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2015 (7) TMI 337 - COMPANY LAW BOARD CHENNAI

2015 (7) TMI 337 - COMPANY LAW BOARD CHENNAI - TMI - Resignation of Director - Company refused to accept the resignation - The Board of Directors responded to the petitioner's letter by not accepting his resignation and seeking his co-operation in resolving the issues facing by the Company, which were, admittedly of his creation. The petitioner however, refused to communicate with the Company.

Held that:- From the plain reading of the provision of the Act, it is crystal clear that if .....

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the default within such time as may be specified in the order. Admittedly, the present petition is filed by the petitioner who is a member (shareholder) for seeking direction from this Bench to the company and any officer thereof to make good the default. Hence the petitioner entitled to file the present petition and the petition is maintainable.

In the present case the petitioner tendered his resignation to the Board of directors in writing vide his letter dated 25.04.2012 therefore .....

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spondents. I am of the view that the company and its officers made default by not filing Form 32 intimating the resignation of the petitioner from the post of director despite receipt of 14 days' notice requiring it to do so. In view of the aforesaid reasons and in exercise of powers conferred under section 614 of the Companies Act, 1956, I hereby direct the company to file Form 32 with the concerned Registrar showing cessation of the petitioner from the post of director w.e.f. 25.04.2012 within .....

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t the petitioner is the founder promoter and one of the first directors of the First Respondent. He had resigned his directorship and had communicated the same to the Respondents vide his email dated 25.04.2012. The petitioner had also sent the hard copy of the resignation letter by registered post with acknowledgement. The same was received by the Respondent No. 2 on 30.04.2012. The petitioner was subject to torture by other Directors and Respondents No. 2 to 4. have been making several baseles .....

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ting allegedly held on 20.07.2012, made various baseless allegations against the petitioner. Notwithstanding the fact that those allegations are vague, baseless and untenable on facts and law, the petitioner humbly states that they are extraneous to the subject matter of this petition. In fact, it may be noted that even Respondent No. 3 had submitted his resignation citing certain untenable and baseless allegations against the petitioner and the same has been accepted by the Board in the same me .....

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signation from directorship and despite the notice under Section 614 of the Companies Act. 1956 issued by the petitioner through his authorised representatives, the Company continues to be in default and the respondents are liable to make good the default in filing the Form No. 32. The failure of the First Respondent and its officers including the Second and Fourth Respondents to file the Form No. 32 pertaining to the resignation of the petitioner from the office of director with effect from 25. .....

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tion under that provision. The petitioner and the second Respondent were the subscribers to the memorandum and were the first directors of the Company. The petitioner employed teams of persons to achieve the objects of the Company i.e. to develop a logistics and infrastructure management software for companies in the oil and gas sector. While the software was developed, the petitioner claimed to have obtained contracts from Indian Oil Corporation and Total Oil India Private Limited for software .....

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y were funded by advances made by the respondents from time to time. Between August 2011 and April 2012, the petitioner also borrowed several lakhs of rupees from various persons, allegedly on behalf of the company. The respondents submitted that these were unilateral decisions of the petitioner and were neither approved by the Board of directors of the Company, nor were such borrowings brought to the knowledge of the board and shareholders. The petitioner was unable to secure contracts for the .....

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e aware of the liabilities created by the petitioner. The petitioner and second respondent convened an extraordinary general meeting of the Company on 13.04.2012 to take stock of the beleaguered situation of the company and to determine measures to address this situation. It was decided at this meeting that the Respondent No. 3. who was a shareholder of the Company would be appointed to the Board of Directors of the Company in view of his experience in this sector. The Board of Directors of the .....

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ng to the company becoming liable to be wound up. The second respondent and the shareholders of the Company had started questioning the process and unilateral decision making of the petitioner right from November, 2011. Faced with mounting expenditure and enormous liabilities, the petitioner decided to abandon the company and issued the letter dated 25.04.2012 claiming that he was resigning from the Company. The Board of Directors responded to the petitioner's letter by not accepting his res .....

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ntellectual property consists of software developed for clients, documents pertaining to the use of such software, including user guides and flow diagrams, webpage content, emails sent to and received from clients, vendors and employees. This is a serious criminal offence that has been committed by the petitioner. The respondents submit that the software developed in the company is the only real asset of the Company, which the petitioner has misappropriated. The respondents however, faithfully a .....

