TMI Blog2015 (7) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... f the company issued a notice for convening EOGM of the company and the petitioners convened the meeting on 12.01.2006 and did not participate in the meeting. The petitioner himself filed a suit bearing O.S No.6/2006 before the Civil Judge at Arsikere against the respondents along with an application seeking temporary injunction from conducting the meeting dated 12.01.2006. The Civil Court refused to grant injunction and the suit was dismissed on 12.03.2006. The meeting which was held on 12.01.2006 is legal and valid. - The petitioners have not made out any case either on oppression or on mismanagement and the petition is liable to be dismissed. - CP. NO. 28/2006 - - - Dated:- 9-1-2015 - SHRI KANTHI NARAHARI, J. For The Respondent : Shri. K. Venkatramani, Advocate ORDER The present petition is filed under section 397 and 398 of the Companies Act, 1956 alleging certain acts of oppression and mismanagement in the affairs of the company and sought various main and interim reliefs as prayed in the petition. It is stated that the respondent company was incorporated in the year 1947 under the Indian Companies Act, 1913. The following are subscribers to the Memorandu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents removed the 1st petitioner as chairman and managing director. K.V Niranjan (R13) as director and Smt Kamalamma (R8) as director. They have also appointed K.C Yogesh, respondent No.2 herein as director in the place of Ravindranath Babu, appointed K.C 13harath in the place of K.V Niranjan and appointed K.N Dhanjaya (R5) in the place of Smt Kamalamma. The removal of the said directors caused ousting out a particular family and concept of the family company has been completely ignored. The 1st petitioner herein walked out from the Extraordinary General Meeting held on 12.01.2006 under protest, though he issued the notice of the EGM in the capacity as managing director. Subsequently, the 1st petitioner herein, aggrieved by the decision taken in the said EGM moved the Court of Civil Judge, Senior Division at Arisekere and filed OS No.6/2006 restraining the respondents therein from moving the resolutions and filed OS No.16/2006 seeking interim injunction restraining the respondents 1 to 9 therein from interfering with the discharging the functions of the managing director. While the Civil Court declined to pass order restraining the respondents 1 to 9 therein from the moving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondents I to 10 filed detailed statement of objections to the petition. It is submitted that the petition filed by the petitioners is highly misconceived. devoid of any merits and the same is liable to be dismissed in limine. It is respectfully submitted that at the time of formation of the RI Company, the paid up capital of the company was ₹ 2,00.000/-. The said shares were subscribed by the subscribers to the Memorandum of Association in the following manner: Shri K. Venkataswamy had held 120 shares Smt K. Lakshmamma had held 40 shares Shri K.G V Swamy had held 10 shares Shri K. Shankaramma had held 10 shares and Shri K. Salamina had held 10 shares. As per Article 14 of the Articles of Association of the R1 Company, the subscribers to the Memorandum and Articles of Association shall be the first directors of the R I Company. It is respectfully submitted that as per Article 15 Shri K. Venkataswamy one of the subscribers to the Memorandum of Association was appointed as the governing director of the R1 Company. It is further submitted that as per the said Article, the said governing director was vested with all the powers to run the day to day affairs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id notice had come to be duly signed by K.V Niranjan. Copy of the EGM notice dated 19.08.2004 wherein the said board meeting is dated 02.08.2004. when things stand thus, copy of the notice produced by the I petitioner reflects all together a different date. It is further submitted that subsequently in the said Extraordinary General Meeting held on 19.08.2004, a resolution was passed appointing the 1st petitioner as the chairman and governing director of the R1 Company. In this regard. it is respectfully submitted that the notice of EGM had not been circulated to all the members of the R1 Company. It is further submitted that the said meeting was attended only by the family members of 1st petitioner, and Shri K.V. Niranjan. It is respectfully submitted that on coming to know of the said resolution was passed at the EGM held on 19.08.2004, all the members who had not been issued notice of EGM had immediately opposed the said resolution passed at the said EGM and had written a letter dated 28.08.2004 to Registrar of Companies, Bangalore with a copy marked to the RI Company expressing their dissent and unhappiness in the said decision taken at the EGM. It is further submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... family had