TMI Blog2013 (5) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... icant craves leave of this Hon'ble Bench to refer to the main company petition as part and parcel of this Application. It is submitted that the First Respondent Company is a family company wholly owned by the family in which the members of the family are the only directors of the Company and it is more akin to the nature of the family partnership and the Applicant being a 20% shareholder along with his wife has a legitimate expectation that he should be a part of the management Of the Company in relation to its day to day affairs with other family members. It is submitted that the Respondent Nos. 2 to 5. While having committed all acts Of gross mismanagement in relation to the affairs of the First Respondent Company, in defiance of the proceedings pending before this Hon'ble Bench have sought to convene an Extra Ordinary General Meeting (EGM) on 26.042013 seeking to remove the Applicant herein from the board of the First Respondent Company which in itself is per se perverse and in negation of the corporate principles as applicable to a family company like the First Respondent Company, solely made with a view to deliberately stifle the sane voice, which had been only hithert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being issued against the First Respondent Company having huge financial repercussions and consequences which are required to be mulcted on the Third Respondent individually. The orders issued by Central Excise in relation to the First Respondent Company clearly prove the allegation made by this Applicant is with substance and in alignment with truth. In these circumstances, the action Of the Third Respondent along With Other Respondents who are in the control and management Of the affairs of the First Respondent Company in CP Nos.57/2009 and 58/2009 is clearly under question and their interest is seriously affected. It is further submitted that being vitally interested and that too when the matter is sub judice, in the resolution of removal the board meeting suffers from the lack Of quorum and could not have passed the notice to be taken into consideration and hence On this Count also the proposed notice convening the EGM on 26.04.2013 is null and void. In support of his case, the learned counsel relied upon the following citations; (i) (2004) 63 CLA 1 18 (CLB) in the matter of D.V. Thirumalai and Anr Vs. Best Vestures Pvt Ltd Ors. (ii) (2001) 44 CLA 283 (CLB) in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the Reserve Bank of India etc., and some of such complaints are in the guise of applications under the Right to Information Act. 2005. It is solely due to the above reasons that the Applicant has been purposely delaying his own eases and he has directly contributed to the case being delayed for seVeral years now. In View Of the above, the Applicant is not entitled to any reliefs whatsoever even under the equitable jurisdiction of this Hon'ble Board. The sequence of events, leading to the proposed convening of the EGM of the Company on 26.04.2013, is as under: S. No. Date 1. 21.03.2013 The Notice of the Board Meeting to be held on 30.03.2013 was dispatched 2. 23.03.2013 Date on which the Applicant received the Notice of Board Meeting dated 30.03.2013 3. 30.03.2013 Date on which Board Meeting was held 4. 30.03.2013 The notice of the Extraordinary General Meeting to be held on 26.04.2013 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 28.12.2009 07.01.2010 17 25.09.2010 04.10.2010 18 25.01.2011 03.02.2011 19 29.04.2011 09.05,2011 20 15.10.2011 24.10.2011 21 20.09.2012 28.09.2012 22 31.01.2013 09.02.2013 4. In so far as preventing the Applicant from having access to information and records or that he was shut out from the Company are being denied as being false and baseless, These Respondents have deposited the statutory registers and books before this Hon'ble Board and the Applicant has already inspected the same and has also taken certified copies of the same. The actual reason for the Applicant having sought for information under the Right to Information Act. 2005 from all possible departments, is towards ulterior purposes of securing information to enable the Applicant to support his company petitions. which otherwise are liable to be dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2013, the boardof directors Of the Company has convened an EGM on 2604.2013 and accordingly, notices have been dispatched to the shareholders of the Company. The Applicant has received the notice of the EGM as early as on 01.04.2013 itself. It is submitted that it is the prerogative of the shareholders to consider whether the Applicant should be removed or not from his position as a director of the Company and this is required to be decided by the shareholders of the Company at the EGM dated 26.04.2013. It is submitted that the Respondent is the father of the Applicant and Of the Respondent NOS. 2 and 3. 5th Respondent was appointed as a director of the Company as he is the senior most person Of the family and as he is also a well-wisher Of both Applicant as the Respondent Nos. 2 to 4. It is pertinent to point out that as on the date of the induction of the Respondent to the board of the Company, the board already consisted of 3 directors being the Applicant and Respondent Nog, 2 to 4 and therefore these Respondents already had a clear majority on the board of the Company even before the induction of the Respondent as a director Of the Company which Clearly establishes that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GM dated 26.042013. 