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TMI Blog2017 (12) TMI 1700X X X X Extracts X X X X X X X X Extracts X X X X ..... /MCA web portal through From No.DIR-12 ; ii. to declare the all Circular Resolutions circulated vide notice dated 1.12.2016 and purported to have been approved on 8.12.2016 but the fabricated notices clearly show that only on 9.12.2016 the said 4th Respondent, Mrs. Sri Hari Priya Tupili gave her CONSENT to act as Director and uploaded into MCA/ROC web portal by way of Form No.DIR-12 showing date of 9.12.2016 as NULL AND VOID AB INITIO; iii. to declare all the e-Forms filed with ROC/MCA web portal showing the appointments of Respondent Nos.3 and 4 as Directors of the 1st Respondent Company as NULL AND VOID AB INITIO; iv. to declare the e-Form MGT-14 dated 22.12.2016 showing change of designation of Petitioner from MANAGING DIRECTOR to DIRECTOR and effectively removing him as MANAGING DIRECTOR as NULL AND VOID AB INITIO; v. to direct the Registrar of Companies (ROC) at Hyderabad to remove the above said e-Forms from the public domain MCA Web portal of the 1st Respondent Company; vi. to declare all notices issued by the 3rd and 4thRespondent impersonating themselves as a Directors of the 1st Respondent Company as NULL AND VOID AB INITIO; vii. to declare the acts of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gher Education, Manipal, Karnataka and did his residency training in New York during 2002-2005. He did Research Fellowship in Department of Nuclear Medicine in Cleveland Clinic (Cleveland Ohio State), USA during 2008- 2009 and got accepted into Department of Radiology and Nuclear Medicine (University of Southern California), Los Angles, California, USA. At the request of the 2nd Respondent, who is the mother of the Petitioner, by sacrificing his brilliant professional career, returned to India in 2009 i.e. the same year in which the Company was incorporated. On 26.11.2009, the Petitioner was appointed as a Director of the Company and he was elevated to the position of Managing Director on 29.03.2010. 5) Subsequent to the joining of the Petitioner, the Company increased its Authorised Capital from to (Rupees ten crore) divided into no. of equity shares of 16.2.2011. aggregate Rs.IO/-each at the EGM held The Petitioner has invested amount of Rss out on an of which has been converted towards equity shares of of Rs. 10/- search representing 13% of the paid up capital of the 1st Respondent Company and balance Rs. 3,53,938/- is parked as unsecured loan with the Respondent No. 1 Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of fake ECM resolution as if the 3rd Respondent was shown to have been appointed as a Director of the Company at a purported EGM on 02.11.2016 which was not at all held. But a fake and fabricated Form No.DlR- 12 was uploaded on 30.11.2016into the ROC/MCA Webportal in connivance with some professionals, who are more than willing to be a part of the conspiracy, fraud, and fabrication of statutory documents. Thus, the Yd Respondent though shown as if a Director is not a Director at alt, and his presence either personally or through video conferring has no locus standi to be considered as a Director of the Company. Any resolutions with his presence shown for the purpose of Quorum is nonest and void abintio. 10) It is stated that through a letter dated 1st December, 2016, the 2nd Respondent proposed to pass two circular resolutions; one for appointing Mrs. Sri Hari PriyaT upili as an Additional Director, and another for to effect change in Registered Office. 11) It is alleged that within 9 days after filing fabricated Form DIR-12 dated 30.11.2016, showing the Yd Respondent as Director as stated above, a grand drama was played to appoint the 4th Respondent as Additional Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no denial from the 2nd Respondent and the so called minutes of the meeting held on 02.11.2016 have not yet seen the light of the day. Clearly, there is a fabrication in this regard. 14) In the above fabricated Board Meeting minutes dated 22.12.2016, it was also fabricated to show in item No.6 that the Board removed the Petitioner from Managing Director under the garb of 'change of designation' from Managing Director To this, the Petitioner objected to Director. and dissented but his dissent did not find any place in the so called minutes. But, contrary to this, the 2nd Respondent uploaded into ROC/MCA webportal a Form No.MGT-14 showing as if the designation of the Petitioner was changed from Managing Director to Director. This is the first step towards his removal even as Director which subsequently came. 15) It is stated that an email notice dated 29.1.2017 from the email of received was '[email protected]' without any name of the 'Director' attaching therewith a scanned copy of notice dated 26.1.2017 has been signed by 4th Respondent, whose Directorship is under dispute attaching therewith a purported notice dated 23.1.2017 u/s 169 of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings before the Director (Discipline) and Directorate of Discipline of the Institute of Chartered Accountants of India, New Delhi. He is also liable for criminal fabrication of documents u/s 447 and 448 of the Companies Act, 2013 Therefore, he is a necessary party to the present procéedings as he acted in concert and connivance with the other Respondents herein. 