TMI Blog2021 (5) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... isition for removal of the existing directors representing the petitioners group. There are no merit in the contention of Mr. Joy Saha, learned Senior Counsel for the petitioners, that there must be good reason to overturn an arrangement which appears to have worked satisfactorily for about twenty-one years. The primary reason given - though not the only reason - is the alleged omission to invite the sole representative of the respondent group for one solitary meeting of the board. This is not enough. The complete exclusion of the petitioner group from the board cannot be justified merely by pointing out that the meeting is a validly convened meeting, that the resolutions were duly approved and therefore the court should not intervene. There is no gainsaying that the principles of equity have been greatly disturbed by the act of the respondent group in removing all the three directors of the petitioner group and assuming 100% control of the board. The petitioners have made out a prima facie case for grant of the interim reliefs. List the main CP for hearing on 20.07.2021 for further consideration. - CP No. 91/KB/2021 - - - Dated:- 5-5-2021 - Rajasekhar V.K., Member (J) An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 431 of the Petition 7. The Respondent No. 1 Company called for the EGM to be held on 14.04.2021, vide notice dated 20.03.2021. Page 433 of the Petition Explanatory Statement dated 20.03.2021 pursuant to section 102 of the Companies Act, 2013, has also been given. Page 437 of the Petition The alleged acts of mismanagement have been set out in the notice dated 01.03.2021 given by the shareholders. 8. Mr. Joy Saha invited our attention to these alleged acts of mismanagement and submitted that the same has been set out in the said notice as follows: Pages 413-414 of the Petition (1) Mr. Rahul Modi, director of the company, was intentionally not invited for the board meeting of 20.12.2020, so that the other three directors are in a position to pass various resolutions; (2) At that meeting, the three directors passed resolutions to increase their salary without the knowledge of Mr. Rahul Modi. (3) The financial statements for the year 2019-20 have been signed by Mr. Bimal Kumar Goenka and Mr. Varun Saraf without obtaining the approval of the board members at a duly convened meeting. (4) The AGM has been conducted on 31.12.2020 by the three directors with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Banerjee encapsulated the points in defence as follows:- (a) The shareholder-requisitionists accused the petitioners of mismanagement. (b) The Respondent No. 1 Company accepts the notice. (c) The Board of Directors of the Respondent No. 1 Company, controlled by the petitioners, calls for the EGM. (d) The voting results indicate that 58.2% of the shareholders voted in favour of the resolution removing the petitioners from office, and to vote in a new set of directors in their stead. 16. Mr. Banerjee further pointed out that simple directorial complaints are not amenable to a section 241/242 petition. The right granted by Ebrahimi's case (supra) could perhaps have been considered had the petitioners themselves not called for the EGM. Now, after having called the EGM, how can the petitioners question the results, Mr. Banerjee queried. He further submitted that forms attesting to their removal have already been uploaded on the MCA portal. 17. On the issue of diversion of business, Mr. Ratnanko Banerji submitted that future apprehension of running the business to the ground, cannot be the basis of a section 241 petition. 18. Lastly, Mr. Banerji submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three out of the four board members being voted of office, and three others - all representing the respondent group - be allowed to assume office just because they have a majority of the shareholding. The sudden move to disturb an arrangement that has been in force for almost 21 years must have a reason behind it. 25. Mr. Joy Saha further submitted that even after the Supreme Court judgment in Escorts (supra), there are hundreds of cases where the voting pattern of general meetings have been overturned. It is now fairly clear that the principles enunciated in Escorts (supra) have never been strictly applied to family companies or quasi-partnership companies. The specific case made out by the petitioners is that this is a family company in the nature of a quasi-partnership. In so far as Bagri (supra) is concerned, the facts of that case are quite different. That was a case where winding up of a company was sought on just and equitable ground. Those facts do not apply here. 26. Mr. Joy Saha submitted that other than a feeble attempt at alleging acquiescence by convening the EGM, there is really no defence on the part of the respondents against grant of interim reliefs. Anal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
