TMI Blog2017 (1) TMI 1667X X X X Extracts X X X X X X X X Extracts X X X X ..... ry for the petitioner with Mr. Surinder Kumar Virdi in person. Mr. Rajinder Mahaian, Advocate for respondents. JUDGMENT. R.P.Nagrath, The instant petition has been filed by the petitioner under Sections 397, 398, 402, 403 and 406 of the Companies Act, 1956 (for short to be referred here-in-after as the 1956 Act). The Company petition filed before the Company Law Board is dated 06.10.2015 and received on transfer by the Tribunal on 26.07.2016. 2. Respondent No.1 Company was incorporated under the Companies Act, 1956 (for short to be referred as 1 1956 Act') on 29.05.1992. The main objects of the Company were to manufacture, process, treat and deaf in leather, leather cloth. plastics, oil cloth. Iinoleum, trapaulines, saddles, garments, gloves, purses, saddler, harness, traveling bags, springs, boot and shoe, leather dressers, tanners and every description of leather goods and leather chemicals. 3. It IS the admitted case of the parties that as on 31.3.2014, respondent No.2 had 10480 equity shares being 35.35%, respondent No.3 7020 equity shares (23.68%), the petitioner had 10850 equity shares (36 50%) and Madhan Mohan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a shorter notice. The R-3 mentioned in her reply that she received the notice on 18.32015 along with the agenda, but had shown her inability to come, but questioned the proposal to appoint Mrs.Nachhattar Virdi as Additional Director. 5. The case set up by the petitioner is that R-3 through a common mend informed that she was willing to attend the meeting at a common place other than the registered office after 2.00 PM on 21.03.2015. Therefore, the meeting was held at Flat No.504 F-1 Nittishri Apartment Shourya Green, Surya Enclave Jalandhar after 2.00 PM. The resolution oi the said Board meeting is Annexure P-5. wherein the presence of the petitioner and R-3 is recorded. Apart from these Directors, the presence of Ashok Kumar and one Prem Kumar has also been recorded. Leave of absence was granted to R-2 because of his court case at Phagwara. It was also recorded that R-3 could not provide accurate financial position of the Company because of non availability of pages Nos.48 to 65 of Summary Ledger for the period from November, 2008 to March, 2010. It was decided that the petitioner shall supply the above record to R-3 through Ashok Kumar. It is also recorded 'n the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the cameraman that R-3 and her husband have tampered with the record and destroyed the data. The custody of the record of the Company was also discussed and it is recorded that Pushpa Devi admitted that the record was in her possession. 8. The next grievance of the petitioner is that he sent another notice dated 11.05.2015 for meeting of the Board of Directors proposed to be held on 18.05.2015, but R-2 and R-3 failed to attend that meeting and thereafter the petitioner was restrained from entering the office or having access to the documents of the Company. The respondents are alleged to have fabricated the documents showing his removal from the Company w.e.f 7.5.2015. The documents available with the petitioner are a notice sent by R-3 dated 30.03.2015 to the Board of Directors. This notice termed as special notice under Section 115 of the Companies Act, 2013 for calling Extra-ordinary General Meeting to move Special Resolution under Section 169 of the Act for removal of the petitioner from the Directorship. R-2 prepared notice dated 31 .03.2015 addressed to all the shareholders for the Extra-ordinary General meeting to be held on 07 05.2015. It is the version of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termination of the petitioner from the post of Directorship to be illegal and void ab initio, (v) for appointment of Administrator or special officer to take charge of the business and affairs of the Company along with the records, books and papers etc., (vi) to appoint a Committee of Directors consisting of the petitioner and respondents to assist the Administrator/Special Officer, (vii) To allow the petitioner to inspect the record of the Company etc. etc. 13. Respondents No.1 to 3 have filed joint written reply. Respondent No.4 has not appeared to contest this petition. It is stated that since the very date of appointment of the petitioner as Director, he is working prejudicial to the interest of the Company. It is further stated that both the R-2 and R-3 had shown their inability to attend the meeting on 21.03.2015, for which notice was issued to them by the petitioner and there being only three Directors of the Company, the Quorum for meeting was incomplete. The minutes of the meeting (Annexure P-5) dated 21.03.2015 are stated to be forged and fabricated. According to the respondents, the petitioner had no authority to call the meeting of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Director vide the resolution dated 07.05.2015. 