9911796707
TMI Blog2017 (5) TMI 1740X X X X Extracts X X X X X X X X Extracts X X X X ..... rtise and know-how, whereas Respondents No. 2 and 3 will be responsible for business development and management of the Company. 2.2 The Company was incorporated as 'Private Limited Company' on 26th April, 2010. The Registered Office of the Company is in Sachin, Gujarat State. The object of the Company is to formulate, prepare, buy, sell, import, export, supply, distribute, store, stock, and otherwise deal in and carry on business in all kinds and varieties of medical devices, instruments, meters, chemical and surgical dressings etc., etc., 2.3 The Authorised Share Capital of the Company as on 19th August, 2016 was Rs. 25,00,000/- divided into 2,50,000 equity shares of Rs. 10/- each. The Issued and Paid-Up Share Capital of the Company as on 19th August, 2016 was Rs. 1,00,000/- divided into 10000 equity shares of Rs. 10/- each. Petitioner is having 5000 equity shares of the Company and he is one of the Directors of the Company. Respondent No. 2 is also having 5000 equity shares of Rs. 10/- each in the Paid-Up Capital of the Company. Differences arose between Petitioner and Respondents No. 2 and 3 regarding management and affairs of the Company. Petitioner made several attem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al year ended on 31st March, 2014. In the said Meeting, Mitul P. Shah and Associates were appointed as 'Auditors' of the Company. It is stated by the Petitioner that, Petitioner and Respondents No. 2 and 3 are shown as 'Directors' of the Company whereas Petitioner and Respondents No. 2 and 3 are having 5000 shares each of the Paid-Up Capital of the Company, as can be seen from Form MGT-7 filed for the financial year 2013-2014. As can be seen from the said Form, five Board Meetings were held between financial year 2014-2015. It is shown in that form that petitioner attended 5 Board Meetings. According to the Petitioner he neither received notice for the alleged Board Meetings nor he attended the board meetings. 2.5 Petitioner alleged that Respondents No. 2 and 3 were carrying out prejudicial acts against the Petitioner taking advantage of their position. Respondents No. 2 and 3 have been misrepresenting the involvement of the Petitioner to the clients and have been acting on behalf of the Petitioner without his knowledge. Petitioner wrote letter dated 19th August, 2016 to IDBI Bank Ltd. and Surat Peoples Cooperative Bank Ltd., informing them that there exists disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant of the Company, Mr. P.K. Shah informed the petitioner that during his absence Respondents No. 2 and 3 approached him to issue back-dated notice of meeting of the Company along with absence letters of petitioner. It is stated by the petitioner that Respondents No. 2 and 3 by initiating such measures fabricated the record of notice of meetings. Respondents No. 2 and 3 taken all steps to malign the petitioner. Respondents No. 2 and 3 informed the Head Office of Surat People's Cooperative Bank Limited (SPCBL) that Petitioner is no longer a Director and basing on that information only SPCBL renewed the cash credit facility of the Company. Petitioner called upon Respondents No. 2 and 3 to produce Resolution whereby he was removed from the position of Director. Respondents No. 2 and 3 are conducting the business of the Company with intent to defraud the Petitioner. 3. Petitioner prayed for the following reliefs in the Petition; (i) To appoint an Administrator(s) or Special Officer(s) or Independent Committee of Management to manage the affairs of 1st Respondent Company; (ii) To direct the Central Government to appoint Inspector(s) to investigate into the affairs of 1st Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock with the firm as per the balance sheet and petitioner cheated the Respondents to the extent of balance sheet figure of stock of Rs. 66.67 lakhs. Since it was the initial stage of investment Respondents somehow pulled on with the petitioner. Later on Respondents realized that debtors balance taken over from Surgi Aid Medical Equipments were also incapable of recovery. Nobody came forward to supply materials to the Company because of bad reputation the Surgi Aid Medical Equipments was having in the market. The proprietary firm did not pay the bills in time for many suppliers. The negative values of the proprietary concern affected the products of the Company also, thereby the Company in fact suffered financial loss, 0.53 lakhs in 2010-11 and Rs. 10.39 lakhs in 2011-12. During the said period Petitioner managed the Company. The losses occurred due to writing off fictitious stocks and books debts. In order to meet the losses, the Respondents and other shareholders pumped funds by way of unsecured loans during years 2010-11 to 2015-16. Respondents brought all the above said facts to the notice of Petitioner in 2012. Respondents also serviced the debt of cash credit limit of Rs. 