TMI Blog2017 (9) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the petitioner that something has happened with reference to the books of account. The expenditure incurred for obtaining power connection was done only with a view to do his unauthorised business in the Company premises. The Respondents cannot be held responsible for the same. Thus, the petitioner had utterly failed to establish any of the clauses of Section 237(b) of Companies Act, 1956 corresponding to Section 213 of Companies Act, 2013 to order for any investigation into the affairs of the Company as no business is carried out by the Company. Thus, the petitioner has also utterly failed to prove any fraud committed by the Respondents towards the creditors and members in the affairs of the Company. Therefore, the petition is liable to be dismissed. - T.P. No. 118/2016 IN CP 01/2014 - - - Dated:- 29-8-2017 - MR. RATAKONDA MURALI AND MR. ASHOK KUMAR MISHRA, JJ. For The Petitioner : K.V. Satish, Adv. For The Respondent : S. Hari, Adv. ORDER Per Hon'ble Shri Ratakonda Murali, Member (J) : This Petition was originally filed before the Company Law Board, Chennai, under Section 237 of Companies Act, 1956, which was numbered as CP No.01/2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares if he agrees to invest. The Petitioner has averred that he accepted the offer and in pursuance of the understanding, he paid ₹ 3,24,700/- to KSSIDC, and he also arranged for ₹ 4,30,000/- to meet the liabilities of other creditors of the Company. It is stated that the petitioner was inducted as Director of the 1st Respondent Company on 07.12.1993. The Petitioner has further averred that on his insistence for allotment of shares to the extent of the amount he has invested into the Company, and pending allotment of shares the monies provided by him is to be accounted for properly, the Respondent No.2 informed the petitioner that since dispute had arisen between himself and the ex-Director Shri V.J. Ramesh and other shareholders, and civil suit was pending, he did not want to make any accounting changes or reflect the investments made by the petitioner resulting in additional claims or troubles. The petitioner stated that the civil suit between the Respondent No.2 and Shri V.J. Ramesh ended on 13.09.2010. During the intervening period, the petitioner has invested from time to time a sum of ₹ 43,09,879/- into the Company. Then, the petitioner demanded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hter of the petitioner and the wife of Respondent No.2 as additional directors of the 1st respondent Company. Since the petitioner did not receive any confirmation as regards the said resolution of the Board, he enquired with the Respondent No.2 as to minutes of the Board resolution, the Respondent No.2 answered in the negative. On the contrary, Respondent No.2 had fabricated the resolution purported to have been passed on the same date, i.e., 02.01.2013, appointing the wife of Respondent No.2 alone as the additional director of 1st Respondent Company by forging the signature of the petitioner. The petitioner would further state that four more resolutions were fabricated by Respondent No.2 by forging the signature of the petitioner and passing resolutions in the Board meeting allegedly to have been held on 20.05.2013 and appointing Sri Umashankar and Smt. B. Lakshmi, who are the son and daughter of Respondent No.2 along with Miss Anju Haridas, daughter of the petitioner and another person Shri Ashok Kumar, who is said to be a friend of the Respondent, as additional Directors. The extracts of such resolutions which were filed with the Registrar of Companies and the certified copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as a respondent. The said suit is pending before the City Civil Court. The petitioner would allege that from the above acts, the Respondent No.2 has committed the act of oppression and mismanagement of the 1st Respondent Company in the capacity of its Managing Director. Thus, the petitioner has prayed for the following reliefs: To order for an investigation into the affairs and management of the Respondent No.1 Company and to pass appropriate orders/directions based on the report of investigation and to grant such other reliefs as deemed fit. Respondents No.1 and 2 have filed their counter. At the very beginning of the counter itself, the respondents have questioned the maintainability of the petition since the petitioner has admitted that the Company has only three members consisting of Respondent No.2, his wife and the petitioner. All the three members are also Directors of the Company. The petitioner has admitted that the acts alleged amounts to oppression and mis-management with the meaning of Sections 397 and 398 of the Act. The petitioner admittedly knowing fully well that since he is unable to satisfy the requirements of law both regarding the number and percen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought in at his own cost a new set of machinery for manufacture of paper cups. All this is without the consent of the respondent and the Board, contrary to the main objects of the company as set out in the Memorandum of Association and without making an application under section 17 of the Companies Act, 1956. With regard to the payments made and the expenditure incurred by the petitioner as alleged in para 8 of the petition, the respondents have stated that this matter is also challenged before the City Civil Court at Bangalore and they are all in connection with the running of the personal business of the petitioner and this has nothing to do with the affairs of the respondent company. As regards advancement of several amounts aggregating to ₹ 43,09,879/-, the respondents stated that this is a subject matter of the suit mentioned above. The respondents also stated that the Board is not a money collecting Court and the matter being subjudice, the matter cannot be gone into by the Tribunal. The respondents have denied any fabrication of documents or any of the facts and no documents have been forged as alleged. The respondents countered that after noting the hostile and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if- (i) the company, by special resolution; or (ii) the Court, by order, declares that the affairs of the company ought to be investigated by an inspector appointed by the Central Government; and (b) may do so if, in the opinion of the Company Law Board, there are circumstances suggesting - (i) that the business of the company is being conducted with intend to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members, or