TMI Blog2015 (12) TMI 1694X X X X Extracts X X X X X X X X Extracts X X X X ..... members and thereby, the company petition is maintainable in terms of section 399(1) of the Companies Act, 1956. As such, the prayer made in the instant company application to dismiss the company petition on the ground of maintainability is hereby disallowed. - C.A. No. 329 of 2014 in C.P. No. 58 of 2014 - - - Dated:- 7-12-2015 - Dhan Raj , Member For the Appellant : Abhrajit Mitra , Senior Advocate, Jishnu Chowdhury , Noelle Banerjee , Dipak Dey and S.M. Gupta , Practising Company Secretary For the Respondent : Jishnu Sana , Senior Advocate ORDER Dhan Raj , Member 1. In this case, the petitioners filed a company petition being C.P. No. 58 of 2014 under sections 235, 397, 398, 399 and 402 of the Companies Act, 1956, alleging the acts of oppression and mismanagement by the respondents in the affairs of respondent No. 1-company, which is pending for adjudication, in the meantime, the advocate for respondents Nos. 1 to 4 moved a company application bearing C.A. No. 329 of 2014, seeking dismissal of the company petition being C.P. No. 58 of 2014 including stay of all further proceedings in the said company petition. Precisely speaking, respondents Nos. 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Co., way back in the year 1897 and subsequently, the business was transformed into a partnership firm constituted of four sons of Mr. Ashutosh Ghosh , viz., Mr. Provash Kumar Ghosh , Mr. Prafulla Chandra Ghosh , Mr. Balai Lal Ghosh and Mr. Kanailal Ghosh and one nephew, viz., Mr. Amulya Chandra Ghosh . Thereafter, the said partnership firm was transformed into a company, viz., M/s. A. Tosh and Sons P. Ltd., in the year 1950 and was reregistered under the provisions of the Companies Act after coming into operation of the Companies Act, 1956. Furthermore, the company was run as a family company with the four sons and the nephew of Mr. Ashutosh Ghosh and it was always understood between the family members that all the four sons and the nephew would constitute five separate groups and their heirs will have representation in the company and also, the company will be run as family-owned business. Later on in the 1970s the company became a deemed public company and thereafter, merged with M/s. Eek-deep Mercantile Ltd., and its all assets stood transferred to M/s. Eekdeep Mercantile Ltd. whose name also, later on, changed to M/s. A. Tosh and Sons (India) Ltd. and the shareholding of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing under section 397 of the Companies Act, 1956. In any event, the petition suffers from gross delay, laches, suppression, estoppels, acquiescence and/or principles analogous thereto and also, the petition is barred by limitation as the acts complained of are ex facie barred by limitation. Similarly, the decision to sell the property at Siliguri, which remained unutilised for many years, was taken by the board and such decision cannot be challenged in the instant proceeding as the amount recovered from the sale of such property, was duly reflected in the balance-sheet and the same was placed in the annual general meeting of the relevant year. In any case, the same was not opposed by any of the shareholders of the company. Besides, the consenting members were all along aware of the affairs of the company and had majorly participated in the affairs of the company and were all along aware of the utilisation of the investments, the sale of the property and the augmentation of the tea business. 1.5 It has been further averred that the allegation with regard to the sale of property in Siliguri has been made after four years which is an afterthought and as such, the same cannot be cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the family members regarding restriction of directors or that there was any restriction of one director from each group. It has been highlighted that the articles of association of the company were wrongly amended which should not have been done and in any event, this could not have been done at a board meeting or at all. Besides, there is a denial that petitioner No. 1 ever authorised any person to represent him or his family members or the other petitioners or the consenting shareholders and also, it cannot be said that Mr. Navan Ranjan Ghosh was entitled to represent petitioner No. 1. Moreover, it was never in contemplation that a representative of each group would form the board of respondent No. 1-company. 1.6 In addition, it has been submitted that the decision to export tea to Russia was a wrong decision and was done without consultation with the other shareholders and also, it has been denied that there was a slump in the tea business worldwide in the year 2000. It has been further denied that petitioner No. 1 left the company after 2004, rather petitioner No. 1 was not allowed to participate and as such, removed from the company. It has been averred that the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various reports attached thereto been received by respondent No. 6. Besides, it has been averred that since no valid annual general meeting for the year 2013 was held, each and ever}' business transacted in the purported annual general meeting held on September 30, 2013, is null and void and accordingly, respondents Nos. 2 to 4 cannot continue to hold the position of directors of the company as they have retired in 2013 and that their reappointment, if any, is invalid in absence of a valid annual general meeting of the company and also, any board meeting held or any board resolution passed subsequent to the stipulated date of the annual general meeting in 2013, is illegal, null and void. 2.2 Further, it has been submitted that no unanimous decision of the board has been taken to liquidate the mutual funds and liquidating the same would cause grave loss and prejudice to the shareholders as the investment by way of mutual funds is for the benefits of the shareholders. It has been categorically stated that respondents Nos. 2 to 4 have admitted that the company has had a turnover of almost ₹ 90 crores for the financial year 2013-14 and the funds from such turnover can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed to participate which constitute oppression, have also been denied. 