TMI Blog2017 (12) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... Besides the above, no material has been shown to demonstrate the fulfilment of the requirements of Section 284(1) and (2) of the Companies Act, 1956, before removing the Petitioners and the Respondent No. 12 from the Directorship of the 1st Respondent Company by the Respondent Nos. 2 to 11. The Respondent Nos. 2 to 11 failed to produce the copy of the 'special notice' containing the agenda for removal of the Petitioners and the Respondent No. 12 as Directors of the 1st Respondent Company. The omission to serve a 'special notice' to the Directors sought to be removed constitutes denial of their statutory right of the reply, and in the absence of the notice to the Directors, any resolution for their removal is vitiated by such gross omission, and the same is neither bona fide nor in the interests of the 1st Respondent Company. Thus, the Respondent Nos. 2 to 11 seem to have made efforts to usurp the office of the Directors and to gain the control over the Board of Directors of the 1st Respondent Company. Therefore, the removal of the Petitioners and R12 from the office of the Directors of the 1st Respondent Company in the EoGM purportedly held on 27.07.2015 amounts to acts of oppres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15.07.2015. The authorised capital of the 1st Respondent company is ₹ 45,00,00,000/- divided into 45,00,000 equity shares of ₹ 100 each. The present issued, subscribed and paid up capital of the 1st Respondent company is ₹ 43,43,50,000/- divided into 43,43,500 equity shares of ₹ 100 each. The main obiect of the company is to carry on business of buying, selling, and dealing in all types of shares, debentures, stock, Government securities and to act as investment consultants, share brokers subject to obtaining such permissions as may be required. The 1st respondent company is the holding company of two subsidiaries viz., M/s. Ashwini Hospital Limited and M/s. Ashwini Health Care Limited. The Petitioners are collectively holding 7,57,110 equity shares of ₹ 100 each amounting to ₹ 7,57,11,000 constituting 17.43% of the issued and paid up capital of the 1st Respondent company. Therefore, the Petitioners are fulfilling the requirements under Section 399 of the Companies Act, 1956 for filing the Petition under the provisions mentioned hereinabove. 3. It has been submitted by the Petitioners that they have been elected as the Directors of the 1st Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent chairman sent an e-mail to Mr. K. Muraleedharan, Deputy Consul General of India, Dubai seeking his comments duly attaching scanned copies of the proxy forms said to be attested by Shri Naresh Kumar for verification along with a scanned copy of the attested proxy by another official of Consulate Shri Pradeep Kumar. The Deputy Consul General informed that Shri Naresh Kumar had left Dubai Consulate on 02.11.2013 on transfer basis as second secretary in the Embassy of Kathmandu and informed that all the documents said to be attested by Shri Naresh Kumar were totally fake. 5. However, the CLB vide its Order dated 07.07.2015 disposed of the Petition No. 34/2015 by recognising the Petitioners and Respondent Nos. 2, 3 and 12 as Directors of the 1st Respondent company. Consequently, the Petitioners have filed the e-forms DIN 12 with Registrar of Companies, Kerala, Ernakulam, the copies of which have also been placed on file as annexure A5. It has been stated by the Petitioners in the Petition that the Respondent Nos. 2 and 3 developed an animosity with the Petitioners on their being elected as Directors of the 1st Respondent company and on 29th morning of July, 2015 at 10.30 A.M., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. Moreover, the Respondents in the extract of resolution electing the Respondent Nos. 2 to 11 as Directors forged the signature of the 1st Petitioner for certifying the resolution when, according to them, the 1st Petitioner is removed from the office of the director by item No. 1 of the EOGM purportedly held on 27.07.2015. 