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TMI Blog2022 (10) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... The shareholding pattern of the Company are as follows extracted from Memorandum of Association & Article of Association of R-1: (b) The business of one M/s Thermotech Synergy Pvt. Ltd. was transferred to Respondent No.1 Company. The transfer of the business is in fact admittedly on record. Mr. Bhupal Prasad Verma (Father of the Appellant) held 44% shares R-2 held 16% shares and R-3 held 13% shares in the said company. (c) The Appellant's experience in the steel sector was the basis of the development of the Respondent No.1 Company business. R-2 and 3 were having no experience of the business model carried in R-1 Company. R.No. 2 and 3 were initially opted into the business of Thermotech Synergy Pvt. Ltd. and subsequently in R-1 Company also due to friendly relations and both of them were also aligned in other business ventures carried along with the Appellant. (d) The dispute erupted in the year 2016 due to taking over some other business by Respondent No.2. (e) The dispute arose on account of hijacking of one Ascent Infrabuild Ltd. carrying Crusher Business wherein all the parties are equal partner including Respondent No.2. (f) It is further pertinent to mention here that R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No.2 and humbly submits this Hon'ble Bench to call upon the proof of service to corroborate the narration as made by Respondent No.3. (k) The Appellant also challenges the collusive act of Respondent No. 2 and 3 for conspiring, illegally acting in concert with a malign objective to throw out and deprive the Appellant from the affairs of Respondent No. 1 Company and also to jeopardise the vested commercial interest of the Appellant held in Respondent No.1/Company. (l) The notice calling EGM is bad in law and liable to be declared as null and void on the following grounds: (i) No notice of Board Meeting called and Convened for taking note of the requisition dated: 03.05.2018. (ii) It is pertinent to mention here that special notice to be given under Section 115 of the Companies Act, 2013 must disclose the specific grounds with all supported information on which the director is proposed to be removed, as disclosure of the ground of removal is of substance and not of form because the director concerned is entitled to make a representation against the removal. This disclosure then only gives the Board of Directors a view and basic statement as provided under Section 102 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided that where any item of special business to be transacted at a meeting of the company relates to or affects any other company, the extent of shareholding interest in that other company of every promoter, director, manager, if any, and of every other key managerial personnel of the first mentioned company shall, if the extent of such shareholding is not less than two per cent of the paid-up share capital of that company, also be set out in the statement. (3) Where any item of business refers to any document, which is to be considered at the meeting, the time and place where such document can be inspected shall be specified in the statement under sub-section (1). (4) Where as a result of the non-disclosure or insufficient disclosure in any statement referred to in sub-section (1), being made by a promoter, director, manager, if any, or other key managerial personnel, any benefit which accrues to such promoter, director, manager or other key managerial personnel or their relatives, either directly or indirectly, the promoter, director, manager or other key managerial personnel, as the case may be, shall hold such benefit in trust for the company, and shall, without prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was registered not only against the Appellant but also against Respondent No. 3 at the instance of Respondent No. 2. The said FIR was registered consequent to the compliant of Respondent No. 2 alleging forgery and also complaint under SCST Act, 1989. The matter is still under investigation. The Hon'ble NCLT further failed to take notice that Respondent No. 2 reconciled with Respondent No. 3 and they together conspired and hand in gloves to oust the Appellant from the Respondent Company. (q) It is further a fact in issue that in case the proposed removal of the Appellant was prompted and had arisen on account of the said FIR, then for what reason Respondent No. 3 was exempted. In the present case both Respondent No. 2 and 3 are acting in concert against the interest of the Appellant in Respondent No. 1/Company. (r) The referred FIR No. 0049 of 2016 registered under SC/ST Act Investigation is going on since 2016. No charge sheet is filed yet. Respondents misled Hon'ble NCLT. 3. The Ld. Counsel for the Respondent submitted the followings: (a) It was submitted by the Ld. Counsel of the Respondent that NCLT dismissed the matter on the ground that there was no case of Oppression