TMI Blog2019 (5) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... uarantee Commission has stated that after completion of trial in the suit, when the suit was coming up for final hearing, the petitioners have sought liberty to withdraw the suit pending in the civil court. The petition to withdraw the civil suit was filed before this Tribunal, when it ought to have been filed before the civil court. The R1 has stated that this is contrary to the procedure prescribed in Order 23 Rule 1 CPC. Further, no liberty was granted to the petitioners. As per section 424(1) of the 2013 Act, the Tribunal shall not, while disposing of any proceeding before it, be bound by the procedure laid down in the Code of Civil Procedure but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, shall have power to regulate their own procedure. Experience of other Tribunals and quasi-judicial bodies whose parent Acts carry similar provisions as section 424(1) of the 2013 Act, shows that while the provisions of CPC may not fully apply but parts of it apply in substance so long as it satisfies the contours of natural justice. Whether the P1 to P3 are entitled for guarantee commission as per the resolution passed by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ordering investigation of the affairs of the Company under section 213 of the 2013 Act? - HELD THAT:- I am not satisfied that there exist any circumstances that would justify making an order for investigation of the affairs of the R1 Company. Hence, there is no order for the investigation of the affairs of the R1 company. Petition disposed off. - CP NO. 42/241/HDB/2017 - - - Dated:- 19-3-2019 - MR K. ANANTHA PADMANABHA SWAMY, MEMBER (JUDICIAL) For The Petitioner : Yogesh Kumar Jagia, Counsel and Ms. Tanya Nagi, Adv For The Respondent : S. Ravi, Sr. Counsel Ch. Pushyam Kiran, P. Sri Harsha Reddy, P.V. Markandeyulu, B.V. Papa Rao, V.K. Sajith, B.S. Prasad, Srinivasan Rajan, Ms. Divya Datla and P.S. Shastry, Advs ORDER PER : MR K. ANANTHA PADMANABHA SWAMY, MEMBER (JUDICIAL) 1. Under consideration is a petition filed under sections 213,241, 242 and 244 of the Companies Act, 2013 (the 2013 Act) and sections 398(1)(b) and 398(2), 406 and 409 the Companies Act, 1956, (the 1956 Act) alleging various acts of oppression and mismanagement in the affairs of Spectrum Power Generation L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of payment @ ₹ 18% p.a. compounding to petitioners. (j) Pass an order to declare and annul voting rights exercised by IDBI in the AGM and EOGM held on 14.02.2005 based on the pledged shares of petitioners without invoking pledge being harsh, burdensome and oppressive. (k) Pass an order to declare and annul issue of 6 crores equity share to ACB (India) Limited and CellcapInfovin India Pvt. Limited on 19.02.2010. (l) Pass an order to declare and annual issue of 35 crore equity shares to ACB (India) Limited and Cellcaplnfovin India Pvt. Limited on 29.06.2010. (m) Pass an order to declare null and void all the resolutions passed by board or members of Respondent No.1 company against the interest of the petitioners being harsh, burdensome, prejudicial and oppressive. (n) The Board of directors of the Respondent No.1 company be superseded and an administrator/or special officer be appointed to take charge over the management and affairs of the Company and of all books paper, records and documents of the company as well as its assets and properties. (o) Alternatively a committee be constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st AGM held on 25.04.1994, it was unanimously resolved to make payment of guarantee commissions to the individual who are willing to extend guarantee in favour of the FIs and Banks for the proposed financial assistance to the company for project finance. At the request of the FIs and Bank, the 1st petitioner had also confirmed that he would not receive any guarantee commissions unless instalment of principal and interest is paid to FIs. (d) As per the resolution made on 25.04.1994, the P1, P2 and P3 have extended personal guarantee in favour of State Bank of India (SBI) and also created charge on their personal immovable assets which are at present valued at one thousand crore rupees. The 2nd respondent refused to extend personal guarantee and subsequently refused to infuse equity capital. The NTPC also refused to subscribe equity capital. Those refusals also culminated into rescinding the promoter agreement dated 29.06.1993 by the board of directors in the meeting held on 14.12.1995. (e) The rescinding of the agreement became the reason for litigation. The 2nd Respondent and NTPC have filed civil suits before Delhi High Court in CS (OS) 1251/1996. