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TMI Blog2018 (5) TMI 2082X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral meeting scheduled on February 24, 2018 to remove the petitioners from their position of directors and they also prayed that the resolutions to remove them as directors should not be given effect to. 2. The original petitioners claimed before the National Company Law Tribunal that original respondent No. 1-company was incorporated in 2005 with the objective of producing and selling medical equipments, devices and other related items. The original petitioners gave particulars regarding the shareholding, paid-up share capital at the time of incorporation and how the same stood subsequently. It was claimed that initially company did reasonably well but due to lack of funds became NPA in January, 2015. The original petitioners claimed that in or around April and May, 2016, the original petitioners met respondent No. 2, a prospective investor and share purchase agreement and the memorandum of understanding was signed by the investor group which was headed by respondent No. 2 (present appellant No. 1) and the original petitioners on April 24, 2017. The petitioners claimed before the National Company Law Tribunal that the respondent-company allotted 2,83,342 equity shares to the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, which is not just the case of taking a decision in the usual course of business but a decision purportedly to have been taken at the board level to remove the managing director, who is the pillar of the company and without suggesting any name further, to step into the shoes of the outgoing managing director, the extraordinary general meeting is being called only to remove the petitioners and not for strengthening the company with another suitable person to occupy the position of managing director. It is true that there are various allegations and counter allegations cast against each other. To appreciate the veracity and the effect of such erroneous decision making as alleged by the respondents and to take appropriate remedial measures, we need to hear the matter fully and completely by affording an opportunity to the respondents looking at their reply with the necessary documentation." 7. It was further observed: "We are of the opinion that the explanatory statement annexed to the notice of general meeting does not make a whisper on the alleged acts of mismanagement purported to have been committed by the petitioners. Any subsequent acts on the part of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent had conducted the meeting on February 24, 2018. 8. In view of this peculiar situation and in the best interest of the company the status quo ante as existed prior to holding of the meeting on February 24, 2018 is to be maintained by the respondents. 9. In addition to the above as spelt out in the interim orders the management committee has to be constituted and proceeded with until the next date of hearing. 10. The orders of this hon'ble court dated February 23, 2018 have been accordingly modified and clarified to the respondents and other parries that there shall not be any change in the operation portion of the order already passed. 11. This order has been pronounced in the open court and in the presence of both counsel appearing for the parties. 12. It is clarified that all the contentions claimed by both the parties are kept open and both the parties are open to pursue their respective rights. 13. Matter is adjourned to April 16, 2018." 10. It is these two orders which are subject matter of these appeals and various disputes are being raised in their connection. 11. Learned counsel for the appellants submitted that the appellants had entered into the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Affairs on Sunday, the February 25, 2018. It is argued by counsel for the appellants that on February 26, 2018 when the matter was mentioned by counsel for the original petitioners before the National Company Law Tribunal, it was taken up before a single judge and although the earlier order was passed by the Division Bench, this second impugned order was passed by judge sitting singly. According to him, the earlier order of the Division Bench could not have been modified by single judge. It has been further argued that the National Company Law Tribunal observed that no case is made out for winding up and if that was so, the National Company Law Tribunal could not have proceeded with the matter under section 242. According to learned counsel, looking to the judgment relied on in the matter of Life Insurance Corporation of India v. Escorts Ltd. reported in [1986] 59 Comp Cas 548 (SC); [1986] 1 SCC 264, the shareholders are within their right to hold the extraordinary general meeting and removing a director cannot be a ground for oppression and mismanagement. The required procedure had been followed for calling the extraordinary general meeting. It is the case of the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utes between the parties, the National Company Law Tribunal considered the shareholding pattern and in the interest of the company found it appropriate to have a via media so that the interest of the company does not suffer. In view of this, the National Company Law Tribunal in the order passed on February 23, 2018 and appointed Dr. Gajanan Ratnaparkhi--a nominee director who is also shareholder in the company but who is not concerned with either the investor group or the promoter group and thus an independent person. The National Company Law Tribunal has appointed appellant No. 1 (original respondent No. 2) as the managing director of the company with full powers but with a check, and kept original petitioner No. 1 as the other director so that the affairs of the company can run smoothly between such committee of directors. 15. Learned counsel for respondents Nos. 1 and 2 (the original petitioners) further submitted referring to the e-mails referred to by learned counsel for the appellants to show that on February 24, 2018 the original petitioners sent the e-mails requesting the appellants to await orders of the National Company Law Tribunal but the appellants went ahead with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above provision is kept in view and it is appreciated that in the present matter on one side, there is the promoter group who were managing the company and who entered into share purchase agreement and memorandum of understanding with investor group led by original respondent No. 2 and there was transfer of shares and soon disputes have started, leading to notice by the investor group (who were given three directors vis-à-vis. two of the promoters) issuing notice for removal of the two promoters directors, we find that what the National Company Law Tribunal has done in the situation should not be disturbed. The National Company Law Tribunal has keeping in view the interest of the company appointed appellant No. 1-Shyam Manglunia (original respondent No. 2) as managing director of the company with full powers as managing director with certain conditions and has made a committee of directors which includes the petitioner (the reference appears to be to original petitioner No. 1) as director and newly appointed nominee director Dr. Gajanan Ratnaparkhi. We are told that he is a cardiologist and not concerned with either the promoter group or the investor group. Thus, the Nationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amoring for) if they had really come to know about it. There was no clear answer from the learned counsel. All said and done, what appears is that there was a gap in the communication of the orders dated February 23, 2018 and the respondents went ahead with the extraordinary general meeting to remove the original petitioners as directors and what the order dated February 26, 2018 has done is that it has maintained the status quo ante February 24, 2018. When even the respondents had participated in the arguments which appear to have taken place on February 22, 2018 they were aware that the matter is under consideration of the National Company Law Tribunal and thus, even if they continued with the extraordinary general meeting it had to be subject to what the National Company Law Tribunal holds. The National Company Law Tribunal has used the words "modified and clarified" and learned counsel for the appellants is trying to bank on these words to make submissions that the order dated February 23, 2018 was by the Division Bench and the order dated February 26, 2018 is by the single judge. However, we do not think that the order dated February 26, 2018 has in any manner modified or clar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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