and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce - House Keeping Exp. - Mess Exp. - Safety and Tools - Business Promotion - Manpower Mobilization expenses (Bhatia, JSW) - Site expenses (Bhatia) (II) Payments amounting to Rs. 362.28 lacs were made in respect of which no satisfactory explanation were provided by the accounts keeping staff and onsite staff responsible for releasing payments after verification of bills and approval of Mgt. Such payments were clubbed under Suspense Head. (III) There were instances of serious breach of Section 40 A(3) of the Income Tax Act, 1961 whereby to check the misutilisation of cash and to ensure that the payments are made to genuine persons, all payments exceeding Rs. 20,000 are to be made only through a crossed cheque or a crossed bank draft. Further, there was no system in place of obtaining payment receipt/acknowledgment from the vendor/suppliers to whom such self-cheques issued. Onsite staff responsible for disbursements & handling of cash expenses had custody of blank signed cheques. (IV) Due to misappropriation of funds, the company is facing cash crunch situation and not able to pay on time its statutory liabilities like TDS, ESI & PF, Service Tax etc. Non-payment of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and decide the appointment of Forensic Auditor. In view of the financial irregularities reported in the Special Audit Report and on consideration of irregularities in current banking operations, the Board observes that the situation demands that an exhaustive forensic audit and investigation should be carried out by an independent agency. The resolution to be passed at the ensuing Board meeting for appointment of a Forensic Investigator. Item No. 8: To consider and take call on the present and future projects of the company. To find the best way to take the company forward so that there in unhindered growth of the company and to eliminate any possible threats for the future development of the company. Item No. 9: To consider and discuss any item, if any, with the permission of the chair. Agenda for 21.03.2018 Item No. 1: Grant Leave of Absence to Directors: To consider the grant of leave of absence to Directors who have requested for the same. Item No. 2: To approve minutes of meeting held on 07.03.2018. Item No. 3: To take note on the statutory compliances till the quarter ended 31st December 2017: To consider the pending statutory dues payable to Govt. authorities in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diverted the business of the Company by undertaking work order from eminent client like Jindal Saw Ltd. & Bhatia Coke & Energy Ltd. and employing same deceptive tactics to his firm M/s. TSPL Coke and Energy. (o) The Appellant upon receipt of the Special Notice dated 16.05.2018 neither bother to send his representation against the EGM Notice to the Board nor came forward to repudiate the disputes against discrepancies in accounts of the Respondent No. 1 Company. Nevertheless, the Appellant approached before the NCLT on grounds of Oppression and Mismanagement against the Respondents. 4. The Adjudicating Authority has observed in its order dated 03.09.2019 as follows: "6. After hearing the arguments advances by the Ld. Counsels, this Bench is of the opinion that the EGM, having been requisitioned at the instance of a shareholder, does not require a prior resolution of the Board of Directors to convene one. The petitioner acknowledges being served through email dated 25.02.2018, granting him the opportunity to file his representation on or before 13.06.2018. The said special notice was accompanied by the explanatory note. Since an FIR had already been instituted against him for cri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not in dispute that the Appellant was the Director of the Company and he is son of one of the promoters of the R-1/Company. b) It is also not in dispute that the Appellant has not been removed from the Company. c) It is also not in dispute that this is a case of friendly relations while coming into the company, has become now an unworkable condition because of several allegations against the Appellant. d) In special audit carried out by Vikas Dahiya and Company, Chartered Accountants, New Delhi vide its Special Audit Report dated 24th May, 2017 has observed multiple irregularities during the Financial Year 2013-14 to 2016-17. The auditor has also observed that huge payments were released in cash without supporting vouchers, receipts and payment amounting to Rs. 3.62 Crore has been made for which no satisfactory explanation was given by the Appellant. Illegal encashment of cheques, direct transaction of the funds, non-compliance of statutory duties of the Respondent No.1 Company etc came to the light and the same had happened under instruction of the Appellant. There are irregularities and misappropriation of funds including non-payment of statutory dues and the special audit h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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