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minee directors and banks and FIs. The objections raised by the R2 was over-ruled and the banks and FIs categorically stated that the payment commission could be paid only after regularization of institutional dues. In the same meeting the petitioners group offered to resign from the company if they are discharged from their obligations under guarantee and mortgage of immovable properties, but the same was protested. (j) The 10th AGM was convened on 30.09.2003 and the directors from the petitioners' group were not re-elected except the 1st petitioner. Since, the directors of the petitioners' group were not re-elected, the petitioners have become minority in the board. (k) After the petitioners have become minority in the board, a resolution was passed on 01.11.2004 not to make provision for payment of guarantee commission to the petitioners' group in the books of account for the year ended 31.03.2003 on the sole ground that such payment is contrary to the loan agreement executed with FIs, even though an amount of ₹ 36,84,56,950/- was provided as on 31.03.2002 towards payment of guarantee commission. (l) The statutory au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority of the Banks and FIs assigned their debt to ARCIL on 29.12.2005. Despite such assignment, the ARCIL has not taken any steps to appoint their nominee directors on the board of the company, which helped R2 to remove all the nominee directors of the FI and Bank by manipulating the minutes of EOGM dated 10.03.2006 and appoint his own persons on the board to gain majority. The ARCIL filed a civil Suit No. 692/2006 before the Bombay High Court, which passed an interim order in April 2006 that any resolution passed at the EOGM would not be effective without the approval of the ARCIL. However, on 24.04.2006 the ARCIL confirmed the forged and fabricated minutes of the EOGM dated 10.03.2006. However, IDBI, vide letter dated 27.04.2006, confirmed that no meeting took place on 10.03.2006. (s) Subsequently on 08.08.2006 the ARCIL commenced their action to handover the company to the R2 accordingly commenced bid for the project of the company. (t) On 02.10.2006, the R2 incorporated P1nnacle Overseas Assets Limited (POAL) (arrayed in the present petition as Respondent No.32) in the British Virgin Islands (BVI), which is a tax haven. POAL's shareholders were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usurping the company from the petitioners' group, the R2 withdrew suits filed before the Hon'ble High Court Delhi surreptitiously. (z) The AGM for the financial year ending 31.03.2015 was convened on 30.09.2015 and in the financials it was admitted liability of ₹ 27.50 crores which is illegally withheld by Respondent No. 1 under the garb of pending contempt petition. Further the R1 company written back interest on the loan of ₹ 1,22,65,870/- as at 31.03.2005 and since then no provision has been made for interest payable, which was being paid/accrued up to 31.03.2005. Further no provision has been made for guarantee commission payable. The petitioners as well as the shareholders supporting the petitioners have not been issued with any notice for any of the meetings. 3. The learned Counsel for the petitioners while reiterating the above facts submitted that the action of the R2 group and banks and FIs are burdensome, harsh and prejudicial to the interest of the petitioners and other shareholders. The learned Counsel relied upon the following judgments in support of his submission. (a) (para 47) Kamal Kumar Dutta v. Ruby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eholders can exercise an intelligent judgment. The provision is enacted in the interests of the shareholders so that the material facts concerning the items of business to be transacted at the meeting are before the shareholders and they also know what is the nature of the concern or interest of the management in such items of business, the idea being that the shareholders may not be duped by the management unless they have formed their own judgment on the question after being placed in full possession of all material facts and apprised of the interest of the management in any particular action being taken. Having regard to the whole purpose and scope of the provision enacted in section 173, I am of the opinion that it is mandatory and not directory and that any disobedience to is requirements must lead to nullification of section 173, the meeting of the company would be invalid and so also would the resolution passed at that meeting be invalid. (e) Mehool Bhuva v. Indo Nippon Chemical Co. Ltd. [ 130 SCL 422 (Bombay CLB) - wherein it is held that - the duty of the company acting through its board to incorporate in the explanatory statement all the material