TMI Blog2019 (6) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... s only because proper procedure was not followed by the company while taking note of the transfer. Consequently, there would be no justification to deprive them of subsequent rights issue. Appeal dismissed. - Company Appeal (AT) No. 2 of 2018 - - - Dated:- 16-4-2019 - A. I. S. CHEEMA J. (Judicial Member) and BALVINDER SINGH Technical Member For Appellant:- Mr. Krishnendu Datta and Mr. Arnav Kumar, Advocate. For Respondents: - Mr. Salman Khurshid, Senior Advocate with Ms Tushita. Ghosh, Mr. Gaurav Mehta, PCS and Mr Aniruddha Choudhury, Advocates for Respondent No.1 to 9, 15, 16.. JUDGEMENT This appeal has been filed by the appellants, original petitioners, being aggrieved by part of the judgement and order passed by National Company Law Tribunal, Chandigarh Bench, Chandigarh in CP No.84(ND)/2013 , RT CP No.29.Chd/Pb/2016 by which judgement the NCLT has upheld the rights issue of 27,100 shares and directed the Respondent No.1 company, Aar Kay Chemicals Pvt Ltd, (hereinafter referred to as the Company ) to take fresh decision relating to appointment of Respondent Nos.3, 6, 7 and 8 as Directors in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No.3 and 8 as Directors of Respondent No.1 company on 16.8.2012. e) Illegal rights issue of 27081 equity shares by Respondent No.1 company on 13.10.2012. 4. It is claimed that these acts have been considered by the Learned NCLT and although while decision relating to acts (a) to (d) have been held in favour of the appellants and act (e) has not been held in favour of the appellants grievance is made claiming that the illegal rights issue of 27081 shares should have been set aside and the NCLT should not have directed taking fresh decision of appointing R-3, R-6 to R8 as directors as well as grievance is made that the NCLT should not have directed to take fresh decision regarding 9040 shares. Operating Part of Impugned Order (in para 146) reads as under:- xxx The instant petition is disposed of with the following directions:- i) The original Board of Directors comprising of P-2, R-2 and R-20 as directors of R-1 company is restored; ii) The respondent company in the first meetig of its members shall take fresh decision of appointing R-3, R-6 to R-8 as directors; iii) The meet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010. (i) The appellant claims and it is argued that Respondents 6 and 7 were purportedly appointed as Director in Board Meeting held on 14.8.2010 and Form 32 showing the said appointment was filed by Respondent No.7 after 7 months on 22.3.2011. According to the appellants no such Meeting took place and forged and anti-dated documents were filed to justify their appointment. It is also claimed that the company was not carrying on any business and there was no requirement of such additional director. (ii) The impugned order dealt with this aspect in paras 103 to 116. NCLT noticed the case put up by the appellants and noted the contentions of the Respondents who pointed out that when the matter came up before Company Law Board an order dated 11.3.2015 was passed. Both the parties had admitted that the company being closely held company there had been no requirement to send notice of the Board Meeting as parties were working on mutual trust and such observations of the Company Law Board were never challenged by the appellants-petitioners by way of any appeal . Respondents also brought to the notice of NCLT the balance sheet for the year ending 31.3.2010 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olders to Respondent No.2,3,4, 5 and 6. i) Regarding this, the appellants claim and it is argued that the contesting respondent group transferred 9040 shares from erstwhile promoters to Respondent No.2 to 6 on 14.8.2010 to create illegal majority. It is claimed in the Annual Return for the financial year 2010 it was recorded that on 14.8.2010 following happened:- Transferor Transferee Number of shares Kewal Kant Arora Respondent No.13 Vijay Kumar Goyal Respondent No.2 250 Santosh Arora Respondent No.11 AR Sharma Respondent No.3 1450 Sanjay Arora (Respondent No.10) Mrs Nirmal Sharma (Respondent No.4) 4470 Satish Arora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. The account statement was filed showing entries of withdrawal on 20.8.1998 and two drafts in the name of Original Respondent 10 Sanjay Arora and Original respondent 11, Santosh Arora. The respondents also brought on record an affidavit of transferors in this regard. With such case before NCLT, it observed:- However, since the transfer of these shares was not recorded in the register of R-1 company for 12 years and there being challenge to the meeting dated 14.8.2010 for which notices are not shown to have been served upon P-2 and R-20, who were also the directors of R-1 company and that the transfer deeds came into being only on 7.8.2010, this transfer of 9040 shares cannot be held valid and therefore liable to be set aside. R-1 company shall now be called to make a fresh decision on the transfer of these 9040 shares held by the erstwhile shareholders/promoters, keeping in view that