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TMI Blog2018 (6) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case are that the Appellant No.1 was incorporated under the Companies Act, 1913 as a company limited by Guarantee and is admittedly a Section 8 company under the present Companies Act, 2013. Appellant No.1 is also a registered charitable trust under the provisions of the Bombay Public Trusts Act, 1950. The object of the appellants are to promote Christianity in India and conduct charitable and benevolent activities. 1st and 2nd Respondent filed a Company Petition being CP No.28/2016 before the Tribunal for oppression and mismanagement of the 1st appellant company by and at the hands of 2nd appellant thereby alleging that the 2nd Appellant, one of the director of 1st appellant, with malafide intention convened an invalid, ultra vires, fake and non-existent Extra Ordinary General Manager (EGM) on 30th September, 2015 and removed 19 directors, most of them being Members of the Company, under Sections 164 read with Section 167 of the Companies Act, 2013 without giving any notice to these directors/members of being heard. It was further alleged that Director 12 was digitally signed by 2nd appellant, certified by one Mr. Aashish Kabra and filed with ROC with a fraudulent motive o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Hon'ble Bench declare the change in the Articles of Association as null and void and all alleged connected actions based on alleged new Articles of Association. VIII) Such further or any other orders be made as this Hon'ble Tribunal Western Region may deem fit. 3. However, during the pendency of the Company Petition the 1st and 2nd Respondent filed MA No.99/2017 in CP No.28/2016 before the Tribunal stating that they being laymen were not aware about the technicalities and provisions of Section 244 of the Companies Act, 2013 and unfortunately their earlier counsel did not properly brief them about the provision and inadvertently the company petition was filed due to urgency as the 2nd appellant was mismanaging the affairs of the company. The applicants further stated the members of company are scattered in and around Maharashtra and hence the applicants could not call the meeting and could not bring them all together to obtain consent and/or to file the above referred petition alongwith them. The applicants further stated that as an abundant precaution, they are in process to call for meeting and/or to obtain consent of all other members of the company but it will take some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side the impugned order on the basis that Respondent Nos.1 and 2 were not entitled to file the Company Petition. B) Strictly without prejudice, in the alternative and only if this Hon'ble Appellate Tribunal is not pleased to grant prayer (A) above, in the alternative, this Hon'ble Appellate Tribunal be pleased to quash and/or set aside the impugned order and refer the matter to the NCLT Mumbai for determination of whether Respondent Nos1 and 2 are members of Appellant No.1. C) That pending the hearing and final disposal of the present appeal, this Hon'ble Appellate Tribunal direct that the Company Petition No.28 of 2016 not be proceeded with before the NCLT Mumbai. D) For ad-interim reliefs in terms of prayer clause (C) above; E) For costs; and F) For any and such other relief as this Hon'ble Appellate Tribunal deem fit and proper in the circumstances; 6. Learned counsel for the appellants stated that at all times there have been only 8 members of the 1st appellant and the respondents are not the members of the appellant and the extract of the Register of Members of 1st appellant had been annexed by 1st and 2nd appellant before the Tribunal. Learned counsel for the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for the appellants further submitted that the Appellate Tribunal may decide whether the waiver under Section 244(1) of the Companies Act, 2013 would apply even to nonmembers of 1st appellant. 9. Reply on behalf of 1st and 2nd respondent has been filed. Learned counsel for the 1st and 2nd respondent submitted that as per the Articles and Memorandum of Association of the company the appellant No.1 is empowered to hold and manage various properties like churches, institutions, schools and orphanages etc spread over company's jurisdiction. The Articles and Memorandum of Association of the company does not contain any provision regarding removal of directors of the company. It is submitted that as per the Memorandum of association and articles of association of the appellant No.1 the company has jurisdiction and is to function only within the said jurisdiction and the directors of the company should be one who is the member of the company and who is residing within the jurisdiction of the company and should also be christian. Learned counsel submitted that the appellant no.2 was never ever a member of the company nor any director but by misusing the online system, doing fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bombay Pubic Trust act, 1950 and the appellant is a company registered as per provisions of the Companies Act. Learned counsel further stated that the appellant is a company registered as per the provisions of Companies Act whereas Nashik Diocesan Council is a public trust registered as per the provisions of Bombay Public Trust Act, both are two different and distinct entities. Learned counsel further submitted that the appellants No.2 to 7 are trying to mislead the Appellate Tribunal by purporting the trust and company being the one and the same entity. Learned counsel for the 1st and 2nd Respondent submitted that the appellants No.2 to 7 may produce the record as to who were the only 8 members of the appellant No.1 since 1943 and to prove the authenticity of the extract of the so called and self prepared Register of Members of the appellant No.1. Learned counsel for the 1st and 2nd respondent submitted that the appellants No.1 and 2 admitted that the 1st and 2nd respondent alongwith several other the then directors have been stood automatically vacated of the office of directors by operation of law on account of non-filing of annual accounts and annual returns and thereby fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficio member, director and Chairman of the appellant company. Learned counsel for 3rd respondent further submitted that till end of 2015 the company was under his control and of Diocese Council. 