9911796707
TMI Blog2018 (8) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... tting aside the impugned order dated 17th October, 2017. 2. The brief facts of the case are that 1st respondent is a private limited company registered under the Companies Act, 1956 was incorporated on 09.07.1993 and having its registered office at New Delhi. Mr. Francis Wacziarg (the father of the appellant) and 2nd respondent were the founders, promoters and equal shareholders of 1st respondent. Both Mr.Francis Wacziarg and 2nd respondent were each holding 50% shareholding of 1st respondent. Mr. Francis Wacziarg passed away on 19.2.2014 and after death his shareholding devolved upon his two legal heirs i.e. appellant and son, Mr. Romain Wacziarg. Mr. Romain Wacziarg relinquished his shareholding in favour of appellant and thereafter the appellant settled a trust namely Wacziarg Family Trust, the beneficiary of which were Mr.Romain Wacziarg and his children. The trust is the holder of 25% shares in 1st respondent. Therefore, the appellant effectively represents 50% shareholding in the 1st Respondent. The appellant was appointed as a Director of 1st Respondent at the AGM dated 30.9.2014 and thereafter only two directors namely appellant and 2nd respondent are on the Board of 1st r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriate orders and/or directions for reversal of all decisions taken as to the affairs of Respondent No.1 company from 12.10.2017 till the date of passing the order including calling back of any monies siphoned off by Respondent Nos 2 and/or 3 from the account of the Respondent No.1 company. i) Pass a declaration that the Respondents have conducted the affairs of the company with an intent to defraud its members or other persons, have been guilty of fraud, misfeasance or other misconduct towards the Respondent No.1 company and/or its members and/or liable to be punished in accordance with law; 6. On 17.10.2017 the matter was listed. After hearing the parties the National Company Law Tribunal, New Delhi passed the following order:- "Learned Sr. Counsels for the Petitioner have prayed for grant of ad-interim relief. Attention of this bench is drawn to the alleged acts of illegality attributed to Respondent No.2, whereby, she is stated to have unilaterally inducted Respondent No.3 as an Additional Director of the Respondent No.1 company, without convening a proper Board Meeting. This was done on the alleged misconception that the Petitioner had been disqualified as a Director in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, New Delhi in petition bearing No.(IB)348(ND) of 2017; and/or b) Pass any other order that this Hon'ble Tribunal may deem appropriate to pass in the interest of justice, equity and good conscience. 8. The appellant have stated that the impugned order does not give any final and conclusive reasons for setting aside the decision of the Board of 1st Respondent after 12.10.2017. The appellant further stated that the impugned order being final in nature is a non-speaking order. 9. The appellant stated that the office of 2nd respondent as a Director in 1st Respondent company, having become vacant, the appellant bona fide appointed 3rd respondent so that the Board of 1st respondent is functional. The appellant further stated that the office of the 2nd respondent as a director in 1st respondent became vacant by operation of law. 10. The appellant further stated that the RTI, on which the 2nd respondent is relying upon, from the Ministry of Corporate Affairs merely states that the disqualification has now been removed and does not specifically state that the disqualification was void ab initio. 11. The appellant next states that the Learned Tribunal should see the malafide ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete control of the company, took a series of decisions like suspending the CEO and terminated the services of two senior consultants, which were detrimental to the interest of the company. 2nd respondent stated that he had never vacated his office as a Director of 1st respondent. 2nd respondent further stated that the impugned order dated 17.10.2017 passed by the Tribunal has been passed by it in exercise of its wide powers under Section 242(4) of the Companies Act, 2013. 19. 2nd respondent stated that on 17.10.2017 a detailed hearing had taken place before the Hon'ble Tribunal and hearing both the parties the learned Tribunal had passed the impugned order which is a well reasoned and speaking order. Appellant was unable to given explanation as to how the appointment of Additional Director can be made vide an email as against in a Board Meeting. 20. 