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, Surgi Aid Medical Equipments was sold to the 1st Respondent Company along with its debtors. Petitioner has withdrawn Rs. 4,93,007/- from the State Bank of India and an amount of Rs. 6,17,820/- in October 2010. Both the above said amounts have been withdrawn behind the back of the Respondents. 4.5 The search made by the Company revealed that M/s. Zest Orthocare Pvt. Ltd., and M/s. Zyro Woundcare Pvt. Ltd., are the companies in which Petitioner is the Director and himself and his wife are shareholders. The said Companies took credit from the Respondent Company way of receipt of goods without disclosing to the Respondents that Petitioner and his wife have got interest in those companies which is against Section 185 of the Companies Act. 4.6 The search made by the Respondent Company revealed that Petitioner has been doing competing business with that of 1st Respondent Company since April 2013. In the Meeting of Board of Directors held on 12.11.2016 it was resolved to issue show cause notice to the Petitioner. The notice of Board Meeting on 12.11.2016 was served to the Petitioner on 28.10.2016. It is stated by the Respondents that non-participation of the Petitioner in day to day a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etings because he did not intimate the change of address to R1 company from time to time and he was changing his address very frequently. In the petition also the petitioner has mentioned his address at 4A, Anupam Bungalows, New City Light Road, Surat which is as per the MCA records. The petitioner vide his letter dated 20.10.2016 informed R1 company to make all the correspondences at B/202, Dreamworld Residency, Canal Road, Near G.D. Goenka School, Surat. Petitioner changed his residence from 4A, Anupam Bungalows, New City Light Road, Surat, to B/202, Dreamworld Residency, Canal Road, Near G.D. Goenka School, Surat. This was informed to the company only on 20.10.2016 and since then respondents have been corresponding at the new address. The new address has not yet found place in MCA site. 6. The petitioner is in the habit of changing address frequently since 2012. Notices sent to the petitioner at 4A, Anupam Bungalows, New City Light Road, Surat to B/202, Dreamworld Residency, Canal Road, Near G.D. Goenka School, Surat vide receipt Nos. RG788598744IN dated 06.10.2016, RG592485690IN dated 13.10.2016, RG788615875IN dated 10.10.2016, RG789831160IN dated 26.10.2016 returned undeliver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2012. 7. Letters dated 02.09.2016 and 19.19.09.2016 were replied by the respondents vide letters dated 06.10.2016 and 10.10.2016, vide annexure R-15. Notice of Annual General Meeting held on 30.09.2016 was posted to the petitioner. As the petitioner has been complaining that since September 2016 about non receipt of notices, respondents thought to visit the address mentioned in the correspondences in September, 2016. In fact, respondent 2 telephoned the petitioner on mobile No. 9925199910 from his mobile No. 9825187562 to attend the Annual General Meeting but the petitioner did not even answer to the phone call. Respondent 2 also visited the petitioner's residence at 4-A, Anupam Bungalows, New City Light Road, Surat but the neighbours told the petitioner was not staying at that place. When respondent 2 visited the clinic address at UG/1, Aagam Kkrupa, Opp. Dream Home, Near White Lotus School, Surat it was told that petitioner was not attending the clinic regularly. Respondent 2 dropped notice of the meeting inside the premises of the petitioner on 24.09.2016 itself. Claim of the petitioner that he received the notice on 07.10.2016 is not tenable since the letters were droppe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed this Tribunal IA 38 of 2016 and advocate gave undertaking to the Tribunal that the company would not give effect to the resolution passed on 23.12.2016 till the next date of hearing. 8. Basing on the aforesaid pleadings, the followings points emerge for consideration:- (i) Whether appointment of respondent 3 as Director of the company as per resolution passed in the Board of Directors meeting held on 8th October, 2013 is valid. 