TMI Blog2020 (11) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... inder before the Tribunal below (Page 403 of Appeal Paper Book). Thus the Respondent s wife and his daughters has given affidavits to the Respondent in order to protect their rights and interest in the company in which they own shares. It is on this basis the affidavits given by the wife of Respondent and his daughters who holds shares in the company is a valid consent within the meaning of Section 244(2) of the Act. The Respondent alongwith his family members hold 2.93% shareholding. His family has given the consent affidavits which were filed before the Tribunal. There are 19 shareholders as per shareholding pattern of Appellant No.1 as filed by the Appellant (Page 18 of the appeal). In the present case that the Respondent alongwith his family members are 4 in numbers but their shareholding is less than 10%. The arguments of the Respondent that his wife is shareholder of M/s Kurinji Metals Pvt Ltd which holds 30.42% shares in the appellant No.1 and she holds approximately 7% of the shareholding of appellant No.1 through M/s Kurniji Metals Pvt Ltd cannot be considered as the Resolution from M/s Kurniji Metals Pvt Ltd is required to give company s consent. The contention that sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st respondent submitted that he is the managing the affairs of the 1st appellant company as Managing Director and he is holding 5000 shares i.e. 0.04% of the total issued share capital of the appellant company. The original petitioner also stated that he is the First Director and promoter of the appellant company and it is trite law that removal of the First Director form the management of the company is an act of oppression. The original petitioner stated that there is a violation of the provisions of the AoA particularly Articles 52 which provides that the controlling shareholders shall have the right to appoint MD of the company and the powers of removal are vested with the controlling shareholders and not with the directors as in this case the Board of Directors vide Resolution dated 14.5.2019 has remove the 1st respondent. The original petitioner also stated that the appellants also violated the terms of agreement which states that each group will have two members. The original petitioner stated that on 14.5.2019 the appellants removed him from the position of Managing Director without sending any charge sheet on the summary of allegations on the basis of which the removal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collateral Mr. Herman Johan Oonk and Mr Harm Jan Oonk(Omega Group 6.5 Cr 5 Cr (SBLC) Mr Tuskar Kant Jindal and Mr. M.OL. Jindal family ₹ 1.75 Cr + ₹ 1.77 Cr ₹ 6 Cr (Collateral + Personal guarant) Mrs Poonam and Mr. Anil Agrawal and family 56 L No Mr Anup Agarwal and Mrs Shashi Agarwal (through HUF and Mangalam Power Systems) ₹ 1.67 Cr No The appellant stated that the share holding pattern of 1st appellant in May, 2019, when the Company Petition was filed is as under: Particulars Amount (in Rs) Percentage Indian shareholder Kurinji Metals Pvt Ltd. 3,73,02,970.00 30.42% Mangalam Power Systems Pvt Ltd 50,13,970.00 4% Mr. Anil Agrawal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Articles of Association was not amended to reflect this arrangement and no formal letter was issued to 1st respondent appointing him the Managing Director. The appellants stated that the respondent was acting against the interest of 1st appellant for quite some time which was adversely affecting the performance of the company, therefore, the Omega Group, majority shareholders decided to outline the job responsibilities and powers of the Managing Director for 1st appellant in consultation with the remaining shareholders. The appellants stated that Notice dated 6.5.2019 for the Board Meeting on 14.5.2019 was issued (Page 262) in which one of the agenda items was to withdraw all powers, privileges and rights of the Managing Director, Mr. Anil Agrawal and to terminate the appointment of Mr. Anil Agarwal as the Managing Director of the company with immediate effect. The appellants stated that the Board Meeting was held on 14.5.2019 and the matter was discussed and the resolution was passed (Page 268 of the appeal) to remove the Managing Director, Mr. Anil Agarwal. 6. The appellant stated that the NCLT allowed the waiver application which is liable to be set aside on the facts tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent stated that the appellant company generated positive results for the first time in 2015-16 and became a profit making company due to his hard work and the Omega Group and Appellant No.4, uncle in law of Respondent, attempted to divest the Respondent of his control over the affairs of the company through extraneous means. These mala fide intentions have culminated in the unlawful removal of the Respondent from the position of the Managing Director in direct contravention of the Joint Venture Agreement and the Articles of Association. The respondent stated that the appellants have taken advantage of his small share in the shareholding of appellant No.1. The respondent stated that these are the exception case of gross oppression and mismanagement on account of which the waiver application has been rightly allowed by the NCLT. The Respondent stated that there is no other minority shareholders with whom the Respondent could join together to maintain a petition under Section 241, in view of the winning over of Appellant No.4 by Appellant No.2 and 3. 8. Rejoinder has been filed by the appellant reiterating the submissions made in the appeal except with respect to the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. Learned counsel for the Respondent argued i) That the Respondent is undisputedly a member of the appellant No.2 and he individually own 5000 shares of appellant No.1 and his wife and daughters together own 3,55,000 shares of the appellant No.1 and they have filed affidavits supporting the Respondent s claim. Thus the Respondent own 2.94% shareholding of appellant No.1. ii) That the respondent represents the interest of a significant number of members in the company. That appellants have now taken over the affairs of the company by winning over 4th appellant (uncle in law or Respondent), thereby reducing the Respondent into an insignificant minority. iii) That Article 52 of the AoA stipulate that the right of appointment of the Managing Director shall be with the controlling shareholders and therefore by necessary implication, the Respondent could only have been removed by the controlling shareholders and not by the Board as has been done in the present case. iv) That from the nature of shareholding that there are no other minority shareholders, with whom the Respondent could join together to maintain a petition under Section 241 in view of the winning over of 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hts and interest in the company in which they own shares. It is on this basis the affidavits given by the wife of Respondent and his daughters who holds shares in the company is a valid consent within the meaning of Section 244(2) of the Act. The Respondent alongwith his family members hold 2.93% shareholding. His family has given the consent affidavits which were filed before the Tribunal. There are 19 shareholders as per shareholding pattern of Appellant No.1 as filed by the Appellant (Page 18 of the appeal). In the present case that the Respondent alongwith his family members are 4 in numbers but their shareholding is less than 10%. 16. That the Respondent has been corresponding with the appellants for the last ten years as Managing Director of 1st appellant and is well known in the knowledge of the appellants. It cannot be said that merely some technical compliances have not been done under the law will be used for detrimental to the interest of the said Managing Director to derive him the benefit provided by the law. 17. The arguments of the Respondent that his wife is shareholder of M/s Kurinji Metals Pvt Ltd which holds 30.42% shares in the appellant No.1 and she holds ..... X X X X Extracts X X X X X X X X Extracts X X X X
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