TMI Blog2022 (4) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... hould commence from 29.09.2016. Even if we assumes the oppression started from the time of the board meeting held on 29.12.2015 when Respondent No.3 was appointed as Additional Director, it really does not matter as there has been continuous act of oppression against the Petitioners commencing from 29.12.2015 which continued in the various board meeting and AGM s held on 03.03.2016, 23.06.2016, 29.09.2016, 24.01.2017, 18.07.2017 i.e. on several occasions between 2016 and 2018. The contention of the Respondent that for the purposes of limitation, it should be considered from the first act of oppression and not from subsequent several acts of oppression and mismanagement is ill founded and absurd. This Bench is of the view that every act of oppression and mismanagement can be agitated by the petitioner before the tribunal for the purposes of justice. However, in this case there is continuous oppression and mismanagement in the company commencing from 29.12.2015 and the petition is well within limitation. Application stands dismissed filed by Applicant (Respondent in the main Company Petition) regarding limitation of the main company petition. Filing of petition for collateral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, particularly, petrochemicals and petroleum products. The Petitioner No.1 and Respondent No.2 had joined the business of Manojkumar Mathurdas Thakkar, and all the business were essentially family businesses. In the year 1995, Petitioner No.1 and Respondent No.2 incorporated the Company, which was effectively in the nature of a quasi-partnership or an incorporated partnership, with Petitioner No.1 and Respondent No. 2 each holding 50% of the shareholding in the Company. 3. From 1995 to 2015, the Company was being run by Petitioner No.1 and Respondent No.2 as a quasi-partnership, with Respondent No.2 looking after the day to day business operations, while Petitioner no.1 was looking after the marketing and P.R. functions. With the marketing and RP efforts of Petitioner No.1, the Company could procure agency from (1) Intraco Limited, Singapore; (2) HPCL for Lubricating Oil. Petitioner No. 1 was the one who had handled all the functions right from identifying the place till establishing the Factory of the Company at GOA. Both, Petitioner No.1 and Respondent No. 2 received monthly remunerations for running the business of the Company. 4. In or around 2015, various differences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this balance by appointing two of his sons i.e. Respondent Nos. 3 and 4 as directors in the Company and objecting to appointment of Petitioner No. 1 s sons as directors in the Company. The Petitioner No. 1 has time and again objected to the appointment of Respondent Nos. 3 and 4 as directors of the Company, but Respondent No. 2 taking advantage of his casting vote has overruled the objections of Petitioner No.1. The Petitioner No. 1 had inter alia addressed an email dated 18th September 2017 objecting to the appointment of two additional directors being tow sons of Petitioners with an attempt to create and continue an imbalance in the constitution of the Board of Directors of the Company so that he can continue enjoying the control and hold of the management of the affairs of the company. 7. The Petitioners submit that in order to restore balance in the constitution of the Board of Directors of the Company, the Petitioner No.1, vide his email dated 19th November 2018 formally proposed the appointment of his two sons, Rohan S. Thakkar and Hriday S. Thakkar as directors of the Company. The Respondent No.2 vide his letter dated 7th December 2018 however objected to the appointment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... participate in the board meetings. Further from the bare perusal of the Annual Returns of the Company for years ending 31.03.2018, 31.03.2017 and 31.03.2016, it is evident that the Respondent Nos. 2 to 4 are acting in the manner prejudicial to the interests of the Petitioners and in a manner oppressive to the Petitioners. 11. The Petitioners submit that from the Annual Returns and Balance Sheet, it appears that Respondent Nos. 2 to 4 mismanaging the affairs of the Company for their own personal gain and in a manner that is detrimental and oppressive to the interest of the Petitioners. 12. Further, the Petitioners submit that Petitioner no.1 and Respondent No. 2 were also directors of an associate company viz. M/s Emerald Petrochemicals Pvt. Ltd., The Respondent No.2 is the chairman of the said associate company as well. The Petitioners submit that Responded No. 2 deliberately did not file the Annual Accounts and Returns in respect of the said associate company despite the Petitioner No. 1 sending to the Respondent No.2 the said documents duly signed by Petitioner No.1 and requiring the signature of Respondent No.2 as the chairman of the said associate company. Due to the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents submit that the Petitioners have twisted the facts and have given an incorrect version of the facts and/or has also suppressed material correspondence entered into by and between the Petitioners and the Respondent No.1 company. The Petitioner No.1 has been director of the Company since incorporation i.e. 21st June, 1995. He has not been removed from the office of Director by Respondents, but he has disqualified by the Registrar of Companies for Non-filing of Accounts and Annual Return in respect of two companies i.e. Puja Fab Chemplast Pvt. Ltd. and Emerald Petrochemicals Pvt. Ltd. Respondent No.2 was also Director in these two Companies and he has also disqualified. As stated above, the affairs of Puja Fab Chemplast Private Limited and Emerald Petrochemicals Private Limited, were managed by Petitioner No.1. The Respondent No. 2, time and again remined Petitioner No.1 that he should hold meetings of the Board of Directors of those companies and place the documents in those meeting and get them approved in terms of the provision of the Companies Act, 2013. However, the Petitioner No. 1 never bothered to do so and as a result of the inaction of Petition no.1, the statutory fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since May, 2015 the Company has held numerous meetings of the Board of Directors of the Company, out of which the petitioner No. 1 has attended most of it, unless specific leave of absence granted in the meetings. In all the Board meetings attended by Petitioner No. 1, he had never given any suggestions for growth of the business, but has only raised objections which are baseless, false and malafide. 