9911796707
TMI Blog2013 (6) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... s, total amounting of ₹ 1,25,16,000 was infused by the petitioner. Thereafter on 16th September, 2008 R-2 and R-3 gave their resignations as directors of the company. They even handed over the minutes book and attendance register for the period 1st April, 2008 to 9th September, 2008. It was contended that the plea of respondents that they have resigned as chairman and managing director of the company is not tenable. The annual return for the year 2004 last filed with office of Registrar of Companies ('RoC') indicates the designation of R-2 and R-3 as directors only. It was argued that R-2 and R-3 were never appointed as chairman and managing director of the R-1-company. They were only directors of the company. Further, it was pointed out that the records submitted by bank vide letter dated 27th February, 2013 also provide that R-2 (Mr. Atulkumar B. Shah) and R-3 (Mr. Vanrajsinh Zala) had signed all documents as directors and not as managing director or chairman. Further, minutes of all meetings dated 5th March, 2008, 1st April, 2008. 30th April, 2008, 9th September, 2008, 16th September, 2008 clearly show designation of R-3 and R-2 as directors. My attention was drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2nd December, 2008, (ii) Form 2 for the allotment dated 1st November, 2009, (iii) Form 32 for the appointment of R-4 and R-5 as director dated 2nd November, 2009, and (iv) Form 2 for the allotment of equity shares dated 26th November, 2009 are showing the registered office of the company as "33. Raj Ratna Complex. Nr. Navarangpura Bus Stand, Navarangpura, Ahmedabad-380009", in fact at the said address company never had registered office since 2002 till date. Inspection report of the RoC officer also discovered that R-1-company had never their registered office at the address "33. Raj Ratna Complex, Nr. Navarangpura Bus Stand, Navarangpura, Ahmedabad-380009". All forms were signed by R-2 in which the registered office of the company is shown as 33, Raj Ratna Complex. Navarangpura, Ahmedabad. All R-2 to R-5 are stating and submitting documents even to the CLB showing the address of registered office of the company as 33, Raj Ratna Complex, Navarangpura, Ahmedabad-380009 which in fact never been a registered office of the company at any point of time during the period 2002 to till date. All acts of allotment and appointment of R-4 and R-5 as directors of the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accountable or other liability which he may have incurred while in office. It was argued that the absence of any provision in the articles the ordinary rule of common law as regards resignation by an officer or agent must be followed, namely, intimation by notice given either to the company or the Board and acceptance of same by them - Glossop v. Glossop [1907] 2 ILR 370 and Latchford Premier Cinema Ltd. v. Ennion [1931] 2 CH 409. In the letter case, even resignation orally tendered at a general meeting and accepted by the meeting was held to be effective. Further, it was contended that a resignation once made cannot be withdrawn except with the consent of the company or the Board - R v. Mayor of Wigan [1885] 14 QBD 908; Glossop (supra) and Shivlal Motilal v. Tricumdas Mills Co. [1921] ILR 36 Bom. 564. My attention was also drawn to Buckley on the Companies Acts, 13th edn. at p. 882: A director can, subject to articles, resign his office, and cannot withdraw his resignation without the company's consent. Notwithstanding an article providing for resignation by notice in writing, a director can resign by word of mouth when a director's resignation is accepted by the Board - A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal in no uncertain terms while reading conjointly with the MoU that the resignation is qua post of executive directors but not as the directors, as the company is a closely held company R-2 and R-3 were looking after day-to-day management were executive director and managing director or chairman. Further, there are serious contradictory statements, averments made in the pleadings pertaining to the meeting dated 16th September, 2008. 5. R-2's and R-3's case is that the petitioner could not comply with the MoU dated 26th March, 2008, infused funds were returned personally by the respondent Nos. 2 and 3 for the equity share consideration which facts were not disclosed by the petitioner. The petitioner had made palpably false statements and had also remained silent about various events and hidden facts of his non-performance. The payments which were required to be made as per the MoU were not made till the stipulated time period and, hence, the MoU came to be terminated. Since process of takeover could not be completed by 30th April, 2008 the last day fixed for the said purpose under MoU dated 26th March, 2008 the MoU become voidable at the option of sellers (R-2 and R-3) und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self as the shareholder of more than 50 percent and, hence, claiming majority shareholder and then also the present petition is filed only to misled the CLB and to get the orders by prejudicing against the respondents that the necessary returns, documents were not filed and correct registered office is not shown. Non-filing of the forms, documents, with the RoC is a procedural default which can be rectified by filing the said forms, returns, documents with additional fees and non-filing has not diluted the alleged rights of the petitioner. 8. It was pointed out by the respondents that at the Board meeting held on 16th September, 2008 Mr. Narendra Patel and Mr. Vijay Patel nominee directors of petitioner were present, the respondents declared that the MoU was terminated by R-2 and R-3 due to non-performance of the contract by 30th April, 2008, the last day fixed under MoU dated 26th March, 2008 and letter of termination was tendered. The R-3 has even paid back ₹ 26 lakh out of ₹ 27.58 lakh received by him towards consideration for 31,623 shares which is demonstrated by the respondents by producing the bank statement. The petitioner even upon receipt back of the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in shares has to be agitated in a civil court. While in the normal course, the company should be a party or the articles should reflect such a private agreement to bind the company, yet if the company has taken benefit or has acted in terms of any such private agreement, then the company is bound by the terms of the agreement, at least in relation to the terms that the company has acted upon or derived certain benefits. However, even if they do not form part of the articles, if the company has acted in terms of such agreements, as in the present case, they are binding on the company insofar as the terms which have been acted upon by the company. In the present case the respondents have implemented the MoU by giving 50.57 percent shares to the petitioner, by appointing his group's three directors on the Board, the respondents' contention that the MoU has lapsed, since the process of takeover could not be completed by which was the last day fixed for the said purpose under the MoU, the MoU had become voidable at the option of the R-2 and R-3, is not borne out from the records of the R-1-company, even after 30th April, 2008, the R-2 and R-3 submitted their resignations dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order whether it would be just and equitable to wind up the company but if winding up which is an alternative to the petition under section 397-398 shall be prejudicial to the interest of the petitioner and not in the interest of the company public interest. CLB may refuse to order winding up of the company. Section 397 read with section 433(f) and section 434(2) makes it clear that a court will not proceed to wind up a company merely because it is just and equitable to do so, particularly in circumstances where the occasion for winding up is mutual lack of confidence and breach of fundamental understanding between the various groups of shareholders, if some way could be found out for continuing the company as a running concern after removing misunderstanding and settling right the acts of the group of the shareholders which constitute the oppressing group. The CLB has, therefore, to consider in all such cases whether, short of winding up, it is possible for the company's affairs to be remedied by recourse to section 397. In the present case, it is noted that though the petitioner has succeeded in making out a case of winding up of the R-1-company but winding up would be unfair ..... X X X X Extracts X X X X X X X X Extracts X X X X
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