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Dharamdas Nandlal Mehta Versus Meridian Construction (P.) Ltd.

2015 (11) TMI 264 - COMPANY LAW BOARD NEW DELHI

Grant of development rights - Restraint order against a person who is not a shareholder of R1 company - creation of third party rights - Held that:- In this case the petitioners initiated this CP against the act of Respondents saying the conduct of R2 and others is oppressive, and this fact of creating third party rights to Magnum has come to their noticed only after disclosure come from the Respondents side, therefore it cannot be said it is hit by limitation.

For having the petition .....

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property has not come into the accounts of the company, therefore, for time being it is to be understood that no money has come into the company showing it as consideration to Swami Samarth Property,

For having this Bench already stated in the order dated 18th May, 2015 that R2 dealt with the affairs of R1 prejudicial to the interest of the petitioners, this Bench directs Magnum Landcon LLP not to alienate or create third party rights over the Swami Samarth Property and shall maintai .....

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Resolution or shareholders resolution, has purportedly caused R1 grant development rights in respect of a property owned by R1 company i.e., Swami Samarth Nagar bearing CS. No.232 situated at Girgaum Division in favour of Magnum Landcon LLP, the petitioners filed this CA 31(MB) 2015 to implead Magnum Landcon LLP and its partners as respondents to this Company Petition. Since this transaction was not in the notice of the petitioners by the time this Company Petition was filed, the Petitioners cou .....

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. Senior Counsel Mr S.N. Mookherjee appearing on petitioners behalf submits that Company Law Board on 18th May, 2015 passed an order observing that R2 himself stated that development rights over the property supra have been granted to Magnum Landcon LLP on 13.10.2014 through a registered document. When they did not produce the copy of the agreement, Company Law Board has observed that creation of third party rights by R2 to Magnum Landcon LLP, is prima facie not correct. CLB has further observed .....

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pattern, the composition of the Board of Directors and also to maintain a status quo with respect to the property mentioned supra along with other properties. 3. Since this Bench appointed an Observer to observe at the time of inspection, he filed Minutes of Meetings recorded on 10.08.2015 stating that when he went for inspection of the records as per directions of CLB, the Advocate on respondents' behalf didn't appear and made a call for postponement of inspection to 31.08.2015. 4. The .....

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nterest of the property and also a right to mortgage for no consideration, Besides this, it has given a Power of Attorney to Magnum to approach State Government and Municipal Corporation or any other localities to act on behalf of R1 Company, since R2 has made a categorical statement that he sold development rights to Magnum for sale consideration of ₹ 9,51,00,000/-, the petitioners obtained statement of Account of the company held by Canara Bank from 01.04.2014 to 31.12.2014. To the surpr .....

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tioners and without any resolution, the counsel submits that R2 through R1 Company sold this property at gross under valuation, because Swami Samarth Property being situated in the heart of Bombay, the value of the property at least as much as four five times to the alleged sale consideration shown in the Sale Agreement. He further submits that CLB, in the earlier order, prima facie is of the view that alienation of development rights to third party is not correct, and since the petitioners are .....

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half filed Vakalatnama stating that since development rights over the property mentioned supra was already transferred to Magnum Landcon LLP, the petitioners cannot seek any relief under Sections 397 & 398 of the Act 1956 and that too against a party who is neither a shareholder nor a director in R1 Company, then the only recourse to the petitioners is to file a suit for specific performance or for declaration to invalid transaction before Civil Court, because jurisdiction does not lie with .....

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e held to create third party rights in favour of Magnum. It is the case of the petitioners that they hold more than 25% shareholding in the company. It appears, from the record that this fact has come to the notice of the petitioner only after they have filed this Company Petition. The petitioners submit that delay in filing of this application soon after this fact has been acknowledged by them is that the Respondents kept the petitioners under an impression that this litigation could be resolve .....

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ench that R2 creating development rights to a third party at an undervaluation is prejudicial to the petitioners and the company as well. 9. The point for discussion here is whether this Bench could pass a restraint order against a person who is not a shareholder of R1 company. In 397 & 398 proceeding, first, it has to be seen whether the act of the persons in management of a company is prejudicial and oppressive against the member of the company, if the Tribunal is prima facie of the view t .....

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ssing orders against persons other than members is whether right of hearing is given or not. This Bench has discussed in CPI India Real Estate Venture Ltd. v. Perpetual Infracon (P.) Ltd. (CP No. 127(ND)2013) before CLB, Delhi decided on 05.03.2014 (paras 40 & 41) as to what order could be passed in cases where money was fraudulently taken out through other companies. If any court or Tribunal is given subject matter jurisdiction to decide an issue in civil cases, to cure such wrong, the cour .....

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r remedy. One need not go that far to say that this Tribunal has Jurisdiction. In section 402 (e) (f) (g) r/w section 403 of the Act 1956 itself, it is said that Tribunal has a right take a call over agreements the company entered with any person, that being the legal position, this Bench can decide this issue and even pass orders against the persons other than the company and other than the members of the company, the only caution is whether creation of third party rights is within the ambit of .....

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