16. The petitioner filed the re-joinder also alleging that there is no resolution of the Board of Directors fixing remunerations of respondents No.2 and 3, which is thus in violation of Article 39 of the Articles of Association. The notice dated 30.03.2015 is said to have been ante-dated and a fraudulent document prepared to pre-empt meeting already scheduled for 02.05.2015. it is alleged that the petitioner was a member of the Board oi Directors, but the respondents No .2 and 3 in violation of the provisions of law created a fictitious resolution dated 31 .03.2015 to hold the EOGM on 07.05 2015, whereas the power to call EOGM vested with the Board of Directors. In this case, the R-2 on his own decided to have EOGM. This is also stated to be in violation of Section 169 of 2013 Act, as no reasonable opportunity was afforded to the petitioner before his removal and they nave misused their position being majority shareholders. 17. The petitioner filed CA No-14 of 2016 for placing on record the additional documents with certain interim prayers. The additional documents are the audited annual financial statements for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further observed that perusal of these documents relating to Annual Return for the year ending 31.03.2014 reveal that these were uploaded on the website of the ROC on 31 .03.2015 and these are thus to be in possession of the respondent Company. The learned counsel for respondents undertook that whole of the original record available with respondent No.1 including any of the records listed in Annexure 'A' will be produced before 03.06.2016. Next date fixed was 26.07.2016. The matter meanwhile was received by transfer by the Tribunal. 21 . The respondent wrote a letter dated 02.06.2015 to the Bench Officer of the New Delhi Bench of the Company Law Board that Of the records mentioned in Annexure 'A in the compliance report was available at the registered office of the Company at the time of preparation of the compliance report dated 01 .09.2014 as approved in the Annual General Meeting dated 30.09.2014. It was reiterated that the petitioner in fact had taken away the record of the Company and did not return the same even after notice given to him and therefore, ODR No 425, dated 28.49015 was lodged at the police station on the complaint of respondent No.2. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents. But now it is stated in the latest affidavit of the respondents dated 24.10.2016 that the entire record was missing including ROC files maintained since incorporation. However, in DOR No.425, dated 28.04.2016, the date of missing of the documents is mentioned as 20.04.2015. As per DDR, the detail of the missing record is ROC records and registers, files of PSIEC, Pollution Control Board, income tax record, certain account books, Latter Head in the name of Company and rubber stamps etc. This was such a serious matter that the respondents were supposed to take effective steps for lodging the complaint to the police making allegations against the petitioner and to pursue the matter for recovery of the record. 25. The major fault, however, lies with the petitioner. The petitioner sent a notice dated 13.03.2015 for holding meeting of the Board of Directors for 2103.2015. That notice was sent on 15.03.2015 at 3.16 PM as mentioned on the copy of email which is part of Annexure P-3 and the acknowledgement due showing despatch of the notice by the registered post is dated 16.03.2015. Any how the respondents had shown their inability to attend the meeting. The petitioner r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no significance. 29. Even regarding appointment of Nachhattar Virdi as Additional Director, as per agenda item 3 of the minutes of the Board meeting dated 21.03.2015 Annexure P-5, it is recorded that R-3 had expressed her dissent with regard to appointment of the said lady. but the petitioner exercising casting vote as Chairman. as per Article 44 of the Articles of Association of the Company passed the resolution for appointment. 30. The petitioner then sent a notice for holding meeting of the Board of Directors for 14.04.2015. That notice dated 06.04.2015 is Annexure P-7 accompanied by the agenda items. The minutes of the meeting dated 14-04.2015 are Annexure A-8, jn which the presence of respondents No.2 and 3 as well as that of Nachhattar Virdl is recorded. The respondents have denied the correctness of the said proceedings. This meeting was convened despite the fact that petitioner was served with notice dated 23.03.2015, that he had shifted the record from registered office of the Company to his residence. In the absence of original minutes book, it is not possible to accept the veracity of these minutes. Same is the consequence of the Board meeting dated 02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties The petitioner has placed the track report of the postal article sent to him, for the period from 2404.2015 to 30.04.2015 and last remark is that the postal bag is opened. but does not suggest that the postal article was delivered for the petitoner till 30.04.2015. 