2013 (12) TMI 1642 - Board - Companies Law

Summary

Issues Involved:
1. Validity of Board Meetings and Appointments
2. Maintainability of Petition u/s 409 of the Companies Act, 1956
3. Interim Reliefs and Stay of AGM

Summary:

1. Validity of Board Meetings and Appointments:
The petitioner, an Executive and Whole Time Director of the first respondent company, challenged the validity of board meetings held on 09.04.2013, 10.04.2013, and 11.04.2013, which led to the appointment of respondents 2 to 4 as directors. The petitioner argued that these meetings were convened without proper notice and were invalid as the fifth respondent had resigned on 06.04.2013. The respondents countered that the fifth respondent had withdrawn his resignation on 09.04.2013 and continued to act as a director, thus maintaining the quorum for the meetings. The petitioner had acknowledged the appointments in a letter dated 15.04.2013 and participated in subsequent board meetings, indicating her awareness and acceptance of the changes.

2. Maintainability of Petition u/s 409 of the Companies Act, 1956:
The respondents argued that the petition was not maintainable u/s 409 as there was no proposed change in the board of directors or membership likely to affect the company prejudicially. They contended that the petitioner had acquiesced to the changes and was estopped from raising these issues. The petitioner, however, claimed that the appointments were part of a conspiracy and sought to prevent the AGM from ratifying these appointments and the transmission of shares.

3. Interim Reliefs and Stay of AGM:
The petitioner sought interim relief to stay the 60th AGM scheduled for 28.11.2013, later adjourned to 18.12.2013. The Bench advised the parties to settle the disputes amicably, but no settlement was reached. The Bench found that the petitioner had not made out a case for interim relief as there was no likelihood of a change in the management or ownership of the company. The AGM was allowed to proceed, with the resolutions passed subject to the outcome of the company petition.

Conclusion:
The petitioner's request for interim relief to stay the AGM was denied. The AGM could proceed, and the resolutions passed would be subject to the final decision on the company petition. The matter was posted for further hearing on 25.02.2014.