facts, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute, merely procedural is to be construed as retrospective and a statute while procedural in nature affects vested rights, adversely is to be construed as prospective. (j) In the matter of Prasanta Kumar Mitra v. India Steam Laundry (P.) Ltd. [2018] 97 taxmann.com 675/149 SCL 777 - wherein the Calcutta High Court held that in the light of the discussion above, I come to the irrefutable conclusion that including in section 434(1)I of the 2013 Act is extensive and expansive and not restrictive in nature. Ergo, Section 343(1)I of the 2013 Act that states all proceedings under the Companies Act 2013 including proceeding relating to.... would include all matters, without any exception, pending before the District Courts and High Courts and all such matters would have to be transferred to the NCLT. (k) In the matter of Deepak. C Shriram v. General Sales Ltd. [2001] 34 SCL 365 (CLB - New Delhi) - where in it is held that ..it was at the instance of counsel for the respondents, that learned counsel undertook to withdraw the application and on that undertaking the arguments were proceeded with and within a few days the said application was withdrawn. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both under 1956 act as also under the 2013 act, any member can make a complaint that any other member is being oppressed. In other words, it is not necessary that only the member who is the object/target of oppression has the locus to maintain a complaint, any other member can so do on his behalf. (p) [2013] 10 Supreme Court Cases 95 - In the matter of Rashmi Metaliks Ltd. v. Kolkata Metropolitan Development Authority - wherein it is held that this court, and even more so the High Courts as well as the subordinate courts have to face lengthy arguments in each case because of the practice of citing innumerable decisions on a particular point of law. The correct approach is to predicate arguments on the decision which holds the field. The rule of precedence, which is an integral part of our jurisprudence, mandates that this exposition of law must be followed and applied even by co-ordinate or co-equal benches and certainly by all smaller benches and subordinate courts. ... it is legitimate exercise, perfectly permissible for the benches to advance the law provided this exercise does not lead to a conclusion which is irreconcilable with a binding appreciates the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the partly paid up shares are paid up to the extent of ₹ 1.71 per share. The petitioner had rounded off the said figures upto two decimals i.e., ₹ 1.71 per share and the amount of partly paid shares is ₹ 1.714328571428571, therefore there is no manipulation of books of account by the Respondents. (e) The petitioners contention that initiation of litigation against the petitioners for rescinding the promoters agreement dated 29.06.1993 amount to oppression is absurd. Further the allegation that the R2 has not provided any guarantee would amount to oppression is equally absurd. At best it would have been violation of promoters agreement for which the petitioners chose to take no action. The details of litigation, at this belated stage has no relevance for the purposes of this present petition. (f) The events said out in paras 4.13 to 4.26 of the petition have taken place during the period when the petitioners were in the management, therefore, there is no basis for the petitioners to allege oppression during the said period. It is the inaction of the petitioners that put the company into financial difficulties and the scheme of ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng guarantees, counter guarantees or indemnities or for undertaking any other liability in connection with any financial assistance obtained for or by the company or in connection with any other obligations undertaken for or by the borrower for the purpose of power project. The contents of those agreements clearly show that the petitioners are not entitled for any guarantee commission contrary to what is being claimed by them. The P1 also have given undertaking dated 11.08.1994 to the effect that he would not claim any guarantee commission so long as money due and owing by the borrower to the lender, without prior approval in writing. (j) A right to guarantee commission is by virtue of a contract independent of holding shares by the person who has given guarantee. This is clear from the fact that a person who does not hold any shares in a company also be a guarantor for borrowings made by the company. It is evident from the language of sections 397 and 398 of the 1956 Act (241 and 242 of the 2013 Act) that the judicial forum created thereunder is devised to adjudicate the rights flowing from shareholding and not independent contractual rights, if any. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orical decision taken by the IDBI, the voting rights of the pledgers were exercised by the Banker and the same cannot be agitated again in the present petition. (o) The Resolution passed in the meeting held on 10.03.2006 was challenged by the petitioners by way of OS No. 326 of 2006 and the said suit was dismissed on 08.08.2008 and no appeal was filed by the petitioners against the decree or dismissal of the suit. Therefore there is no basis for the petitioners to re-agitate issues that have already been attained finality earlier. (p) The allegation that the POAL was incorporated for the purpose of controlling the affairs of the Company is baseless and on the said allegation alone the petitioners cannot seek an investigation of the affairs of the company. The investigation of affairs of the company is done only in an extraordinary circumstances, whereas no such extraordinary circumstances prevails in the Company. Even if the allegation that a charge has been created illegally by POAL is true, the petitioners are not aggrieved on the said illegality and the shareholders of POAL have to raise the issue. (q) During the management of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imate beneficial shareholders of POAL to meet the immediate obligations in terms of scheme of arrangement and other commitments. The petitioners abandoned the petition i.e. CP No. 212 of 2010. The withdrawal of the petition by the R2 has no relevance to the present company petition and cannot be considered to be an act of oppression and mismanagement. (v) The further share allotments have been made as per the law and the allegation in this regard is bald and baseless. The APTRANSCO has been regularly paying Return of Equity to the Company in terms of Power Purchase Agreement contrary to the assertion of the Petitioners. (w) The present management after taking over the control of the company during the year 2006 put in lot of efforts by infusing additional equity and streamlined the operations and management and turn around the company from the debt trap and have been servicing the debt to the lenders without any default till date. (x) The petitioners have sought omnibus reliefs in a proceeding that is hopelessly barred by limitation by re-agitating issues that have been dealt with and adjudicated upon by various fora and without fulfilli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliminary to the application to section 397 that there is just and equitable ground for winding up the company (5) The conduct complained of can be said to be oppression only when it could be said that it is burdensome, harsh and wrongful; oppression involves at least an element of lack of probity and fair dealing to a member in matters of his proprietary rights as a shareholder. (f) In the matter of Rai Mathura Prasad v. Hanuman Prasad Bhagat [1984] 56 Comp. Cas 467 (Patna) wherein it is held the entire scheme clearly indicates that the court's power in this regard us to be used to protect the interest of the public or a group of shareholders. Sub-section (3) of section 399 permits an individual member to make an application on behalf and for the benefit of all members of a company entitled to move the court. (g) in the matter of Dwarka Prasad Agarwal v. B.D. Agarwal [2004] 49 SCL 25 (SC) - wherein it is held that for the purpose of granting permission even for withdrawal of suit in terms of Order 23 Rule 1 of the Code of Civil Procedure, the civil courts themselves were required to apply their mind as to whether having regard to the dispute betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agricultural (P.) Ltd. - wherein it is held that the period of limitation is there years both under articles 113 and 137 of the Limitation Act 1963. The period of limitation commences when the right of sue or right to apply accrues. (b) [2015] 62 taxmann.com 55/132 SCL 435 (CLB - Chennai) - in the matter of Sundar Iyer v. Twenty First Century Realty - wherein it is held that it is now well settled that an isolated incident may not be enough for grant of relief by the Company Law Board under sections 397 and 398 of the Companies Act, 1956. There must be continuous course of oppressive conduct on the part of the majority shareholders and necessary to be proved. (c) In view of his above submitted the learned Counsel for the R5 finally submitted that the prayers sought by the petitioners in the petition cannot be granted, therefore, he prayed to dismiss the petition. 