8. The leamed counsel for the Appl i cant submitted that while the petition was pending, the Respondents proposed to convene the EOGM only to remove the Applicant which is unjustified on the ground that the Company is a family company wholly owned by the family in which the members of the family are the only directors of the Company. On the other hand. the Respondents contended that the Applicant addressed several complaints to various authorities such as the bankers Of the Company, the Registrar Of Companies. the Regional Director, the Reserve Bank of India and some of such complaints are in the guise of applications under the Right to Information Act, 2005. The contention Of the Applicant is that he has a legitimate expectation and he should be a part of the day-to-day management Of the Company. However, the fact remains that he has not taken part in several board meetings or Annual General Meetings for the last several years in spite of receipt of notices Of such meetings and now conveniently chooses to falsely allege that he was sidelined from the affairs of the Company. Itis seen from the records that a shareholder of the Company issued notice dated 20.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason Of which several investigation, enquiries, inspection have taken place Over the years under the different Statutes. Some Of the e-mails the said Mr. Narayanamurthy Thirumurthy has sent to several etc., which has hampered the day-to-day functioning Of the Company. The requisitionist has given details Of the e-mails and other communications. Further it is stated at Para 3 of the requisition that the requisitionist intends to move the resolution removing the Applicant from his position as a director of the Company in accordance with the Articles of Association of the Company and subject to the provisions of Section 284 of the Act. The requisitionist signed the notice dated 20.03.2013 and deposited it with the Registered Office of the Company. Thus the requisitionist has complied with the above provision of law in relation to the notice as contemplated u/s 1 69 of the Act and the requisitionist has a right to move the resolution even under Section 284 ofthe Act. The Company. after receipt of notice from the requisitionist, addressed a letter dated 21.03.2013 to the Applicant informing him that the Company received a notice dated 20.032013 that pursuant to Section 284 of the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter. arnong other things have stated that the Applicant being a director has not taken part in several meetings or Annual General Meetings for the last several years in spite of receipt of notice of such meetings and now conveniently chooses to allege that he was sidelined from the affairs of the Company. The Respondents have given the details Of the meetings held and the notices sent to the Applicant. It is seen that almost 22 meetings were held during the period from 19.07.2008 till 09.02.2013. Further the Res ndents have emphasized and detailed out the events that led to convening of the EOGM proposed to be held on 26.0-4.2013. Mere calling and convening the prom sed EOGM dated 2604.2013 cannot presumed that the Applicant would be removed in the proposed EOGM. It is the right Of the shareholder Who fulfils the share qualification to issue a notice for requisitioning an EOGM. As stated supra. in the present case the shareholder is qualified to issue a notice and the Company has followed the due procedure of law. The Bench cannot interfere in the democratic wisdom of the Company unless and until there is any statutory violation. The Applicant. preemptory. cannot seek the injuncti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions Of the Companies Act, he Cannot be restrained from calling a meeting and he is not bound to disclose the reasons for the resolutions proposed to be moved at the meeting nor are the reasons subject to judicial review. Further the Apex Court held that the Life Insurance Corporation Of India, as a Shareholder Of Escorts Ltd, has the Same right us every Shareholder to call an EOGM Of the Company for the purpose Of moving a resolution to remove some directors and appoint others in their place. The Life Insurance Corporation oflndia cannot be restrained from doing so nor is it bound to disclose its reasons moving the resolutions. In (b) supra, the High Court Of Bombay considering the similar situation in regard to the democratic rights exercised by the shareholders in an EOGM requisitioned by the shareholders of the company held at Para 85 that in my view the conclusion drawn by the CLB that passing Of a resolution by the shareholders of the company in EOGM did nor in any manner amount to oppression or mismanagement and cannot be subject matter Of the petition u./s 397.398 Of the Companies Act; cannot be interfered With. In my view, the decision was taken by the majority O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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