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2018 (8) TMI 258 - AT - Companies LawOppression and mismanagement - Held that:- When major part of property of the Company has been shown as sold off by Respondent No.2 who had tendered resignation as Director but went ahead to execute the sale deed, there was oppression and mismanagement on the part of Respondents 2 to 4. Respondent No.7 was mother-in-law of Respondent No.3 who is brother of the Respondent No.2. Looking to such relationship of these parties and the fact that it is Private Limited Company, keeping in view the contradictory pleadings claiming exchange viz-a-viz the sale deed claiming that money had been paid, the transaction in favour of Respondent No.7 was apparently suspicious and transfer without authority. Respondent No.2 could not have passed title to Respondent No.7. If Respondent No.7 did not have legal title, she could not pass it to Respondent No.8. Respondent No.8 failed to verify if his vendor had duly acquired title and thus failed to act reasonably to show bona fides. The learned NCLT rightly set aside both the sale deeds dated 3rd November, 2015 and 4th November, 2016. The arguments on behalf of Respondents 3, 4 and 7 depending action of Respondent No.2 executing sale deed relying on Section 176 of the Companies Act, 2013 cannot be accepted. Section 176 provides that no act done by a person as Director shall be deemed to be invalid, notwithstanding that it is subsequently noticed that the appointment was invalid for reasons stated in the Section. In the present set of facts where it is shown that the Respondent No.2 had incurred disqualification and had also resigned, the act of such Respondent in subsequently going ahead and holding himself out as Director to execute sale deed cannot be protected. Such acts attract criminal liability. Although other allegations were made in the Company Petition but NCLT did not find any merits in the other contentions raised. Even before us, no sufficient material has been pointed out to examine the other averments of oppression and mismanagement made in the Company Petition and thus we do not find any reason to interfere in that part of the finding of NCLT where it rejected other reliefs sought by the Original Petitioner.
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