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TMI Blog2010 (7) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. 2. The applicant is JRG Securities Ltd., which is respondent No. 1 company in the company petition filed under sections 397 and 398. The company petition has been filed by respondent Nos. 1 and 2 herein and five others. The impugned statement is submitted by respondent No. 1 and respondent No. 2 (petitioner No. 1 and petitioner No. 3 in company petition). As per the communication dated 6-7-2010, respondent No. 1 and respondent No. 2 addressed the company to circulate the statement under the provisions of section 188 of the Companies Act, to all the members of the company who are entitled to have notice of the annual general meeting. The statement is produced by the applicant as annexure 2. 3. The statement mainly refers to two items : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng adjudication, and it amounts to an abuse of the process of law. In the counter filed by respondent Nos. 1 and 2 (petitioner No. 1 and petitioner No. 3) it is contended that the present company application is not maintainable in a company petition filed on a different cause of action. Another argument is that any order by the Company Law Board will have the effect of taking away the statutory right of the shareholders, and result in miscarriage of justice and against public policy of the company. According to them, the true facts are stated with an intent to guide the public shareholders, and does not amount to defamatory statements. Referring to the speech of the chairman (respondent No. 7) made on 25-5-2010, it is alleged that certain d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the disputed statement is extracted below for easy reference : "In the ensuing annual general meeting (annual general meeting), a proposal is coming up for the appointment of Mr. Munish Dayal as a director liable to retire by rotation. It is important to all of you to know that Mr. Dayal is a director who is the principal officer of the company enjoying and wielding substantial powers of the management. However the board of directors has never thought it fit to appoint him as a whole-time director of the company. He is the head of the day-to-day affairs of our company. Not even a single day passes in the affairs of our company without his instructions and he is the ultimate authority so far as the day-to-day matters are concerned and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instructions of Mr. Munish Dayal who is, as already stated, the de facto principal officer of our company. Therefore no such increase is called for. We urge you to denounce the same and reject the proposal for increasing the remuneration payable to Mr. Soni. Independent directors ought to have raised their objection to the above things. These facts smack the laudable legislative objective in requiring a public listed company to have a certain number of independent directors. Independent directors actually owe a statutory duty to denounce such practices and if they continue to remain silent it speaks volumes about their so called independence." 7. It is relevant to note that relief 8(d) in company petition is : "An order may be passed d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in and of itself and is not capable of an innocent meaning amounts to defamation per se as per Black's Law Dictionary. Viewed in the background of the above as well as the averments in the company petition and the facts stated in the impugned statement, I am of the considered opinion that the words used in the statement if circulated will lower the esteem of the company among the public. As rightly pointed out by the applicant, the averments and reliefs sought for in the company petition are indirectly sought to be circulated for publicity among the shareholders. I see no bona fides in the contention of respondent Nos. 1 and 2 that what is conveyed as per the statement is only some information which is true. For the reasons stated above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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