the factum of passing of consideration of the sale to the transferors in the year 1998 is not being disputed by the Transferors themselves. It is clear that the title to the shares was transferred in 1998 itself. Procedure remained to be done was of bringing the names on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No.20 had not signed Annexure 5 filed with Form 32. Original Respondent 20 did not file petition questioning the contesting Respondents. What the original respondent No.20 wanted to say in this regard is nowhere considered by NCLT. Be that as it may, the other aspect is that although such form of resignation relating to Respondent No.20 was uploaded with the Ministry on 26.6.2012, Respondent No.20 or the appellant reacted to the same immediately is not demonstrated. The petition was filed only in June, 2013. In operative order (i) NCLT restored the Board of Directors comprising of P2, R2 and R20 and in direction (ii) directed Company to take fresh decision with regard to R 3, 6 to 8 as directors and (in the context that practice of giving Notice was not made) directed in (iii) to follow the Companies Act, Rules and Regulations. We have noted reasons why such directions have been given by the Learned NCLT. 10. Alleged Illegal Act d d. Illegal appointment of Respondent No.3 and 8 as Directors of Respondent No.1 company on 16.8.2012. i) With regard to this, the appellants point out that the Respondent group filed Form 32 on 17.8.2012 and 21.8.2012 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to internal decisions may be put to challenge and set as naught. Considering such facts arising from the record, NCLT, gave directions (i) and (ii) in the final operative order and in direction (iii) asked the company to follow the various provisions specially relating to service of notice. This appears to have been directed considering the CLB order dated 11.3.2015 noted in impugned order para 105 that initially the parties had not been following procedure of sending of formal notices. 11. We have referred to the above illegal acts (a) to (d) considering that the parties referred and made submissions regarding them, and that, Appellants have questioned the Impugned Order directions (ii) and (vi) as to why should NCLT have directed Company to take fresh decisions . The Appeal further questions alleged Illegal Act e . 12. Alleged Act e e. Illegal rights issue of 27081 equity shares by Respondent No.1 company on 13.10.2012. i. According to the appellants on 13.10.2012 the respondent company increased share capital and made illegal and unlawful rights allotment of 27081 shares to Respondent No.2,3,4,5,6 and 7 increa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the appellants after such rights issues on 13.10.2012 the respondents being in majority filed CP 131/ND/2012 on behalf of the Respondent No.1 company against A.P. Refinery Pvt Ltd which came up for hearing on 16.10.2012. According to the appellants the rights issue was illegally executed and there was no need for raising such funds and the funds raised were used only in litigation. iv. Learned NCLT dealt with this issue in para 133 to 139 of Impugned Order. NCLT noticed that the respondents had attached proof of service of notice for the Board Meeting to P-2 and R-20 through Aakash Ganga Courier service and found that inspite of notice the original petitioners No.2 and Respondent No.20 did not attend the Board Meeting on 16.8.2012. It was observed in para 135 as under:- Admittedly the petitioners did not apply for the allotment of the said equity shares, though it was submitted that the petitioners considered this matter before the Arbitrators and also informed them that their unsecured loan of approximately ₹ 1.5 crores was standing in their favour in the books of account of APS and APO, which may be released in their favour and use the same to subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having not participated or brought any proof of having made any offer to purchase additional equity shares, are now estopped from challenging this decision having delayed so such to challenge this decision. Although the appellants are trying to show us that the funds raised were utilised for litigation, considering these observations of the Learned NCLT and also taking note of the observations of the NCLT in para 144 of its judgement we find that the contesting respondents cannot be said to be mismanaging the company. Even from the lessee the contesting respondents ensured that Solvent Extraction Plant of the Company gets materially expanded. 13. It is the argument of the learned counsel for the appellants that if illegal transfer of 9040 shares to Respondent No.2 to 6 had been set aside, the privilege shares could not have been issued to them. We discard this argument. The reason for this is that although the NCLT while dealing alleged transfer of 9040 shares stated that the transfer of 9040 shares cannot be held to be valid and was liable to be set aside, what NCLT actually was doing was to direct following of procedure for rectification of register of member ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
