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TMI Blog2013 (4) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... r acted as the managing director of the company while R2 was to be non-executive chairman presiding over the Board and general body meetings of the R1-company. The petitioner identified a factory producing drugs and pharmaceuticals at Rakanpui, Taluka Kalol, District Gandhinagar and owned by a company by name Sarthi Pharmaceuticals Ltd. The said factory of Pharmaceuticals Ltd. was under mortgage of Janta Cooperative Bank Ltd. (in liquidation), Nadiad. The petitioner negotiated with the directors of Sarthi Pharmaceuticals Ltd. and arrived at the terms of take over of the factory by R1-company. The terms of take over including the total consideration of Rs. 4 crore to be paid by R1-company were reduced into writing in the form of memorandum of understanding ('MoU') dated 23rd April, 2009 and signed by the director of Sarthi Pharmaceuticals Ltd. and R1-company. To ensure smooth implementation of the MoU with Sarthi Pharmaceuticals Ltd., the petitioner negotiated with Janta Cooperative Bank Ltd. (in liquidation) for one time settlement of the dues of Sarthi Pharmaceuticals Ltd. to the said bank of paying a lump sum amount of Rs. 2.51 crore and ensured an MoU between the said company an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is relevant to mention that R5 who has resigned from the directorship of R1-company on 3rd December, 2009 vide Form 32 filed on the said date has illegally signed the deed of cancellation dated 5th December, 2009 with Sarthi Pharmaceuticals Ltd. that is after he ceased to be a director of R-company. 3. He further submitted that the acts of oppression and mismanagement by R2 to R6 are in connivance with R7. The respondent No. 2 has removed the petitioner illegally from the directorship of the company under section 283(1)(g) and section 283(1)(z) by creating false record of issuing notices for Board meetings under certificate of posting and conducting meetings only on paper. The Form 32 filed on 27th May, 2010 for the removal of the petitioner from the Board of directors of R1-company along with notices dated 2nd January, 2010, 12th February, 2010, 8th April, 2010 for the purported Board meetings alleged to have been sent under certificate of posting to the petitioner. The said notices of Board meetings were never received by the petitioner. It is settled law that notices sent by certificate of posting are not valid means of service. It can be seen from the purported notice dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he court may entertain a petition at his instance." (5) In the matter of Sumit Jain v. Alliance Dermatological (P.) Ltd. [2010] 94 CLA 247 /[2009] 95 SCL 26 (CLB - New Delhi) to show : "Although in a petition under sections 397-398 directorial complaints are not entertained, that does not apply in exceptional cases like those of closely held companies or companies in the nature of quasi-partnership." (6) In the matter of A. Sivasailam Tractors & Form Equipment Ltd. v. Registrar of Companies [1995] 4 SCL 66 (CLB - Mad.). (7) In the matter of B.N. Kaushik v. Registrar of Companies [2009] 91 CLA 134 / 92 SCL 127 (Delhi). (8) In the matter of Radhe Shyam Tulsion v. Panchmukhi Investments Ltd. [2002] 46 CLA 187 / 35 SCL 849 (CLB - New Delhi). (9) In the matter of Srichand Bajaj v. Bajaj Promoters (P.) Ltd. [2006] 75 CLA 303 /[2007] 76 SCL 8 (CLB - Chennai) to show : 'Whether mere statutory returns without being supported by any primary documents will not have any evidentiary value, because the RoC does only ministerial acts and his taking of statutory forms on record will have no sanctity in regard to the validity of such returns - Held "Yes".' [Head Note] (10) In the matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scription amount. He has to pay for the shares agreed to be taken to become the shareholder of the company. There is no material on record in the petition or elsewhere to prove that the petitioner has paid Rs.33,330 on 3,333 equity shares he had agreed to subscribe. There was no averment or confirmation at the hearing held on 19th July, 2010 before CLB that petitioner has paid the amount due on 3,333 equity shares. The petitioner is, therefore, not eligible to file this petition. A person other than an eligible shareholder cannot maintain a petition under section 397/398 of the Act. The petitioner is not a member of the respondent-company as per records of the company, viz., register of members and annual return. As per provisions of section 399(1)(a) the applicant filing application under sections 397 and 398 must have paid all calls and other sums due on their shares. The petitioner has not paid the amount due on 3,333 shares agreed to be taken by him as a subscriber to the MoA and, therefore, he is not entitled to file the present petition. The petitioner has failed to establish that he has paid Rs. 33,330 for 3,333 equity shares which constitute 33 per cent of the issued and pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cooperative Bank Ltd. (in liquidation.) towards the dues payable by SPL. The petitioner has used three different personal accounts in which the funds of the company were deposited after 20th July, 2009 and from which the payments in three tranches were made. He further submitted that the petitioner has perpetrated a very serious financial fraud on the company by engaging in embezzlement and siphoning off of the company's funds which were given by the R2 as unsecured loan to the company and which belonged to the company. The petitioner has alleged that he paid Rs. 5,00,000 from his personal cash to Janta Cooperative Bank which is not true as the said amount is paid from the company's cash he was handling. The amount was paid on behalf of SPL to the bank on 20th October, 2009 in cash. The petitioner be directed to disclose the source of Rs. 5,00,000 which he claim to have deposited with Janta Sahakari Bank from his personal account. The payment is made on behalf of the company. The petitioner is a fraudster and has tried to establish that he is having financial stake in the company. The petitioner was allowed to be a part of the management of the company to arrange the funds from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany. The petitioner was well aware of the financial position as well as inability of the company to fulfil the obligations under the MoU and despite being so aware the petitioner has filed the said civil suit. It is also known to the petitioner that even if the civil court directs SPL to perform the obligations under the MoU, then also the company would not be able to honour the obligation under the MoU. Therefore, the said civil suit is being withdrawn. The application for withdrawal is pending before the civil court of Kalol (Gujarat). The petitioner has vacated his position as the director of the company under section 283(1)(g) and 283(1)(i) of the Act and has not been removed as alleged. It is denied that R2 has removed the petitioner by creating false record of issuing notices under certificate of posting and conducting meetings on paper. The so-called act by R2 has not been done in connivance with R6 and R7 as alleged. The service of notices for Board meetings held on 9th January, 2010, 20th February, 2010, 15th April, 2010 and 26th May, 2010 was in accordance with section 53 of the Act and, hence, in accordance with law and there is no illegality at all. The petitioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passing resolutions as required by law. The Form 23 and/or Form 18 do not require attaching any such documents as alleged and the fact that the said form is/are duly registered by RoC itself suggests that there is no illegality in the matter of shifting of registered office of the company. The petitioner not being a shareholder of the company was not entitled to receive the notice of extraordinary general meeting ('EGM') held on 26th May, 2010 in terms of section 172(2)(i) of the Act. The R6 has been targeted by the petitioner to prove his case. The petitioner being a company secretary ought to have refrained from implicating R6 as well as R7 who have been acting as professionals and have no mala fide designs. The allegations made by the petitioner against the said respondents itself shows the character and intentions of the petitioner. The petitioner by filing the present petition and complaint for misconduct with ICSI has created a panicky atmosphere in the fraternity of company secretaries and this is another attempt to deprive the company from seeking the assistant from the professionals. The petitioner is not a shareholder and, therefore, he cannot file the present petition. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above provision it is crystal clear that if the name of any person without sufficient cause entered or omitted from the register of members, or default is made in entering in the register, the person aggrieved may apply to the CLB for rectification of register. Mere mention of a particular provision would not make out a case automatically unless, the ingredients of that provision is satisfied in the petition. In the present case no such grounds are mentioned nor is any case made out seeking enforcement of that provision of law. Moreover it is an attempt to make out a case to maintain a petition. Admittedly, the petitioner's name appears in the MoA of the company as a subscriber and there is no other documentary proof to establish that he is a member of the company. The respondents categorically stated that the petitioner did not pay the subscription amount to the company. The petitioner did not deny the same except stating that he spent huge amounts on the company. Therefore, I am of the firm opinion that the petitioner did not pay the subscription amount thereby he cannot claim to be a member of the company. Hence, I declare that he is not a member of the company. To maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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