TMI Blog2019 (11) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... o deliberate the same on. It is vital to mention here that the Company has not undertaken any substantial business from the date of its incorporation and there is a need to put it in motion, the reason for which the Company was envisaged. The dispute between the parties has paralysed the Administration and ordinary business of the Company. Section 397 and 398 of the Companies Act, 1956 read with Section 242 of the Companies Act, 2013 provide that the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit. It is hereby directed to prepare an agenda of the meeting now authorized and place it before the Chairman on or before 19.07.2019 and after obtaining the approval conduct the meeting within 21 days' time i.e., on or before 09.08.2019 - application disposed off. Petition disposed off. - C. P. No. 30 of 2014 (T. P. No. 61 of 2016 ) - - - Dated:- 28-6-2019 - Rajeswara Rao Vittanala, Member (J) and Dr. Ashok Kumar Mishra, Member (T) For Appellant/Petitioner/Plaintiff: A. Murali and Andre Peter, Advocates For Respondents/Defendant: Jaykumar N.D., Advocate ORDER C.P. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce void ab initio; i. declaring that any act done by Respondent Nos. 2 to 4 in relation to the property of the Company, as described herein above, is without authorisation, ex facie illegal and void ab initio; j. declaring a permanent injunction restraining Respondents from dealing with the property of the Company; k. declaring that any contract, agreement, arrangement, memorandum or any other such understanding entered in relation to the property of the Company, as described herein above, by Respondent Nos. 2 to 4, their men, servants, agents or any person acting on their behalf, is ex facie illegal and void ab initio; l. directing Respondent Nos. 2 to 4 to hand over any documents that they may possess which belongs to either the Petitioner or the Company, including the details of the digital signature of Respondent No. 2 that has been used to upload various Forms, any other documents in hard copy, print outs, materials on compact discs, pen drives, external hard drives and any other such storage devices; and m. directing an investigation to be made in respect of the various actions of Respondent Nos. 2 to 4 impugned herein and appoint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company with the Registrar of Companies which indicate inter alia that: i. The Respondent No. 3 is also a Shareholder of the Company, when in fact there is no transfer that was validly done to her; ii. Respondent No. 3 and 4 are depicted as Additional Directors of the Company when in fact they were never appointed to such a post. Further, even after lapse of over 5 years, they continue to be depicted as Additional Directors which is wholly contrary to the provisions of section 260 of the Act. d) The Petitioner submits that the Petitioner has all along held 1,00,000 equity shares of the face value of ₹ 10/- per share and holds nearly 92% of the issued share capital of the Company. e) The Petitioner submits that Respondent No. 4 is an individual whose details are not known to the Petitioner other than what has been set out in the cause title. f) The Petitioner submits that Respondent No. 2, who is acting in collusion with Respondent Nos. 3 to 4, is acting in a manner which is oppressive of the Petitioner, prejudicial to the Company, in direct contravention of the Companies Act, 1956, the Articles of Association of the Company and various pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said forms have been digitally signed by Respondent No. 2, even though there was no board meeting, which authorised him to affix his digital signature for filing Forms on behalf of the Company. k) The Petitioner submits that it is shocking that each of the Forms filed for the respective financial year's states that the Annual General Meeting of the Company for each of those years were all stated to have been held on 01.08.2012 though no such meeting was held. No notice was given to the Petitioner and neither did he attend any such meetings. Further, being one of two Shareholders, no such meetings could have been held without his presence. Further, from the Forms filed it is made to appear as if the meetings were called in the respective years and adjourned sine die and such adjourned meetings were held on 01.08.2012. That the Petitioner being a majority Shareholder of the Company did not get any notice of any of the meetings that were proposed to be held in the respective years. Further, the Petitioner did not attend any of the said meetings and therefore no decision could have been taken including a decision to adjourn the said meetings sine die. Furthermore, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person who is not a member so long as any member is willing to purchase the same at its fair value... (iii) The shares in the Company shall not be transferred except to the person/s selected by the Board of Directors of the Company and at the price determined as fair value of the shares of the Company. It is further submitted that no offer was ever made to the Petitioner and therefore there is no question of his