLT Rules, 2016, to maintain 'STATUS QUO' concerning the constitution and activities of a company. The applicant alleged that since a specific incident in 2019, the company's operations had come to a standstill, with financial irregularities and key decisions being made without proper authorization.

2. The main company petition (C.P. No. 82/BB/2020) involved serious allegations of misappropriation of funds, diversion of money without board resolution, and attempts to remove a director. The petitioner requested the appointment of an Administrator to oversee the company's functioning, conduct an audit, and potentially wind up the company if necessary.

3. The applicant and respondents were involved in a dispute regarding shareholding and attempts to remove a director from the company. The petitioner, holding a significant percentage of shares, sought protection from unilateral actions affecting her position and rights within the company.

4. The tribunal noted that the respondents had not appeared despite notices being served, leading to a request for interim orders to address the ongoing issues. The tribunal had previously issued interim orders to prevent certain actions until a proper hearing could take place.

5. Ultimately, the tribunal disposed of the application by directing the respondents not to force the applicant to accept a Right Issue until further orders. The communication of this order to the respondents was permitted, emphasizing the need for compliance with legal procedures and protection of the applicant's rights within the company.