TaxTMI 
TaxTMI 
2016 (1) TMI 652
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....ate for the Respondent No. 1 Company (Applicant herein) moved an Company Application bearing C.A. No.683/2015 signed by Smt. Vandana Agrawal (the Petitioner No.2 herein), Director of the Respondent No. 1 Company, praying for an Order of injunction restraining and/or declaring as non-est the appointment of any Advocate-on-record and/or Counsels under the claimed authorization of the erstwhile Directors of the Respondent No. 1 Company and Respondent Nos.8 to 11, who have vacated their offices in terms of Section 167(1) of the Companies Act, 2013, Precisely speaking, the Respondent No. 1 Company/Applicant Advocate submitted that all the erstwhile Directors of the Respondent No. 1 Company vacated their offices in terms of Section 167(1) of the Companies Act, 2013 read with Section 164(2) of the said Act, due to the default committed by the erstwhile directors in filing the financial statements of the Respondent No. 1 Company and its subsidiary Companies for the years 2010-11, 2011-12 and 2012-13. Subsequently, on or about 06.02.2015, a Board Meeting of the Respondent No. 1 Company was held wherein it was recorded that the new Board has been constituted and the required number of Direct....
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....ompany has not filed the financial statements. As such, the aforesaid document and the said admission in juxtaposition with the provisions of Sections 164 and 167 of the Companies Act, 2013, would lead to an irresistible and immutable conclusion that the office of all the defaulting Directors stood vacated on coming into force of these provisions w.e.f. 01.04.2014. further, that reasons given by the Respondent No.2 in the said letter for not filing of annual accounts that the Junior Division of Ld. Alipore Court, Kolkata, vide Order dated 15.12.2010, injuncted the Respondent No. 1 Company from holding any General Meeting and hence, from approving the annual accounts, cannot be a ground for not filing annual accounts, per se, meaning that the Respondent No. 1 Company, even in those self created and orchestrated circumstances, was obliged to file unapproved annual accounts. In fact, the Respondent No.2 (Mr. Partha Ghosh) and Mr. Arun Banerjee, along with others, since December, 2010, colluded to fraudulently procure and maintain an injunction on the Respondent No. 1 Company and its subsidiaries, preventing them from holding the General Meeting by filling a Title Suit being T.S. No.34....
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....ain Company Petition have been validly authorized to represent the Respondent No. 1 Company, is baseless and misconceived in view of the fact that the purported appointment of the Petitioners herein as the Directors of the Respondent No. 1 Company is illegal and untenable as no valid reconstitution of the Board of Directors of the Respondent No. 1 Company can take place in view of the fact that the existing management of Company is already in power and discharging its duties. In addition, it has been submitted that the purported allegation of the Applicant that the existing Board of Directors have vacated their offices as they have been disqualified under Section 167(1) read with Section 164(2) of the Companies Act, 2013 for non-filing of the Annual Returns and/or financial statements before the ROC for the financial years 2010-11, 2011-12 & 2012-13, is false and baseless. In fact, the existing Board of Directors has been unable to file the Annual Returns and/or financial statements owing to an Order of the Court preventing the Respondent No. 1 Company from holding the Annual General Meetings. 2.1 Further, in a Writ Petition being W.P. (C) 3296/2015 filed by the Petitioners before....
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....he Respondent No. 1 Company from holding the Annual General Meeting, is a spurious one since the said Order dated 15.12.2010 does not in any manner put a restriction on the filing of the financial statements. It has been contended that the operative portion of the said Order has been omitted from the Annexure attached to the said affidavit, which, inter alia, states "Accordingly, the defendants are hereby restrained, by an order of ad-interim injunction from holding any general meetings of the Respondent Companies file 14.01.2011." Therefore, it is evident that the said Order, which was obtained by perpetrating fraud on the Learned Court, does not in any manner make any reference to any restriction on the filing of the financial statements, in addition, it has been submitted that on 19.01.2011, on behalf of the Respondent No. 1 Company, the Respondent No.2 had filed a Statement of Facts and Reasons with the Registrar of Companies (ROC), West Bengal, wherefrom it is evident that despite there being an Order of Injunction dated 15.12.2010, on holding of the Annual General Meeting, the Respondent No.2 has made a specific reference to the need to file the Annual Accounts in accordance ....