18) Thus, as clearly demonstrated above, there are only two validly existing Directors i.e. the Petitioner and the 2nd Respondent and there is no third Director, who can claim to be a Director of the 1 st Respondent Company. The appointments of Yd and 4th Respondents as Director/ Addl Directors are false and the documents filed into the ROC/MCA web portal are fabricated ones and liable to be punished u/s 447 and 448 of the Companies Act, 2013. The grand is now clearly came to light that initially the Yd Respondent was shown as if he was a Director though he is an NRI settled in USA but shown as if he was appointed in a non-existing EGM shown with date 2. I I.2016. It is universal truth that fraud vitiates everything, and any subsequent acts based on fraudulent resolutions and fake documents would not crea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited. The Yd respondent is also a promoter Director holding 13 % of the shares in the Company. The 4th respondent has been inducted into the Board as an Additional Director on 02.11.2016. The 5th respondent is the Chartered Accountant and he has been arrayed in the respondents for the reasons best known to the petitioner. The Yd petitioner has been appointed as a Director vide Board Resolution dated 02.11.2016. c) It is stated that the petitioner, who has completed his MBBS, returned to India, after an unsuccessful stint in the USA, having failed to complete his residency in the USA. Furthermore, the petitioner also faced marital problems. To prevent her son getting into depression, the 2nd respondent, started the 1st respondent Company and the petitioner was made a Director in the Company. In meanwhile, the petitioner had remarried in the year 2012. d) It is stated that the petitioner and his wife began to demand a more assertive role in the Company. The petitioner and his wife stayed at Odissa for some time to take care of the project work. However, during their brief stay, they have siphoned off crores of rupees. Un-accounted expenses began to appear in the Company's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. h) It is denied the allegation that resolution dated 02.11.2016 is fake and created. And meeting was held in terms of the provisions of the Companies Act 2013. There are no back ground players behind the 2nd respondent as alleged by the petitioner. Moreover the petitioner consistently refuses to identify by name, any of those so called, alleged 'background players' in his petition. It is clear that the petitioner has been reduced to concocting fictitious tales, narratives and even persons to lend credence to a false story of mismanagement and misappropriation. i) It is stated that shifting of the registered office of the Company was done to disable the petitioner's 2nd wife from illegally usurping Company documents and other possessions. It was done in duly complying with provisions of Companies act, 2013. j) It is further stated that the petitioner's objection to his removal as a Director and the appointment of additional Director, is rooted in a singular illegal reason, i.e. his removal as Director prevented him from freely liquidating Company assets to fuel his lifestyle. The petitioner has not been able to substantiate. how his removal from Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the petitioner is interfering in the Company affairs along with his wife so as to cripple the Company, the Company has no other alternative except to curtail his powers and also to remove him from the post of Managing Director and also as Director. This is done in order to maintain affairs of the Company strictly in accordance with law and also in accordance with Articles of Association of the Company. Therefore, the Company Petition is liable to be dismissed with exemplary costs. 8. Ms.U.K.Gayatri, learned PCS for the Respondent No.5, by filing reply dated 14th July, 2017, has interalia contended as follows: i) The Respondent No.5 has signed certain e-forms for appointment of Respondent No. 3 as a Director, which is in accordance with Rules 8 and 18 of Companies (Appointment and Qualification of Director) Rules, which are not fake e-forms and does not fall under the purview of Professional Misconduct as per the code enshrined in the Chartered Accountants Act, 1949; ii) It would be the duty of the Chairman to see that the meeting is duly convened and constituted in accordance with the Act or any other applicable guidelines, Rules and Regulations before it proceeds to tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares in Company cannot demand, as matter of right, to continue him as MD and Director. 