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2022 (4) TMI 313 - AT - Companies LawOppression and Mismanagement - Allotment of Shares made in a Board Meeting - validity of Board Meeting - it was alleged that the Board Meeting was without mandatory notice to the Appellant (one of the Directors) - Maintainability of Resolution - HELD THAT:- The Resolution is set aside in its totality, as the name of the first Respondent was not categorically mentioned in the operative portion of the Order. Whether the shares allotted to Smt. Usha Rani in the Board Meeting still hold good and whether she continues to be the shareholder as the last para of the Order does not mention the subject party/i.e., the first Respondent/Ms. Usha Rani? - HELD THAT:- When the Resolution itself is set aside in its totality, merely because the name of the first Respondent was not categorically mentioned in the operative portion of the Order it has to be interpreted in its truest sense as NCLT has categorically set aside the Resolution dated 18/02/2014 whereby the authorised share capital was increased. In pursuance of the Resolution having held to be illegal, the allotment of further shares in favour of Respondent-4 was also set aside. Learned Counsel for the Appellant vehemently contended that only Mr. Surjeet Singh and Mr. Prakash Kumar have equal shareholding of 50% each and that Ms. Usha Rani was not at all a shareholder and therefore she does not have the locus standi to move an Application under Sections 241/242 of the Act. The only reference with respect to Ms. Usha Rani/first Respondent being a shareholder is the copy of an Annual Return MGT – 7 dated 27/02/2018 wherein it is shown as the Shareholder/Director having 5,000 shares and the list of shares annexed dated 31/03/2018 showing the Applicant as well as M/s. Prowess International Private Ltd. as Directors and shareholders having 5,000 shares and ₹ 2,01,00,000/- shares respectively, but the same cannot be relied upon. The contention of the Learned Counsel for the first Respondent, that the last para does not mention the subject party/first Respondent and therefore the Order in C.P. 104/2014 does not pertain to the first Respondent is completely untenable - The alleged Board Meeting was without any notice, though the Petitioner No.1 was director of the Company. Therefore, the Impugned Act comes under the purview of oppression and mismanagement and Board Resolution regarding the permission to increase the authorised share capital and allotment of shares to Respondent No. 4 deserves to be set aside. This Appeal is disposed of with the clarification that in the light of the Resolution dated 18/02/2014, having been set aside and having attained finality pertains to the setting aside of the allotment of shares to the first Respondent/Ms. Usha Rani also. In view of this clarification, the matter is remitted back to the NCLT to decide the maintainability of Petition as expeditiously as practicable but not later than two months from the date of this Order. Appeal disposed off.
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