9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 1473 - Tri - Companies LawOppression and mismanagement - validity of sale of land - cancellation of illegal sale of land - holding of post of Directorship or any office in the Respondent No. 1 Company - doctrine of indoor management - time limitation - bonafide purchaser or not - legal validity of impugned Sale Deed dated 04.09.2015 in the absence of any valid Board Resolution. Time limitation - HELD THAT - This Tribunal is of the view that the Limitation is a mixed question of Law and fact. A petition cannot be thrown out on the mere plea. It would be relevant to note that in the instant case, the petitioners have alleged that the Board Resolution dated 01.08.2015, is a fake and fabricated document and that the Respondent No. 2 in collusion with Respondent No. 3 has played fraud on the Petitioner. As per Section 17(1)(b) of the Limitation Act, 1963, in case of fraud, the period of Limitation would run from the date of knowledge of fraud. It was pointed out that the Petitioner became aware of the impugned sale of land a month prior to the date of petition when some people started coming and seeing the land and it was upon enquiry and verification that the petitioner and her daughters came to know that the Respondent No.2 in collusion with the Respondent No.3 has transferred the said land to Respondent No.3 by false Board Resolution passed at the meeting which never took place. The Respondents have failed to adduce any evidence relating to the presence of the petitioner at the Board Meeting held on 01.08.2015. No evidence has been produced before this Tribunal relating to the service of notice of the Board Meeting purportedly held on 01.08.2015 by the Respondent No.2 on the Petitioner - The contention of the Petitioner throughout has been that the subject land was sold without her knowledge, upon coming to her knowledge about the same, she approached this Tribunal for appropriate reliefs. Therefore, in terms of the provisions of section 17 of the Limitations Act, 1963, the present petition is well within time and not barred by limitation. Doctrine of Indoor Management - HELD THAT - It is observed that there were several disputes between the Respondent No.2 and Mr. Y. Naga Satish who is the Director of Respondent No.3 Company and that such disputes were in existence even prior to the impugned Board Meeting dated 01.08.2015. That in view of such disputes between Respondent No.2 and Mr. Y. Naga Satish (Director of Respondent No.3 Company), the Respondent No.3 Company ought to have conducted a thorough inquiry and due diligence as to whether the Respondent No.2 was properly authorized by the Board of Respondent No. 1 Company and ought to have enquired with the petitioner whether the Petitioner has signed the impugned Board Resolution, dated 01. 08.2015, authorising Respondent No. 2 to alienate the property of the Company. In this context, the judgment of the Hon'ble Supreme Court in the matter of M.R.F. Ltd. and Ors. Vs. Manohar Parikar and Ors. 2010 (5) TMI 900 - SUPREME COURT , is squarely applicable to the present case, wherein it was held that the suspicion of irregularity has been widely recognized as an exception to the doctrine of indoor management. The protection of the doctrine of indoor management is not available where the circumstances surrounding the contract are suspicious and therefore, invite inquiry - no shelter under doctrine of indoor management is available to the Respondent No. 3. Conduct of Board Meeting - HELD THAT - In the instant case, admittedly, there are only two shareholders and two Directors i.e., petitioner and Second Respondent. Therefore, question of conducting any valid Board meeting in RI Company does not arise, without participation of petitioner or the Respondent No. 2. Even the Respondent No. 2 and 3 did not produce any notice of the impugned Board meeting at which the impugned Resolution dated 01.08.2015 was passed. As there was no Board meeting conducted and the Respondent No. 1 Company also did not furnish those details in the Form MGT-7 filed with Registrar of Companies - Therefore, it is to be held that there was no Board Meeting held on 01.08.2015, so as to authorize the Respondent No. 2 to transact the impugned sale of the property of the Respondent No. 1 Company and thus the impugned Sale deed is void ab initio and non- est in the eye of law. When the impugned transaction itself is void ab initio, there would not be any rights conferred upon the parties, who have dealt with property in question basing on alleged Board Resolution. The contention of the Respondent No.3, that they have purchased the impugned property for valid consideration and they are not aware of internal affairs of Respondent No. 1 Company, and thus they are protected by Law basing on principle like 'Doctrine of indoor management' and also under theprinciples enunciated in Section 41 of the transfer of the Property Act etc., are not at all tenable - As per the Annual Return Form No. MGT-7 for the financial year 2015-2016, filed with the ROC has inter alia stated that the Petitioner and the Respondent2 are the shareholders by holding 5000 Equity shares, AGM was held on 30.09.2015 whereas four (4) Board meetings were held viz., 12.06.2015, 01. 09.2015, 09.12.2015 and 27.03.2016. Therefore, it is held that MGT 7 in question filed by the R 1 Company correctly depict the state of affairs of the Company. The actions of Respondent No. 2 are acts of oppressive to the interest of petitioner and the Company in general and it being continuous harsh and burdensome as the impugned property is tried to transfer to third party. It is admitted that the Respondent No. 2 received a considerable amount from the sale of the property and he has not stated with the documents that how it was utilized for the company. The recording that the company received advances is also false and created by the Respondent No. 2. It is proved that the Respondent No.2 is mismanaging the affairs of RI Company by selling the company's property illegally. The alleged impugned Board Resolution dated meeting on 01.08.2015 is declared as null and void - the impugned registered documents No. 15747/2015 dated 04.09.2015 by land admeasuring Acres 918 Guntas of Respondent No. 1 Company with the Sub-Registrar, Sangareddy TS, is also declared as null and void. Petition allowed.