8. The R6 filed a counter and the learned counsel for the R6 inter alia submitted that: (a) This Respondent is a nominee director of IDBI Bank Limited and the R5 was not connected or involved in any of the above allegations made by the petitioners and have acted o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as per the agreed provisions of the loan agreements and the R7 had no role in the said conversion of loan into equity. (c) During the period as Chairman of IDBI, not involved in any of the facts / incidents mentioned during the period of tenure as Chairman of IDBI, hence the petition arraying me as R7 filed by the petitioners is liable to be dismissed. In view of the above submissions, the learned Counsel for R7 prayed for dismissal of the petition. 11. The R12 is a nominee director of R13 and both have filed a common counter and the learned counsel for R12 R13 inter alia submitted that: (a) The R12 is the nominee director of the R13 which is a bank and the R12 was appointed as nominee director as per the terms of the loan agreements and the R12 was never involved in the day-to-day affairs of the Company. (b) The provisions contained under section 149(6) of the 2013 Act provide unequivocally that a nominee director would not be considered as an Independent Director in relation to the company. According to the provisions of Section 161(3) the board to appoint nominee director and such appointment shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to all the cases in respect of the scheme of arrangement. (f) The petitioner suppressed the fact that the petition filed under section 392 of the 1956 Act before the Hon'ble High Court of Andhra Pradesh was dismissed and the Hon'ble Court has observed that the petitioners have abandoned the petition. (g) The R32 adopted the counter statement of R1 for the allegations made in sub-para 4.95 (a) to (n). (h) The takeover by POAL was the matter before various courts and all the courts negated the contentions of the petitioners. Therefore the petitioners cannot re-agitate the same in the present petition. (i) The R2 has no say in R32 and it is fact that the scheme was held beneficial to the Company. (j) The Scheme of arrangement and the bidding by the ARCIL have been approved by the Courts and there is no illegality. The petitioners have not made out a case under sections 241 and 242 of the 2013 Act against the respondents, therefore, the petition is liable to be dismissed. In view of the above submissions, the learned Counsel for the R32 prayed for the dismissal of the petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of debt to ARCIL was part of entire game plan which is very much evident from the events unfolded at the part of ARCIL which was also noted by the Hon'ble High Court in its order dated 23.01.2008. (g) The company was not declared as NPA due to the action of P1, whereas it is the R2 who put the company under forced litigation after wilful default to discharge agreed obligations under promoters' agreement. (h) One side the entire equity was converted to preference shares and the petitioners were removed from the board of directors and other side the company was claiming continuation of guarantees executed by the Petitioners and further denied the guarantee commission. Conversion of 100% equity to preference is per se oppressive though it may have been approved on the test of legality. (i) The Respondents are barred from raising the issue of withdrawal of the suit after having consented the order dated 06.04.2017 by which the instant petition was admitted. (j) As contingent liability R1 took note of ₹ 64.35 crores towards operation and maintenance. The board resolution dated 29.06.2010 is silent about ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y creation of ante-dated documents on the opinion of ICAI. The auditor's report is dated 04.11.2004, whereas the director's report is dated 01.11.2004. Only to cover up their anti-dated documents the respondents are placing the Guide to Companies Act by Ramaiah 16th edition reprint 2006 vol. 2 page 2295. The respondents are concocting a story that the director's report would precede the auditor's report. The fraudulent acts of the Respondents are being claimed as legal. Since it is fraudulent, the entire business transacted and audited balance sheet deserves to be declared null and void. (p) The respondent in its notice dated 01.11.2004 for the EOGM to be held on 01.12.2004 disclosed all the material facts which have a bearing on the question which the shareholders have to form their judgments including the concern or interest of the management. Even if it is presumed that the company has become NPA during the period of petitioners, the same does not absolve the Company from discharging their responsibilities of compliance of section 173(2) of the 1956 Act. (q) The pledge agreements were not registered with the company, therefore, votin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng