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TMI Blog2023 (2) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent/company be rectified by registering the names of the Petitioners, after setting aside transfer of 760 shares of the 1st respondent dated 07.03.2005 in favour of the 6th respondent. * The relief as to damages against the 3rd and 6th respondents is hereby rejected. * We hereby set aside appointments of 4th respondent/Nirmal Kumar Gupta and 5th respondent/ Girish Gupta as Directors of the 1st respondent/company, consequently we direct the reconstitution of the Board of the 1st respondent/company. * We hereby declare that the Extraordinary General Meeting dated 20.04.2005 as illegal and invalid. Consequently, it is held that the Resolutions passed and decisions taken, if any, including the decision to remove the 2nd respondent as Director is hereby set aside. * Under the circumstances, we direct both the parties to bear the costs. 2. I.A. Nos. 1101 & 1103/2022 in Comp. App. (AT) (CH) No. 128/2022 are filed seeking urgent hearing of the Appeal and stay of the EGM conducted on 28.12.2022. All the IAs are being disposed of by this Common Order. 3. Learned Counsel Mr. Y. Suryanarayana appearing for the Applicant submitted that consequent to the passing of the 'Impugned O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 % of the paid up capital and the Respondents No. 4 & 5 who had died, held 24% of the paid up capital. 7. Mr. Y.Suryanarayana, Learned Counsel for the Applicant submitted that the Ice Cream business being run under the name of 'Chanda Softy Ice Creams' (Milky Way) (which was established in the year 1994), was doing extremely well and the Respondents were suppressing the cash income generated from out of this business and there were 'simmering differences' between the Appellants and the Respondents herein. It is submitted, that in order to resolve the differences there was a 'Family Understanding' whereby it was agreed by the Respondents that instead of holding 50% partnership, located in Chennai, it would be taken over by the Respondents Group based in Chennai and 100% of the shares of the 1st Appellant Company, Hyderabad, would be owned by the Appellants Group based in Hyderabad. The first portion of the 'Understanding' was implemented by way of a 'Deed of Dissolution' executed between 3rd Appellant and 2nd Respondent on 31.10.2002, the second portion of the understanding was implemented on 31.12.2002 after the wedding of the 3rd & 4th Appellants which took place in Hyderabad on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to how the 'Share Certificates' related to the 760 shares are not in their possession. Admittedly, the 'Land' of the 1st Appellant Company is the only major 'Asset' of the Company and the Company did not have a registered 'Title' over the said 'Land' at the time of 'family understanding' in the year 2002. It is submitted that if the Respondents had not transferred their entire shareholding pursuant to the 'family understanding' in the year 2002, their representatives, Shri Sat Narain Bansal, ought to have represented the 1st Appellant Company in the 'Sale Deed' dated 26.03.2004 and not the 2nd Appellant, as was done in this case. 11. The fact is that the total control over the Company was with the Appellant and not the Respondents, evidences that the Respondents had already transferred their shares in the Company pursuant to the 'family understanding'. It has submitted that it is an 'afterthought' by the Respondents regarding issues of division of the property, winding up of the Company, development of the property and further the exploitation of the property of the Company. 12. It is the case of the Applicant/Appellant that no details, whatsoever, was provided by the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pta. The transfer of shares was transacted in the 'Board Meeting' after being mentioned as an 'Item' in the agenda. The Respondents have given a 'concocted story' that the records of the Company were maintained under the charge of Mr. Ghanshyam Bhati, however, subject to the overall control of Shri Sat Narain Bansal and that the 3rd Appellant had taken away the records from Mr. Ghanshyam Bhati on the false promise of reference and informed that he would return the same soon. It is submitted that this statement has been made without any evidence as the Respondents in Company Application No. 54 of 2017 stated that they themselves entrusted the share certificates to the 2nd Appellant. Mr. Ghanshyam Bhati addressed letters dated 18.12.2004 & 08.02.2005 to the 3rd Appellant seeking return of the file containing documents related to 'Registrar of Companies', 'share transfers form' and 'statutory registers'. The Respondents had colluded with Shri Sat Narian Bansal and preferred the petition with an 'ulterior motive'. It is submitted that this is clear from the fact that the remuneration to the Advocate of Shri Sat Narain Bansal, was paid by the 1st Respondent and Shri Sat Narian