2012 (11) TMI 453 - Board - Companies Law

Signature on Company Petition - fraud by Petitioners - Held that - It is not an appropriately constituted petition as the person signing the petition on behalf of Mr. Rupak Gupta Petitioner No. 1 holding 16320 shares of the Company in three different capacities was not duly constituted Power of Attorney of the Petitioners at the time when he signed the petition. Mrs. Supriya Gupta, Petitioner No.2 not being a member of the company was not eligible to file the petition under section 397 & 398 of the Act. Her signing the petition is therefore of no avail. The Petitioners had suppressed material facts and had also made statements on oath which were false to their knowledge. This was done with an intention to gain advantage which would not have been available if true facts were revealed. Elements of Fraud were thus present. The suppression of material facts in the petition and false statements by Petitioner No.l and 2 in their affidavits amounts to an abuse of the process of this Board. By opening the floodgates of affidavits to cover-up or to show that it was a trivial or bona fide error the damage cannot be undone. The Law-firm representing the Petitioners in this petition and one of its Advocates had acted, in the matter of preparing the petition and filing of affidavits, in an irresponsible manner which is appalling and not expected of a Law-firm. False affidavits were sworn on 08/06/2012 by Mr. G.K. Agrawal and notarised by the Notary Shri Dipankar Das. False identification was done by an Advocate representing the Law-firm in the affidavits. Taking a liberal view and granting liberty to the Petitioners Nos. 1, 2 & 4 to file a properly constituted fresh petition subject to cost of Rs. 50,000/- to be deposited within a week with the High Court Legal Aid Committee, New Delhi. The Law Firm and one Advocate had acted in the matter of filing of affidavits in this petition also impose exemplary cost of Rs. 50,000/- on the Law Firm and direct that the cost be deposited within a week from today with the High Court Legal Aid Committee, New Delhi.

Summary

Issues Involved:
1. Whether the Company Petition No. 75(ND)/2012 is properly signed as required by Order 6, Rule 14 of the CPC.
2. Whether the affidavits supporting the petition were valid and properly notarized.
3. Whether Mrs. Supriya Gupta was eligible to file the petition under Sections 397 and 398 of the Companies Act.
4. Whether the petitioners suppressed material facts and made false statements on oath.
5. Whether the conduct of the Law Firm and Notaries involved was appropriate.

Detailed Analysis:

1. Proper Signing of the Petition:
The petition must comply with Order 6, Rule 14 of the CPC, which requires that every pleading be signed by the party or a duly authorized representative. The court noted that it is sufficient if one petitioner signs the petition, provided they are authorized. However, in this case, Mrs. Supriya Gupta, who signed the petition, was not a member of the company and thus not eligible to file the petition under Sections 397 and 398. The petition was also signed by Mr. G.K. Agrawal, who was not duly authorized at the time of signing. Therefore, the petition did not meet the requirements of Order 6, Rule 14 CPC.

2. Validity of Affidavits:
The affidavits supporting the petition were signed and verified on 30th May 2012 but notarized on 8th June 2012. The court found discrepancies in the signatures and noted that the affidavits were not properly notarized. The affidavits were signed by Mr. G.K. Agrawal, impersonating Mr. Rupak Gupta and Mrs. Supriya Gupta, which was identified as false impersonation and improper notarization by the Notary Public Mr. Dipankar Das. The affidavits were thus deemed invalid.

3. Eligibility of Mrs. Supriya Gupta:
Mrs. Supriya Gupta did not hold any shares in the company and was therefore not a member, making her ineligible to file the petition under Sections 397 and 398. Her signature on the petition was considered inconsequential.

4. Suppression of Material Facts and False Statements:
The petitioners were found to have suppressed material facts, such as Mrs. Supriya Gupta's lack of shareholding and the true status of the Trust. The affidavits contained false statements, and the petitioners attempted to cover up these lapses with multiple affidavits. The court concluded that the petitioners acted with an intention to gain an advantage through fraudulent means.

5. Conduct of the Law Firm and Notaries:
The Law Firm representing the petitioners acted irresponsibly by not verifying the compliance with Order 6, Rule 14 CPC before filing the petition. The Notaries involved, Mr. Ashok Kumar and Mr. Dipankar Das, were found to have notarized documents improperly, leading to a recommendation for disciplinary action against them. The court imposed exemplary costs on the Law Firm for its conduct.

Conclusion:
The court dismissed the Company Petition No. 75(ND)/2012 in limine, finding it was not duly constituted in law. The petitioners were granted liberty to file a properly constituted fresh petition subject to a cost of Rs. 50,000 to be deposited with the High Court Legal Aid Committee, New Delhi. The Law Firm was also fined Rs. 50,000 for its conduct. The Chief Secretary, NCT of Delhi, was directed to initiate disciplinary action against the Notaries involved and to issue instructions to ensure proper notarization practices in the future.