held on 10.05.2002. The provision for making payment of guarantee commission was in the financials of the company upto the year ended 31.03.2002 and the R5 first time denied the guarantee commission by voting in favour of audited balance sheet in the AGM held on 14.02.2005 for the year ended 31.03.2003 after a period of 11 years. (e) The petitioners did not challenge the exercise of voting rights of IDBI but challenged the manner and purpose for which such rights were exercised. Since R5 has not denied the allegations of manner and purpose in which the voting rights were exercised as alleged in the petition, the same is deemed to be admitted by the R5. (f) The R5 in its reply raised contentions contrary to the reply filed by its nominee director (R6) in his counter affidavit. R6 in para 10 of his reply stated that he has not acted to affect the interest of R1 company or IDBI whereas the IDBI (R5) in its reply stated that the nominee director inky aced in the interest of the R1. 15. The petitioners have filed rejoinder statement for averments made by the R6 in its counter and the learned Counsel for the petitioners while denying most o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the learned Counsel for the petitioners while denying most of the averments of the counter statement inter alia submitted that: (a) The promoters agreement was entered into on 29.06.1993 and it was terminated on 14.12.1995. There was lot of litigation from 1996 to 2003. On 29.12.2005 the banks and FI assigned the entire debt to ARCIL. The ARCIL called IEI through private circulation on 28.07.2006. (b) The R2 incorporated Pinnacle Overseas Assets Limited (POAL) on 02.10.2006 in which Cellcap Securities Limited and Lehman Brothers Opportunity Limited were the shareholders. Cellcap Securities Limited was under the control of the CellcapInfovin India Pvt. Ltd. and Aryan Beneficiaries Private Limited (presently ACB India Limited), the companies under the control of the R2. (c) The ARCIL fixed the last date for bidding as 17.10.2006, however, the same was extended to 24.10.2006. On 23.10.2006, the POAL pledged 60% of its shares held in the company to HSBC, Hong Kong and got a sanction of ₹ 150 crores. The Company has never issued any shares to POAL and it is evident from the MCA filings. On the last date i.e. 24.10.2006, POAL filed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having knowledge about acts prior to 2006, all allegations levelled by the petitioners which are not responded in the counter to be deemed to have been accepted. (j) Since the petition is admitted, the plea of the R32 that the petition is barred by limitation does not sustain. (k) The POAL was incorporated by the R2 only for the purpose of taking over the Company illegally and there is no bar seeking an order under section 213 of the Act to have an inspection of the affairs of the Company. The inspection will bring the truth that when the POAL was incorporated and how the ARCIL has accepted the bid of POAL. (l) The R32 has not filed a single document to rule out the role played by the R32 or details of promoters of R32 and it would prove ex-facie complicity in its functions. (m) The R32 has not filed any document to show that the P1 has mismanaged the affairs of the Company and it is fact that the nominee directors have appreciated the P1 in the 52nd meeting held on 10.05.2002. (n) The R32 was not a shareholder when the Company passed a resolution for making guarantee commission, whereas the R32 cannot say ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue to provide for the provisions relating to guarantee commission to the plaintiffs for the guarantee given by the plaintiffs and their group companies for the benefit of the defendant till such time the properties and all the guarantees of the plaintiffs which were the subject matter of the guarantee are not released and returned to the plaintiffs; and (c) A permanent injunction restraining the defendant from reversing/writing back the provision of guarantee commission payable to the plaintiffs in connection with the guarantees that were executed by the plaintiffs for the benefit of the defendant company. 22. In the present petition before this Tribunal, the petitioners have made the following prayers: - (a) Pass an order declaring that Resolution passed in the meeting of the board of Respondent No.1 company held on 01.11.2004 approving accounts for the financial year ending 31.03.2003 without making provision for guarantee commission payable to Petitioner Nos. l to 3 being promoter shareholder as null and void; (b) Pass an order declaring resolution passed in the AGM held on 14.02.2005 adopting audited accounts for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply but parts of it apply in substance so long as it satisfies the contours of natural justice. 