2nd respondent stated that the appellant herein in addition to instant appeal, as a counter blast, has also filed a Company Petition bearing C.P. No.401(ND)/2017 on the ground that the appellant herein was being disallowed by the 2nd respondent to participate in the affairs of the 1st respondent. The Learned Tribunal has issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of disqualified directors and the Hon'ble NCLT was pleased to issue Notice to the ROC in the said application on 09.10.2017. The appellant stated that 2nd respondent did take some steps but later on 2nd respondent withdrew the said application and sought to rely on the reply received under RTI dated 12.10.2018, which stated that the disqualification had now been removed. 24. The appellant stated that this Appellate Tribunal vide order dated 14.11.2017 had directed that 2nd respondent will not take part in any meeting of the Board of Directors, which relate to policy decision of the 1st Respondent. The appellant stated that 2nd respondent having been restrained from participating in the policy decision of 1st respondent, malafide refused to even share the policies of the company with the appellant. The same is recorded as part of the report of the Local Commissioner appointed at the request of the appellant by order dated 16.11.2017 in CP No.401(ND)/2017. 25. During the course of hearing 2nd respondent was given an opportunity to place certified copy of the application and concerned record/order from the office of ROC which formed the basis for issuance of RTI response dated 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent as director and that the 2nd respondent had never vacated his office as a Director of 1st respondent. Learned counsel for the respondent argued that the appellant convened a purported Board Meeting on 12.10.2017, for which no notice of the said Board Meeting was given to 2nd Respondent, and the decisions taken therein are illegal and against the interest of the company. Learned counsel for the 2nd respondent argued that the name of the 2nd respondent appeared in the list of disqualified directors prepared by ROC on account of an apparent error. Learned counsel for the 2nd respondent further argued, without prejudice, that the said disqualification if at all was only in respect of company in which it had arisen and did not extend to any other company and the 2nd respondent has never vacated his office in other companies, except Ashok Brother Impex Pvt Ltd. Learned counsel for the respondent further argued that the appointment of 3rd respondent as director was not in accordance with law. Learned counsel for the 2nd respondent further argued that by RTI response, the ROC intimated that the matter was considered and the name of the 2nd respondent, which was wrongly put in the lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration of NCLT. At the stage at which the present litigation is standing, we are not entering into the dispute whether ROC could "remove disqualification". The dispute raised in the present matter is that the entering the name of the respondent No.2/petitioner in the list of disqualified director was a technical error. Original Petitioner is showing document that ROC did act upon his representation. ROC could do so or not will be matter in issue. That would be matter for consideration in the petition. At this stage we are not entering into the arguments of automatic activation of disqualification provisions as looking to the fact referred to by the parties before us, it would have to be decided whether in fact and in law the disqualification had been incurred. 31. If the disqualification of original petitioner whether it was in fact and in law is yet to be decided, so is the question whether the appellant could or could not have legally appointed Respondent No.3 as Additional Director by sending off an email. The case put up by the appellant is that in view of Section 174 when she was the only director left she could appoint another Additional Director. Section 174(2) of the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the interim order needs to concentrate on regulating the conduct of the company's affairs on such terms and conditions as are just and equitable. At the time of notice in the present appeal vide orders dated 14.11.2017 we had directed that the 2nd respondent-original petitioner may continue as director for day-to-day affairs of the company but will not take part in any of the Meeting of the Board of Directors which relates to policy decision of the company. Now when we are disposing this appeal, we find the operative order of the impugned order was not correct as it was in the nature of final orders which could not have been passed at the interim stage. We intend to give directions so as to balance the equities between the parties. 33. For the above reasons we pass the following order:- The impugned order is quashed and in its place it is directed that the 2nd respondent-original petitioner will continue as director alongwith the appellant. The appointment of Respondent No.3 as Additional Director/Director is stayed. The decisions taken by original Respondent No.2 and 3 subsequent to 12.10.2017 are also stayed till the decision of the company petition. We request NCLT to appoin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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