Bansal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . the 'Partnership Firm' was dissolved on 31.10.2002; 130 shares of the 1st Appellant Company were allotted on 08.12.2002 to the 3rd Appellant; 760 shares of 1st Appellant Company were transferred on 13.12.2002 by the Respondents. It has also submitted that the NCLT had erred in observing that the value of the property holding of the Respondents of the 1st Appellant Company at the time of 'Dissolution of the firm' was about Rs.2 crores. The Respondents miserably failed to prove their case and there were continuous contrary claims by both Sri Sat Narain Bansal and the Respondents herein. The Respondents, not being the Directors of the 1st Appellant Company, cannot dispute any 'Board Meeting' as per Section 195 of the Companies Act, 1956. 18. Learned Counsel lastly submitted that the 'Impugned Order' does not mention an 'Affidavit' dated 17.05.2005 of the 'Witness to Transfer Deeds'; or the 'Deposition of the Witness' before the NCLT on 20.01.2017; Cross Examination of the Witness; or the Letter dated 24.05.2005 of M/s. Tirupati Roller Flour Mills Pvt. Ltd and also not given 'any finding' with respect to CA 51of 2021 or Letter dated 13.09.2010 of Sri Sat Narain bansal to his Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss an 'Order' not to implement the Resolutions passed in the EGM dated 28.12.2022 till the disposal of the main Company Petition and pass an Order to freeze the 'Fixed Deposits' of the first Applicant/Appellant Company allowing with various Banks till the disposal of the main Appeal. 22. Mr. P.H. Arvindh, Learned Senior Counsel submitted that the Applicants have not demonstrated any case to stay the 'Operation' of 'Impugned Order'; there were no disputes in 2002 between the two groups to necessitate the purported family settlement; FIR No. 659/2006 evidences that the Appellant group and the Respondents did not have any disputes till march 2005; the 3rd Appellant transferred his 260 shares to 1st Respondent on 15.10.2002 and the Respondents did not object to fresh allotment of 150 shares to the 3rd Appellant in December, 2002, which actions are against the normal course of conduct, if indeed there were disputes between the parties. It is vehemently argued that there was no evidence at all to prove any 'oral family settlement'. 23. It is also the case of the Respondents that 'Deed of Dissolution' dated 31.10.2002 is silent on any 'Family Settlement'. Clause 8 of the 'Deed of Dissol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Nirmal Kumar Gupta and, therefore, the evidence does not possess 'high probative value'. The witness deposition is also 'suspect' as he does not remember when the share certificates were handed over and also other specific details. As regarding the letter dated 07.04.2005 of Sri Gajanandji Gupta, it is submitted by the Learned Senior Counsel that the alleged signature of Sri Gajanandji Gupta was 'dramatically' different from his other purported signature. This letter was never received by the Respondents as is evident from the letter dated 03.06.2005. 26. It is also submitted that mere possession of the share certificate is not indicative of a valid transfer; that there is no question of any full control by any one group as there were no disputes between the parties till 2005; there is no proof of handing over these transfer form and the reason for doing the same. The letter dated 13.09.2010 was submitted, after the matter has heard and reserved for orders, twice and the issue regarding the collusions of Respondents with Mr. Sat Narain Bansal has been considered in detail by the `Tribunal'. The `NCLT', appreciates the 'expert evidence' which indicates that the notice submitted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture, any consequent developments, subsequent to the 'Impugned Order', cannot be stayed, in the light of the fact that no substantial reasons have been found by this `Tribunal', to order any `Status Quo'. 30. Having regard to the fact that the apprehension of the Learned Counsel for the Respondents, keeping in view the 'Balance Sheets' uploaded with the RoC that the Appellants has siphoned off a sum of Rs.42 Lakhs/- and their strong opposition to granting the stay of the 'Impugned Order', we are of the considered view that the main Company Petition is to be decided at the outset 'on merits'. It is pertinent to mention that the Applicants in their 'Rejoinder' in I.A.1102/2022, have stated in para 15 that they have no objection to freezing of the FDs. As the Bank Accounts are already frozen, no specific, separate directions with respect to freezing of FDs be given. Additionally, the Prayer seeking permission to operate the Bank Accounts for executing day to day operation is denied keeping in view that the findings in the 'Impugned Order' have a bearing on these consequent developments and unless the main matter is decided 'on merits', and further specifically keeping in view the 'C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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