TMI Blog2006 (12) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... mprising of 50,000 shares of ₹ 10/- each which was raised to ₹ 13.5 crores in the year 2000-2001 comprising of 70 lakhs of equity shares of ₹ 10/.- and 65 lakhs 10% cumulative redeemable preference shares of Rs. l0/- each. 3. Shri Ganda, Advocate, appearing for the petitioners submitted: A tripartite BOT agreement dated 8th September, 1999 was executed between Ministry of Surface Transport, Government of Punjab and the 7th respondent for construction of 4 Lane ROB near Dera Bassi. The 1st respondent company was incorporated as a special purpose vehicle to implement the project and accordingly the 7th respondent, which is under the control of the 2nd respondent, assigned the agreement to the 1st respondent. Since the 2nd respondent could not find financial resources to complete the project, he approached the 1st petitioner who was an NRI and his son, the 2nd petitioner for financial assistance. During the discussions, the proposal of the 2nd respondent for marriage of his daughter - the 3rd petitioner with the 2nd petitioner also materialized. To mobilize sufficient funds, one Shri Rana Gurjit Singh and his associates were also invited to join the project. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, the IDBI and PNB restructured their loans with reduced rate of interest due to which the viability of the project improved substantially. Once the project became viable, with the malafide intention of taking over the control of the company, notwithstanding the fact that the 2nd respondent was no longer a director, he filed form No. 32 dated 2.12.2004 with the ROC indicating therein the appointment of 2nd, 3rd and 4th respondents as directors and of removal of the 1st, 2nd and 3rd petitioners and the 8th respondent as directors. He also filed form 1B changing the name of the company from R.S. Infrastructure Limited to R.S. Infrastructure Private Limited. Form No. 5 of the same date was also filed to indicate increase of authorized equity capital from ₹ 700 lacs to ₹ 850 lacs. Again by another form No. 32 dated 20.12.2004 indicating appointment of 5th and, 6th respondents as directors was also filed with ROC. The petitioners did not receive any notice either for the board meeting or for the general meeting in which the above decisions were allegedly taken. The petitioners came to know of filing of form No. 32 only from a letter dated 18.12.2004 received from ROC. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rits, the petitioners cannot have any claim over the control and management of the company. The entire project was given only because of the expertise of the 2nd respondent and but for him the project could not have been awarded to the 7th respondent. The 1st and 2nd petitioners have no experience of construction and maintenance of projects of this magnitude. The 1st respondent company was promoted by the 2nd respondent and his group. Since the 2nd petitioner who is his son in law was unemployed, the 2nd respondent transferred the project from the 7th respondent to the 1st respondent company. It was the 2nd respondent who organized the entire funding for the project through IDBI and PNB along with his own resources and that of Rana group. Even though the 2nd petitioner was taken as a director on 13.12.1999, the petitioners' group had contributed only ₹ 2.92 lacs till Feb. 2000 by which time the project had achieved the substantial progress. The shareholding pattern as on 30.9.2004 would indicate that the 2nd respondent group held 42.88% equity shares, Rana group 40% and the petitioners' group only 17.12%. The petitioners invested in 10% cumulative redeemable preferenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitioned EOGM was sent to all the shareholders on 29.10.2004. The meeting was held on 29.11.2004 wherein all the decisions impugned in the petition were carried through. Therefore, what has been alleged in the petition regarding the forms filed by the 2nd respondent has been done legally and in accordance with law. However, none of the resolutions has been given effect to since this Board has ordered maintenance of status quo. 6. The learned Counsel further submitted: The acquisition of shares from Rana group and 2nd respondent's group as claimed by the petitioners is fraudulent. The deed of settlement with Rana group was never disclosed to the board of directors and as a matter of fact in terms of the original MOU, if Rana group were to transfer their shares, the respondents were entitled to acquire 35% of such shares. But by fraudulent means, the petitioners acquired the entire shares of Rana group. Likewise, when the 2nd respondent was unwell, the 2nd petitioner induced him to sign transfer deeds in respect of 1050000 shares from his group to the 2nd petitioner. No consideration has been received in respect of these shares and therefore the alleged transfer is a nullity i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 29.8.2004 nor the requisition dated 29.9.2004. Even the respondents have not stated that these notices were served on the company but have only averred that the same were served on Shri Ujjagar Singh who is the brother of the 2nd respondent. Therefore it is quite obvious that these documents have been manipulated within the family by the 2nd respondent and his brother. When there is a regular managing director, the question of serving the notices on an ordinary director did not arise. Even otherwise, in terms of Section 188, requisition requiring a special notice should be given not less than 6 weeks before the meeting. Since the AGM was scheduled on 30.9.2004, the notice given on 29.8.2004 cannot be a valid notice. Further, even the requisitioned meeting had not been convened by the requisitionist but by the company itself under the signature of the 2nd respondent as the MD. Whatever might be the mode and manner of convening and holding the meeting, the fact is that petitioners never received the notices for the EOGM. On this account alone, the meeting has to be held as invalid. 10. I have considered the pleadings and arguments of the counsel. The respondents have challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any evidence that notices for this meeting had been sent to the petitioners who at that time held, if not majority of the shares but substantial percentage of shares. In the absence of any proof that notices were sent to the petitioner, on this ground alone, the EOGM held on 29.11.2004 has to be held invalid and accordingly I do so, with the result that no statutory authority will take cognizance of the resolutions passed in that EOGM. In other words, the status quo in regard to the board would remain as it was before the EOGM, as also the authorized and paid up capital and the name of the company. Any application money paid by the 7th respondent in pursuant to the allotment made in that meeting, if has been received by the company, will be refunded to the 7th respondent. 12. The respondents have contended because of the credential of the 7th respondent, the contract was awarded to it and only because of the close relationship of the 2nd petitioner, the contract was assigned to the 1st respondent company so that the 2nd petitioner could manage it. However, in the EOT agreement with the Government, the 7th respondent has been styled as the entrepreneur and in Clause 2.1 of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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