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TMI Blog2011 (9) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (P.) Ltd. and Nippun Construction (P.) Ltd. and Sameer Mittal and Naveen Mittal in Aarti Construction (P.) Ltd. as directors is null and void and they be restrained from interfering with the administration of the company and acting for and on behalf of the company in any manner whatsoever ; declaration that the illegal purported resolutions dated 9th December, 2006, 27th August, 2007 and 31st August, 2007 are null and void and are of no consequence; declaration that the petitioner No. 1 and his group manage the operation and administration of the company in the interest of all the members of the company and the company in general and to appoint an independent chairman/administrator, if deemed necessary ; that the R-3 to 5 should not interfere with the administration ; debarring of R-3, R-4 to 5 from acting as a director or involving themselves as director and or in any capacity in the management of a company for a period of at least 5 years from the date of passing of said order. 2. It is noted that the petitioner No. 1 is one of the four bothers, namely, S/Shri Mahesh Mohan Mittal, Naresh Mohan Mittal, Ratish Mohan Mittal and Satish Mohan Mittal and petitioner No. 2 is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 on a monthly rent of Rs. 6,200. The rent was to be payable in advance on the 7th day of each calendar month. It was pointed out that Mittal Hotels (P.) Ltd. was also promoted by all four brothers and their family members but later on all the shares of Mittal Hotel (P.) Ltd. were transferred to eldest brother Shri Mahesh Mohan Mittal (now dead) and his family members in and around April 1995. On 31st August, 1992, the tenancy agreement between Sangeeta Construction (P.) Ltd. and Mittal Hotel (P.) Ltd. came to an end by efflux of time. The Mittal Hotel (P.) Ltd. did not get the lease deed renewed and since that day, i.e., 1st September, 1992, they are the illegal occupant of the premises. As on today, the lessee is in arrears of rent. To compound the illegalities, Mittal Hotels (P.) Ltd., has encroached upon terrace and carried on illegal and unauthorised construction. 4. The petitioners' grievance is that the respondent-company had convened a Board meeting on 31st August, 2007. A notice of the meeting was sent to all three directors along with agenda. Due to some unavoidable circumstances two of the three directors were not able to attend the meeting and both of them sent their a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... While searching the Website of RoC the petitioner was shocked and surprised to discover that a company secretary Sh. Naresh Kumar vide diary No. 3615 had filed certain documents including Form 32 certifying induction of Shri Sandeep Mohan Mittal as director of the R1-company, the Form 32 indicated that Sh. Sandeep Mittal had been made director of the company based on a Board resolution dated 9th December, 2006. The same was a matter of utter shock for Sh. Naresh Mohan Mittal and Sh. Amul Mohan Mittal as no Board meeting ever had taken place on 9th December, 2006 and no such resolution had ever been passed including Shri Sandeep Mittal as a director of the company. Another Form 32 certifying induction of Sh. Nippun Mittal as director of the company was also filed indicating that Sh. Nippun Mittal had been made director of the company based on a Board resolution dated 31st August, 2007. After these facts came to the knowledge of the petitioner on 12th September, 2007, the petitioner located Mr. Naresh Kumar (R9, the company secretary who had filed the said Form 32 with the office of the RoC). The petitioner wrote to R-4 to give an explanation for these fraudulent act vide letter dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Naveen and Chhikara for your reference as Annexure A and Annexure B. I also hereby state that in future, if your goodself want some more information, then I am ready to cooperate.... Certified copy of resolution passed in the Board meeting of Sangeeta Construction (P.) Ltd. held on Saturday, 9th day of December, 2006 at its Registered Office of the company. "RESOLVED THAT pursuant to section 260 of the Act, Mr. Sandeep Mohan Mittal be and is hereby appointed as additional director of the company to hold office till the date of AGM". "Resolved further that Mr. Ratish Mohan Mittal, director of the company be and is hereby authorised to sign and submit the Form No. 32 in RoC, Delhi". Resolved further that Mr. Naresh Kumar, company secretary in whole time practice is authorised to certify the said Form.... Certified copy of resolution passed in the Board meeting of Sangeeta Construction (P.) Ltd. held on Saturday, 31st day of August, 2007 at its Registered Office of the company. "RESOLVED THAT pursuant to section 260 of the Act, Mr. Nippun Mittal be and is hereby appointed as additional director of the company to hold office till the date of AGM". "Resolved further that Mr. Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany in violation of various provisions of the Act and have been continuing to defraud the company, petitioners. The R-3 directly with respondents 4, 5 and 6 have virtually gained control over the composition of the Board of the directors of respondent No. 1 without conducting any meeting of the Board and shareholders. This act of acquiring the control on the Board of respondent 1 is in violation of section 171 read with section 174 of the Act. The action of R-3 is prejudicial to the interest of the company, creditors as well as oppressive to the petitioners. Further the appointment of respondent Nos. 4 and 5 to the Board of respondent 1 is not done by following the provisions of the Act, as no Board meeting was conducted for making the said appointment. The petitioners were never given a notice of these alleged Board meetings. The appointments of respondents 4 and 5 on the Board is not in conformity of provisions of the Act relating to notices, quorum and Board meeting and appointment of directors by Board is void ab initio. The respondent are not issuing any notices for holding the meetings of the Board of directors and shareholders, therefore, they are not complying with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No. 1-company with effect from 25th October, 2004 to hold office up to the date of next AGM, which was held on 24th September, 2005. As per the minutes of the said AGM, Mr. Amul Mohan Mittal (petitioner No. 2) was not appointed as director, the P-2 had accordingly ceased to be director with effect from 24th September, 2005. All Board meetings held thereafter are purportedly attended by Mr. Naresh Mohan Mittal (petitioner No. 1) and Mr. Amul Mohan Mittal (petitioner No. 2). It was pointed out that the petitioner No. 2 having ceased to be director with effect from 24th September, 2005, hence, all