that the company was formed for any fraudulent or unlawful purpose; (ii) that persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members; or (iii) that the members of the company have not been given all the information with respect to its affairs which they might reasonably expect, including information relating to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Board resolutions which are purported to have been signed by him but disputed as forged. Further, he is also challenging the appointment of wife of Respondent No.2 as Director. His main grievance is that the Registered Office of the 1st Respondent Company is situated in the residential premises of Respondent No.2 and that he had no access to look into the records of the Company. His allegation is that his signatures were forged in the minutes of the Board resolution filed with the Registrar of Companies. This allegation does not fall in any of the grounds mentioned in clause (b) of Section 237 of Companies Act, 1956. Of course, the respondents who are the Company and its Managing Director, have strongly disputed this allegation made by the petitioner against them as if his signature was forged in the minutes of the resolution. It is not out of place to mention that the petitioner has also filed a criminal case against Respondent No.2 making the allegation of forgery and the complaint was taken on file. Against taking cognizance by the Special Court of Economic Offences bearing C.C. No.233/2014, the Respondent No.2 preferred revision to the Sessions Court, Bangalore. The revision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sprove the contention of the respondents that the Company was not at all doing any business in any of these years. On the other hand, it is the specific case of the respondents that the petitioner taking advantage of the old age of Respondent No.2 who is physically challenged had occupied the Company premises unlawfully without authority and has started doing his own business of manufacturing paper cups which is totally against the objects of the 1st Respondent Company. It is the specific case of the respondents that there is no Board resolution for the petitioner to run the business of manufacture of paper cups. Secondly, the petitioner has illegally occupied the Company premises. It is also the case of the respondents that the petitioner might have spent money for running his own business of manufacturing paper cups. Thus, the respondents have come with a specific allegation against the petitioner that he has been running his own business in the 1st respondent company premises, which is opposed to the objects of the company and that no permission was obtained from the Board. The petitioner has not filed any proof to show that the 1st Respondent Company is doing business and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnature and has illegally appointed his wife Smt. Vellur Janakiram Geetha Kumari as Director. Further, he has alleged that Respondent No.2 has illegally transferred his 450 equity shares in favour of his wife. It is the case of the petitioner that those two acts of Respondent No.2 are illegal. Smt. Geetha Kumari is the wife of Respondent No.2. Whether Respondent No.2 is competent to transfer 450 shares in favour of his wife? Can the petitioner question the transfer of shares of Respondent No.2 to his wife? Whether it is incumbent on Respondent No.2 to obtain the consent of petitioner for transfer of a part of his shares to his wife? The first contention of Respondent No.2 is that the petitioner himself was a party to the Board resolution for appointment of Smt. Geetha Kumari as Director of the Company. The Board resolution was dated 02.01.2013. The Respondent No.2 has filed a copy of the Board resolution and marked as Annexure-R/1. It is signed by the petitioner as well as Respondent No.2. The contention of the petitioner is that this signature is a forged one. Absolutely, there was no need for Respondent No.2 to forge the signature of the petitioner. The petitioner has simply d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appointment made in the Board meeting is valid . The contention of the petitioner is that his signature is forged in the resolution dated 02.01.2013, whereas, the contention of Respondent No.2 is that the petitioner attended the meeting and had signed in the attendance register and required copies were filed with the Registrar of Companies. So, the contention that his signature is forged is ruled out. Even otherwise, the petitioner has filed a complaint against Respondent No.2, his wife and against the Company before the Special Court (Economic Offences), Bangalore, bearing CC No.233/14, dated 08.10.2015. The Trial Court took cognizance of the complaint and numbered as CC No.233/14. The Respondent No.2, preferred revision against taking cognizance bearing Criminal Revision Petition No.892/15 at LXVII Additional City Civil and Sessions Court and the revision was allowed and taking cognizance by the Trial Court was set aside. Further, the petitioner has also filed Civil Suit OS No.1154/2014 before the City Civil Court on the same grounds and it is pending. Annexure-A/8 to the petition is the plaint copy. We have already discussed about the prayer in the Civil Suit which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced the books of account as directed by the Tribunal for inspection in the premises of the Tribunal. It is the contention of Respondent that the Company records were produced by the Respondents on 22.11.2016 as directed by the Tribunal. They are Minutes book of Board meeting, original attendance Register, statutory registers, minutes book of AGM. After going through the records produced by the respondents, the petitioner could not make out anything. One thing is that the Company is not at all doing any business. So, the question of tampering with the accounts does not arise. It is a mere apprehension of the petitioner that something has happened with reference to the books of account. The contention of the petitioner is that an understanding was reached between him and Respondent No.2 under which, he would be allotted 49% shareholding and the Respondent No.2 will be entitled to 51% of shareholding and in consequence of the understanding, a MoU was drafted and it is annexed as Annexure-A/7 to the petition. The Respondent No.2 has vehemently denied that he had agreed for transfer of 49% shareholding to the petitioner and that an understanding was reached in that connection. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
