TMI Blog2021 (3) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... ther evidence would be required. Here it appears to be instant paper possession. Fault cannot be found if NCLT did not accept the claim of possession of Appellant and passed orders. The transfer of entire substratum of Company would adversely affect the interests of its shareholders. Appeal dismissed. - Company Appeal (AT) No. 170 of 2020 - - - Dated:- 17-3-2021 - Justice A.I.S. Cheema, Member (Judicial) and Dr. Alok Srivastava, Member (Technical) For Appellant: Shri Krishnendu Datta and Shri Gursat Singh Vachher, Advocates. For Respondents: Shri Virender Ganda, Sr. Advocate (R-1 2) Shri Anand Sengar, Advocate, Shri Prashant Mehta and Shri Aaryav Mehra, Caveators (R-1 2) Shri Siddarth Bhatli and Shri Abhishek Chaudhary, Advocates (R-5,6,7 8). JUDGMENT This appeal has been filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter called the IBC ) by the Appellant who is aggrieved by the order dated 31.07.2020 (hereinafter referred to as the Impugned Order ) the National Company Law Tribunal, New Delhi, Bench-V (hereinafter referred as the NCLT ) in CP No.81/241-242/ND/2020. The Appellant MBev Spirits Pvt. Ltd. is a pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 03.12.2019 with the Appellant for leasing total land area of 26.76 hectares for a period of five years beginning from 1.12.2019, which was extendable up to thirty years, in pursuance of a resolution dated 3.12.2019 passed by the Board of the Company. The Board Resolution authorized Sanjay Singh, s/o Late Shri Ganga Prasad Singh as Authorized Representative to execute the lease agreement on behalf of Respondent no. 3. (iii) With the objective of setting up a distillery and brewery plant on the said land the Appellant made an application to the District Excise Officer, Rudrapur, Distt. Udham Singh Nagar to obtain license for the plant. The Respondent No.1 filed false and frivolous complaints with police authorities and the District Administration, Kashipur threatening the Appellant to hand over the land under question to him. After failing in his efforts to get hold of the said land, Respondent no. 1 has filed a company petition to pressurize the Appellant and succeeded in obtaining a restraining order from the NCLT. (iv) The Learned Counsel for the Appellant has submitted that the Appellant Company has given the Respondent No.3 Company a sum of ₹ 3 crores as Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease deed since it was a Related Party transaction was not obtained which is breach of Section 188(1) (d) of the Companies Act, 2013 nor any ratification of the Board Resolution was done by its Board members and shareholders. He has claimed that the non-disclosure of interest by Respondent-4 in Appellant Company tantamount to harming interest of shareholders of the Respondent-3 Company and is in contravention of Section 188(1)(c ) of the Companies Act, 2013. (vi) The Learned Counsel for Respondents Nos. 1 2 has also pointed out that the lease period in the lease deed dated 03.12.2019 is 5 years and that the lease deed was not registered, which is in contravention to Section 17(1)(d) of the Registration Act, 1908. Therefore, the Lease Deed is non est in view of Hon ble Supreme Court Judgment in Anthony vs. K.C Ittoop and Sons and Others (2000) 6 SCC 394. The lease deed is also in violation of Shareholder s Agreement dated 23.7.2007 of the Respondent 3 Company and it erodes the substratum of Respondent-3 Company. (vii) The Ld. Counsel for Respondents 1 2 has also raised the issue of discrepancy in the area of the leased property as included in pages 42-43 of Appeal and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged by the Respondents no. 1 2. We have perused the notice and minutes of this Board Meeting. It may be mentioned that execution of the lease deed dated 03.12.2019 was done pursuant to a resolution passed in the Board meeting dated 03.12.2019 of the Respondent- 3 Company. 7. The Appellant has claimed that under the provision of Section 167 (1)(b) of the Companies Act, 2013, Mam Chand Goyal was no longer a director of the R-3 Company as he had been failing to attend the board meetings in the last 12 months without seeking leave of absence of the Board. Hence it is claimed there was no requirement to send him notice for the Board Meeting dated 03.12.2019. Now before this Tribunal the Appellant has mentioned that Respondents have not been regular with the board meetings despite the service of notice numerous times due to which notice about the Meeting dated 03.12.2019 was provided but the meeting was not attended by the Respondents no. 1 and 2 . Respondents no. 1 and 2 have stated in their reply (para 9, page 5 of Reply of Respondents no. 1 and 2) that no notice was sent to Respondents No. 1 and 2 for the Board Meeting. Further no documents have been presented by the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is compulsorily registerable and held that such a lease deed would be null and void. This ratio in this judgment supports the argument of the Respondents no. 1 2. 10. The claim of Appellant is that the possession of the said land was taken on the same date when the resolution was passed and lease deed signed, which is 03.12.2019. The related parties, unseemly haste in holding the board meeting, signing the lease deed and alleged taking of possession of the said land indicates more an effort for completing paper work, than real bonafide transaction. This does provide a pointer to the reason why Respondents 1 and 2 were kept out of the picture in this process. The claim of the Appellant that the land lease is for the benefit of the Respondent No. 3 Company keeping the interest of the shareholders is suspect. 11. We now turn our attention to another point raised by the Respondents No. 1 2 that while the original lease deed (though unregistered and executed on a lower value stamp paper) was for entire land admeasuring 26.76 hectares for a period of 5 years starting from 1st December 2019 (pp. 52-55 of the Appeal, para 1 and Schedule of the property) the lease deed executed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial resolution since the land to be leased and transferred was 100% of the land owned by the Company has also not been complied with. The validity of the Resolution dated 3.12.2019 is also under issue in context of agreement dated 23.7.2007 which required presence of Respondent No. 1 in the Board Meeting dated 3.12.2019 as per clause 5 and clause 7. 15. Various acts of commission and omission in the holding of Board Meeting dated 3.12.2019, execution of the two lease deeds by the Appellant, the lack of proper compliance of various legal requirements, non-disclosure of interest by Anil Kejriwal, the common director in both the companies are sufficient reasons to cast a strong doubt on the lease deeds entered into by the Respondent No. 3 Company and the Appellant. 16. The purpose of looking at various issues connected with the signing of the lease deeds dated 03.12.2019 and 25.06.2020 and the connected circumstances has been a limited one- i.e. the interest of the company itself. The act of creating document after document of lease deed in doubtful circumstances with common director hobnobbing on both sides and declaring possession taken, and facts and documents as discussed ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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