TMI Blog2020 (8) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... manner, taking advantage of the majority in the Board. The mere undertaking of the transferees not to transfer their shares will not cure the illegality. Since, the petitioners are questioning the actions of respondent No. 1-company, non-joinder of the Trust nor its Trustees as parties is not fatal and this Tribunal has every power to conduct legal scrutiny. Even otherwise, the provisions of the Code of Civil Procedure, 1908 are not applicable except to the extent provided under the Companies Act to the proceedings before this Tribunal. Therefore, the objection of the respondents with regard to non-joinder of parties is not legally sustainable and is rejected. Transfer of shares of other members in the board meeting - HELD THAT:- Those shares were held by other individual members who have every right to deal in their own right and, there-fore, this Tribunal is not inclined to interfere. Appointment of Mr. Sunil Agarwal, CA Bal Kishan Bansal, Mr. Anup Kumar Khemani and CA Saloni Bansal - HELD THAT:- Since Mr. Anup Kumar Khemani purchased the shares of M/s. Kalicharan Das Trust, his directorship automatically gets cancelled in view of setting aside the transfer of shares of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 respondent No. 1-company was incorporated under the name and style of Assam Medical Corporation P. Ltd., as a public limited company with the aim and objects which were being stated in the memorandum of association and articles of association. Respondent No. 1-company was incorporated in 1960 with a paid-up share capital of ₹ 5,00,000 (rupees five lakhs only) divided into 50,000 equity shares of ₹ 10 each. Subsequently, respondent No. 1-company was converted into a private limited company and the value of shares of respondent No. 1-company was changed from ₹ 10 each to ₹ 1,000 each. Consequently, the number of equity shares of respondent No. 1-company was reduced from 50,000 to 500 of ₹ 1,000 each. 4. It is stated here that the number of shares owned by Dr. Das in respondent No. 1-company was 117 and number of shares owned by his wife, Divya Prabha Das was 55. Some like-minded humanitarian persons, namely, Dr. Susil Ranjan Roy, Dr. Shailendranath Sengupta, Dr. Ataur Rahman, Dr. Ramani Kanta Talukdar and Mr. Sukumar Dutta, a pharmacist and Mr. Jogendra Narayan Baruah, a businessman too got associated with such project established to address some im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that over the years, the area where the nursing home is situated today has become the hub of enormous commercial activities and, therefore, many unscrupulous people, more particularly the people having connections with the real estate business have been eyeing the sprawling plot of land which houses the said nursing home. The fact that such a plot of land itself would fetch a huge amount of money if the same is disposed of today, makes such a position very clear. 10. In course of time, petitioner No. 1 herein also came to know that there were some transactions in the name of respondent No. 1-company which had been done in total disregard of the rules and procedures holding the field and such transactions were done not at all to further the great charitable ideas and purposes for which respondent No. 1-company was incorporated by the founder members of respondent No. 1-company almost seven decades before, but to cater the very selfish ends of some persons who wanted to exploit the land in question for some entirely commercial purposes. 11. In that connection, it has also been stated that in January, 2017, petitioner No. 1 came to know that some unaccounted cash transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of aforesaid persons as additional directors respondent No. 1-company was likely to dilute the aims and objectives, specified in the charters of respondent No. 1-company. Petitioner No. 1, therefore, vehemently objected to the above design of the board of directors of respondent No. 1-company, but his objections were neither considered nor recorded in the board meeting held on January 3, 2018. 16. In the meantime, another board meeting was also convened on January 24, 2018 but petitioner No. 1 was not served with a valid notice. Petitioner No. 1 came to know that in the said meeting, about 169 numbers of equity shares of ₹ 1,000 each in respondent No. 1-company comprising 33.8 per cent. of total share capital of respondent No. 1-company were purportedly transferred to some real estate companies as well as to some individual real estate developers. 17. In the said board meeting convened on January 24, 2018 the entire shares of Dr. Das held in the trust, had also been transferred to some outsiders including some real estate companies. Quite importantly, in the said meeting, 50 numbers of shares held by Mr. R. P. Hansaria, one of the trustees of the aforesaid trust and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appoint any additional director and since such power was not conferred on the board, it was beyond the competence of the Board to appoint the aforesaid three persons as additional directors on January 3, 2018. 21. It has been further submitted that section 105(4) of the Companies Act, 2013 and the Secretarial Standard 2, paragraph 6.6 state that proxies shall be deposited with the company either in person or through post not less than forty-eight hours before the commencement of the meeting in relation to which they are deposited. Most interestingly, the articles of association of respondent No. 1-company has increased such period to 72 hours. It is already found that some members of respondent No. 1-company, who purportedly gained entry into the company in the board meeting held on January 24, 2018 at 10.00 a.m. participated in the extraordinary general meeting held on the same day at 11.00 a.m. through proxies. 