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Manmohan Singh Kohli Versus Venture India Properties P. Ltd. and Ors.

2004 (3) TMI 796 - COMPANY LAW BOARD NEW DELHI

CP No. 11/2002 - Dated:- 15-3-2004 - For The Appellant : Sajad Sultan, Adv., B.N. Sah, Practicing Company Secy. and M.S. Kohli, Adv. For The Respondents : Naveen Chawla, Adv. ORDER K.C. Ganjwal, Member 1. The CP No. 11/2002 has been filed by Capt. Manmohan Singh Kohli (petitioner). The petitioner was one of the first director and shareholder holding 50,000 equity shares of ₹ 10 each of respondent company M/s Venture India Properties Pvt. Ltd forming 33.33% of its total share Capital The pe .....

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tant of the company. 3. The authorized share capital of the company as on 31.3.2000 is ₹ 20 lakhs divided into 2,00,000 equity shares of ₹ 10 each. The issued, subscribed, paid up share capital as on 31.3.2000 is ₹ 15,00,000 divided into 300 equity shares of ₹ 10 each duly paid up issued for cash at par and 1,49,700 equity shares of ₹ 10 each fully paid up issued for consideration other than cash. The Articles of Association of the company indicate the objective of .....

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of Kailash, New Delhi for carrying on the business of Real Estate developers and contractors. The firm was awarded a contract by Air Force Naval Housing Board(R-7) to procure and deliver over 108 farm houses of 1 acre each in Tehsil Nuh Gurgaon on a turn key basis for the defence officers. The company acquired 130 acres of land 108 acres to be used for farm houses balance 22 acres for infrastructure. The petitioner has alleged that bulk of the land was purchased @ ₹ 85,000 to 1,20,000 per .....

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arshan Kumar. Mr. Puneet Bhagat (R-3) was appointed as a accountant of the firm. Soon after the deed was registered Mr. Har Krishan Singh Kohli, Mr. Sameer Mutreja Mr. Darshan Kumar retired from the firm as per agreement dated 23.8.1996. Consequent upon the retirement of the three partners from the firm the partnership firm was reconstituted as under:- 1. Capt.M.S. Kohli - 33.33% shares (petitioner) 2. S.K. Mutreja, 33.33% shares 3. Mrs. Suneta Bhagat- 33.33% shares (R-2) 6. Meanwhile, Mr. S.K. .....

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ities, oppression and mismanagement of the company. Petitioner has alleged that R-3 on the pretext to expedite operation of the projects, very cleverly manipulated the petitioner and the respondents to sign blank cheques with a pre-determent malafide intention of misusing the same at an appropriate time. R-3 being a Chartered Accountant and advocate probably thought that the manipulation in the partnership becomes too apparent and suggested to convert the partnership firm into a Private Limited .....

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that as a first step, R-3, on the pretext of maintaining accounts, shifted the entire records and files from the Gurgaon office to K- 32 Jangpura Extn. New Delhi without the prior consent of the other partners, when objected by the other partners, R-3 persuaded them to agree in the ultimate interest of the company. Similarly, R-3 procured a large number of pre-signed blank cheques from the petitioner and Shri S.K. Mutreja so that he could misuse these cheques at a future date. R-3 also refused .....

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Some other instances have also been quoted by the petitioner of having issued cheques to wrong persons by respondent No. 3 which had been dishonored due to insufficient funds. In order to harass the petitioner the proceedings under Section 138 of Negotiable Instrument Act 1881 have been initiated in Kathua, J& K. 9. The petitioner has further alleged that R-3 withdrew ₹ 9.40 lakhs fraudulently for giving consideration for transfer of R-2' shareholding to Mr. Anil Vaswani. Mr. Anil .....

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directorship of the company on 26.3.99. The petitioner has alleged that his removal was illegal. The notice of the Extra Ordinary General Meeting was issued on 20.2.99 which has not been received by the petitioner as mentioned by him. Although the respondents have filed copies of the UPC as proof of service. The petitioner has alleged that the UPC's have been posted from Shahdara whereas the Regd. Office of the company is at Pathankot and Head Office at Noida, and hence the UPC's are pro .....

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Ors. in CP No. 93/2000. The learned counsel referred to para 11 of this judgment to press his point that a meeting of the Board of Directors held without sending notice to the director was invalid and the resolution passed therein are also not valid. The relevant portion of para 11 of the judgment reads as "-In the absence the copy of the said notice and the postal receipts evidencing that the notices were duly sent at the right address and was received by the petitioner, we are of the view .....

