2021 (11) TMI 1047 - Tri - Companies Law

Seeking inspection of the records of the company with the help of an Auditor or any person, to video graph the entire proceedings of the 28thAGM dated 23.11.2021 - seeking appointment of observer to the said meeting - HELD THAT - It is felt necessary to appoint an observer for AGM to be held on 23.11.2021. Accordingly, Mr. P. Nagesh, Sr. Counsel is appointed as an observer to watch the proceedings of the 28th AGM dated 23.11.2021 and submit a report. The appropriate fee of the Observer shall be fixed by the Court on receipt of the report of the Observer. The entire proceeding of the AGM shall be video recorded and produced before this Court. Besides the Petitioner will be entitled to have inspection of any statutory records or any financial statements through a reputed Chartered Accountant or a Company Secretary or any other professional and produce such Inspection Report before this Court - List the matter on 3rd December, 2021.

Summary

Issues:
1. Appointment of an observer for Annual General Meeting (AGM) on 23.11.2021.
2. Inspection of company records by the Petitioner.
3. Video recording of the AGM proceedings.
4. Restraining Respondents from proceeding with Criminal Proceedings.
5. Fixing the appropriate fee for the appointed observer.

Appointment of an Observer for AGM:
The Petitioner, holding a 35% stake in the company, sought inspection of company records and the appointment of an observer for the 28th AGM dated 23.11.2021. The Respondent raised concerns about the Petitioner's involvement in siphoning off funds and non-cooperation with police investigations. The Tribunal, considering the application and contentions, appointed Mr. P. Nagesh as an observer for the AGM. The observer was tasked with watching the proceedings and submitting a report. The Court reserved the right to fix the observer's fee upon receiving the report.

Inspection of Company Records:
The Tribunal granted the Petitioner the right to inspect statutory records and financial statements through a qualified professional like a Chartered Accountant or Company Secretary. The Petitioner was authorized to produce the inspection report before the Court. The Respondent was prohibited from objecting to the recording of proceedings or the presence of the observer at the AGM. Additionally, the Respondents were restrained from pursuing Criminal Proceedings until the next court date, scheduled for 3rd December 2021.

Video Recording of AGM Proceedings:
To ensure transparency, the Tribunal ordered the entire AGM proceedings to be video recorded and submitted to the Court. This measure aimed to provide an accurate record of the meeting and safeguard the interests of all parties involved.

Restraining Respondents from Criminal Proceedings:
The Tribunal issued a restraining order against the Respondents, preventing them from advancing with the Criminal Proceedings initiated with the police until the next court hearing. This decision aimed to maintain the status quo and protect the Petitioner's rights during the ongoing legal process.

Fixing Observer's Fee:
The Tribunal decided that the appropriate fee for the appointed observer, Mr. P. Nagesh, would be determined by the Court after receiving and reviewing the observer's report. This step was crucial to ensure fairness and transparency in the appointment process.