9911796707
TMI Blog2017 (12) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... l and void. b. To declare the impugned Allotment of shares made on 30.09.2015 and 26.11.2016 as null and void. c. To declare the impugned Board Meeting held on 30.09.2015 as null and void. d. To declare the impugned Board Meeting held on 31.10.2016 as null and void. e. To declare the impugned Extra-ordinary General Meeting held on26.11.2016 as null and void. f. To declare the impugned Board Meeting held on 26.11.2016 as null and void. g. To declare the impugned appointment of Mr. Mallesham Mekala as Additional Director as null and void. h. To direct the Respondents 2, 3 and 4 to sell their shares to thePetitioner by fixing a fair value by appointing a valuer. i. To declare Annual Return filed for the period ended 31.03.2016 as null and void. 2. Brief facts, leading to the filing present petition, which are relevant to the issue in question, are as follows: 1) M/s. SRP LOGISTICS PRIVATE LIMITED (hereinafter referred to as the "Company") was Incorporated as a Private Limited Company on 28.05.2003, under the provisions of the Companies Act, 1956. The present Authorised Capital of the Company is Rs. 40,00,000/- (Forty Lakhs only) divided into 4,00,000 equity shares of Rs. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08,615 20,86,150 69.51% 2 Salalitha Parsha 48,510 4,85,100 16.17% 3 Mallesham Mekala 100 1,000 0.03% Total 2,57,225 25,72,250 85.71% 4) As on the date of Incorporation of the Company, the following were the First Directors: S No Name Designation Date of Appointment 1 Sekhar Pendam Managing Director 28.05.2003 2 Proddaturi Malathi Director 28.05.2003 i. Later on, the constitution of the Board of Directors was as follows: S No Name Designation Date of Appointment 1 Sekhar Pendam Managing Director 28.05.2003 2 Proddaturi Malathi Director 28.05.2003 3 Salalitha Parsha Director 24.10.2003 5) The impugned Board Meeting was held on 31.10.2016 for issue of Notice of Extra-ordinary General Meeting without issuing any notice of Board Meeting, as per the provisions of the Companies Act, 2013 and SS-1 (Secretarial Standard on meetings of the Board of Directors) issued by the Institute of Company Secretaries of India. 6) It is stated that Mr. Mallesham Mekala is appointed as Additional Director of the Company at a Board Meeting held on 26.11.2016 for which no notice was issued as per the provisions of the Companies Act, 2013 and SS-1 (Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No. 2 has not furnished bank statements to the petitioner in spite of several requests. The Respondent No. 2 has unilaterally operating the Bank Accounts of the Respondent No. 1 Company with his single signature as authorised signatory. Since the conduct of Respondent No. 2 is prejudicial to the interest of the Respondent No. 1 Company and to the Petitioner, it is need of the hour to change the authorised signatory for operation of bank accounts jointly with the petitioner. 10) It is stated that the petitioner has received a notice dated 04.03.2017 with regard to conducting of Board Meeting on 15.03.2017. The petitioner has made certain objections vide her letter dated 11.03.2017 with regard to conducting of the Board Meeting on 15.03.2017 in which the petitioner categorically questioned how Mr. Mallesham Mekala be regularised as Director and under what circumstances it was proposed to remove the petitioner from the Directorship. The petitioner has also questioned the proposed allotment of 99,900 equity shares to the Respondent No.2 including the intention in conducting Extraordinary General Meeting in a hurried manner. After receiving the said letter dated 11.03.2017, the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appointment of Mr.Mallesham Mekala from the Additional Director to Director is in sheer violation of the provisions of Section 161 (1) of the Companies Act, 2013. 12) It is contended that the Petitioner has also approached the Registrar of Companies with a Complaint as soon as the notice for the Board Meeting dated 04.03.2017 is received by the Petitioner. It was advised by the office of the Registrar of Companies that the Petitioner has to file an electronic Investor Complaint Form for a speedy Redressal of the complaint. Accordingly, as advised, the Petitioner has filed the complaint in the electronic form with the Registrar of Companies. No reply has been received so far till the date of this petition about action if any initiated. 13) It is alleged that allotment of shares to Respondent No. 2 & 3 as on 30.09.15 with an intention to gain control over the Company and to reduce the stake of the Petitioner is against the provisions of Section 62 of the Companies Act, 2013 is an an act of oppression. The petitioner ought to get equitable ratio of shares but has been allotted with less number of shares. 14) It is alleged that the petitioner has not received any notice to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is competent to transact the business of Company and the petitioner is not qualified to work as custom house agent. It is asserted it is only second respondent, who is instrumental in running the affairs of Company. 3) It is contented that Petitioner has drawn remuneration of Rs. 5,40,000/-each for year 2014-15 & 2015-16. Annual Returns are not routine matter and they are prima facie evidence as per Section 95 of the Act. The petitioner herself uploading all annual returns, now cannot belatedly feign the ignorance of the contents thereof and she is prevented from the challenging the same. It is stated that transfer request from Respondent No. 5 was noted by the Company in the Board Meeting held on 04.04.2005 in which Petitioner was also present.. It was decided in the said meeting that the shares be transferred to Respondent No. 3, who is the Director of the Company; the petitioner who was present consented for the decision. On 16.06.2005 the Board approved transfer of 10 shares from Respondent No. 5 to Respondent No. 3. In the said Board Meeting, the Petitioner is also the beneficiary of first allotment of shares to the extent of 19,995 she is