such Board meetings are illegal and invalid as the same having been held without any quorum, the petitioners have never refuted those averments despite the same being on record since August 2008, except the reference made in the rejoinder arguments to the provisions of section 290 which only validates the acts done by a person as director. As per the proviso to section 290, however, nothing in section 290 shall validate acts done by petitioner No. 2 after the comments of respondents on statutory records in the form of affidavit was placed on record on 22nd August, 2008, in any case th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitting the allegations in the petition, the respondent No. 1-company becomes the petitioner itself which can not be allowed under the provisions of sections 397 and 398 of the Act, reliance was placed on the case of Sai Sugars Ltd. v. Deepak Sabharwal [2008] 144 Comp. Cas. 726 (CLB - New Delhi) 14. Further, the respondents argued that the reliefs sought by the petitioners are for seeking declaration to the effect that appointment of respondent Nos. 4 and 5 as directors was illegal and so were the resolutions dated 9th December, 2006, 27th August, 2007 and 31st August, 2007. It was pointed out that the entire petition deals with the facts and circumstances, wrongly or rightly as to whether or not the Board meeting was held on 31st August, 2007 and, whether or not the appointment of respondent Nos. 4 and 5 as directors was valid. It was contended that it is an established principle of law that an isolated act and directorial complaints cannot be made subject-matter of a petition under sections 397 and 398 of the Act. Reliance was placed on Hanuman Prasad Bagri v. Bagrees Cereals (P.) Ltd. [2001] 33 SCL 78 (SC). 15. Further, the respondents pointed out that in the petitioners rejo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offer on the eligibility or ineligibility of respondent No. 6 to be appointed as statutory auditor and the same shall have to be dealt with as per the laws, however, it was contended that the letter dated 12th September, 2007, reflects and provides true proceedings held at the meeting dated 31st August, 2007, and refute all the allegations made by the petitioners. Further, it was pointed out that the petitioners have heavily relied upon the R-9's letter dated 12th September, 2007, reproduced above. It was pointed out that R-9 has been a close associate of the petitioners attending to the secretarial matters of several companies belonging to them. There is, therefore, direct collusion of petitioners with respondent No. 9. It was pointed out that the facts directly contradict the contents of letter dated 12th September, 2007, of the petitioner addressed to the R-9. Whether or not the said Board meeting dated 31st August, 2007, was held, is a fact which can be proved or disproved by leading evidence, oral or documentary, and corresponding cross-examinations which can only be adjudicated upon in a civil proceedings and not in the proceedings under sections 397 and 398 ; reliance was pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Shri Ratish Mohan Mittal, director of the company, namely, Sangeeta Construction (P.) Ltd. had engaged respondent No. 8, for and on behalf of the said company, in the capacity of professional advisor as special invitee for recording the proceedings of the Board meeting on 31st August, 2007. It was denied that he asked Shri Naresh Kumar to file Form 32 and supported them with documents. It was stated that the petitioners made a false complaint to police of P S Ashok Vihar against respondent No. 8 in response to that respondent No. 8 gave a legal notice to the petitioners dated 21st September, 2007 explaining the facts and circumstances and thereby asking the petitioners to withdraw the false complaint against respondent No. 8. It was stated that Shri Amul Mohan Mittal was not known to him and when he entered in the office, Shri Ratish Mohan Mittal told him that the person who had just entered in the office is one of the directors, namely, Shri Amul Mohan Mittal. Shri Amul Mohan Mittal was not forcibly made to sit and asked to be present to sign his attendance and sign a few blank papers. Only Shri Ratish Mohan Mittal asked Shri Amul Mohan Mittal to sign his attendance sheet and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioners' case is that P-2 was forcibly made to sign the attendance sheet and other blank papers relating to the Board meeting dated 31st August, 2007 to the venue of which he had gone simply to inform that he was indisposed and will not be able to attend the meeting the other petitioner had already sought leave of absence. It has been alleged that the R-3, namely, Shri Ratish Mohan Mittal who was the only third director in these companies, and who had attended only one meeting in the last seven years, with the help of the other respondents which also included the company secretary and the statutory auditor overpowered P-2 forcibly, for which even complaint was filed with the police, in the endeavour of the respondents to gain control on the affairs of the company. The petitioners have sought resolutions passed on 9th December, 2006, 27th August, 2007, and 31st August, 2007, to be declared as null and void as the quorum of the Board of directors was not met, hence, the appointments of Shri Sandeep Mittal and Nipun Mittal in Sangeeta Construction (P.) Ltd. and Nippun Construction (P.) Ltd. and appointment of Shri Sameer Mittal and Shri Navin Mittal in Aarti Construction (P.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, if he had ceased to be director with effect from 24th September, 2005. It is noted that Naveen Kumar Gupta and Gulshan Kumar Arora have not entered appearance in these cases despite service. It is also noted that Shri Gulshan Kumar Arora was, in fact, removed by the Institute of Chartered Accountants of India from his membership during the period when the companies had re-appointed him as a statutory auditor, he, in fact, was ineligible to be re-appointed as statutory auditor. Further, it is noted that the replies of the company secretaries is also very evasive and not up to the standards of statutory compliances which they are required to practice and uphold. It is very obvious that the filing of the documents with the RoC has been managed and is not in accordance with the procedure prescribed. Form 32 has been filed after a delay of 9 months. Signatures on the documents are alleged to be forged. The facts and circumstances of this case give credence to the narration of events as given by the petitioners. The exoneration of the company secretary by the ICSI and restoration of membership of the statutory auditor does not validate the irregularities and the illegalities committed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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