22. It has been submitted that therefore, one would be hard-pressed to comprehend as to how a member who gained entry in to the company at 10.00 a.m. could participate in the extraordinary general meeting at 11.00 a.m. on the same day and that too through proxy a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner No. 1. Mr. Balendra Choudhury from the directorship of the company and confirmation of appointment of new directors. 25. The aforesaid meeting scheduled to be convened on May 3, 2018 was not concluded and was adjourned to May 5, 2018 at 11 a.m. Petitioner No. 1 was present on May 5, 2018 at 11 a.m. to attend the postponed board meeting of May 3, 2018 but nobody turned up and the said meeting was subsequently adjourned to May 17, 2018 in the meantime respondent No. 1-company issued notice of extraordinary general meeting to be held on June 1, 2018. Petitioner No. 1 requested for a copy of the minutes of the aforesaid board meeting dated May 3, 2018 but he has not been provided with it till date. Petitioner No. 1 also raised objections regarding the process of issuance of the notice of extraordinary general meeting to be held on June 1, 2018. 26. Petitioner No. 1 received another notice dated May 17, 2018 of extra-ordinary general meeting to be held on June 11, 2018 to transact the same business which was to be transacted at the aforesaid proposed extraordinary general meeting to be held on June 1, 2018. In the extraordinary general meeting proposed to be held on June 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner No. 1. However, the succession certificate being nonest and void, the said transfer of share to petitioner No. 1 is also invalid, void and non est and therefore, petitioner No. 1 cannot file the present petition on the strength of such invalid shareholding and on this ground itself the present petition needs to be dismissed as not maintainable. 29. It has been submitted that in 2009, petitioner No. 1 was named as a director of respondent No. 1-company. However, his appointment as director was never approved in any subsequent meeting of the board. 30. That respondent No. 1-company was on July 13, 1960 incorporated under the name and style of Assam Medical Corporation Ltd., as a public limited company with a capital of ₹ 5 lakhs divided into 50,000 shares of ₹ 10 each. At the time of inception the company had 3 directors, namely, Dr. S. R. Roy. Dr. Kalicharan Das and Jogendra Narayan Dutta and sub-sequently, on December 18, 1961 respondent No. 1-company was converted into a private limited company with an authorised share capital of ₹ 5 lakhs divided into 500 equity shares of ₹ 1,000 each. 31. That respondent No. 1-company was incorporated with i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place. 33. It is also the submission of the respondents that respondent No. 1-company and the nursing home and polyclinic has been running for the past more than 50 years. However, in the recent times the company has been facing financial recession due to lesser footfalls of patients and rising maintenance cost. To overcome the situation the company attempted renovation and modernization of the nursing home. But due to coming up several big private hospitals and nursing home in the Gauhati City, the business of respondent No. 1-company has affected severely and this was discussed in various board meetings. Further, problems were created due to the fact that Dr. Rajendra Prasad Hansaria, who has been associated with the company as a director since 1970 had shifted to Mumbai and due to his advanced age he found it difficult to come to Guwahati for managing the affairs of the company and Dr. Deepali Dutta, a long-term director also passed away on November 11, 2017. As a result, respondent No. 1-company was under severe constraint. Therefore, it was necessitated to induct new people for revival of the situation so as to save its existence and smooth functioning. 34. That keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents further submit that on March 16, 2018 the petitioners most illegally acting against respondent No. 1-company with male fide intention against respondent No. 1-company complained to the DC, Kamrup (Metro) and Sub-Registrar, Kamrup (Metro) without any material evidence that there are various anomalies in the affairs of respondent No. 1-company and requested them not to register any document with regard to the company and due to such actions of petitioner No. 1, respondent No. 1-company received notices from three members requesting for holding extraordinary general meeting for removal of petitioner No. 1 from the directorship of the company. Therefore, respondent No. 1-company was compelled to issue a notice on April 23, 2018 for convening a meeting on May 3, 2018 proposing an agenda for removal of petitioner No. 1 from directorship of respondent No. 1-company. The said meeting was adjourned and on May 3, 2018 another notice was issued for convening extraordinary general meeting with agenda for confirmation of appointment of CA Saloni Bansal as director of the company and removal of petitioner No. 1 from directorship. However, in the meantime, petitioner No. 1 filed the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital of respondent No. 1-company. 44. Respondent No. 4, Mr. Anup Kumar Khemani is director and share-holder of respondent No. 1-company holding 16.66 per cent. of the issued, subscribed and fully paid-up share capital of respondent No. 1-company. 45. Respondent No. 5, Mr. Shanky Agarwal is shareholder of respondent No. 1-company holding 2 per cent. of the issued, subscribed and fully paidup share capital of respondent No. 1-company. 