Home Case Index All Cases Companies Law Companies Law + AT Companies Law - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 926 - AT - Companies LawOppression and mismanagement - maintainability of transfer of shares from Respondent No.4 to Respondent No.3.- status of payment of remuneration to the Appellant - siphoned off the money in the name of salaries of Directors - Held that:- No doubt as per Sub-Section (9) of Section 309 of the old Act, the provisions regarding remuneration of Directors under the old Act was not applicable to private companies unless it was subsidiary of a public company. But then, it has been argued by the Counsel for Appellant that keeping the yardsticks as found in these provisions and capital of the Respondent Company in view, the remuneration which Respondents 2 and 3 took could not have been more than ₹ 1,25,000/- per month but each of them took more than ₹ 3 Lakhs per month. As argued that Respondents 2 and 3 in this manner siphoned off the money to themselves in the name of salaries of Directors by shutting out the Appellant from participating and then not declaring any dividends. We find that the submissions are not without basis. The Respondents have to act in trust and they cannot deprive the Appellant, one third shareholder in the Company by neither giving him participation nor remuneration nor dividends. Such diverting of profits to salary and not declaring dividends, in the facts of the matter, must be held to be oppressive of Appellant. Going through the reasonings recorded, we do not think that the learned NCLT appreciated the matter in proper perspective. The Petitioner who had himself fairly put up all the e-mails and copies of the Board Resolutions, which Respondents 2 and 3 brought about by way of majority, has been presumed to be in the wrong. The very fact which is admittedly on record and which shows that when the relations strained, the parties did sit down together and on 2nd January, 2014 (Appeal Page – 213). Board Resolution was passed to appoint Valuer of the Company including of tangible and intangible assets and liability and Vani Consultants Private Limited was assigned the job, shows admitted position between the parties that they did accept between themselves that they could no longer continue together and need to split. The Valuation Report is of July, 2014. According to the Appellant in spite of receiving the Valuation Report, the Respondents did not act upon the same and it was not placed before the Board. Respondents 2 and 3 did act oppressively with the Appellant before Company Petition was filed as well as during pendency of the Company Petition and for such acts of theirs there was tacit consent of Respondent No.4 and thus he is also guilty of oppression. We find that winding up of the Company would unfairly prejudice the members of the Company but otherwise the facts justify making a winding up order on the ground that it is just and equitable that the Company should be wound up. We set aside the transfer of shares from Respondent No.4 in favour of Respondent No.3. The Appellant is entitled to function as Director and is entitled to remuneration as Director equal to what has been paid to Respondent No.3 from August, 2014 till his shares are purchased by Respondent Nos.2 and 4 from the funds of the Company. We remit back the matter to NCLT, Kolkata Bench. NCLT will first give opportunity to the Respondent Nos.2 and 4 to purchase shares of the Appellant of Respondent No.1 company on the basis of Valuation Report (Annexure A-11) (filed in this Appeal with Diary No.2428) within time preferably of 3 months (or as may be specified by NCLT). If the Respondents 2 and 4 fail to purchase the shares of the Appellant in time as may be specified by NCLT, opportunity will be given to the Appellant to buy out, in time to be specified by NCLT, the shares of Respondents 2 and 4 in which contingency he would be entitled to purchase the shares of Respondent No.2 and 4 on a discount of 5% on the value as specified in the Valuation Report. NCLT may pass any and further suitable Orders deemed fit in the context, and matter. Parties to appear before NCLT, Kolkata on 19.11.2018.Respondents 2 and 3 each will pay costs of Appeal ₹ 1 Lakh each to Appellant from their own sources.
|