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oods and service providers who were, by this time, very upset and angry at the lack of response from the company. In fact the liability, which the respondents found was almost ₹ 60 lakhs was not fully applied for the purposes of the company. Further, the borrowings undertaken by the petitioner ostensibly on behalf of the company were impermissible, since the company is a private limited company. Accordingly, the respondents decided to file a complaint with the jurisdictional police station .....

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itioner agreed to meet with the other directors at the registered office of the Company. The directors then proceeded separately to the registered office of the Company. On the basis of these discussions, the petitioner undertook to settle the liabilities created by him in the name of the company. The petitioner and the third respondent also agreed to withdraw their communications for resignation from the board of directors of the Company. The directors then passed certain resolutions on the dis .....

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tions by the petitioner and the third respondent and their continued participation in the company's affairs. The petitioner had again disclaimed his responsibilities and is now seeking to dishonestly claim that he is no longer a director of the Company. These allegations are false and dishonest and are denied by the respondents. The respondents submitted that the petition is misconceived and cannot be sustained in view of the fact that the petitioner continues to be a director of the Company .....

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dated 01.04.2014, directed the registry to send notices to the respondents. In accordance with the directions the registry sent notices to all the respondents and the notices sent to respondent Nos. 1, 2 and 4 returned unserved with a postal remark as "not claimed'''. The notice sent to the Respondent No. 3 was served. The matter was heard and reserved for orders and the order is being passed on the basis of counter filed by the respondents and on the basis of the pleadings and .....

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e his letter dated 25.04.2012 sent by email to the Board of directors of the R1 Company, and the Company received the said resignation letter, However, the respondents have not accepted the resignation of the petitioner. It is seen that the Respondent No. 3 vide his letter dated 26.04.2012 addressed to the petitioner, wherein it is stated that the petitioner cannot resign as director of R1 Company until all liabilities incurred by the Company at the behest of the petitioner between October, 2010 .....

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d and recorded that the petitioner has been passing information to the creditors from whom he has borrowed money on behalf of the Company and also recorded that he has entered into an agreement with M/s Vertex System Private Limited. It is also recorded that the petitioner has borrowed monies ranging from ₹ 50,000 to ₹ 5,00,000 from various parties under false pretences of pay back on behalf of the company, but not accounted in the company's account and the company is not at all .....

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nditure and enormous liabilities decided to abandon the company and issued the so called resignation letter dated 25.04.2012. whereby resigning from the post of director. 4. Without going into the merits of the case, I am of the view that whether the present petition is maintainable under Section 614 of the Companies Act, 1956. Section 614 of the Act empowers this Bench to direct the Company and any officer to make good the default within such time. The said provision of the Act is reproduced he .....

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egistrar, make an order directing the company and any officer thereof to make good the default within such time as may be specified in the order. (2) Any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officers of the company responsible for the default. (3) Nothing in this section shall be taken to prejudice the operation of any provisions in this or any other Act imposing penalties on a company or its officers in respect of any .....

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to it by any Member or Creditor or by the Registrar, make an order directing the company and any officer thereof to make good the default within such time as may be specified in the order. Admittedly, the present petition is filed by the petitioner who is a member (shareholder) for seeking direction from this Bench to the company and any officer thereof to make good the default. Hence the petitioner entitled to file the present petition and the petition is maintainable. Admittedly the petitioner .....

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itioner and the 3rd respondent vide his letter dated 26.04.2012 addressed to the petitioner stated that the petitioner cannot resign until all liabilities incurred by the R1 Company at the behest of the petitioner during the periods from October 2010 to April 2012 are cleared. From the letter it is clear that there is no other reason not to relieve the petitioner from his position as director until he clears all the liabilities. The said reason cannot be a ground to withhold in filing form 32 wi .....

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mentioned therein do not contain any provision regarding acceptance of resignation. Therefore it is clear that a director may at any time resign from his office. It is reiterated that where there is no provision making acceptance of resignation necessary, a director vacates office on giving notice of his resignation. He cannot withdraw his resignation without the consent of the company. Further various Hon'ble High Courts have held that the resignation of director takes effect from the date .....

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