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2018 (10) TMI 1018 - AT - Companies LawLegality of transfer of shares - change of designation of Petitioner from Managing Director to Executive Director - legality of BOD meeting - Held that:- The Respondents themselves through Respondent No.2 filed Form 32 on the basis of meeting dated 25.09.2011 changing the designation of Petitioner from Managing Director to Executive Director. There is yet another Form 32 submitted by Respondent No.2 purporting to state that the Petitioner was Director and was now being designated as Executive Director. This form is based on some meeting dated 15.11.2011. The Minutes record that the Petitioner – Ayoli Abdulla, who has been Managing Director, his designation needs to be changed from Managing Director to Director, w.e.f. 15.11.2011. This would be against the Minutes dated 25.09.2011 (Annexure A9 – Page 207) where Respondent No.4 had been designated by these three as Managing Director w.e.f. 25.09.2011. If the Respondents were treating the original Petitioner, still as Managing Director or Director, admittedly they never gave any Notice of any such meetings to the original Petitioner. They blow hot and cold in the same breath. In the face of these documents put up by them, Respondents also claim that as Petitioner transferred all his shares on 27.04.2011, he ceased to be Director in view of Articles of Association and no Notice was required to be given to him. Reading of these various minutes and the forms submitted at the hands of Respondent No.2 and the case put up by Respondents shows that the documents are not beyond suspicion. It is the case of the original Petitioner that after coercing him to sign the forms, the Respondents with the help of Respondent No.2 went on submitting Forms to the ROC and it was only when in the Civil Suit, the Respondent No.4 filed Affidavit that he came to know about what Respondents were up to. Coming to the question of coercion of the original Petitioner, we have purposely referred to the Company Petition and Reply of the Respondents which was filed in NCLT, in some details and we have purposely reproduced portions from the Affidavit of Respondent No.4 which he had filed in the Civil Suit and we find by referring to these details that the pleadings themselves (including what the Respondents have claimed), disclosed that the Petitioner was coerced to sign the transfer forms. Had it been a normal execution of forms, there would not have been so many questionable acts on record. It is not the case of Respondents that Petitioner transferred the shares for any consideration. There is no good reason for him to simply give up his control as Managing Director. There is substance in the claim of Petitioner that due to valuable property involved in Civil Suit, Respondents tried to take over. We discard defence that silence of Petitioner after 27.04.2011 till filing of Petition should be held against him regarding claim of co-ercion. There is substance in what Petitioner has argued that although he was co-erced to sign the forms, he did not react immediately as he was rest assured that without his involvement no Board Meeting could be held. The Respondents are changing stands even where some time they say there was General Body Meeting of Meezan Group where shareholders of different companies of alleged Meezan Group had assembled and sometime they referred to Board Meeting of Respondent No.1 Company. We have already mentioned there is no material to show that there was any validly called Board Meeting on 27.04.2011. For such reasons, we do not find that there is any error in the Impugned Judgement and Order passed by NCLT. The NCLT has rightly allowed the Company Petition and set aside the transfers purportedly made to Respondent No.4 and further transfers they made inter se themselves. The NCLT rightly restored the original Petitioner as Managing Director and the further directions it has given to ROC for ignoring the findings done under the digital signature of Respondent No.2. We do not wish to interfere.
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