3. In addition, it has been submitted that five groups were duly represented and the accounts for the year 2012-13 were duly presented before the family members during the annual general meeting and all family members were aware of the utilisation of the funds which included petitioner No. 1 who is now feigning ignorance only with a mala fide motive. It has been contended that since petitioner No. 1 is disgruntled family member, who is trying to put the spanner in the running business only for the purpose of promoting his own interest, which is detriment to the interest of respondent No. 1-company. 3.1 Respondents Nos. 1 to 4/applicants' advocate has also filed another rejoinder affidavit to the reply affidavit filed by respondent No. 6/non-applicant advocate, wherein all the allegations made in the said reply affidavit have been denied. In addition, it has been stated that the deponent (Mr. Abhijit Ghosh --respondent No. 6 in main company petition) being a disgruntled member has now, with a mala fide intention, filed a company petition being C.P. No. 81 of 2014 and the real grievance of the deponent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds have been, for quite a long time, liquidated as and when the board deemed necessary and such liquidation has been done when the deponent himself was a director. However, the amounts liquidated were used for the purpose of augmenting the tea export business and with such sums valuable properties have been purchased and also, the business of the tea has gone by leaps and bounds and the annual turnover has crossed ₹ 90 crores. In addition, it has been averred that the deponent is now siding with the petitioners only to advance his personal gain to the detriment of the business interest of the company and/or the shareholders. 4.1 Respondents Nos. 1 to 4/applicants' advocate argued that the petitioners and the consenting shareholders cannot constitute the one-tenth of the total number of shareholders of respondent No. 1-company. In fact, the number of members holding issued share capital in respondent No. 1-company is 34 whereas the petitioners along with the consenting shareholders comes to 3 which is less than 10 per cent of the total 34 members. I n addition, the shareholding of the petitioners also comes to less than 10 per cent. Apart from this, it has been plead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an alleged share ledger of the company. It has been argued that since these documents have not been made part of the pleadings and the petitioners/non-applicants never had an opportunity to deal with the same, such documents should not be considered. In fact, these documents have been fabricated and produced now to support the case of the applicants. Furthermore, the annual report of the company itself lists a number of documents which include the share register and it is on this basis, every year a statement is contained that there are 27 shareholders. Therefore, it is obvious that these purported documents sought to be relied upon are an afterthought and is an attempt to obtain an unfair advantage in this litigation. 6. Having considered the company application, reply, rejoinder and the arguments (oral and written) of the advocates of the rival parties, it is observed that the main company petition has been preferred by the petitioners and consenting shareholders owning less than 10 per cent shareholding in the respondent-company and hence, the requirement of section 399(1) of the Companies Act, 1956, of holding at least one-tenth of the issued share capital is not fulfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company petition under section 399(1) of the Companies Act, 1956. On this reasoning, Mr. Ambarish Ghosh joint with Mrs. Priti Ghose (Folio Nos. 498 and 435) is the only one shareholder whereas, they have been shown separately as per different folios. Likewise, Mr. Partha Sarathi Ghosh (Folio Nos. 575 and 590) and Mr. Arup Kumar Ghosh (Folio Nos. 574 and 589) have been shown separately as shareholders based on different folios, whereas they are only two shareholders instead of 4 as claimed by the respondents' advocate. Not only this, Mrs. Tripti Ghosh joint with Mr. Amitava Ghosh has been shown at Folio Nos. 601, 566 and 570 and thereby, the one shareholder Mrs. Tripti Ghosh has been counted thrice. Similarly, Mr. Paritosh Ghosh joint with Mr. Abhijit Ghosh at Folio No. 481 and joint with Mrs. Kalpana Ghosh at Folio No. 593 has been shown twice. Apart from this, Mrs. Chandra Ghosh joint with Mrs. Barnali Paul (Folio No. 483) has been shown again at Folio No. 467 being the first shareholder with Mr. Manotosh Ghosh and thereby, the same shareholder has been counted twice. 7.1 Under the aforesaid facts and circumstances, it is crystal clear that the number of shareholders hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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