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upt development the respondent No. 3 manipulated the statutory books and shifted all of them to his residence at A-8, Sector 17, Noida. The Board Meeting for shifting of office is purported to have been held on 22.3.99 for which no notice whatsoever had been issued to the petitioner director. The petitioner has further alleged the diversion/misappropriation of funds and that R-3 had projected a profit of ₹ 15-20 lakhs whereas the actual financial results show a zero profit. The R-3 manipul .....

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he petitioner has also pointed out that a relative of R-3 was illegally appointed as a consultant on a salary of ₹ 25,000 per month. The petitioner submits that there is no valid justification for payment of such amounts and R-3 is siphoning of the funds of the company. The petitioner also submitted that he being director of the company was not informed of the meetings of the Board as well as the Extra Ordinary General Meeting as a result of which certain important decisions had been taken .....

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years IV. To order to wind up the company on the ground that it is just and equitable to do so. 13. The other reliefs asked for are not of much consequence to this petition and as such they have not been listed. 14. The reply has been filed by Respondent No. 1, 2 and 4 together. Respondent No. 3 has filed a separate, reply. In reply of respondent No. 1, 2 and 4, the learned counsel for respondent submitted that the petitioner has chiefly made allegations against R-3 who is neither a member nor a .....

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s concealed material facts that he has filed numerous complaints before AFNHB and also with various police stations on the same grounds. The petitioner is a person of fractious temperament and prone to making wild allegations. The learned counsel for respondents has enumerated number of complaints filed with the police at Gurgaon and Noida. The respondent have alleged that the petitioner was creating obstructions in smooth functioning of the company and he was therefore removed from the director .....

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t was this reconstituted firm which entered into a contract with R-7 for developing 108 farm units for the retired and serving air force and naval personnel. The respondents have also denied that the bulk of land was purchased at ₹ 85,000 to ₹ 1,20,000 per acre. The purchase of land was duly signed by the petitioner and were audited by the independent auditors. The respondents have further submitted that R-3 did not approach the petitioner and Mr. S.K. Mutreja. In fact the petitioner .....

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which M/s Puneet Bhagat and Co. an independent firm of Chartered Accountants was appointed by the partnership firm and it was decided that all the books of accounts of the partnership firm shall be maintained by them. The respondents have reiterated that R-3 had no locus-standi in the erstwhile firm and the petitioner has made wild allegations which are full of contradiction. Further as the firm has ceased to exist allegations against the firm cannot be taken into account. The respondents have .....

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m the minutes of the Extra Ordinary General Meeting of the company held on 27.3.99. The respondents have further mentioned that the petitioner has admitted that he was guiding the construction of the project of the company. This admission clearly demonstrates that the petitioner was in charge of the only project of the company and in fact running the affairs of the company. The same person, is how alleging mismanagement without producing any evidence of the same against present directors. Furthe .....

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e learned counsel for respondent referred to the following judgments:- 1. Shanti Prasad Jain v. Kalinga Tubes Ltd 1965 35 Comp. Cases 351(SC). The Supreme Court in this case has defined oppression as "The phrase "oppressive to some part of the members"-suggest that the conduct complained of "should at the lowest involve a visible departure from the standards of fair standards of fair dealing and a violation of the conditions of fair play on which every shareholder who entrust .....

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how that he has been constrained to submit to a conduct which lacks in probity, conduct which is unfair to him and which causes prejudice to him in the exercise of his legal and proprietary rights as a shareholder. 3. V.M. Rad v. V.L. Dutt and Ors. and V.M. Rao and Ors. v. Rajeshwari Ramakrishnan and Ors. 1987 61 Comp. Cases 20 (Madras High Court) The Madras High Court in this case has enumerated the requirements of oppression as "these decisions are, therefore, clear authority for the posi .....

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there is just and equitable ground for winding up the company; (5) The conduct complained of can be said to be "oppression" only when it could be said that it is burdensome, harsh and wrongful; oppression involves at least an element of lack of probity and fair dealing to a member in matters of his proprietary right as a shareholder." 4. Surinder Singh Bindra and Ors v. Hindustan Fastners Pvt. Ltd. and Ors. AIR 1990 Delhi 32. In this case the Delhi High Court has held that the act .....