27. It is settled law that no party should be allowed to pursue two parallel remedies in respect of the same subject matter, as laid down by the Hon'ble Supreme Court in Jai Singh v. Union of India [1977] 1 SCC 1. However, acceptance of the contention of the R1, especially when the civil court proceedings have been withdrawn following an order of this Tribunal, will render the petitioners without a remedy at this stage. 28. Therefore, now the issue before this Tribunal is- (1) Whether the P1 to P3 are entitled for guarantee commission as per the resolution passed by the Company; (2) Whether the act of the Company reversing the payment of guarantee commission and not making provisions for making payment of guarantee commission is in order or not; (3) Whether withholding the unsecured loan provided by the petitioners to the Company is in order and whether the reversal of making interest on the unsecured loan is in order or not; (4) Whether there is any ground for declaring the voting rights exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to note that the making payment of guarantee commission was passed in the 1st AGM held on 25.04.1994 whereas the undertaking was given by the P1 on 11.08.1994. The recital at para (ii) (page 419 of the counter of R1 Volume No.I) becomes important which reads as follows: (ii) claim or receive any remuneration or commission except those fixed or to be fixed in accordance with the provisions of the Companies Act, 1956 from time-to-time and approved by you; and ... The R1 company while reiterating the said undertaking of the P1 has given a different set of undertaking at para 22 in page 14 of its counter. 32. All the above facts would show that the payment of guarantee commission was decided in the 1st AGM held on 25.04.1994 and the undertaking was given on 11.08.1994. It is also pertinent to note that the R2 has not filed any counter statement rebutting the allegations against him and in the absence of any rebuttal it would be deemed that the allegations are accepted. 33. It is clear from the minutes of the 1st AGM held on 25.04.1994 that the P1 to P3 are entitled to guarantee commission, but that on the insistence on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter in the board meeting held on 27.01.2007, it was resolved to reverse the interest payable on the unsecured loan of ₹ 1,22,65,850/- and TDS of ₹ 28,64,023/- deducted and deposited with revenue authorities. 40. The R1 company stated that the pending contempt proceedings was the reason for not making payment whereas the petitioners contended that there no such order made by the Hon'ble High Court of Delhi. It is the contention of the P1 to P3 that the company owes ₹ 27.50 crores of outstanding loan and the same are to be settled with 18% interest p.a. Like the reversal of guarantee commission, the R1 company has also reversed the entry regarding unsecured loan citing the reasons that the petitioners mismanaged the affairs of the Company. 41. It is the contention of the P1 to P3 that the Hon'ble Delhi High Court in order dated 13.09.2002 in IA No.4350/2002 in suit No.904/2002 took judicial notice of the unsecured loan to R1 Company. The Suit itself was dismissed as withdrawn by order dated 23.09.2010. However, R1 has in their audited financials even as on 31.03.2015 claimed that the loan is not being repaid because of the pende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that the Petitioners are not seeking any relief in relation to the bidding but are brining on record to demonstrate how the petitioners have been oppressed, on page 21 of the written synopsis, the Petitioners have stated that dismissal of writ petition challenging bid of POAL and its approval by ARCIL or challenge to scheme of rearrangement under section 391 of 1956 Act cannot be construed that the issue of oppression and mismanagement was decided. Therefore, this argument cannot be accepted. 47. As may be seen from the common orders of the Division Bench of the Hon'ble Andhra Pradesh High Court in OSA No. 1/2009 and OSA Nos. 62, 65 and 66/2007, the petitioners have alleged that the ARCIL took over the R1 Company under the SARFAESI Act and through a sham and dubious bidding process and allotted the same to POAL (para 20 of the order). The Petitioners have also challenged the provisions of the scheme itself that provided for conversion of the entire equity capital into preference share capital (para 28 of the order) as well as the exercise of voting rights by IDBI as pledgees of the shares (para 35 of the order). 48. The Hon'ble Division B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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