the beneficiary in the allotment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Company, who are also 100% shareholders of the Company got shares allotted by merely converting the pending share application money that was lying in the books of accounts and were allotted by way of unanimous resolution passed by the Board of Directors (and also 100% shareholders of the company). The Balance sheet for year 2014-15, which clearly discloses a sum of Rs. 8,42,601/- was pending as share application money and this balance sheet was also authenticated by petitioner herself. The Ministry of Corporate Affairs vide its notification No. G.S.R. 241 (E) dated 31.03.2015 has directed the companies to complete the share allotments with respect to share application money pending with the Company before the notification of 2013 Act. Hence the company allotted shares with respect to pending share application monies received from shareholders/directors to the extent of the share application money pending as on 30.09.2015. Since all these shareholders and directors have participated and approved the allotment on 30.09.2015 there cannot be any complaint or grievance on this issue by any of the shareholders. 7) It is stated that the petitioner has also admitted her attendance at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the said allotment is against the provisions of the Companies Act, 2013. He has further contended that the Respondents acted contrary to the Notification vide GSR 241 (E) dated 31-03-2015 issued by Ministry of Corporate Affairs (Notification) where in it was notified that the shares against which the allotment was pending as on 31-03-2015 were required to be allotted by 1st June,2015. The Company shall by 1st June,2015 either return such amounts to the persons from whom they were received or allot shares. A perusal of the documents on record demonstrates that Respondents effected the allotment of shares on 30th September,2015. Furthermore, even though an amount of Rs. 8,42,601/- was pending as share application money as per the Balance Sheet for the year 2014-15, the respondents made unlawful allotment of Rs. 10,00,000/- in excess of Rs. 1,57,399/-. It is to be noted that the monies received as share application money available as per the Balance sheet and the excess amount for which shares were allotted were shown as received in cash which is impermissible under the Provisions of the Companies Act,2013 and the Rules and Regulations made there under. It is also submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3 (1) (iii) of the company's act 1956. The right of transferor of shares is restricted and prohibits any invitation or acceptance of deposits from persons other than its members/directors or their relatives. The initial authorized share capital of the Company is 5,00,000/- divided into 50,000 equity shares of Rs. 10 each as per article 3(a). As per Article 4, shares will be under the control of the directors who may are a allot or otherwise dispose of the same or any of them to such persons, either at premium or at par or a discount and at such times as directors may think fit and with the power to issue any shares as fully paid-up in consideration of services rendered of the Company in its formation or otherwise on such terms and conditions as Board of Directors in the direction deem fit but subject always to the provisions contained in article 2 which is finally subject to provisions of Act. Article 11 deals with transfer and it says shares cannot be transferred except a person agreed to by a majority of directors as being fit and proper to hold such shares with exception that it shall not apply where the holder of shares proposes to transfer the shares to any other member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the allegation cannot be accepted and it is an afterthought. 6) On direction of the Tribunal, the Respondent has produced all original records relating to issue in question. We have carefully perused all proceedings. Crucial documents to be scrutinized are the proceedings of meetings of Annual General Body Meeting and Board of Directors meeting held on 30 September 2015 in which the petitioner has admittedly participated. The minutes of AGM held on 30 September 2015 has recorded that both the petitioner as well as the respondent No 2 were present. During these proceedings, it was resolved to increase the authorised share capital of the company from the existing 5,000, equity shares into 1,50,000 equity shares of Rs. 10 each ranking pari passu in respect of all with the existing equity shares of the Company. The chairman / second respondent herein is authorized to take appropriate steps to amend the articles of Association. 7) The minutes of the Board of Directors meeting held on 30 September 2015 at 3:30 PM at the registered office of the Company clearly shows that the petitioner as well as the second respondent was present as Director and chairperson respectively. Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interalia held that Courts can compare signatures of parties. Moreover by accepting additional shares by the petitioner by virtue of impugned proceedings dated 30 September 2015, it is not at all tenable to question those proceedings on frivolous grounds. We have no doubt to come to a conclusion that the petitioner having participated in the proceedings, cannot subsequently raise any dispute for the proceedings, which have been taken strictly in accordance with law. It is also relevant to point out here only the petitioner and the second respondent are two shareholders available in the Company and other share holders holding 10 equity shares were subsequently transferred to respondent No. 3, who is none other than the wife of second respondent. Therefore, the second respondent and third respondent together constituted majority in the Company to run the affairs of the Company. 