11. The Company is a Private Limited Company and it is necessary to advert the relevant articles of the Company. As per Article-27 of Articles of Association (AOA) dated 12.05.2009, Mrs. Vijaya Lakshmi V (2nd Respondent) and Chalasani Ramalingeswara Rao are first Directors of the Company and these Directors shall not be to retire by rotation but all other director are eligible for re-election. The petitioner has filed a copy of Form 32 (Annexure -P5, page 57) by stating that he was appointed as Director w.e.f 26.11.2009 by Board resolution dated 26.11.2009. And the same was uploaded by the second respondent. However, he has not enclosed a copy of Board Resolution dated 26.11.2009 through which he was stated to have been appointed as Director. It is not known as to whether he was appointed or nominated as Director. However, for the reasons best known to him, he is trying to dispute and makihg all sorts of allegations against the Company and the respondents without any basis for subsequent actions of the Company. As per Article-26 of the AOA, number of Directors shall not be less than two an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Companies Act, 2013, a Company is entitled to transact its business, conduct its affairs in its own wisdom and the Company guided by its Board of Directors are best judge to run its affairs. The Tribunal/Court are not entitled meddle into day to day affairs of the Company. It is also settled position of law that Company and its affairs will run by its duly constituted Board of Directors, all the decisions of the Company will be taken by a majority by duly convening appropriate meetings. Meetings are to be conducted by duly following principles of natural justice by giving requisite notice to all parties to convene any meeting of a Company. In the instant case, as stated supra, the petitioner is admittedly holding only 13% of the Shareholding of the Company, and he is entitled for a notice for any meeting. By reading of various pleadings made in the petition and documents filed by the both parties, it is clearly established that the petitioner are aware of all impugned proceedings but only opposing the impugned decisions by raising frivolous grounds. It is not in dispute that the second respondent, being head of family, is running the affairs of Company and she herself has initial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the Company are held to be legal. 15. It is not the case of the Petitioner that the Petitioner is not aware of the affairs of the Company, who is staying in India and the corresponding filed by the Petitioner has also clearly established that the Petitioner is well aware of all the meetings and decision taken by the Company. However, he is opposing the decisions of Company, which are taken after following due process of law. 16. The Petitioner himself has filed the Form DIR-2 dated 29.10.2016 along with all material papers, consent by Respondent No.3 to act as a Director and his DIN No.021978467 is also furnished apart from all required conditions. A resolution was also passed at EGM held on 02.12.2016, appointing 3rd Respondent as Director with effect from 02.11.2016. It is not in dispute the circular of Resolution dated 01.11.2016 was circulated to the petitioner to appoint Mrs. Tupili Sri Hari Priya (R- 4) as additional Director to the Board, with effect from 08.12.2016 to hold office till ensuing Annual General Meeting Of the Company. 17. Mrs. Tupili Sri Hari Priya (R-4) has furnished her consent to act as director in prescribed in form DIR-2 dated 09.12.2016, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P-23) by proposing to convening a General Meeting, of the members of Company to remove the petitioner from the director of the Company with immediate effect (Page 159 to 161). Including agenda in the petition, the petitioner has also filed attendance sheet, which indicates that the Petitioner is in receipt of notice to remove him. 20. It is settled principle of law that the Courts/ Tribunal will not, intervene at the instance of in general, shareholders in matters of internal administration; and will not interfere with the management of a Company by its directors so long as they are acting within the powers conferred on them under the articles of the Company. And the internal disputes between the shareholders is to be made the subject matter of an action by shareholders, which is laid down as early as 1843 in the celebrated case of Foss vs. Harbottle. [Foss vs. Harbottle (1843) 2 Hare 461.] 21. The Hon' ble Supreme Court of 'India, in the case of Rajahmundry Electric Supply Corporation Ltd. V. Nageshwara Rao (1956) 26 Comp. Cas.55(S.C):1956 SCJ 310: 1955 (2) SCR 1066: AIR 1956 SC 213, is observed as follows: "The Courts will not, in general, intervene at the instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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