TMI Blog2023 (2) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the Impugned Order, unless the Impugned Order is decided on merits, this Tribunal, does not see any substantial grounds to Stay the Operation of the Impugned Order, passed by the Tribunal. As the Learned Counsel for the Applicant/Appellant has raised grounds regarding evidences not addressed to by the NCLT, it is imperative that the main Appeal be heard at length on merits and at this juncture, 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. 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, it is believed that the main Company Petition is to be decided at the outset on merits - 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 Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Citi Union Bank on 05.11.2022, 07.11.2022 and 09.11.2022 that the accounts maintained by them in the respective Banks are frozen consequent to the Impugned Order . This is affecting the day to day operations of the Company and therefore it is imperative that the Operation of the Impugned Order is stayed. 4. The Learned Counsel explained the background of the filing of the Company Petition as follows: The 1st Respondent herein viz., Mr. Vijay Kumar and Shri Nirmal Kumar Gupta are brothers and sons of Shri Gajanandji Gupta Sri Sat Narain Bansal is the brother in law (sister s husband) of the 1st Respondent herein and Shri Nirmal Kumar Gupta. The 2nd and the 3rd Respondents herein are sons of the 1st Respondent herein. The 2nd Appellant is wife of Shri Nirmal Kumar Gupta. The 3rd and the 5th Appellants are the sons of the 2nd Appellant and Shri Nirmal Kumar Gupta The 4th Appellant is wife of the 3rd Appellant. 5. He drew our attention to the chronology which has led to the institution of the Company Petition before the NCLT: 24.08.1976 Pursuant to Agreement of Sale between the Andhra Pradesh State Financial Corporation (APSFC) and Sham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted transfer forms to the 4th Appellant who controlled the 1st Appellant Company. 8. It is submitted that the Respondents in their Petition wrongly stated that they have never executed any Transfer Deeds but in the Rejoinder admitted to have executed these Transfer Deeds in the month of February, 2002 to an alleged buyer in Hyderabad. The witness to the Transfer Deed is an attesting witness, namely, Shri Shashi Bansal, who had sworn in an Affidavit dated 17.05.2005 that the Transfer Deed duly executed by Mr. Vijay Kumar Goyal and the other two Respondents in favour of the new Bride Ms. Shushma Gupta, as a Gift were handed over in his presence to Mr. Vinod Lath, the father of the bride. The above witness was Suo Moto summoned by NCLT on 20.01.2017 where the witness has confirmed the contents of his Affidavit dated 17.05.2005. It is submitted that the Witness was also cross-examined by the Respondents and the same was also recorded by the NCLT in their order dated 20.01.2017. 9. The Respondents, in their cross-examination, questioned Shri Shashi Bansal as to why he was selected as a Witness out of all the people present and the Witness had answered tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was any agreement entered into or any advance offered with respect to the alleged purchase of the property. If the Transfer Deeds were executed for a third party, the witness column should have been filled in by a person, witnessing the signatures of the Respondents and further the witness proves the execution of Transfer Deeds and the time period of such execution. The Respondents never had a consistent stand on how the Transfer Deeds came into the possession of the Appellant group. 13. Learned Counsel drew our attention to page 1086 of the Appeal Paper Book which states that one brother/4th Respondent gets possession of certain blank signed transfer forms and also at para 6 in which it is stated that the share transfer forms and certificates, which the Respondents had entrusted to Respondent No.3 to 5 (the 2nd Appellant 3 Appellant) shows that Shri Nirmal Kumar Gupta approached them and obtained the Transfer Deeds from them. It is also argued that the Respondents have severely failed to explain why only the executed Transfer Deeds were handed over (as stated by the Respondents in the Rejoinder ) and not the Share Certificates , when there were intended for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued to the ROC, it was stated that the Board comprises of only two persons while Mr. Sat Narian Bansal represents the interest of our group viz. VKG group and Smt. Sheela Gupta represents NKG Group. Certified copies were obtained by Sri Sat Narian Bansal and given to Respondents. Shri Sat Narian Bansal was a paid employee of M/s. Tirupati Roller Flour Mills Pvt. Ltd which managed and controlled by the Respondents. The 3rd Appellant filed IA No. 51 of 2021 before the NCLT highlighting this collusion between the Respondents and Sri Sat Narian Bansal and when the said IA came up for hearing on 12.07.2022, the NCLT stated that in the light of the prayers sought for, this CA cannot be disposed of independently, especially when the Company Petition which is more than 17-year old, is ripe for final hearing. Hence, this IA will be heard along with the Company Petition . 