Home Case Index All Cases Companies Law Companies Law + AT Companies Law - 2018 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 55 - AT - Companies LawOppression and mismanagement - Increase in Share Capital - Held that:- NCLT took note of the letter of the Bank of Baroda dated 24.11.2009 and the circumstances as to why it was necessary to increase the share capital. NCLT took note of the sequence of the events as to how the Original Respondent No.2 had approached Bank of Baroda for additional finance and the Bank of Baroda vide letter dated 24.11.2009 suggested increase in paid up share capital because of which the EOGM was required to be called. The NCLT thus found that the increase in the share capital was justified and the increase in the share capital was done after following due procedure. There is error in these conclusions drawn by the learned NCLT. Thus, on this count, we do not wish to interfere. Removal of Original Respondents 2 and 3 from posts of Directors - Held that:- Sub-Section (6) of Section 169 of the old Act provided that if the Board does not, within 21 days from the date of deposit of a valid requisition in regard to any matters, proceed duly to call a meeting for the consideration of those matters on a day not later than 45 days from the date of the deposit of the requisition, the meeting may be called by the requisitionist themselves. Although the Petitioners were part of the Board of Directors, the requisition (Page 235) of special notice for removal of Directors was given by the Original Petitioners as shareholders. It is not that any Board Resolution as such had been passed. In such circumstances, looking to the reasoning recorded by the learned NCLT and considering the provisions of Section 169 as mentioned above, we do not find that the decision recorded by the learned NCLT that removal of Respondents 2 and 3 was not valid, could be found fault with. Thus we do not interfere on this count also. Parties continue to make allegations and counter allegations against each other with regard to the EOGM called by Respondents 2 and 3 on 27.01.2010 and the EOGM called by the Original Petitioners on 05.03.2010 and whether or not the allotment of shares after the increase in share capital was correct or not. The arguments of the Appellants (Original Respondent Nos.2 and 3) to rely on above documents dated 18.07.2010 and 14.01.2011 and on that basis to set aside the Impugned Order directing distribution of increased share capital, cannot be accepted as neither Company was party to them nor Company adopted them and question of oppression and mismanagement can be decided only by NCLT, which has much broader Jurisdiction to take decisions with regard to interest of Company. Looking to the submissions, we find substance in what the learned counsel for Original Petitioners is submitting. Thus, although the learned NCLT did not record in so many words as to why it was directing that the allotment in respect of increased share capital still needs to be made, there is no reason why we should interfere with the above direction of NCLT in para – 92 (a) of the impugned order. One of the arguments raised by the learned counsel for the Appellants (Original Respondents 2 and 3) is that NCLT directed audit of accounts from 2009 – 2010 on the basis of allegations regarding siphoning but the Order shows that NCLT noted there were allegations of siphoning even for period earlier than 2009-2010. In this regard, Impugned Order shows NCLT considering the grievances of the parties in paragraphs – 36 to 41 and in paragraphs – 85 to 88. It considered the grievances and observed need of audit. Considering the grievances made by parties and observations of NCLT, audit of the accounts may be done since 2008 – 2009. The impugned Order needs to be modified only to that extent. Order In the impugned Order in directions Para – 92(c), instead of words “financial year 2009 – 2010”, we substitute the words “financial year 2008 – 2009”. Rest of the directions given by NCLT in the impugned Order para – 92 are maintained.
|