TMI Blog2017 (8) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... it would not be just and equitable to declare that the acts of the Respondents are oppressive and constitutes mismanagement. In connection with the allegations of shifting of Registered office of the 1st Respondent company, the Respondents have given a plausible explanation i.e. Office was housed on the basis of lease and licence agreement that expired in October, 2014, and further to curtail the cost, the office was relocated for cheaper accommodation and the same was intimated to the concerned Registrar of companies. Therefore, a bona fide shifting of the registered office of a company causing no loss to the company does not amount to mismanagement - C.P. No. 29 of 2015 And TCP NO. 167 of 2016 - - - Dated:- 11-7-2017 - MR. ANANTHA PADMANABHA SWAMY AND MR. CH. MOHD. SHARIEF TARIQ, JJ. For The Petitioner : Ms. D. Sneha Jain, PCS For The Respondent : Suveer Gulati ORDER CH Mohd Sharief Tariq, Judicial Member (J) Under consideration is the Company Petition No. 29 of 2015 which has been transferred from the Hon'ble Company Law Board, Chennai to this Tribunal and renumbered as T.C.P No. 167 of 2016. The Petitioner has filed this petition under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a Private Company limited by shares in the State of Tamil Nadu with its main objects to promote online shop, e-shop, health portals, online store; and to develop Business to Customer, Business to Business, online shopping mediums and all other means of e-trading and services in healthcare. 4. The Petitioner and the R2 R3 were the original subscribers to the Memorandum of Association and also one of the first directors of the 1st Respondent Company. Presently, the Petitioner holds 25,000 equity shares in the paid up capital of the 1st Respondent Company. Subsequently, the Authorised Share Capital of the Company was increased by 55,000 equity shares of ₹ 10/- each, out of which 40,000 shares were allotted to newly inducted Saumil Gandhi (In short, '5th Respondent') and 15,000 shares to R2 at a premium of ₹ 2.5/- per share on 4th February, 2013. The Petitioner, being one of the Subscribers to the Memorandum of Association and founder of the said Company, agreed to act as a non-executive Director. According to the Petitioner, within 8 months of incorporation of the said Company, he, at his own will, has resigned from the post of Directorship on 20th March, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent Company by way of mail dated 16th June, 2015, but instead of holding 2nd AGM, Respondent Nos. 2 3 have made unacceptable excuse that they are not in town. The Respondent Nos. 2 3 in a reply to a complaint made by the Petitioner to RD, Southern Region intimated the Regional Director that on account paucity of funds in the 1st Respondent Company, the Board has taken the decision of closing down the operations through Fast Track Exit Scheme and thereby the Board does not deem it necessary to hold any AGM or even get its books of account audited. The same reply was forwarded to the Petitioner by the Regional Director. 10. The petitioner also contends that 1st Respondent Company never indicated its intention of closing down the operations of the Company and they have kept the petitioner in dark. Suspecting the intentions of Respondent Nos. 2 3, the Petitioner through his representative, made enquiries and searches in the affairs of 1st Respondent Company and found that e- commerce portal is still alive and doing good business. He also stated that the e-commerce business of the 1st Respondent Company is regarded as Second Biggest E- commerce Company in Healthcare seg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company. The petitioner had resigned from the directorship of the Company at his own will within 8 months from the date of incorporation of the company by making excuses for his shoddy and slipshod work ethic and lack of professional commitment towards discharging his fiduciary duties and responsibilities toward 1st Respondent Company. The said resignation of the petitioner has made a dint in the affairs of the company and entire future plans of the company are at massive risk. 13. With regard to purchase of shares of the petitioner, they have stated that the Petitioner approached R5 with request to sell his entire stake of shares to R5 stating that he has invested ₹ 5,00,000/- in the 1st Respondent Company. Initially, the petitioner accepted the offer of ₹ 5,25,000 of R5, however, he backtracked and demanded an additional amount ₹ 25,000 from R5. The Petitioner also further demanded ₹ 5000 in lieu of reimbursement of expenses from the company which shows that the petitioner does not want to exit from the company in a smooth manner. The respondents have further stated that they have given a clear picture about the company in the director's report and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in vain, they have decided to close down the operations of the Company through Fast Track Exit Scheme and the said intention was intimated to the Regional director, MCA, Chennai. 15. The Respondents, in their counter denied the submission of the petitioner that the website of 1st Respondent company is a revenue generating asset. They contends that had it been a revenue generating asset, the company would not have incurred heavy loss and struggled for funds and sold the said web portal to R4 Company. The said statement by the petitioner was only to mislead this Tribunal. Since the web portal was not generating any significant income, by way of Board Resolution dated 20th March 2014, it was decided to sell for a total consideration of ₹ 2,25,000/- to R4 Company which was over and above the WDV of the 1st Respondent Company as on 25/3/2014. Even after the sale was made to R4 Company, the 1st Respondent Company was allowed to use the website for a span of 6 months and in the said period, the R4 Company was made to spend money to make the website function more effectively and efficiently. The sale was effected after taking all efforts to improve the website, anyhow the financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petitioner for ₹ 5,25,000/- and also petitioner was willing to sell his shares, however the petitioner backtracked for the reasons best known to him. The losses of the company were mounting and it has not made any significant development from its incorporation and the company was struggling for finance. In view of the factual aspect, and if the conduct of the petitioner is to be taken into consideration, the entire action of the petitioner lacks bona fide, and the petitioner could not place evidence before this bench to prove his case . Shanti Prasad Jain v. Kalinga Tubes Ltd. [1965] 35 Comp. Cas 351 (SC), it was observed that to be an act oppressive, the conduct of the company must be burdensome, harsh and wrongful and mere lack of confidence between the majority shareholders and the minority shareholders would not be enough unless the lack of confidence springs from oppression of a minority by a majority in the management of the company's affairs and such oppression must involve at least an element of lack of probity or fair dealing to a member in the matter of his proprietary rights as a shareholders. 18. On considering the present case on merits, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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