15. Learned Counsel concluded that the NCLT had erred in not considering the letter dated 09.04.2005 of Shri Nirmal Kumar Gupta and erred in also overlooking the contents of the reply dated 05.03.2005 of the 3rd Appellant wherein it was clearly stated that Mr. Ghanshyam Bhati, the sender of the letters, was repea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsal to the erstwhile Company Law Board . It is vehemently contended that the NCLT has not given any observation with regarding to the allotment of 130 shares of the 1st Appellant Company only to the 3rd Appellant; the Dissolution of the Partnership firms ; Full control of the Appellant on the first Appellant Company; the collusion of the Respondents with Sri Sat Narain Bansal and also the evidence regarding the AGM notice. In view of all these submissions made, Learned Counsel vehemently argued that the Operation of the Impugned Order dated 19.10.2022, be stayed. 19. It is vehemently argued by the Learned Counsel for the Applicant that NCLT has not dealt with or considered the main evidences in favor of these Applicant/Appellants and has also misunderstood the facts of the case. After reconstitution of the Board in terms of the NCLT Order dated 19.10.2022, the composition of the Board is as under: (a) Smt. Shila Gupta DIN00045796 (b) Sh. Mitesh Gupta DIN00348848 20. It is submitted that the Respondents have purportedly called an EGM without fallowing due process of law and without giving any requisition to call the EGM to the Board of Directors of the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l settlement of claims between the parties, which agreements has not been dealt with by the Respondents. It is argued by the Learned Senior Counsel that only Annual Returns filed by Appellant Group as also the IT Returns filed by the Respondents indicate the shareholding in the name of the Respondents. The IT Returns of the 4th Appellant (obtained under RTI) does not include the 760 shares in her name. It is contended that if there indeed were disputes between the parties, the Appellants would have ensured that the transfers were registered immediately but only reason given by the Appellants for the unnatural delay in registration of transfer of shares from 13.12.2002 to 07.03.2005 is due to genuine oversight , which is also flawed because the Annual Returns for 2002-03 till 2004-05 signed by the Appellant Group continuously reflect the Respondents shareholding of 760 shares. Other transfers that were made in the same period i.e. allotment of 130 shares to 3rd Appellant on 08.12.2002 and transfer of 260 shares from 3rd Appellant to Respondent No.1 on 15.10.2002 were recorded immediately as can be seen in the Annual Returns . 24. It is the case of the Respondent that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2nd Appellant. While considering this with other piece of evidence, the `Tribunal (`NCLT ) concluded that the Appellants have not furnished proper notice. The Appellants have been inconsistent in their stand, firstly by stating that the transfer of 76% of the shareholding was part of a non-existent family settlement; secondly it was consideration for handing over the 3rd Appellant share in Chanda Softy Ice Creams; and thirdly that the same was a Stridhan to 4th Appellant. The Appellants are themselves confused if the 760 shares is the family property of Nirmal Kumar Gupta, or a property of the 3rd Appellant by way of transfer as consideration, or the property of the 4th Appellant by way of a Gift . Despite the order of NCLT, directing that the appointment of Mr. Nirmal Kumar Gupta as also the 3rd Appellant is set aside and the Board of Directors be reconstituted, the Appellants are attempting to portray themselves as Directors before various banks where the Company maintains its accounts, with a motive of siphoning off the funds and given the unlawful conduct of the Appellants, Learned Senior Counsel vehemently opposed for granting of any interim directions. 27. As regar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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