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TMI Blog2023 (6) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... 09/2015 (T.P. No.71/2016), passed by the NCLT (National Company Law Tribunal, Bengaluru Bench), whereby and whereunder the NCLT has dismissed both the Company Petitions. 2. Facts in brief are that C.P.07/2013 was filed by the 'Petitioner'/'Appellant' herein before the Company Law Board, Chennai under Sections 397, 398, 399, 402, 406 & 542 of the Companies Act, 1956 (hereinafter referred to as the 'Act') seeking to declare the Meetings of the Board of Directors of the first Respondent Company/M/s. MetroCorp Infrastructure Ltd. (hereinafter referred to as 'MetroCorp'), held on 02.11.2009, 10.11.2009 & 25.10.2010 as 'null & void' and to declare the 'Mortgage Deeds' dated 10.11.2009, 19.11.2009, 02.11.2010 signed pursuant to the aforesaid Meetings as 'null & void' and ordered for cancellation of the said Deeds of Mortgage. It was also prayed to direct the removal of the second Respondent from the Board of Directors of MetroCorp. 3. C.P.09/2015 was filed by the 'Petitioner'/'Appellant' herein before the Company Law Board, Chennai seeking to declare the Meetings of the Board of Directors of MetroCorp held on 30.07.2013, 30.08.2013 and 25.09.2013 as illegal as they were held in violatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sr. Counsel for the 'Appellant' that the Mortgage Board Meetings were not convened as per the AoA as Article 87(iii) of the AoA states that the quorum for the Board Meetings requires two Directors with at least one Director each from the 'Promotors' and the Appellant. If the quorum is not present within 120 minutes specified for the Board Meetings, it will have to be adjourned for seven days after the original date of the Meeting. If the quorum is not present again in the adjourned Meeting within 30 minutes of the adjourned Meeting, the Meeting will be adjourned to a date not more than five days from the date of the said adjourned Meeting. It is also submitted that, if the quorum is still not present at the second adjourned Meeting, then Article 87(iii) of the AoA will be disregarded; that there was no nominee Director of the Appellant present in any of the Mortgage Board Meetings as required for the quorum. Even if it is assumed that the Appellant's nominee Directors were absent, despite the service of the 'Notice', from the Mortgage Board Meetings, the AoA requires the Board Meeting to be adjourned as mentioned above. However, the Respondents have not submitted any evidence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. NCLT has erroneously held that since the 'Appellant' was a majority Shareholder in control of R-1, R-2 could not have carried out the oppressive Acts as detailed by the 'Appellant'. It was not considered by NCLT that if a majority Shareholder is reduced to a minority by oppressive Acts of the Company, the said Act is termed oppressive by themselves. Learned Counsel placed reliance on the following Judgements in support of his submissions: 'IL&FS Trust Co., Ltd.' Vs. 'Birla Perucchini Ltd.' (2004) 121 ComCas335 (Bom). 'Cine & Supply Corporation (P) Ltd.' (2003) 115 CompCas481 CLB. 'Dale & Carrington Invt. (P) Ltd.' Vs. 'P.K. Prathapan & Ors.' 2005 (1) SCC 212. "24. Further, it was held that if a member who holds the majority of shares in a company is reduced to the position of minority shareholder in the company by an act of the company or by its Board of Directors mala fide, the said act must ordinarily be considered to be an act of oppression to the said member. The member who holds the majority of shares in the company is entitled by virtue of his majority to control, manage and run the affairs of the company. This is a benefit or advantage which the member enjoys and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , C.P. No. 37 of 2004 stands allowed. The R-1 Company is hereby directed to restore the position of shareholding as reflected in its Annual Returns for the years 2002/2003 and allotment of shares to Respondents is hereby set aside, all Statements/ Statutory Forms filed in this regard with the ROC are held to be invalid, all resolutions passed in Board Meetings/ AGM/EOGM are hereby cancelled, the R-1 Company is hereby directed to rectify its Register of Members and Shares Register accordingly after taking into consideration consolidating of equity shares in the name of the parties pursuant to the orders of Hon'ble Rajasthan and Calcutta High Courts sanctioning amalgamation of shareholder companies, considering the claims of the applicants for transfer of shares by duly constituted Board in compliance with this order. Further, the appointments of R-3, R-5, appointed as Directors despite protest by the petitioners is hereby set aside giving the majority shareholders in this family company their right of proportionate representation on the Board in accordance with the principle of legitimate expectation, the legitimate representation having been denied; the majority shareholders ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchaser were to provide documentary evidence regarding their completion to the Appellant: (i) Obtain permission from Bangalore International Airport Area Planning Authority for the sale of 52 Plots; (ii) Obtain nil-encumbrance certificates from appropriate authorities, which would confirm that no encumbrance exists on the Plots, and all other consents, governmental approvals, permissions, sanctions, and approvals as may be applicable and required; (iii) Pay all the provident fund dues and statutory dues; and (iv) Split the share certificates representing the ownership of the Appellant's shares in distinct share certificates of blocks of 1,000 shares each. 15. The 'Settlement Agreements' have been rendered meaningless due to the Fraudulent Acts of R-2 as the Plots, such were meant to finance the purchase of the Appellant's shares, have already been sold by the Respondents. Furthermore, two out of the three Plots that formed part of the Appellant's Security under the Settlement Agreements (Plot No. 230 and Plot No. 231) were also sold by the R-2 vide an 'Agreement to Sell'. Furthermore, these Agreements to sell have been witnessed by Mr. Sumeeth Sainatha who is a Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeking ICD and upon conducting due diligence and following all required procedures, R-4 decided to give ICD to them upon the terms that MetroCorp mortgages its properties for securing the same. As per the ICD Agreement Rs.32,46,00,000/- was remitted to M/s. MetroCorp Samsara Housing Pvt. Ltd., subsequent to which MetroCorp passed Resolutions dated 02.11.2009, 10.11.2009, & 25.10.2010 authorizing R-2 to create a Mortgage in respect of the properties fully described in the respective Resolutions. R-4 places reliance on the Board Resolutions of MetroCorp Samsara Housing Pvt. Ltd. on the aforenoted dates, the Agreements entered into between R-4 and MetroCorp Samsara Housing Pvt. Ltd. on 10.11.2009, 19.11.2009 & 02.11.2010 and also depends on the declarations given in respect of the ICD on these dates coupled with a Board Resolutions of R-4 dated 30.10.2009 & 23.10.2010 authorizing the ICDs to MetroCorp Samsara Housing Pvt. Ltd. read with the letter dated 25.01.2023 issued by Canara Bank reflecting the ICDs amount to paid to MetroCorp Samsara Housing Pvt. Ltd. in support of his submissions that ICDs were legally authorized. 19. As against the argument of Settlement, Learned Sr. Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the 'Appellant'/'Petitioner' for release of the second tranche, there was no response. 21. It is seen from the record that it is an admitted fact by the 'Appellants' themselves that Board Meetings were conducted on 29.10.2008, 25.02.2009, 23.06.2009, 02.09.2009, 27.12.2010, 18.03.2011, 05.10.2011 & 17.10.2011, but it is the case of the 'Appellants' that the four Board Meetings dated 02.11.2009, 10.11.2009 & 25.10.2010 were conducted without issuing proper 'Notice' and were not convened as Article 87(iii) of the AoA and that their nominee Director was not present only because due process of service of 'Notice' was not followed. It is seen from the record that the Board Meetings dated 02.11.2009, 10.11.2009 & 25.10.2010 which the 'Appellant' is strongly contesting are illegal, null & void, are the dates falling in between the aforenoted admitted Board Meetings and being a majority Shareholder the 'Appellant' has failed to adduce any evidence in support of his case that these Board Meetings were not conducted as per procedure of Law specifically taking into consideration that Mr. Jason Van Hoong, who has based in Singapore and China has not chosen to attend a single Meeting eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 addressed to M/s. Victoria Sharpe Singapore raising the issue of collusion of Pramerica and its officials illegally usurping 60% of the Equity Stake in the Nirvana Project. The 'Appellants' have not filed any material/documents in support of their contention that being a majority Shareholder they had taken all the steps to be lawfully involved in the Project through their Directors. 24. It is evidenced from the record that a 'Notice' of EGM dated 24.06.2013 for the Meeting proposed to be held on 30.07.2013 was sent through RPAD and the Respondent herein has filed the 'Postal Receipts' establishing that the 'Notices' were indeed sent and served. A Board Meeting was also scheduled to be held on the same date and a 'Notice' was also issued for the same, the agenda being increase of Share Capital to Rs.1,10,00,000/- and to pass special Resolution to allot Equity Shares to the existing Shareholders. In the EGM Resolutions were passed appointing Mr. Suhas Banerjee and Mr. DP Biswas as Directors and the removal of Mr. Surendar Singh and Mr. Jason Van Hoong was ratified. It is significant to mention that neither Mr. Surendar Singh nor Mr. Jason Van Hoong had appeared or raised any prote ..... X X X X Extracts X X X X X X X X Extracts X X X X
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