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stations and to other authorities. They were not functioning as responsible directors and their removal from the directorship, therefore, was not an oppression as it was not a continuous act. Smt. Kanak Lata Ghose v. Amal Kumar Ghose AIR 1917 Calcutta 328. 6. Achamma Thomas v. E.R. Fairman AIR 1970 Mysore 77. These two cases deal with dispatch of notices by UPC's and receipt thereof. The learned counsel submitted that they had posted the notices from Shahadara Post Office as one of their em .....

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sked for it to be returned. Further other directors have also given substantial interest free loans to the company. 20. The respondents No. 3, Shri Puneet Bhagat who is son of R-2 Smt. Suneta Bhagat has filed a separate reply and argued his case in person. The R-3 submitted that he is neither a member nor a shareholder nor a director and nor an employee, nor an agent nor any way connected with running of day to day affairs of the company. The respondent No. 3 has also mentioned that the petition .....

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onomic Affairs Wing of Delhi Police stating that Mr. Puneet Bhagat with malafide intention took away all the files of the firm to his office al K-32 Jangpura Extn, New Delhi and he clandestinely got the company registered under a different name "Venture India Properties Pvt. Ltd." etc. 22. The respondent No. 3 has denied all these allegations and submitted that he was constrained to file a complaint against the petitioner with the police for various irregularities and criminal actions .....

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thus constituted on 26.2.1996 between the petitioner, Mr. Sushil Kumar Mutreja, R-2, Mr. Hari Kishan Singh Kohli, Mr. Sameer Mutreja and Mr. Darshan Kumar having its office premises at E-4, East of Kailash, New Delhi. These premises are owned by the petitioner where he also runs a guest house. Accordingly, from Feb 26, 1996 to Apr 30, 1996 R-3 and R-2 paid a sum of about ₹ 53.21 lakhs into the partnership firm accounts. It is further submitted that after the payments were made, the petitio .....

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answering respondent as well as respondent No. 2 remained intimidated, in view of the risk of losing the huge investments made by them, R-2 had handed over some pre-signed blank cheques by her to the petitioner, through respondent No.4 to felicitate business operations. On 28.9.98 Mr. Sushil Kumar Mutreja retired from the partnership firm and respondent No. 5 became a partner in the partnership firm. It was further submitted by R-3 that it is pertinent to note that no company by name of M/s Ven .....

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emote control. Respondent No. 3 has also denied that he offered to maintain the accounts of the firm. On the contrary, it was a mutual decision of all the partners as per Clause 7of the partnership deed dated 26.2.96 under which M/s Puneet Bhagat and Company, an independent firm of Chartered Accountants was appointed by the partnership firm and it was further decided that all the books of accounts of partnership firm shall be maintained by them. The records were thus kept at the premises of Pune .....

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o now wants to escape the liability towards repayment of the same by filing such frivolous litigations and he submitted that the petition be liable to be dismissed. 24. I have carefully considered the pleadings and arguments of the learned counsels. It is on record that the firm in the name of M/s Venture India (Regd.), was started by Capt. M.S. Kohli, a distinguished person with numerous awards including Padma Bhushan and Arjuna Award alongwith Mr. S.K. Mutreja. This firm entered into a contrac .....

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Yudhisterpal Sharma 25. The petitioner have prayed for number of reliefs and the main relief is that the petitioner and his son have been unlawfully removed from the directorship of the company. The other allegations regarding misappropriation of funds, non refund of unsecured loan and illegal appointment of consultant have already been answered by the respondents in their reply and I need not dwell on them. The petitioners had alleged that respondent No. 3 Shri Puneet Bhagat manipulated the sta .....

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irector nor a shareholder nor a member nor an employee nor an agent nor in any way connected with running of day to day affairs of the company. The argument of the learned counsel of the petitioner that he was functioning as a defacto director is not tenable. 26. The only issue to be decided is the removal of Capt. M.S. Kohli and his son from directorship of the company. The petitioners have argued that necessary notice of the Board Meeting was issued as per provisions of the Companies Act, 1956 .....

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f a company has to be issued from the nearest post office, it is up to the company to decide from which post office they would like to issue the notice as per their administrative convenience. In this case the respondents have argued that one of their employee who is slaying in Shahadara who was entrusted this work of posting notices from Shahadara. There is nothing on record to prove that the stamps of the post office is fake or manipulated. As such, I am not inclined to accept the arguments of .....

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