9. It is the case of the petitioner that he was away from the management and affairs of the 1st respondent company from 2012, of course, according to the petitioner, on account of non-cooperation from respondents. According to the respondents, on 08.10.2013, in the meeting of Board of Directors of the 1st respondent company, respondent 3 was appointed as Director. 10. Petitioner stated that he never received any notice or intimation regarding Board Meeting dated 08.10.2013. A perusal of resolution also goes to show that it is not even specified that any leave of absence was requested by the petitioner and same was granted. 11. In the reply, it is stated that petitioner did not challenge contents of MGT-7 which is self-explanatory and, therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by ordinary post. Unserved notices are filed as Annexure R-2. Even though petitioner was staying away from affairs of the company, it is the duty of respondents to send notices of meeting. When the petitioner denies receipt of notices, respondent my place some material on record to show that notices were served on petitioner. When there are only two directors in the company and they are the only shareholders in the company, there is an extra duty cast upon the 2nd respondent to involve the petitioner also in the management of the company or at least to intimate him about the meetings. Without placing any material on record by merely filing form MGT-7 it cannot be concluded that petitioner attended five Board meetings. Therefore, from the facts and the material available on record it appears that the petitioner was not involved in the management affairs of the company from 2012 to 2016. Delay and latches on the part of the petitioner:- 17. It is a fact that the petitioner himself kept away from the affairs of the company from 2012. Again in the year 2016, petitioner started inquiring about affairs of the company. Thereafter, he filed this petition in November, 2016. Petitioner b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner did not attend the meeting but one day prior to the meeting he sought for postponement of the meeting on the ground of his sickness. Company agreed to postpone the meeting in case petitioner pay Rs. 14.50 lacs towards shortfall of his deposit. Since the petitioner neither remitted the money nor replied to the notice dated 29.11.2016, Board of Directors on 07.12.2016 passed resolution for issuance of 50000 right shares of Rs. 10/- each at par to all the shareholders. All the shareholders except petitioner applied for right shares. Respondent 2 applied for 43000 equity shares against his eligibility of 22000 shares and respondent 3 applied for 5000 equity shares against his eligibility of 500 shares. Necessary cheques were deposited with bank account of the 1st respondent company. 21. Petitioner moved this Tribunal IA 38 of 2016 seeking direction restraining the company from holding meeting on 26.12.2016. The matter was heard by the Bench on 23.12.2016. Learned counsel appearing for the respondent gave undertaking that the resolutions that are going to be passed in the Board meeting scheduled to be held on 26.12.2016 will not be given effect and those resolutions will not be fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antadevi P. Gaikwad reported in MANU/SC/0052/2005 : (2005) 11 SCC 314 it is observed that the powers of the court to grant appropriate relief under Section 397 of the Companies Acts wide amplitude and while exercising its discretion, the court was not bound by the terms contained in Section 402 of the Act if any particular facts situation a further relief or reliefs was warranted. Justice Chandrachud after considering a large number of decisions of this Court as also the English courts including Shanti Prasad Jain (supra) and H.R. Harmer Ltd. categorically held that in Needle Industries (India) Ltd. and others vs. Needle Industries newey (India) Holding Ltd. and others MANU/SC/0050/1981 : (1981) 3 SCC 333 held that even though the company petition fails and the appeals succeed on the finding that the Holding Company has failed to make out a case of oppression, the court is not powerless to do substantial justice between the parties and place them, as nearly as it may, in the same position in which they would have been, if the meeting of 2nd May were held in accordance with law. 27. In the light of the facts and circumstances of the case and in view of the legal position and consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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