8. The Petitioners plead that in the notice attached in relation to the appointment of Respondent Nos. 4 to 11 as directors of the 1st Respondent company, the said Respondents are being appointed by a single resolution which itself is in violation of Section 162 of the Companies Act, 2013. It has further been submitted by the Petitioners that the Respondent Nos. 2 and 3 have withdrawn a sum of ₹ 30 Lakhs and ₹ 35 Lakhs respectively from the accounts of the 1st Respondent company maintained with the South Indian Bank Ltd., Thrissur, Kerala. A copy of the Bank statement for the period from 17.08.2012 to 24.08.2012 is attached as evidence in support of the factum of withdrawal of money. As a consequence, when the directors withdraw the money from a public limited company without prior approval of the Central Government, the concerned director vacat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioners in order to control and take over the management of M/s. Ashwini Hospital Limited, has invested the equity share capital of the 1st Respondent company. The 1st Respondent company has no other activity other than the investments made in the subsidiary company i.e. M/s. Ashwini Hospital Limited and M/s. Ashwini Health Care Limited. It has also been admitted by the Respondents that the then CLB appointed an independent Chairman for convening a meeting for the purpose of election of Directors on 15.06.2015. It is submitted by the answering Respondents that had it been disclosed to the independent Chairman appointed by the then CLB, the 1st Petitioner and other NRIs would have not been elected as Directors of the 1st Respondent company, due to which the meeting and election of the 1st Respondent company was convened and conducted by way of EoGM on 27.07.2015 to remove the Petitioner Nos. 1 to 9 and Respondent No. 12 and elected Respondent Nos. 2 to 11 as Directors of the 1st Respondent company which was being done in view of the invalid meeting held on 15.06.2016 of the 1st Respondent company. There are other allegations that the 1st Petitioner announced that the 8th Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing percentage is 99.68% which resulted in misleading the CLB. Because, the Chairman ought to have mentioned as to how much percentage of voting each panel got. 10. The answering respondents stated in the counter that a criminal complaint has been made by the respondents against the Petitioner and his daughters and apprehended the consequences of facing the criminal complaint and consolidation of shares due to the non-disclosure of the residential status. The Petitioner approached the 2nd Respondent for settlement of the matter and the 1st Petitioner promised and assured to restore the Directors who were removed earlier and wanted to take back his investments in the 1st respondent company and the holding company. Therefore, upon the consensus arrived at, the 1st petitioner called for a Board meeting on 1st July 2015 at 10.30 a.m. wherein it was decided to issue the notice calling for EoGM on 27.07.2015 and the notice was sent to shareholders. The EoGM was held on 27.07.2015 and the Respondents 2 to 11 were elected as Directors and the shares of the petitioner along with other have been forfeited. Accordingly, the petitioner filed the required Form with the ROC. Therefore, when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and reiterated the averments made in the petition stating that the Respondent Nos. 1 to 11 are usurpers of the office of the Directors against the will of the shareholders who have overwhelmingly voted in the EoGM held on 15.06.2015 under the independent Chairman appointed by the then CLB and stated that the digital signatures of the 1st petitioner was forged by the Respondents by hijacking the website of ROC, Kerala, Ernakulam in filing the E-forms DIR-12 in Ashwini Hospitals Ltd. and also forged the signatures of Vice Consul and seal of the Consulate of India, Dubai in proxy forms and trespassed into Ashwini Hospitals Ltd. along with Goondas and forcibly took away all the documents, records and manhandled the Directors and staff with regard to which FIRs have been filed and the same were under investigation. It has specifically been stated in the rejoinder that the company petition is maintainable. Because, the petitioner has challenged the illegal forfeiture of shares that has been done by Respondent Nos. 2 to 11 in the EoGM purportedly held on 27.07.2015 in relation to the 1st respondent company. It has further been specifically stated that the shareholders have participated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing prevented the respondents from approaching the CLB before the conduct of the meeting held on 15.06.2015 and the cancellation of shares of these 73 shareholders/members are also challenging the petition as the cancellation of shares can only be done by the Hon'ble court under section 100 of the Companies Act by way of reduction of capital of by this Hon'ble Board under section 402 of the Companies Act, 1956 