proportionate representation in the company is vehemently denied as false and baseless statement. During the year 1989, when Sint K. Lakshmamma had ceased to be director by death, the Board of directors comprised of the petitioner, Shri K.V Niranjan and Smt K. Kamalamma. It is submitted that the Board of directors continue to remain the same since the year 1989 and there is no change in management. It is further submitted that the Board of directors comprised of only the family members of Shri K.G.V Swamy excluding Shri K.V Gurumurthy who had not been inducted into the Board of directors of RI Company. It is further submitted as stated in the earlier paragraph hereinabove as per Article 24 of the Articles of Association, all the directors of the company other than the governing director shall retire once in three years and get re- elected, however it is respectfully submitted that in the given case none of the former directors viz., Shri K.V Ravindranath I3abu. Smt K.V Niranjan and Smt K. Kamalamma retired at the AGM and have been re-elected. The subject matter pertaining to appointment of directors were not discussed at AGM and that they have been continuing to hold of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinued to claim to be the managing director of the Rl Company and walked out of the said meeting. Further the 1st petitioner and his two sons viz., Shri K.R. Satish and Shri K.R Madhusudhan the petitioners 2 3 herein while signing the attendance register of the said meeting had appended their signature with a note Signing under Protest Court Order not Received . The petitioner aggrieved by the decision taken in the said EGM moved the court of Civil Judge, Senior Division at Arsikere and filed OS No.6 of 2006 in the said court seeking interim injunction is vehemently denied herewith as false and baseless statement. On the other hand, the petitioner had filed the said Original Suit No.6 of 2006 on 1 1.06.2006 before the commencement of the said EGM and sought an order of injunction restraining the respondents from convening the said EGM, however the presiding officer of the Senior Division, Arsikere had refused to pass an order of injunction and directed the petitioner to participate in the EGM to be held on 12.01.2006. Subsequent to the said EGM, Hon'ble Civil Judge, Senior Division Arsikere had dismissed the said original suit bearing No.6 of 2006 filed by the petitioner ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the smooth functioning of the business operations of the R1 Company and further with the 1 petitioner misusing his position as director of R1 Company and had issued cheques of R1 Company for his personal liability and the same being duly returned dishonoured for insufficient funds and the company facing the brunt of prosecution, the respondents had removed the petitioner from the office of director of R1 Company. The averment that the petitioner group families holding more than 241 shares, they are entitled to have proportionate representation in the Board of R1 Company is denied herewith as false and baseless statement. In view of the aforesaid reasons it is requested the Bench to dismiss the petition. 5. Heard the learned counsel for the respondents. None appeared for the petitioners continuously for three hearings i.e dated 21.08.2014, 16.10.2014 and on 19.12.2014. The matter pertains to the year of 2006 and the Bench has decided to dispose of the matter keeping in view of the long pendency of the matter on the basis of the pleadings and documents filed by the parties. The petitioners prayed this Bench to declare the removal of the first petitioner and respondent No. 13 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his capacity as director for convening of EOGM under section 169 of the Companies Act. 1956. The EGM was convened on 12.01.2006 at 3.00 PM at the registered office of the company. The petitioner after convening the meeting walked out of the said premises where the meeting was conducted after signing the attendance register under protest. The members in the meeting suggested for a poll to transact the business of removal of the petitioner and other members from the office of directorship of the R1 Company. The said facts have been admitted by the petitioners. The petitioners also admitted the fact that no notices were issued to any shareholders and they would be invited orally. I am of the view that the holding of the EGM on 19.08.2004 is invalid and illegal on the ground that the petitioners have not issued notices for convening the meeting to all the shareholders of the company except informing orally to the shareholders who supported the petitioners cause. The petitioners failed to establish that they have issued notices to all the shareholders for the EGM held on 19.08.2004. The petitioners have enclosed a notice dated 02.08.2004 for convening the EOGM to be held on 19.08.1.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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