turning down the offer to acquire the shares being offered by Respondent No. 2 and therefore the same could not have been transferred to Respondent No. 3. Also, the Petitioner being a member of the Board of Directors has not in any meeting of the board approved of such a transfer. iii. It is assumed by the Petitioner that the said transfer would have happened in the financial year 2006-2007 since, conspicuously, the Form 20B for the financial year ending 31.03.2007 has not been uploaded by the Respondent No. 2. Evidently, the said transfer is a sham transaction and has no credence or correctness in the eyes of law. iv. The said Form 20B's reveal that the Respondent Nos. 3 and 4 have been shown as Additional Director of the Company having been appoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding 31.03.2009, 31 March, 2010, 31 March, 2011 and 31 March, 2012. The Compliance Certificates record that the Annual General Meeting for the financial years 31 March, 2009, 31 March, 2010 and 31 March, 2011 all were adjourned sine die and held on 01.08.2012. That no provision in law contemplated that the Annual General Meeting of a company can be adjourned sine die and conducted on a future date. s) The Petitioner submits that the compliance certificate purportedly was prepared and filed by Mr. Gopichand Rohra. However, such appointment could have only happened at a Board Meeting at which the Petitioner was present, the Petitioner being one of the two Directors. Therefore, the said Mr. Gopichand Rohra was clearly not entitled to issue any Compliance Certificate. t) The Petitioner submits that the dates of the alleged Board Meetings mentioned in the Compliance Certificate are false and incorrect and no such Board Meetings were held. u) The Petitioner submits that the Compliance Certificates filed point out that the Company has only 2 Members and the said fact is a correct position. v) The Petitioner submits that the above mentioned actions of Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... areholder and Managing Director of the Company since its inception and failed to conduct the Board Meetings regularly and Shareholders Meeting annually for 6 years continuously including the appointment of the Statutory Auditors as per the provisions of law. The Respondents submit that they have not done anything illegal as the Respondent's sole aim is to save the Company from being declared as a dormant or inactive Company by the Ministry of Corporate Affairs. c) The Respondents submit that the emergence of Respondent Nos. 3 and 4 as Directors of the Company is perfectly in accordance with the provision of law. The Petitioner remained absent from the activities of the Company and in 2012 the Respondent No. 2 sent a letter to the Petitioner to convey and conduct the Board meeting and conduct the activities of the Company in accordance with law. The said registered notice was returned back unserved. The Respondents then sent a copy of the of the letter to the Registrar of Companies, Bangalore for intimation and necessary action, The Registrar of Companies, Bangalore sent a notice to the Company vide letter dated 12.03.2012 requesting the Company to respond to the allega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpliances required under the provisions of the Companies Act. j) The Respondents submit that they have not made any financial and structural changes in the accounts except what has been disclosed in the year immediate after incorporation. The Respondents have spent from their own pocket for the payment of the Auditor's Fees, Compliance Fees, filing of Annual Return and other miscellaneous expenses as the Company did not have any liquid cash available in its account. The Respondents submit that they took the said initiative to comply with the statutory requirements or else the Registrar of Companies would have prosecuted the Directors for non-compliances. k) The Respondents submit that they have not made or earned income from the Company except spending from their personal pocket to retain the Company as active. l) The Respondents submit that they are ready to convene fresh meetings of the Director and Shareholder under the supervision of this Tribunal and abide by the outcome of such proceedings. m) The Respondents submit that Mr. Ramesh Parmar (Respondent No. 2) had invested additional amount with the consent and permission of the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a law abiding citizen. d) The Petitioner submits that the postal acknowledgement cards attached by the Respondents in their counter showing two acknowledgements signed by Mrs. Padma Rekha, the wife of the Petitioner, are not signatures of Mrs. Padma Rekha and are forged signatures. Further, while there were letters that were sent to the Petitioner, the alleged contents of the same being notices for a board meeting in 2012 is incorrect and denied. e) The Petitioner submits that the contention of the Respondents in regard to DIN-2 and DIN-3 is baseless inasmuch that mere nonfiling of the same cannot cause a Director to cease to be Director. Further, the contention of the Respondent No. 2 that he has to appoint Respondent Nos. 3 and 4 to keep the Company alive is baseless and unwarranted. f) The