20. The Respondents further submit that it is clearly shows intention of Petitioner no. 1 to create a dead lock in operations of the Company and further disrupt the Board process. Email from Respondent No. 2 dt. 5th December 2015 to petitioner for not signing attendance records along with the emails exchanged between Respondent No. 2 and the Petitioner No. 1. 21. The Respondent submits that the Petitioners have levelled baseless and frivolous allegations of oppression and mismanagement against the Respondent just to malign the image of the Respondents and inflict damage to the Respondents hard earned reputation. It is submitted that the malafide and fraudulent conduct of the Petitioners disentitles them for any relief from the Tribunal. There is total transparency in the managing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 and 4 are the sons of Respondent No.2. The Respondent No.2 along with his wife hold the remaining 50% shareholding in the Respondent No.1 Company. The Bench notes that this Company was incorporated on 21.06.1995 and Petitioner No.1 and Respondent No.2 were running the Company like a quasi-partnership with Petitioner No.1 and Respondent No.2 being only shareholder and directors of the Company. It is the submission of the Petitioner that Respondent No.2 looked after day to day business operations while petitioner no.1 looked after marketing and PR functions. 4. The Bench notes that genesis of oppression of the Petitioner started on 29.12.2015. During the Board meeting, held on, that date the Respondent no.2 under the Agenda any other business with permission of Chairman resolved to appoint his son, Anand A Thakkar, Respondent No.3 as Additional Director of the Company. Here, the Bench notes that the Petitioner no.1 opposed the same but Respondent No.2 using his casting vote passed the Resolution. The reason extended by the Respondent no.2 for appointing his son as Additional Director was that he desired to find a suitable successor due to his ill health who could handle the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 3 used their vote strength to pass the resolution. 9. The Bench further notes and as submitted by Petitioners, the Petitioner No. 1 and Respondent 2 were Directors of an associate company M/s Emerald Petrochemicals Pvt. Ltd. The Respondent No.2 was the chairman of the said associate company as well. The Petitioners submit that the Respondent No.2 deliberately did not file the annual returns in respect of the said associate company despite Petitioner No. 1 sending to the Respondent No.2. the said documents duly signed by Petitioner No. 1 which subsequently required the signature of Respondent No.2 as the chairman of the said associate company. As a consequence, the Petitioner No. 1 and Respondent No.2 were disqualified to act as Directors with effect from 30.10.2018 in accordance with Section 164(2) of the Companies Act. As a result of this, the Bench notes that the Respondent Nos. 3 and 4 became the sole director on the board of the Company though they only represented 50% of the shareholding. 10. The Bench is of the considered view that effectively after 30.10.2018, Petitioners holding 50% shareholding were totally pushed out of the board of the Company where legitimately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision through circular resolution without any discussion in the board meetings was opposed by the Petitioners but the Respondent No.2 using his casting vote and subsequently their strength on the board passed the same without effective approval of 50% shareholders of representative (Petitioner No.1) on the board. This act by the Respondents are not in line with tenets of Corporate Governance. 14. Here, the Bench notes that vide order dated 25.04.2019, this tribunal had directed the Respondents to maintain absolute status quo and spend the money only for the purpose of business and not otherwise. 15. The main submission of Respondent is that the Company Petition is barred by limitation. As per the Respondents, the date of oppression is 29.12.2015 and this Application is filed on 01.01.2019 i.e. after more than 3 years from the starting of the first act of oppression and mismanagement therefore it should be dismissed. Thus, the Respondents have filed by way of a maintainability application bearing M.A. No. 976/2019. 16. In this regard, the Bench notes that the decision of 29.12.2015 regarding appointment of Respondent No.3 as additional director of the Company was only re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Nos. 3 and 4, as director of the company. b. The Respondents were not conducting the board meetings in a fair manner. The Company all through 2016-18 has passed all major decisions through circular resolution which was subsequently being posted before the board for ex post facto approval as a fait accompli. c. The board meetings were held only for procedural formalities without following practice and norms of Corporate Governance. 20. In view of above, The Bench directs the following: i. The Petitioner s side and the Respondent s side in line with their about 50% of the shareholding to have equal number of representations in the board of Directors of the Respondent No.1 Company. ii. Keeping in view that the casting vote have been heavily misused by the Respondent s side, there will not be any casting vote available to either side and all decisions on the board will be taken only when representative of both side (petitioner and respondent) represented in equal numbaer on the board, agree to the Resolution before the Board. iii. The bank accounts of the company will be operated under the joint signature of representative (one representative each) from the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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