46. Respondent No. 6, Ms. Sangita Khemani, is director and shareholder of respondent No. 1-company holding 2 per cent. of the issued, subscribed and fully paid-up share capital of respondent No. 1-company. Respondent No. 7, Mr. Anil Agarwal, is shareholder of respondent No. 1-company holding 2 per cent. of the issued, subscribed and fully paid-up share capital of respondent No. 1-company. Respondent No. 8, Ms. Kabita Agarwal, is also a shareholder of respondent No. 1-company holding 2 per cent. of the issued, subscribed and fully paid-up share capital of respondent No. 1-company. 47. Respondent No. 9, Ms. Nina Agarwal is a shareholder of respondent No. 1-company holding 1 per cent. of the issued, subscribed and fully paid-up share capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing for respondent No. 1-company clearly pleaded in their reply and also confirmed during the course of arguments that no such extraordinary general meeting was held on June 1, 2018 and, there-fore, the said relief has become infructuous and no order needs to be passed in this regard. 59. The main grievance of the petitioners in the pleadings as well as at the time of argument is that respondent No. 1-company has illegally transferred its shares of the promoter trust M/s. Kalicharan Das Trust to respondents Nos. 4, 6, 12, 13 and 14 in the minutes of meeting dated January 24, 2018 without considering his objections only with an intention to convert the land of respondent No. 1 for construction of real estate project against the aims and objects of respondent No. 1-company. It is the contention of the petitioners that the transfer of 117 shares of M/s. Kalicharan Das Trust is contrary to article 15 of the articles of association of respondent No. 1-company. It is the submission of the petitioners that respondent No. 1-company was initially started as a small nursing home by his late uncle Mr. Kalicharan Das with an object of providing free medical services to the poor and ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) To what relief ? 61. In order to answer the above issue No. 1, it is important to read article 15 of the articles of association and also the minutes of the meeting dated January 24, 2018 which are extracted hereunder for ready reference as follows : 15. Notice of transfer.-Every member or the legal representative of a deceased member who intends to transfer shares (hereinafter called 'the vendor') shall give in writing to the Board notice of his intention. That notice shall constitute the Board his agent for the sale of the said shares, in one or more lots at the discretion of the Board, to members of the company at a price to be agreed upon by the vendor and the Board or in default of agreement at a price which the auditor of the company for the time being shall certify by writing under his hand to be in his opinion, the fair selling value thereof as between a willing vendor and a willing purchaser. The minutes of the meeting of the board meeting held on January 24, 2018 reads as follows : Minutes of the board of directors meeting held on January 24, 2018 at the registered office of Assam Medical Corporation P. Ltd., Guwahati-16 Directors present : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In order to decide the above issue No. 1, it is important to look at the reply filed by respondent No. 1-company. Respondent No. 1-company in their reply stated that the shares were transferred in a valid and legal manner and Dr. R. P. Hansaria, Sri Binod Hansaria and Dr. Madhab Prasad Bajaj voluntarily stepped down as directors and Mr. Sunil Agarwal, CA Bal Kishan Bansal and Mr. Anup Kumar Khemani were appointed as directors in the board meeting held on January 24, 2018. It is very clear from article 15 of the articles of association that a procedure for transfer of shares is provided under the articles of association. Respondent No. 1-company except making the above statement in their reply did not place any evidence before this Tribunal regarding the procedure adopted by them in transferring the shares of the Trust. It is interesting to note that in the minutes dated January 24, 2018 respondent No. 1-company having recorded the objections of the petitioners with regard to transfer of 117 shares of the Trust, miserably failed to record the explanation under which the petitioner was satisfied about his objections. It is very hard to believe that the petitioners having satisfied, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of directors and auditors is the exclusive domain of the Board and this Tribunal shall not interfere unless serious prejudice to the public interest or to the affairs of the company is shown. 65. As rightly contended by the respondents, the petitioners claimed numerous reliefs and all the reliefs, if granted, will virtually halt up the smooth functioning of respondent No. 1-company and cannot be granted. Even otherwise, the petitioners have not placed any substantial evidence before this Tribunal warranting grant of those reliefs nor pressed those reliefs at the time of submissions. 66. In the light of the above facts and circumstances and observations, this Tribunal is of the considered opinion that the petitioners are not entitled to all the reliefs claimed in the petition except to the extent of setting aside the transfer of 117 shares of M/s. Kalicharan Das Trust and accordingly, this Tribunal pass the following orders : (i) it is hereby declared that the transfer of 117 shares of M/s. Kali charan Das Trust in the board meeting dated January 24, 2018 is not in accordance with law and is hereby set aside and consequently, respondent No. 1-company is directed to undo the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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