Petitioner submits that the Petitioner is well aware of the legal position that the assets of the Company are not that of its Shareholder and to save the property from the Respondents the document was in the name of the Petitioner as a Director of the Company. Further, if it was indeed the intention of the Petitioner to transfer the property to himself, he would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany. b) The Respondents submit that the Petitioner has not applied for Director Identification Number and has not intimated the DIN 2 to the Company or filed DIN 3 with the Registrar of Companies. This non-compliance by the Petitioner debars him from acting as a Director of the Company and thus, he has ceased to be a director of the Company by operation of law. c) The Respondents submit that neither the Company nor Respondent No. 2 have removed the Petitioner from the post of the Managing Director or Chairman by any Board resolution. d) The Respondents submit that Respondent No. 2 has not transferred any shares owned by the Petitioner. The Respondent No. 2 has merely transferred his own shares to his family members. There is no question of raising of new shares or usurping the shares filed by the Petitioner. Thus, the Company Petition has been filed by the Petitioner by confabulating facts in a vindictive manner and is therefore liable to be dismissed with exemplary costs. e) The Respondents submit that the Respondent No. 2 acted only with the intent to secure and safeguard the interest of the Company. f) The Respondents submit that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Respondent No. 2 appointed Respondent Nos. 3 and 4 as Additional Director only to safeguard the interest of the Company. Further, if Respondent No. 2 had not acted in time, the Company would have been declared as Dormant Company allowing the Petitioner to misuse the only asset for his personal benefit. 6. Heard Shri Andre Peter Learned Counsel for the Petitioner and Shri Jaykumar N. D., Learned Counsel for the Respondents. We have carefully perused the submissions and materials placed on record by the Petitioner and Respondents. 7. The bone of contention in the present Company Petition vests in the fact that Respondent No. 2 transferred part of his Shareholding to Respondent Nos. 3 and 4 (whom he claims to be his family members) in violation of the Articles of Association of the Company and further, proceeded appointed Respondent No. 3 and 4 as Additional Directors of the Company without the consent of the Petitioner who is the sole Majority Shareholder (by virtue of owning shares in excess of 90% of the total paid-up share capital of the Company) and thereby sidelined the Petitioner from the affairs of the Company in order to take over the sole asset vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 and have reproduced the same as under: Section 186 of the Companies Act, 1956 states as follows: Power of Tribunal to Order Meeting to be called 186. (1) If for any reason it is impracticable to call a meeting of a company, other than an annual general meeting, in any manner in which meetings of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this Act or the articles, the Tribunal may, either of its own motion or on the application of any director of the company, or of any member of the company who would be entitled to vote at the meeting,- (a) order a meeting of the company to be called, held and conducted in such manner as the Tribunal thinks fit; and (b) give such ancillary or consequential directions as the Tribunal thinks expedient, including directions modifying or supplementing in relation to the calling, holding and conducting of the meeting, the operation of the provisions of this Act and of the company's articles. Explanation. -The directions that may be given under this sub-section may include a direction that one member of the company present in person or by proxy shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to suo motu invoke the power vested in it by virtue of Section 397 and 398 of the Companies Act, 1956 read with Section 242 of the Companies Act, 2013 and Section 186 of the Companies Act, 1956 read with Section 98 of the Companies Act, 2013 and order the conduct of an Extraordinary General Meeting. Therefore, we order for calling, holding and conducting of the meeting. 16. It is also hereby held that for the purpose of execution of legal formalities, Mr. D.S Kumar and Mr. Ramesh Parmar, shall be deemed to constitute a quorum of the meeting. A meeting so held shall, for the purpose of Sub-section 1 of Section 98, be deemed to be duly called, held and conducted by the Company. 17. As a result, it is hereby directed to prepare an agenda of the meeting now authorized and place it before the Chairman on or before 19.07.2019 and after obtaining the approval conduct the meeting within 21 days' time i.e., on or before 09.08.2019. 18. We appoint Mr. B N Harish, Advocate, practising in the Company matters and having address at No. 18, Shuklam, 1st Main, 1st Avenue, Near ICICI Bank, Shubh Enclave, Harlur Road, Off Sarjapur Road, Bangalore - 560102, as Chairman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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