TMI Blog2024 (4) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... eeting is conspicuous by its absence. There are no traces of the alleged oral settlement which has been made the basis of the lease, the terms of which are more against the company (R1) than its favour, therefore, these are unconscionable terms and conditions which would attract the provisions of Section 241 and 242 of the Act. Moreover, the Appellant did not deliberately implead Rohit Agarwal and Shobhit Agarwal as parties to the present appeal though they were respondents in the main petition only in order to conceal the fact that Shobhit Agarwal who is the son of Appellant No. 1 (Ajay Kumar Agrawal), is a partner of Appellant No. 3 (TX Homes LLP) whereas as per Section 188 r/w 2(76) of the Act and Rule 4 of Companies (Specification of Definition Details) Rules, 2014, the lease deed would not have been executed in favour of the related party. The power under Section 241 and 242 of the Act would include the power to set aside the lease deed which has been executed on behalf of R1 in violation of mandatory provisions of the Act, AoA and terms and conditions of the impugned lease deed are against the very interest of R1 and is oppressive, therefore, the lease deed has rightly been s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No. 1 alleged to have passed a resolution in a meeting of the board of directors held in its registered office on 23.08.2019. The text of the resolution is reproduced as under:- Resolved that the consent of the board of directors be and is hereby given to authorize Mr. Neeraj Singh s/o Shri Mani Ram r/o village Akbara, Tehsil, Kiraoli, Distt. Agra to sign and execute the lease deed to lease the land and building in the name of the company and to execute all the necessary documents and do all such acts and deeds as required to give effect to the same with regard to the lease of land and building of the company having total land area of 39112 sq. mt. and having total covered area of 7940 sq. met. Situated at Khasra No. 2080, Jeoni Mandi, Agra (detailed as per the draft lease deed placed before the board and taken on record by the board) in favour of TX Homes LLP (LLPIN: AAE4614) Whereas the said authorized person would mandatorily require the identity proof with photograph to do such certified copy of the board resolution duly signed by the director(s) of the company including his specimen signature to give effect to the above mentioned assigned work before the concerned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel shall maintain a status quo with respect to possession of the lease hold property of the respondent company till further orders. No sub-lease, assignment, transfer or encumbrance shall be created over the property of the respondent company without prior permission of this bench. List the case on 30.01.2020. 9. The aforesaid order is not challenged by the Appellant by way of an appeal. 10. The Tribunal finally allowed the main petition by way of the impugned order dated 05.05.2022 after recording a categoric finding not only on the issue of law emerging from Section 188(3) and (4) of the Act but also clause 36(ii) of the Article of Association (AoA) of Respondent No. 1 as on 23.08.2019, in which it is categorically provided that the board of directors shall not except with the written consent of 100% members of the company in duly convened general meeting, sell, exchange, mortgage, lease or enter into any part of contract related to construction or otherwise dispose of absolutely or conditionally, whole or any part or portion of any undertaking or immoveable property of the company. No such consent of the shareholders was taken at any general meeting of R1 prior to the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order, the civil suit filed by the Appellant No. 3 has been rendered infructuous. It is submitted that the Tribunal has exceeded its jurisdiction while passing the impugned order as the appropriate forum for determining the validity of the lease deed is civil court where the suit was pending. In support of his arguments, he has relied upon a decision of the Hon ble Supreme Court rendered in the case of Aruna Oswal Vs. Pankaj Oswal, (2020) 8 SCC 79. He has also submitted that the Tribunal has further erred in deciding the main petition i.e. CP No. 170 of 2019, ignoring the petition (CP No. 175 of 2019) filed by the Appellants. It is submitted that both the parties have raised grievances of oppression and mismanagement in Respondent No. 1 Company but the Tribunal chose to decide only CP No. 170 of 2019. It is further submitted that the resolution passed by the board of directors on 23.08.019 is valid and the registered lease deed executed pursuant thereto is a valid instrument which is in furtherance of the oral family settlement. 12. In reply, Counsel for Respondent No. 1 to 3 has submitted that there is no error committed by the Tribunal in allowing the main petition because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Companies (Specification of Definition Details) Rules, 2014 the lease deed therefore would be a related party transaction which itself on the part of the Appellants warrants dismissal of the present appeal with costs. It is further submitted that the first proviso to Section 188(1) of the Act r/w Rule 15 of the companies (Meeting of board and its powers) Rules 2014, a company can lease property which is at least 10% of the company s turnover to a related party only through a resolution passed at a general meeting. It is argued that the property in question having a value of far more than 10% of R1 s turnover could not have been leased to a related party without a resolution passed at a general meeting which has not been done in this case. It is also submitted that in terms of Section 188(3) of the Act, Respondent No. 1 also duly avoided the purported lease deed vide meeting held on 24.10.2019. Noting the company secretary s certificate stating that no board meeting was held on 23.08.2019. The Appellant did not challenge the minutes of meeting held on 24.10.2019 and the certificate of company secretary before the Tribunal. It is also submitted that the Tribunal has wide powers un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has the jurisdiction to hear the present claim pursuant to section 430 of the Act. It is also submitted that judgment relied upon by the Appellant in the case of Aruna Oswal (Supra) is distinguishable on its facts because in that case the civil suit in question pertained to adjudication of ownership rights whereas the civil suit in the present case has only been filed for the purpose of protecting the possessory rights as a lessee. 14. We have heard Counsel for the parties and perused the record with their able assistance. 15. The bedrock of this case is the lease deed dated 26.08.2019, executed pursuant to the resolution dated 23.08.2019 which is not only contrary to the provisions of Section 188(1) of the Act r/w Rule 15 of the companies (Meeting of board and its powers) Rules 2014 but also clause 36(ii) of the AoA as on 23.08.2019, which provides that the board of directors shall not, without consent of 100% members of the company, in duly convened general meeting can lease and dispose of the property of the company by way of lease etc. and that the consent of 100% members of the company in a duly convened general meeting is conspicuous by its absence. There are no traces of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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