10) The other contention that the petitioner being a lifetime Director as per article of Association cannot be removed by the Company is not at all tenable for the simple reason that the Company is ultimately bound by the provisions of the Companies Act 1956/2013. As per Section 169 of Companies Act, 2013, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y wef 24.10.03 with authorization to the second respondent to take all necessary action to appoint her. Subsequently, the Board of Directors at its meeting held on 4th April, 2005, in which,, the petitioner, respondent Nos. 2 & 3 present has interalia passed resolution at item No. 3 as "The Chairman informed that Proddaturi Ramakrishna holding 10 shares in the Company as given notice that he is desires to transfer all his shares to any person identified by the Company at a price of Rs. 10/-. After a brief discussion, it was decided to accept the transfer request and said shares may be transferred to Mrs. Salalitha Parsha, Director of Company. The Board authorized the Chairman to do further acts in this regard and communicate the Board's decision to Mr. P.Rama Krishna" Accordingly, in the subsequent Board meeting held on 16th Day of June, 2005, while approving the minutes of previous Boards meeting, has further resolved for approval of transfer of shares as follows" 'The Chairman informed that share certificates along with duly filled in transfer deed received from Mr. P.Rama Krishna , who was holding 10 shares of the Company and passed resolution unanimously approving and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allotted to the petitioner, Respondent No.2 and Respondent No. 3, (Pendam Shekar-33,620 shares, Proddaturi Malathi-17,880 shares and Pendam Salalitha -48,510 shares) at the nominal value of Rs. 10/- each. It is also not in dispute that the share application money of Rs. 8,42,601/- was pending allotment of shares and the same was also reflected in the balance sheet as on 31.03.2015. All the above meetings were attended by the petitioner and also signed in the attendance register. The Ministry of Corporate Affairs Notification dated 31.03.2015 has interalia directed to allot shares for the money pending for allotment or return it by 01.06.2015. The petitioner, while accepting the above allotment made to her, is trying to dispute allotment made to others without any basis. The petitioner while admitting that share application money was pending with Company is only disputing quantum of amount. However, the relevant Balance sheet proves that share application money and the Company have proportionally been allotted shares as stated supra. Therefore, the allegations of petitioner contrary to above position are not tenable and they are hereby rejected. Therefore, Board meetings held on 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents for forensic examination. Signatures of petitioner are substantially tallying with admitted signature with corroborated evidence like petitioner has signed some papers, accepting allotment of shares etc as discussed supra. 5) So far as contention raised before the Hon'ble NCLAT with regard to removal of petitioner, who is nominated as life time Director, is concerned, as discussed supra, theCompany is ultimately governed by provisions of Companies Act, 1956/2013 and the Memorandum and Articles of Association of Company cannot have overriding powers over the Companies Act. It is admitted position that special notice dated 15.03.2017 was given by the Respondent No.2, U/s. 115 of the Companies Act with agenda of removing the petitioner as Director of the company. Section 169 of Companies Act, 2013 deals with removal of a Director. Sections 115, 117 and 169 are extracted below for ready reference. As per Section 117 of the Companies Act, 2013: "Resolutions and agreement to be filed". 117. (1) A Copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act, 2013, which is relevant in the instant case is extracted below for ready reference:: "Resolution requiring special notice. 115. Where, by any provision contained in this Act or in the articles of a company, special notice is required of any resolution, notice of the intention to move such resolution shall be given to the company by such number of members holding not less than one per cent of total voting power or holding shares on which such aggregate sum not exceeding five lakh rupees, as may be prescribed, has been paid-up and the company shall give its members notice of the resolution in such manner as may be prescribed. As per section 169 of the companies Act, 2013 deals with the removal of the director and the section is extracted below for ready reference: "Removal of directors " 169. (1) A company may, by ordinary resolution, remove a director appointed by the Tribunal under section 242, before the expiry of the period of his office after giving him a reasonable opportunity of being heard: Provided that nothing contained in this sub-section shall apply where the company has availed itself of the option given to it under section 163 to appoint not les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have held office if he had not been removed. (7) If the vacancy is not filled under sub-section (5), it may be filled as a casual vacancy in accordance with the provisions of this Act: Provided that the director who was removed from office shall not be re-appointed as a director by the Board of Directors. (8) Nothing in this section shall be taken- (a) as depriving a person removed under this section of any compensation or damages payable to him in respect of the termination of his appointment as director as per the terms of contract or terms of his appointment as director, or of any other appointment terminating with that as director; or (b) as derogating from any power to remove a director under other provisions of this Act. 11. By the reading of the above provisions of the Act, even though Articles of Association of the Company named petitioner as Life Time Director, she can be removed as per the above provisions. It is not in dispute that petitioner was in receipt of notice to convene Extra Ordinary General Meetings of Members of the Company to be convened on 10th April, 2017 for her removal. The petitioner was stated to have attended it, after scheduled time of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
