TMI Blog2021 (11) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... in petition i.e. CP-193(MB)/2021 is still pending before the Ld. National Company Law Tribunal, Mumbai Bench, Court-IV for hearing and adjudication. There is no illegality in the impugned order - Appeal dismissed. - Company Appeal (AT) No. 102 of 2021 - - - Dated:- 18-11-2021 - [Justice Anant Bijay Singh] Member (Judicial) And [Ms. Shreesha Merla] Member (Technical) For the Appellant : Mr. Dhruba Mukherjee, Sr. Advocate with Mr. Ankit Tripathi, Mr. NPS Chawla and Mr. Kumar Anurag Singh, Advocates For the Respondent : Mr. Akshat Singh, Mr. Gaurav Mitra and Mr. Bhanu Gupta, Advocates JUDGMENT Justice Anant Bijay Singh; This Appeal has been preferred by the Appellants aggrieved and dissatisfied by the order dated 19.07.2021 passed by the National Company Law Tribunal, Mumbai Bench, Court-IV in CA-201/2021 in CP-193(MB)/2021 whereby and where under the Ld. National Company Law Tribunal passed the following interim orders: 3. The removal of directorship of the Petitioner is inconsistent with the restriction provided under the Articles of Association. Therefore, the Petitioner has made prima facie case for grant of interim stay of resolution passed in EO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is pertinent to mention that during his tenure as director in the Appellant No. 1, the Respondent failed to perform its duties and responsibilities towards Appellant No. 1 and due to the dereliction of Respondent s duties, the Appellant No. 1, shareholders and the management of Appellant No. 1 was losing its trust in him. vii) The Appellant No. 3 has been associated and contributing in the capacity of Sales Head for more than 15 years in the Appellant No. 1. He has gained a lot of expertise and has achieved all the targets in the past 15 years in the capacity of Sales Head, thereby taking the Appellant No. 1 to a greater height. viii) That in view of Appellant No. 3 s contribution, it was therefore decided unanimously by Appellant No. 2 and Respondent to reward him for his past performance association by appointing him as an additional director in Appellant No. 1 by passing a resolution in the Board meeting. Accordingly, it was decided by the Appellant No. 2 and Respondent to call a board meeting and appoint Appellant No. 3 as an additional director. ix) Pursuant thereof, on 17.09.2019, the Appellant No. 1 held a Board Meeting wherein the Appellant No. 2 in the capacit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2019-20 which resulted in the details of Appellant No. 3 as well as details of Relative of Appellant No. 3 from being disclosed in the Balance sheet of Appellant No. 1 for the year ended on 31.03.2020. xiv) The 17th Annual General Meeting of Appellant No. 1 was held on 31.12.2020 (Annexure A-6 at page 129 to 130 of the Appeal Paper Book) approved the resolution for reappointment of Appellant No. 3 which was attended by the Appellant No. 2, Appellant No. 3 and the Respondent. In the AGM, amongst other resolutions proposed, a resolution was passed to reappoint Appellant No. 3 as the Director in Appellant No. 1 Company. xv) The Appellant No. 1 had bank accounts with ICICI Bank as a part of which a declaration was submitted to Bank by the Appellant No. 1 on 06.02.2021. The Respondent himself signed KYC declaration on 05.02.2021 which was submitted with ICICI Bank confirming the details of all the three directors i.e. Appellant No. 2, Appellant No. 3 and Respondent of Appellant No. 1 as submitted to the Bank on 06.02.2021 in the declaration mentioned the designation of Appellant No. 3 as a director (Annexure A-7 at page 131 to 132 of the Appeal Paper Book). xvi) Meanwhile, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the urgent hearing application even when the Respondent did not even sought for any such reliefs in the early hearing application. 5. It is further submitted the Hon ble National Company Law Tribunal failed to appreciate that the removal of the Respondent as a director of Appellant No. 1 was pursuant to a properly conducted extraordinary general meeting and the majority in the Appellant No. 1 have voted and spoken against him as he had acted against the interest of the Company. 6. It is further submitted that the Hon ble National Company Law Tribunal failed to appreciate that the Respondent was removed from the Appellant No. 1 as a director by following the due procedure prescribed in law and all the prerequisite statutory compliance required under the provisions of Section 100, 115 and 169 of the Companies Act, 2013. 7. The Learned Sr. Counsel for the Appellants further submitted that these facts are not considered by the Ld. Adjudicating Authority while passing the impugned order. So, based on these submissions the impugned order is fit to be set aside and the Appeal be allowed. Submissions on behalf of the Respondent 8. The Learned Counsel for the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce and the irreparable loss that has been caused to the Respondent. However, if the Appellants are aggrieved by the interim order, they can file an objection against the interim stay order. They are at liberty to request the Ld. NCLT to set aside the temporary stay order. 13. It is further submitted that the Respondent filed a company Petition before the Ld. NCLT on being aggrieved by the resolution passed fraudulently in the EOGM dated 31.05.2021 wherein he was purportedly removed as director. The Petitioner / Applicant is a founder director, and as per Article 26 of the Articles of Association of the Appellant Company, the Respondent herein and the Appellant No. 2 are appointed as life-time/founder Directors, defined as First Directors who shall not be liable to retire and that they shall hold office until they resign or cease to hold office on account of death/incapacitation or otherwise become disqualified to hold such office in accordance with the provisions of the Companies Act, 1956. 14. The Learned Counsel for the Respondent further referred to Extract of Articles 25 and 26 of the Articles of Association are reproduced herein under: Directors 25. The numbe ..... 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