15. Learned counsel for the 3rd respondent submitted that 2nd appellant has illegally usurped the management of the company and is steadily destroying its social and charitable purposes. Learned counsel further submitted that 2nd appellant with a view to use the vast properties held by the company for his malafide personal gain has illegally removed several members of the company including removing him. Learned counsel for 3rd respondent submitted that the 2nd appellant convened an illegal meeting on 13.9.2015 and removed several members without any notice or being given the opportunity of being heard. It is also alleged that the 2nd appellant fraudulently signed various company forms for the removal of the original directors and added six new directors and the directors purportedly remaining in the company all are close relatives or friends of 2nd appellant. Learned counsel for 3rd respondent submitted that the material objects of the company were purported to be changed and the said app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents for the EGM which prove that they are members of the company. 18. Learned counsel for 3rd respondent has submitted that the appellants have wrongly stated that the company has had only 8 members at relevant times. It is further stated that the appellants have cleverly used the words "at relevant times" which has no meaning in law. It is further submitted that the Trust has been in operation for over a hundred years with several Christian members that have been appointed by the Nashik Diocesan Council. Learned counsel submitted that these eight members have been falsely inducted in the year 2015 for forging and fabricating the documents digitally and against all of them the FIR has been registered and all these 8 members are from the same family. Learned counsel stated that the all the appellants particular Appellant No.2 are guilty of serious acts of oppression and mismanagement which includes forging documents and illegally removing members both of which have been prima facie observed by the Tribunal. At the end the learned counsel concluded that the appeal filed by the appellants may be dismissed with costs. 19. Rejoinder on behalf of appellant No.1 to the affidavit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or members of a company, the Central Government was empowered to form opinion whether circumstances exist which make it just and equitable to do so, authorise the member(s) of a company to apply before the Company Law Board under Sections 397-398 (now Section 241), notwithstanding that the requirements of clause (a) or (b), as the case may be of sub section (1) of Section 399 are not fulfilled. 25. Now there is a clear departure from earlier provision i.e. subsection (4) of Section 399 whereunder the Central Government was empowered to permit the ineligible member(s) to file an application for 'oppression and mismanagement' by its executive power. Under proviso to sub-section (1) of Section 244 now the Tribunal is required to decide the question whether application merits 'waiver' of all or any of the requirements as specified in clauses (a) and (b) of sub-section (1) of Section 244 to enable such member(s) to file application under Section 241. Such order of 'waiver' being judicial in nature, cannot be passed by Tribunal, in capricious or arbitrary manner and can be passed only be a speaking and reasoned order after notice to the (proposed) respondents. The basic principle of jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and Articles of Association, members of the said company shall be Christians elected or nominated by a managing council known as the Nashik Diocesan Councils of which the Bishop is the Chairman. The Appellant No.2 has stated that the appellant company consist of 8 members. Neither of the Respondents are members of the appellant company. Appellant No.2 further stated that general meeting of appellant No.1 was held on 30th September, 2015 and it was recorded that various persons including the Respondents hereto stood automatically vacated the office of directors by operation of law on account of, inter alia, non-filing of annual accounts and annual returns and thereby failing to discharge their duties as directors, in terms of Section 167 read with Section 164 of the Companies Act, 2013. However, we observe that the Respondent No.1 and 2 have attended the Annual General Meeting of Nasik Diocesan Trust Association held on 28th November, 2014 and their signatures are on the attendance Sheet at Sl.No.4 and 5 at Page 66. 28. As per Cyrus Mistry case it is admitted position that if applicant is not member he cannot move an application. In the present case, we also noted that there are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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