TMI Blog2022 (5) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... OU is legally binding and are appropriately incorporated in the AoA through the Amendment as prescribed under the Companies Act for the amendment of AoA - Notification No. 464(E) of MCA dated 05.06.2016 provides for subject to certain exceptions, modifications and adaptation which are enumerated therein limited to non-application of second proviso to sub-section(1) of Section 188 which is a matter of examining a full case and thereafter, to consider whether the interest of the shareholders are protected or not. This is not a fit case to consider interim relief for grant of stay when the matter even travelled to the Hon ble High Court of Kerala upto its Division Bench and effect of stay of the impugned order dated 31.12.2021 will cause irreparable harm to the Company and accordingly the case is not a fit case for granting interim relief and accordingly we are not inclined to grant any interim relief and hence appeal is dismissed. - I.A No. 208 of 2022 In Company Appeal(AT) (CH) No. 18 of 2022 I.A No. 209 of 2022 in Company Appeal(AT) (CH) No. 19 of 2022 I.A No. 210 of 2022 in Company Appeal(AT) (CH) No. 20 of 2022 - - - Dated:- 25-5-2022 - [Justice M.Venugopal] Member (Judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GM) of the Company for the years 2015-16, 2016-17, 2017-18 of the 1st Appellant company as prescribed under Article of Association (AoA). The Company, at the time of filing petition before the Tribunal were having three Directors i.e. Mr. Raj Kumar Gupta, Mr. Vishnukant Gupta Mahesh Kumar Gupta. The percentage of shareholding as appearing in the statements of Companies and reports to the Registrar of Companies are as follows: b. The Company is a family enterprises and the management of the Company vest in the Board of Directors and not in any one individual including the Managing Director of the Company in terms of Clause 34 of the AoA. It was also stated by the Ld. Sr. Counsel for the Appellant that the 1st and 2nd Respondent herein have also stated before the Tribunal that the Financial documents filed before the ROC show related party transactions which are in violation in Section 188 of the Act. c. The 2nd and 3rd Appellant herein have siphoned off funds under the guise of remuneration for themselves and their spouses and have been consistently violating the AoA and oppressing the majority of shareholders. d. The AGM were conducted after giving due noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 2nd 3rd Appellants. 11. It has also stated by the Ld. Sr. Counsel for the Appellant that after filing the present appeal on 25.02.2022, a Review Application was also filed in this case by the same Appellant who were Petitioners in CP 114 of 2019 seeking certain reliefs including issue of direction to the Bankers to cease to honor with immediate effect all financial transactions initiated by the Mr. Raj Kumar Gupta- Appellant No.2, Mr. Vishnukant Gupta- Appellant No.3 in this appeal and also to refund all amounts drawn illegally through related party transactions disclosed in Financial statements from 2015 onwards etc. The Tribunal vide its order dated 16.03.2022 has granted certain reliefs like removal of the Appellants No.2 3 from the Director of the Company and have appointed Ms. Sulochana Gupta -Respondent No.1 herein and Mr. Radha Ballabh Gupta as Directors of the 1st Respondent company with immediate effect including refund of all amounts drawn illegal by them through related party transactions and have changed signatory to the banks based on mandates signed by Mrs. Sulochana Gupta and Mr. Radha Ballabh Gutpa etc. Based on above submissions, the Appellant has pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions done by the Respondents are contrary to the provisions of law and in breach of the Articles of Association of the Respondent Company and, therefore, the said Related Party Transactions are hereby declared as invalid and all the proceedings which have been done in violation of the Articles of Associations are also hereby declared as invalid. The other reliefs in these petitions are consequential reliefs. Since we have declared that the action of the Respondents are illegal, we are not ordering any investigation into the Respondent Companies affairs and imposing any penalty on the Respondents for non-compliance of the rules/ articles of the Company. 56. The Company Petition No. 114/KOB/2019, Company Petition No. 119/KOB/2019 and Company Petition No. 125/KOB/2019 stands disposed of with the aforesaid orders. 13. The Ld. Sr. Counsel for the Respondents have stated that the 1st and 2nd Respondent herein are the majority shareholders in the three companies under aforesaid appeals - RBG trading Corporation Pvt. Ltd, RBG Enterprises Pvt Ltd and RBG Retail Pvt. Ltd owning 51.75%, 51.68% 51.68% of the equity respectively alongwith other shareholders viz. Mr. Radha Ballabh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 47(1) of the Act. The rights of the shareholders cannot be abridged by the MoU unless its terms are incorporated through an amendment of the AoA in accordance with Section 5. They have cited the Judgment of V.B.Rangaraj Vs. V.B.Gopalakrishnan AIR 1992 SC 453. The MoU is under the Judicial scrutiny of the Munsiff Court, Kochi in O.S 310 of 2019. 15. We have carefully perused the pleadings of all the parties and extant provisions of the Companies Act, 2013 and Rules made there under and we are having the following observations: - a) This is a case of family management company dispute where certain Members / Shareholders are not seeing eye to eye and the Tribunal has observed certain irregularity in its functioning. b) It cannot be disputed that the Company s Article of Associations (AoA) is more powerful than the MOU and that too not signed MOU by all members of the Company/ family partition shareholding right. c) If, there is overlapping provision between the Companies Act will prevail over the AOA. Accordingly, AoA will prevail over MOU, unless the MOU is legally binding and are appropriately incorporated in the AoA through the Amendment as prescribed under the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
