TMI Blog2016 (11) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... he attending circumstances, the company petition cannot be dismissed at the threshold because it requires a detailed enquiry into the matter complained of and, thus, in exercise of the powers conferred under proviso to section 244 of the Act, 2013, I waive all the requirements of section 244(1)(b) of the Act, 2013 by treating the company petition under order 1, rule 8 of the Code of Civil Procedure, as a representative petition read with section 241 of the Act, 2013 for the purpose of proceeding to enquire into the matter complained of. Thus, the company petition is held maintainable. Any of the observations made above shall have no bearing on the merits of the case. Since the company petition is held maintainable and in the given circumstances there is an urgent need to regulate the affairs of R1-company. Thus, proceed to remove all the directors and managing committee including office bearers by appointing hon'ble Justice Shri K. Samanth (Retd.) as the chairman who is authorised to nominate four suitable persons to be chosen from the sub-units/Dioceses of Churches and three office bearers. The chairman will recommend the names of the persons to this Tribunal for appointment as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in connection with the Church within the said area whether the same are confined to the said area or not and the activities connected thereto along with the powers to sell, mortgage, charge, lease, dispose of, exchange and otherwise deal with any property of or held by their association in any manner authorised by law with such consent (if any) as may be by law required and in accordance with such rules and regulations as may from time-to-time be laid down by the Synod of the Church of South India. Since the company is a religious charitable trust there is no authorised, issued, prescribed and paid-up capital. As per the articles of association, the total number of members who are directors is restricted to ten and total number of office bearers is four. One-third of the members/office bearers should retire every year. Members shall be elected only by the Synod of the Church, and election shall be conducted every two years. The tenure of the present Synod was expired in January 2016. Thereafter, no such Synod is in its place. The company constitutes 23 units called Dioceses and sub-units called churches, educational institutions, hospitals and other institutions. The churches under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office bearers without any authority borrowed heavily on the properties of the company by way of creating charges on its properties. (iii) The present committee members stated to have been indulging in selling the property elsewhere in South India, for throw-away prices for their personal gains, causing irreparable losses to the company. Whereas the last Synod of church conducted for Biennium was in January 2014 and the same expired on 13th January, 2016. Thereafter, the Synod was not conducted and no election to the company membership was held. (iv) The present management committee is said to have executed powers of attorney to non-members of the company to deal with company's properties without any authorisation and have misused the office of the company for their own benefits. (v) The present management committee members are said to be there for more than six years without any legal base. Not only this, it has also been stated in the company petition that the auditors who audited the accounts of the company have exhibited several disclaimers and denied to give their opinion on the incomplete accounts submitted to them for audit. (vi) It is also mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son who is holding the position in any of the bodies of the church or SICA shall not be appointed for its salaried office of CSI or CSITA or Synod. The persons who have signed as honorary secretary and honorary treasurer of CSITA are also holding the salaried office as general secretary and treasurer, respectively of the Synod. 9. In the counter, it has specifically been pleaded by the Respondent/Petitioner that they seek leave of this Tribunal under section 244 of the Companies Act, 2013 to get waived off all the pre-requisites for filing the company petition, and if directed, will file a separate application to get invoked the proviso to section 244 of the Act, 2013. 10. From the above said facts and circumstances which have been pleaded by the parties, the sole issue arises here is as to whether the petitioner fulfils the requirements laid down under section 244 to file the company petition under section 241 of the Act, 2013. In. this case, it is an admitted fact that R1-company is a religious and charitable trust, not having any share capital which falls within the purview of clause (b) of sub-section (1) of section 244 of the Companies Act, 2013 which provides that in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no permanent membership as envisaged under section 2(55) of the Act, 2013. The definition of the term 'member' given under the above said section is reproduced as follows:- (55) member , in relation to a company, means - (i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members; (ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company; (iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository; 13. If we look to the language used in the above mentioned definition of the term 'member', then the membership of R1-company is not falling within the purview of the definition of section 2(55) of the Act, 2013 in any manner. Because, in the articles of association of R1-company, it has been provided that the members shall be such persons as shall be elected by the Synod of church and 1/3rd of the members shall retire at each meeting of the Synod of church b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presenting all the Dioceses/sub-units of the churches and they appointed 53 general members with a provision to increase the number for giving representation to all Dioceses/sub-units of the churches, i.e., up to 88 and 53 newly elected members elected 15 directors, two office bearers, viz., the chairman and treasurer/CEO among the directors to carry out the management of the company and the stakeholders ensured proper representation being given for all the units of churches in five southern States. Out of the elected number of members, 24 persons have given their consent to the petitioner for filing the company petition. 15. The petition, in essence, is a representative petition which falls within the purview of order 1, rule 8 of the Code of Civil Procedure, 1908. The petitioner represents a large number of persons who have a common interest in R1-company which is a religious and charitable institution and admittedly, a public trust. Once, it is established that R1-company is a charitable institution which caters the needs of the beneficiaries/stakeholders, the properties of such religious and charitable trust must be protected jealously. This has been observed by the Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Civil Procedure, as a representative petition read with section 241 of the Act, 2013 for the purpose of proceeding to enquire into the matter complained of. Thus, the company petition is held maintainable. Any of the observations made above shall have no bearing on the merits of the case. 18. Since the company petition is held maintainable and in the given circumstances there is an urgent need to regulate the affairs of R1-company. Thus, I proceed to remove all the directors and managing committee including office bearers by appointing hon'ble Justice Shri K. Samanth (Retd.) as the chairman who is authorised to nominate four suitable persons to be chosen from the sub-units/Dioceses of Churches and three office bearers. The chairman will recommend the names of the persons to this Tribunal for appointment as director and as office bearers, respectively. The remunerations of directors and office bearers shall be fixed by the chairman. However, such names shall neither be chosen from the group of petitioner nor from the respondents, but they must be independent persons to be chosen from the sub-units/Dioceses of Churches. The chairman shall be entitled to monthly remuneratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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