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TMI Blog2020 (9) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... akraborty, Advocate for R8 JUDGEMENT Mr. Balvinder Singh, Member (Technical) The appellants have filed these two appeal (Company Appeal (AT) No.92 and 93 of 2020) under Section 421 of the Companies Act, 2013 against the impugned order dated 11th June, 2020 passed by the National Company Law Tribunal, Kolkata Bench, Kolkata in an unnumbered urgent Application being IA No. Nil of 2020 in CP No.1836/KB/2019. The brief facts of the case are that the original Petitioners filed Company Petition under Section 241, 242 and 244 of the Companies Act, 1956 against the Respondents which is still pending. During the pendency of the company petition the appellants filed an application being IA No. Nil of 2020 in CP No.1836/KB/2019 seeking the following relief: a) The interim reliefs as prayed for in CP No.1836/KB/2019 filed by the Petitioners be granted by this Hon'ble Tribunal by directing the respondents to maintain status quo in respect of the shareholding and constitution of Board of the respondent No.1 company. b) Declaration that the purported decisions taken in the meeting of the Board of Directors of the company allegedly held on February 08, 2020 and the resolutions passed there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020 passed in IA of 2020 in CP No.1836/KB/2019 be set aside and also stay the operation of the impugned order till the disposal of the instant appeal. Appellant stated that 1st appellant and 2nd respondent jointly entered into a Consortium Agreement and agreed to form a partnership to submit a Resolution Plan to take over 1st respondent. Resolution plan submitted was approved by the COC and thereafter ratified by NCLT Kolkata under Section 31 of Insolvency & Bankruptcy Code, 2016. As per the Resolution Plan, appellants are 34% shareholders and the 2nd Respondent is 51% shareholder. The remaining 15% shares are yet to be issued to the Employees' Trust and in effect the appellants are holding 40% and 2nd respondent is holding 60% shares of 1st respondent. Appellant stated that as per mutual understanding two directors of appellant No.1 and one director of 2nd respondent was appointed. Appellant stated that several disputes arose between 1st appellant and 2nd respondent and 2nd respondent kept trying to oust the 1st appellant from the business. Appellant stated that the integrity and character of the nominee director was questioned as well as oppression by 2nd to 7th Respondent had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us even Rs. 3.40 crores paid by 1st appellant for purchasing shares of 1st respondent is from the money of 2nd respondent and that the entire shares of 1st respondent which have been purchased by 1st appellant should have been actually purchased in the name of 2nd respondent only, but instead thereof the said 1st appellant has wrongfully purchased shares of 1st respondent in its own name from the money provided by 2nd respondent for such purpose which is a clear breach of trust. 2nd respondent stated that 9th Respondent (original 4th petitioner) is also Director of 1st appellant's group company (Master Mercantile Pvt Ltd) who by mis-utilising her position as Director of 1st respondent has done related party transaction with the said Master Mercantile Pvt Ltd for a sum exceeding Rs. 18 crores in the last financial year 2019-20 and has siphoned out huge sum. 2nd respondent stated that 1st respondent is never a partnership of quasi partnership of 2nd respondent and 1st appellant. 2nd Respondent stated that the original petitioners are seeking to paralyze the functioning of 1st respondent. 2nd respondent stated that as per Section 169 of the Companies Act, 2013, 2nd respondent can se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f hearing. 2nd respondent stated that 1st appellant has claimed that such sum was received for purchasing shares of 1st respondent. Thus even Rs. 3.40 crores paid by 1st appellant for purchasing shares of 1st respondent is from the money of 2nd respondent and that the entire shares of 1st respondent which have been purchased by 1st appellant should have been actually purchased in the name of 2nd respondent only, but instead thereof the said 1st appellant has wrongfully purchased shares of 1st respondent in its own name from the money provided by 2nd respondent for such purpose which is a clear breach of trust. 2nd respondent stated that 9th Respondent (original 4th petitioner) is also Director of 1st appellant's group company (Master Mercantile Pvt Ltd) who by mis-utilising her position as Director of 1st respondent has done related party transaction with the said Master Mercantile Pvt Ltd for a sum exceeding Rs. 18 crores in the last financial year 2019-20 and has siphoned out huge sum. 2nd respondent stated that 1st respondent is never a partnership of quasi partnership of 2nd respondent and 1st appellant. 2nd Respondent stated that the original petitioners are seeking to para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 13.2.2020 so no other nominee of appellant is remaining on the board. Learned counsel for the Appellant argued that in the Meeting dated 2.6.2020 it was resolved to remove the nominee of the appellant in an EOGM to be held on 29.6.2020 without giving a fair opportunity to give her representation. Learned counsel appearing on behalf of 1st, 3rd, 4th, 5th and 7th respondent argued that there is shareholders agreement or the likes between 1st appellant and 2nd respondent. Learned counsel further argued that in the Resolution Plan there is no mention of involvement right or involvement of either 1st appellant or 2nd respondent in the running of 1st respondent. Learned counsel further argued that the appellant has presented no irregularity of whatsoever nature in the convening of the EGM of 1st respondent on 29th June, 2020 (adjourned to 07.07.2020 due to lack of quorum) and the resolution that was passed for removal of one of the two nominee directors of 1st appellant. Learned counsel further argued that the appellant in Company Appeal (AT) No.93/2020 duly received the notice dated 26.5.2020 under Section 169(3) and also did not make any representation against the resolution, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resence of Neha Singh Chauhan in the Board of Directors of 1st respondent is totally counterproductive to the interest and functioning of 1st Respondent as she has levelled vague allegations against the directors of the company and filed false complaints before the various local authorities. Learned counsel further argued that Neha Singh Chauhan is Director in one of Matashree Mercantile Pvt Ltd which is a competitor of the 1st respondent. 1st respondent has engaged in diverse related party transactions with the said Matashree Mercantile Pvt Ltd and by such means has siphoned off a sum of Rs. 18 crores in the FY 2018-19. Learned counsel for 2nd Respondent further argued that appellant and its nominee director has no relation or family ties with 2nd respondent and the principle of quasi-partnership is usually invoked in family companies. Learned counsel further argued that the dispute in the present case do not involve members of the same family, the principles of quasi- partnership out not to be invoked. Learned counsel for 8th Respondent argued that he is not being allowed to act and is not acting as a director in 1st respondent as the affairs of the Company is grossly mismanaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the original petitioners under Section 241, 242 and 244 under the Companies Act, 2013 and the petition has not been decided as yet. Therefore, we will not give our observation/conclusion with regard to the Company Petition and the same will be decided by the NCLT, Kolkata. We will only decide the issue with regard to removal of original Petitioner No.4 from the directorship of 1st Respondent. It is not in dispute that the 2nd Respondent is the majority shareholder in 1st respondent company. We have perused page No.124 of Appeal Paper Book under hearing "Management and control of the business of the Corporate Debtor during resolution term" and find no mention of involvement right or involvement of either 1st appellant or 2nd respondent in the running of the 1st respondent company in future. It only mentions that new Promoters to appoint 3 directors to take over the management for better operations. We note that Special Notice dated 21.5.2020 (Page 1801 of appeal paper book) pursuant to Section 169 of the Companies Act, 2013 was given to remove original petitioner No.4 (Ms Neha Singh Chauhan). Section 169(3) of the Companies Act, 2013 provides as under:- "169. Removal of dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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