33. It seems that the original register of minutes book of the Board meeting relating to the minutes held on or after 31.03.2015 and the minutes book of the general meeting held on or after 01.04.2015 onwards produced in compliance with the order dated 19.04.2016 is manipulated. This record was sent along with letter dated 27.04.2016 addressed to the Bench Officer of the Company Law Tribunal, New Delhi. It is reiterated in the said letter that the minutes book of the meeting of the shareholders of the Company, which were taken away by the petitioner have not been returned. The respondents also produced copies of paper books for the financial year 2013-14 and 2014-2015 along with supporting documents down loaded from MCA Portal. 34. The only document, from which the process of holding Extraordinary Genera' Meeting to move a special resolution under Section 169 of the Companies Act, 2013 for rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 100 of the Act relates to calling an extra-ordinary general meeting of the Company, for which the decision has to be taken by the Board of Directors and not at the whims of an individual Director. 37. There is no explanation in the written reply supported with any record that the notice dated 31 .03.2015 was sent to the petitioner by any other means than the registered post, as per the postal acknowledgement dues at page 112 of the company petition. As already observed the acknowledgement dues show that these notices were despatched on 24.04.2015. There is a track report of this registered notice addressed to the petitioner for the period from 24.042015 upto 30.04.2015 and till this date, the report does not show that postal article was delivered to the petitioner. There is no contrary allegations or the document in the written reply of the respondents as to how they could prove that at least a clear 21 days' notice of the meeting dated 07.05.2015 as required by Section 101 of the Act, was served upon the petitioner. Prima-facie therefore the termination of petitioner as director is not legal though the same would be subject to the final decision in the pending civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o wanted to say that nothing was even paid to his mother. who was a shareholder during her life time, but mother of the petitioner never raised any such issue before any forum. This aspect would however give rise to a cause as to how the affairs of the Company are being managed just to ignore the interest of the petitioner. who has maximum shareholding in the Company out of four shareholders. 40. Looking into the aforesaid aspects, it is quite clear that functioning of the respondent No. 1 Company is in a total mess because of the distrust between the petitioner on the one hand and the respondents on the other. We find it just and proper to provide exit to the petitioner because respondents No.2 to 4 jointly hold majority shares in the Company, whereas the petitioner is a minority shareholder. We take cut off date as end of financial year 2014-15 i.e. 31.03.2015 for evaluating the fair value Of the shares of the Company as soon thereafter i.e. on 07.05.2015. the petitioner was prima-facie illegally removed from the Board of Directors. We thus issue the following directions; i) Mis Khurana Rajiv Company, Chartered Accountant, SCO No.83940, Sector 22-A, IInd Floor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d instalment on submission of the valuation report within the stipulated period and the third and final Instalment shall be payable to the Valuer on submisston of the final report together with the objections and supplementary report; vii) We further direct that with effect from the date of passing of this judgment, the respondents shall not draw the remunerations for future till the exit is provided to the petitioner and the amount of remuneration shall form part of the income of the Company till the exit is finalised, which would be liable to be distributed among the shareholders to the extent of shareholding Bf the petitioner and respondents No.2 to 4. The respondents would also not transfer, lease or otherwise alienate any immovable assets of the Company during the interregnum. 41 . In case of any difficulty in implementing this order, the petitioner is at liberty to come back to the Tribunal. The other reliefs prayed by the petitioner are declined. There is no order as to costs of this petition. Any other miscellaneous applications filed during the pendency of this petition shall also stand disposed of and the interim stay stands vacated subject of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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