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....Company, either by virtue of their shareholding or management rights or shareholders agreement or voting agreements or in any manner whatsoever. Accordingly, the Applicants do not exercise control over the affairs of the Company in any manner whatsoever as defined under Section 2(27) of the Companies Act, 2013. Moreover, the Applicant admittedly, as per her own pleadings in C.P. No.859/2010, has asserted the lack of control over the affairs of the Company. Furthermore, the Petitioner No. 1 having resigned from the Board of Directors of the Company pursuant to an understanding arrived at on or about 20th/ 21st January, 2010 and having subsequently resigned vide his resignation dated 22.01.2010, cannot in any manner assert any modicum of control over the affairs of the Company. 4.1 It has been further argued that the Company having been prevented from convening the General Meetings, including the Annual General Meeting (AGM) of the Company, the Board of Directors of the Company was unable to make necessary appointments so as to prepare its financial statements and table the same for approval. It has been asserted that it is a settled proposition of law that upon being prevented from....
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....s instituted writ petition being W.P. (C) No. 3296/2015, wherein the applicants admitted that so long as their digital signatures are not uploaded on the MCA Portal, the purported new Board of Directors would remain "totally incapacitated to take any corporate action". Further, the said writ petition has been dismissed by the Hon'ble High Court at Delhi, by Order dated 14.09.2015 without any reliefs to the applicants herein and hence, the applicants are incapable of asserting control over the affairs of the Company. 5. The Respondent No. 1 Company/Applicant Advocate contended that since the erstwhile directors have vacated their offices due to the default in filing the financial statements of the Respondent No. 1 Company and its subsidiary Companies for the financial years 2010-11, 2011-12 & 2012-13 in terms of Section 167(1) of the Act, no new Advocate-on-record or Counsel on behalf of the Respondent No. 1 Company could be appointed under the authorization or its erstwhile directors. Further, the Court Order dated 15.12.2010 only restrained the Respondent No. 1 Company by an ad-interim injunction on holding the Annual General Meeting till 14.01.2011, but in no way, the said O....
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.... arguments, the Respondent Nos.2 & 3 Advocate has made a submission at paragraph 1(iii)(c) at pages 10 & 11, which was never advanced by them in their reply to the instant Company Application nor at the time of hearing of the said Application on 17.09.2015. In any case, the Hon'ble High Court at Delhi has, by its Order, asked the Petitioners to seek direction upon the Registrar of Companies (ROC) from the Hon'ble Company Law Board, regarding the matter of digital signatures of directors which was the only issue before the Hon'ble High Court at Delhi in the writ proceedings. Hence, in the aforesaid circumstances, the Respondent Nos.2 & 3 could not have incorporated such submission in their written notes of arguments which was never placed by them before the Hon'ble Board and therefore, the said submissions of the Respondent Nos.2 & 3 be not allowed to be considered by this Hon'ble Board, otherwise, grave miscarriage of justice would be occasioned on the Applicant. 6. Having considered the Company Application, supplementary Affidavit, reply, rejoinder and the arguments [oral and written) of the Advocates of the rival parties, it is observed that the Petitioner No....
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....ny general meetings of the Respondent Companies till 14.01,2011." Further, this contention has been further strengthened on the ground that despite there being an Order of injunction dated 15.12.2010 on holding of the Annual General Meeting, the Respondent No.2 has made a specific reference on 19.01.2011 to the ROC explaining the need to file the Annual Accounts in accordance with Section 220(2) of the Companies Act, 1956 and thus, the statutory requirement was appropriately complied with for the financial year 2009-10. As such, it has been vehemently argued that now the Respondent No.2 cannot take shelter of the Order of Injunction dated 15.12.2010 for the failure to file the Financial Statements for the financial years 2010-11, 2011-12 and 2012-13. 6.2 The Advocate for the Respondent Nos.2 & 3 has controverted that it is a settled proposition of law that upon being prevented from holding any AGM, the entire business of the Company comes to a standstill and there can be no allegation of non-compliance of statutory filing requirements on account of complete standstill of the affairs of the Company. Further, in any event, the provisions of erstwhile Section 220 of the Companies Act....
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....013, upon vacation of the office by the Board of Directors of a Company by reasons of incurring disqualification under Section 164 of the said Act, an interim Board of Directors can only be appointed either by the Promoter or the Central Government, whereas the Applicants are not the Promoters within the meaning of the definition of Promoter in Section 2(69) of the Companies Act, 2013 and as such, are not competent to reconstitute the Board of the Company and pass any resolution of the aforementioned agreement. Not only this, the Applicants are not identified as Promoters in any Prospectus nor are identified as such in the Annual Return of the Company. Furthermore, the Applicants do not have control over the affairs of the Company, either directly or indirectly, whether as a shareholder, Director or otherwise nor are persons in accordance with whose advice/direction the Board of Directors of the Company is accustomed to act and therefore, the Applicants do not have any right to appoint majority of the Directors or to control the management and take decision in the affairs of the Company, either by virtue of their shareholding or management rights or shareholders agreement or voting....