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2023 (5) TMI 902 - AT - Companies LawOppression and mismanagement - Illegal transfer of shares - ostensible intention (of two sons of Company's founder) to divide the Company into two parts through a scheme of demerger to distribute the proceeds between themselves leaving out the daughter from the sharing - wrongful cessation of the offices of Managing Director and Director held by A-1 and R-9 - seeking interim relief for appointing a Special Officer in R-1 Company to make an inventory of all books and accounts and take possession of all books and record of the Company - HELD THAT:- The Appellants have been reiterating the prayers made in the original CP No. 42/KB/2016 even though in the later applications prayer about reinstatement of A-1 and R-9 as Managing Director and Director has also been added. Thus it is seen that in the company applications filed after the status quo order dated 3.5.2016, clarificatory order dated 18.8.2016 and NCLT order dated 1.10.2019 for the appointment of a Special Officer, the issue of violation of these orders has also been regularly raised by the Appellants. The order dated 1.10.2019 passed by NCLT, which pertained mainly to the appointment of Special Officer to investigate into the affairs of the Company and also supervise the conduct of business by holding meetings of the board of directors periodically was appealed before NCLAT in [2021 (1) TMI 766 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI], and that the NCLAT dismissed the appeal in view of the fact that 'the Report of the Special Officer will give a true and fair picture of the state of affairs of the R-1 Company’. This order of the NCLAT was challenged in ARUN GUPTA & ANR VERSUS SOUTH EASTERN CARRIERS LIMITED & ORS. [2021 (4) TMI 1359 - SUPREME COURT] before the Hon’ble Supreme Court of India. The appointment of Special Officer was upheld by the Hon’ble Supreme Court and it was, therefore, not only desirable but necessary that the Special Officer submit his report regarding the affairs and management of the R-1 Company before the NCLT. It is noted by us that no such report is placed on record to show that the Special Officer could conduct any investigation or enquiry in the affairs of the Company and thereafter submit a report - eventually A-1 and R-9 were removed from office basically on the ground that they did not attend any of the four board meetings held on 14.7.2016, 26.10.2016, 19.1.2017 and 5.4.2017, though the hurdles being placed in their way of attending the board meetings was being regularly brought to the notice of the NCLT. It is not clear why the NCLT chose not to consider these prayers and give its findings in the Impugned Order. Thus the conclusion that A-1 and R-9 did not attend even one meeting in the past 12 months and were, therefore, presumed to vacate office under section 167(1)(b) of the Companies Act does not appear to be correctly arrived at after considering the rival contentions. In the interest of justice and in view of multiple allegations of oppression and mismanagement raised by the Appellants, matter remanded to NCLT, Kolkata for decision afresh - appeal allowed.
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