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2020 (8) TMI 549 - Tri - Companies LawOppression and Mismanagement - transfer of shares of promoters in Board Meeting without considering his objections only with an intention to convert the land of respondent No. 1 for construction of real estate project against the aims and objects of respondent No. 1-company - HELD THAT:- As rightly contended by the petitioners those 117 shares were held by M/s. Kalicharan Das Trust and they cannot be transferred in a routine manner like transfer of shares of other members, as the said shares belongs to a Trust created by the founder member of respondent No. 1-company late Dr. Kali Charan Das. The burden of proof with regard to the legal and valid mode of transfer of those shares is upon the respondents and they have miserably failed to discharge their burden. As rightly contended by the petitioners, respondent No. 1-company has to observe all the legal formalities for transfer of shares of a trust, be it private or public. It is very clear from the conduct of the respondents that those shares were transferred in a routine manner, taking advantage of the majority in the Board. The mere undertaking of the transferees not to transfer their shares will not cure the illegality. Since, the petitioners are questioning the actions of respondent No. 1-company, non-joinder of the Trust nor its Trustees as parties is not fatal and this Tribunal has every power to conduct legal scrutiny. Even otherwise, the provisions of the Code of Civil Procedure, 1908 are not applicable except to the extent provided under the Companies Act to the proceedings before this Tribunal. Therefore, the objection of the respondents with regard to non-joinder of parties is not legally sustainable and is rejected. Transfer of shares of other members in the board meeting - HELD THAT:- Those shares were held by other individual members who have every right to deal in their own right and, there-fore, this Tribunal is not inclined to interfere. Appointment of Mr. Sunil Agarwal, CA Bal Kishan Bansal, Mr. Anup Kumar Khemani and CA Saloni Bansal - HELD THAT:- Since Mr. Anup Kumar Khemani purchased the shares of M/s. Kalicharan Das Trust, his directorship automatically gets cancelled in view of setting aside the transfer of shares of M/s. Kalicharan Das Trust by this Tribunal unless he possesses some other shares other than the shares of M/s. Kalicharan Das Trust - In so far as appointment of Mr. Sunil Agarwal, CA Bal Kishan Bansal and CA Saloni Bansal is concerned, the appointment of directors and auditors is the exclusive domain of the Board and this Tribunal shall not interfere unless serious prejudice to the public interest or to the affairs of the company is shown. The petitioners are not entitled to all the reliefs claimed in the petition except to the extent of setting aside the transfer of 117 shares of M/s. Kalicharan Das Trust - it is hereby declared that the transfer of 117 shares of M/s. Kali charan Das Trust in the board meeting dated January 24, 2018 is not in accordance with law - Petition allowed in part.
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