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TMI Blog2022 (5) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ip of Petitioner No. 1, 2 and 3 with MCA as it stood as on 05th June, 2019; to direct the Registrar of Companies, Bihar to give effect to the said restoration and to uphold the removal of Respondent No. 2 and 3 by shareholders of the Company. 2. The facts of the case, in a nutshell, are that the Petitioner No. 1, 2 and 3 are directors (Petitioner No. 1 is Managing Director) and shareholders in the Respondent Company holding 60% (Sixty percent) shares of the Respondent Company together with other petitioners and few Kith and Kin. Whereas, Respondent No. 2 and 3 are also directors of the Respondent Company holding 40% (Forty percent) shares. 3. It is submitted that the Respondent Company was incorporated on 03.07.1992 with the main object to carry on the business of Construction, Development and Real Estate activities. On 18.10.1995, the Respondent Company entered into a Development Agreement with Baptist Church Trust Association for development of residential and commercial project at Patna. Due to illegal and prolonged encroachment on the land, the development work could not take place and the Respondent Company ran into financial crisis. In view of the said financial crisis, Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RISHNA KUMAR RUNGTA to increase his shareholding in Respondent Company upto 50% of the total paid-up share capital. In lieu of the aforesaid, Respondent No. 2 took unaccounted consideration from KRISHNA KUMAR RUNGTA. The petitioners upon finding out the aforesaid from KRISHNA KUMAR RUNGTA informed him that Respondent No. 2 and 3 had entered into the MOU behind their back and without any authority from the Respondent Company and that they should settle their claims and counter claims mutually. However, the Respondents did not settle the matter with KRISHNA KUMAR RUNGTA leading to bitterness, dispute and losses to Respondent Company. As a consequence of such bitterness, KRISHNA KUMAR RUNGTA resigned from the Respondent Company w.e.f. 10.08.2016 and consequent upon his resignation he executed a MOU with Petitioner No. 1 on 17.11.2016 for transfer of his shareholding. The aforesaid transfer was effectuated and approved on 08.04.2019 by majority directors of the Company at a duly convened Board Meeting. 6. The Petitioners have also contended that due to efforts of the Petitioners, sometime around 2016, the land was freed from illegal encroachment and the development work could be comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter and issued a show cause notice dated 20.06.2019 to the Respondents seeking their reply within 15 days. However no representation has been made by the respondents in this regard. Thereafter the ROC marked the R1 Company as "having management dispute". 10. The Petitioners have submitted that since, Petitioner No. 1, 2 and 3 had never resigned from directorship of the Company and hence, considering their fiduciary duties, they duly convened the Board Meeting on 09.06.2019. Thereafter, in due compliance of all provisions of the Companies Act, 2013, an Extra Ordinary General Meeting was convened on 08.07.2019 (notice of which was duly served to Respondent No. 2 and 3 also) and shareholders (representing 59.20%) unanimously approved the resolution under Section 169 for removal of Respondent No. 1, 2 and 3 from directorship of the Respondent Company. 11. The Respondents have challenged the shareholding of the Petitioners. They have challenged the transfer of shares from KRISHNA KUMAR RUNGTA to Petitioner No. 1. 12. The Respondents have also contended several instances of oppression and mismanagement by the Petitioners. The Respondents have alleged that the land was encroached and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consent of Respondent No. 2 and 3 through a validly held Board Meeting of the Respondent Company. The Petitioners have submitted relevant copy of resolution duly certified by Respondent No. 2 and 3. (e) The amount of Rs. 04.00 Crore taken by Petitioner No. 1 from M/s. Azalfa Building Construction Private Limited was taken by the Petitioner in his personal capacity as loan/advance for personal purpose and not on behalf of the Respondent Company. [The Petitioners have submitted Audited Annual Accounts of M/s. Azalfa Building Construction Private Limited evidencing the said amount being recorded in the name of Petitioner No. 1 and not the Respondent Company.] (f) The Petitioners have submitted certified copy of resolutions and minutes of Board Meetings vide which Petitioner No. 1 was authorized to enter into sale agreement and other arrangements in respect of development of land and hence, disputed the allegation of the Respondents that the Petitioners have sold portions of land without any authority. (g) The Petitioners have denied the allegation of misappropriation of fund of the Respondent Company by the petitioners. The Petitioners have contended that Respondent No. 2 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Rungta to the Petitioner No. 1 and got him inducted as Director and Shareholder of the Respondent Company on the pretext of infusion of funds and expedition to get the aforesaid parcel of land free from illegal encroachment. Respondent No. 2 and 3 went behind the back of the Respondent Company and the Petitioners and entered into an unauthorized Agreement with Mr. Krishna Kumar Rungta with a promise to provide him representation in Board of Directors and shareholding of the Respondent Company and also extorted funds from him. The same is evident from the letter of Mr. Krishna Kumar Rungta dated 04.02.2016, copy of which has been submitted by the Petitioners. 19. Thereafter, Mr. Krishna Kumar Rungta resigned from the Respondent Company w.e.f. 10th August, 2016. Consequent upon his resignation, Mr. Krishna Kumar Rungta executed an MOU with Petitioner No. 1 on 17th November, 2016 for transfer of his shareholding. The Petitioners have contended that the transfer was approved and effectuated on 08th April, 2019 at a duly convened meeting of Board of Directors of the Company. The Petitioners submitted attendance sheet and minutes of the said Board Meeting to evidence that Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies Act, 2013. In the instant case, the Petitioners have submitted that taking cognizance of the detrimental acts of Respondent No. 2 and 3 against the interests of the Respondent Company and its stakeholders, the shareholders of the Company vide Special Notice dated 20.04.2019 proposed to remove Respondent No. 2 and 3 from Board of Directors of the Respondent Company. Upon receipt of the said Special Notice, opportunity of being heard was provided to Respondent No. 2 and 3 and they replied to the said Notice vide their letter dated 13.05.2019 refuting the grounds of their proposed removal. Thereafter, notice dated 28.05.2019 was issued for convening a Board Meeting of the Respondent Company on 09.06.2019 for taking note of the Special Notice and calling Extra-Ordinary General Meeting. The notice aforesaid were issued to all the directors of the Respondent Company including Respondent No. 2 and 3. 24. The Petitioners have submitted copies of all the aforesaid documents before this Tribunal and such documents seem to be in order and in due compliance of Section 169 of the Companies Act, 2013. The resignations of the Petitioners were filed with the Registrar of Companies, Bihar o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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