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2019 (12) TMI 1428 - Tri - Companies LawSeeking appointment of Chartered Accountant to look into the Books of Account of the Respondent No.1 Company - Illegal transfer of shares or not - utilisation of others money for the allotment of shares or not - siphoning of funds - HELD THAT - It appears from record that according to the Investigating Officer (Police Chief Idukki State of Kerala) the alleged offences of Respondents 2 and 3 are punishable under section 120(B) 406 420 465 467 468 471 34 IPC. The same issues are involved in this Company Petition / Interlocutory Application also. It is relevant to note that the Hon ble High Court of Kerala dismissed the appeal and the Hon ble Supreme Court has also dismissed the SLP filed by the Respondent No.2 with regard to the Criminal Investigation Proceedings initiated against him. The issue raised by the applicant in the Interlocutory Application to appoint a Chartered Accountant to look into the Books of Account of the Respondent No.1 Company is adhered with - Both the parties are directed to suggest the name of a Chartered Accountant within 2 days of this Order to enable this Bench to appoint him to look into the books of account of the 1st Respondent company and direct him to report whether the 1st respondent Company received money in respect of all the allotment of shares both equity and preference from its members especially the 2nd and 3rd respondents or the 2nd and 3rd respondents utilized someone else money for the allotment of shares to them. List the matter on 13.12.2019 for further orders.
Issues Involved:
1. Allotment and transfer of equity and preference shares. 2. Allegations of oppression and mismanagement. 3. Limitation period for filing the petition. 4. Appointment of an independent Chartered Accountant to investigate financial transactions. Issue-wise Detailed Analysis: 1. Allotment and Transfer of Equity and Preference Shares: The applicant filed a petition under Sections 59, 213, 241, and 242 of the Companies Act, 2013, detailing acts of oppression and mismanagement by the respondents. The applicant sought directions to allot 75,000 equity shares of Rs. 100 each to the applicant, instead of the 75,000 6% non-cumulative non-preference shares allotted on 7.9.2010. Additionally, the applicant sought to set aside the transfer of 75,000 equity shares to Respondent No.2, which was allegedly illegal. The applicant claimed to have infused Rs. 1.50 crores into the company, expecting 1,50,000 equity shares but received a mix of equity and preference shares, which the applicant challenged. 2. Allegations of Oppression and Mismanagement: The applicant accused Respondents No.2 and 3 of not bringing in any money towards the shares subscribed by them. The applicant alleged that the respondents hijacked the company by altering the capital structure and shareholding pattern, thereby oppressing the applicant's rights and committing a breach of trust. The respondents allegedly transferred 75,000 equity shares from the applicant to Respondent No.2, reducing the applicant's shareholding significantly. 3. Limitation Period for Filing the Petition: The respondents argued that the petition was barred by limitation, citing that the allotments and transfers occurred between 2010 and 2012, and the petition was filed in 2018. They referenced Section 433 of the Companies Act, 2013, and various case laws to support their claim. The applicant countered that the limitation period should be reckoned from the date of knowledge, which was in 2016 when the applicant discovered the allotment of preference shares and immediately lodged a police complaint. 4. Appointment of an Independent Chartered Accountant: The applicant requested the appointment of an independent Chartered Accountant to examine the books of account of the 1st Respondent company to verify if the company received money for the allotment of shares from its members, particularly Respondents No.2 and 3. The tribunal agreed to this request, considering the allegations and the need for a thorough investigation. Tribunal's Order: The tribunal allowed the Interlocutory Application, directing both parties to suggest the name of a Chartered Accountant within two days to investigate the financial transactions of the 1st Respondent company. The fee for the Chartered Accountant would be borne equally by both parties. The matter was listed for further orders on 13.12.2019. Conclusion: The tribunal recognized the applicant's allegations of oppression and mismanagement and the need for an independent investigation into the financial transactions. It addressed the limitation issue by considering the date of knowledge and allowed the appointment of a Chartered Accountant to ensure a fair examination of the company's financial records.
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