2020 (1) TMI 1588 - Tri - Insolvency and Bankruptcy

Seeking stay on removal of Dr. Kedarnath Panda, the Petitioner No. 1 from the Directorship of the Company - seeking stay on discontinuation of service and stay on restriction to enter hospital premises till disposal of the Company Petition - HELD THAT - The proposed agenda and logical outcome of the meeting cannot be stayed at this stage. The shareholders have right to convene the meeting and pass resolutions as per Companies Act, 2013 and Rules. There is no prayer by petitioner to stay the EGM nor there is any irregularity. Application dismissed.

Summary

Issues:
1. Stay on removal of director from company
2. Permission for board meeting to obtain financial facilities

Stay on removal of director from company:
The petitioner filed an application seeking a stay on the removal of Dr. Kedarnath Panda as Director of the Company, discontinuation of service, and restriction to enter hospital premises until the disposal of the Company Petition CP No. 98/CTB/2019 under Section 241-242 of the Companies Act, 2013. The petitioner had previously approached the Hon'ble NCLAT under Company Appeal (AT) No. 283 of 2019 seeking interim relief, which was granted through an ex-parte ad interim Order dated 22.10.2019. However, based on an undertaking by the respondents, the NCLAT disposed of the appeal, directing the respondent to file a reply to the Company Petition No. 98/CTB/2019 before a specified date. The Tribunal noted that there was no prayer by the petitioner to stay the Extraordinary General Meeting (EGM) for the removal of the director, and no irregularity was found. The Tribunal dismissed the application, stating that the petitioner could raise any grievances at the time of the final disposal of the main Company Petition.

Permission for board meeting to obtain financial facilities:
The respondent filed an application seeking permission to hold a board meeting to pass necessary resolutions for obtaining financial facilities from bankers. The Tribunal allowed the prayer in the application, directing the petitioner to conduct the board meeting as requested. However, a subsequent issue arose regarding the wording in the agenda of the meeting, which the petitioner found misleading. After discussions, the respondent agreed to change the wording to align with the previous order. Additionally, the venue for the meeting was deliberated, with the petitioner suggesting a specific hotel and the respondent agreeing to bear the costs. The Tribunal resolved the venue matter and instructed the petitioner to book the conference room, failing which the respondent would decide the venue. During the proceedings, it was mentioned that the petitioner did not wish to attend the board meeting scheduled for 20.01.2020. Both parties presented their arguments, with the respondent emphasizing that the notice period for the EGM had been duly complied with. The Tribunal noted that the shareholders had the right to convene meetings and pass resolutions as per the Companies Act, 2013 and Rules. The application seeking stay on the removal of the director was dismissed, and the Tribunal emphasized that the petitioner could address any grievances during the final disposal of the main Company Petition.

In conclusion, the Tribunal dismissed the application seeking a stay on the removal of the director from the company and upheld the permission for the board meeting to obtain financial facilities, emphasizing the rights of shareholders and the compliance with legal procedures under the Companies Act, 2013.