Issues Involved:
1. Whether the present petition is barred by limitation. 2. Whether the Board of Directors passed the impugned Board Resolution dated 01.08.2015 in accordance with Articles of Association of R1 Company and extant provisions of Company law. 3. Whether the Respondent No. 3 is a bona fide purchaser. 4. Legal validity of the impugned Sale Deed dated 04.09.2015 in the absence of any valid Board Resolution. Detailed Analysis: 1. Limitation: The Tribunal held that limitation is a mixed question of law and fact. As per Section 17(1)(b) of the Limitation Act, 1963, in case of fraud, the period of limitation runs from the date of knowledge of fraud. The petitioner claimed to have discovered the fraudulent sale a month before filing the petition. The tribunal found no evidence from the respondents proving that the petitioner attended the alleged Board Meeting on 01.08.2015 or received notice of it. The petitioner's signing of the balance sheet did not imply knowledge of the sale, as the sale should have been recorded as revenue but was not. Thus, the petition was deemed within the limitation period. 2. Validity of Board Resolution: The Tribunal found that the alleged Board Resolution dated 01.08.2015 was not valid as there was no evidence of a Board Meeting being held or notice being served to the petitioner. The Articles of Association required the presence of both directors (petitioner and Respondent No. 2) for a valid Board Meeting, which did not occur. The absence of the Board Meeting was corroborated by the Form MGT-7 filed with the Registrar of Companies, which did not list the meeting. Therefore, the resolution was declared null and void, making the sale unauthorized. 3. Bona Fide Purchaser: The Tribunal rejected the claim that Respondent No. 3 was a bona fide purchaser protected under the Doctrine of Indoor Management. Given the pre-existing disputes between Respondent No. 2 and Mr. Y. Naga Satish (Director of Respondent No. 3), the latter should have conducted due diligence. The Tribunal cited the M.R.F. Ltd. case, emphasizing that suspicion of irregularity negates the protection of the Doctrine of Indoor Management. Respondent No. 3 failed to verify the authenticity of the Board Resolution and acted on a color photocopy, indicating a lack of due diligence. 4. Legal Validity of Sale Deed: The Tribunal declared the sale deed dated 04.09.2015 void ab initio due to the absence of a valid Board Resolution authorizing the sale. The sale deed, executed based on a fabricated Board Resolution, did not confer any rights to the parties involved. The Tribunal held that the sale deed was illegal and not in compliance with the provisions of the Companies Act, 1956 and 2013. Consequently, the sale deed and the Board Resolution were declared null and void. Orders: 1. The Board Resolution dated 01.08.2015 was declared null and void. 2. The sale deed dated 04.09.2015 was declared null and void. 3. The Sub-Registrar was directed to cancel the sale deed and restore the property to Respondent No. 1 Company. 4. Respondent No. 1 Company was directed to return the sale consideration to Respondent No. 3 with interest. 5. Respondent No. 2 was declared unfit to hold the post of Director for five years, and the Company was directed to appoint a new Director. 6. The disputed Board Resolution was to be preserved for record purposes. 7. All interim orders were merged into the final order, and all pending IAs were closed. The petition was disposed of with no orders as to costs.
|