by way of buy back of shares. Therefore, it is obvious that the company did not buy back the shares of the 73 shareholders under section 77A of the Companies Act, 1956 or section 68 of the Companies Act, 2013. Thus, the respondents did not follow the principles of natural justice before cancelling the shares of 73 members in the EoGM purportedly held on 27.07.2015. The Petitioner had also controverted the issue pertaining to misjoinder of party as Respondent No. 12 on the ground that he was not present at the time of filing of the petition and therefore he is arrayed as Respondent so that he can present his case. 14. It has further been specifically stated that the validity of the meeting dated 15.06.2015 was decided by the judicial court such as CLB, Civil Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Relief. 16. In relation to the issue No. (a), it is on record that an EoGM was held and conducted for the purpose of election of the Directors on 15.06.2015 under the supervision of an independent chairman appointed by the then CLB. After fulfilment of the legal requirements, the Petitioners along with the Respondent Nos. 2, 3 and 12 were elected as Directors of the 1st Respondent Company in the said EoGM. The detailed report of the chairman was submitted to the then CLB. The CLB on 07.07.2015 disposed of the Petition No. 34/2015 by recognising the Petitioners and the Respondent Nos. 2, 3 and 12 as Directors of the 1st Respondent Company pursuant to which the Petitioners have filed e-forms, DIN 12 with the Registrar of Companies, Kerala, Ernakulam. If Respondent Nos. 2 to 11 had any legal objection in relation to the EoGM conducted on 15.06.2015, then, they could have approached to the then CLB to file their objections prior to the disposal of the Petition No. 34/2015. Now, the objections which the Respondent Nos. 2 to 11 have taken pertaining to the EoGM dated 15.06.2015 are afterthought. Therefore, convening, holding and conducting of the EoGM purportedly on 27.07.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fact has been proved by showing the entries of his travel in his passport during argument. Further, the shareholders have not received notice of EoGM purportedly held on 27.07.2015 as the 1st Respondent Company has received 76 complaints from the shareholders stating that they did not receive any notice of said EoGM. Moreover, the Respondent failed to produce the proof of service of notice dated 01.07.2015 on 344 shareholders pertaining to the EoGM purportedly held on 27.07.2015. Therefore, the defence taken by the Respondent Nos. 2 to 11 is highly improbable and full of fallacy. 19. Besides the above, no material has been shown to demonstrate the fulfilment of the requirements of Section 284(1) and (2) of the Companies Act, 1956, before removing the Petitioners and the Respondent No. 12 from the Directorship of the 1st Respondent Company by the Respondent Nos. 2 to 11. The Respondent Nos. 2 to 11 failed to produce the copy of the 'special notice' containing the agenda for removal of the Petitioners and the Respondent No. 12 as Directors of the 1st Respondent Company. The omission to serve a 'special notice' to the Directors sought to be removed constitutes den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l status by the members. 22. Assuming that the Respondent Nos. 2 to 11 were Directors at the time of forfeiture of the said shares on 27.07.2015, and were authorised to cancel the shares. But legally, the Directors of the Company cannot utilise their fiduciary powers over the shares purely for the purpose of cancellation of the shares of the minority shareholders to improve their voting power. The court cannot allow to exercise such powers which might have been delegated by the company to the Board of Directors. Therefore, there was no authority with Respondent Nos. 2 to 11 to forfeit the shares of the Petitioner Nos. 1, 2 and 5 including 73 shareholders. The whole action is patently illegal, perverse and is declared as null and void. This view is fortified by the ruling given in Rashmi Seth v. Chemon (India) (P.) Ltd. [1995] 82 Comp. Cases 563 (CLB). Thus, in view of the legal position stated above, issue No. (b) also stands decided in favour of the Petitioners including 73 shareholders and against the Respondent Nos. 2 to 11. (c) Relief:- 23. In the light of the factual and legal position stated above, we hold that the EoGM purportedly held on 27.07.2015 was illegal, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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