2017 (4) TMI 730 - Tri - Companies Law

Changing and/or shifting the registered Office - alteration of Clause II of the Memorandum of Association for shifting its registered Office from the State of West Bengal to the State of Uttar Pradesh as approved by the members by special resolution passed in accordance with Section 114 of the Companies Act, 2013 at its Extraordinary general meeting - Held that - The purported Extraordinary general meeting showing to be held on 17-02- 2015 and the resolution, if any, passed therein, was not as per the provisions of law. The applicants/respondents 1, 2 and 3 submitted that notice of extraordinary general meeting has been duly served to the petitioner and respondent No. 4 but they failed to show or prove the service of notice upon the petitioner and/or upon the respondent No. 4 and/or upon any other members/shareholders as required under Rule 30 of the Companies (Incorporation) Rules, 2014. Further, the Memorandum and the Articles of Association (Annexure P1 of the Company Petition) shows the Registered Office at 55, Bhupen Bose Avenue, Kolkata, but in the order dated 11th February, 2015 passed by the Regional Director reflect the address as 65, Dilkhusa Street, Kolkata. How and when it is shifted from 55, Bhupen Bose Avenue, Kolkata to 65, Dilkhusa Street, Kolkata is also not explained. More so, when the Memorandum and the Articles of Association show the address of the Company as 55, Bhupen Bose Avenue, Kolkata. How the Regional Director allowed/approved the application of the applicants/Respondents 1,2 and 3 showing the address as 65, Dilkhusa Street, Kolkata, without alteration of the Memorandum and Articles of Association as required under Section 12(4) & 13 of the Companies Act, 2013? - Held that - It is a settled principle of law that the conduct of the parties is a very relevant factor to be considered in the equitable proceeding. The person/party seeking equitable relief, must come with clean hand and good conduct failing which it constitutes a gross abuse of the process of law and equally, he who seeks equity, must do equity and he who does equity, must come with clean hand. As discussed find that the equity is in favour of the petitioner. Rather, it is the conduct of the applicant/respondent 1, Company and the applicants/respondents 2 and 3, as detailed above, which has been prejudicial to the interest of the petitioners/non-applicants and it would be highly unjust to allow the prayers sought by the applicants/respondents 1, 2 and 3 to transfer the Company petition to Safedabad (UP). The relief as prayed by the applicants/respondents 1, 2 and 3, if granted, would be highly oppressive to the petitioner/non-applicant as the applicants/respondents 1, 2 and 3 have acted in the manner not only prejudicial to the interest of the petitioner/non-applicant but also acted in violation of the established principles/procedures of law while shifting the registered office of the respondent No. l, Company from the local jurisdiction to other and thereafter, from State of West Bengal to the State of Uttar Pradesh.

Summary

Issues Involved:
1. Territorial jurisdiction of the tribunal.
2. Validity of the Extraordinary General Meeting (EOGM) held on 17-02-2015.
3. Compliance with legal procedures for shifting the registered office.
4. Service of notice to shareholders regarding the EOGM and the resolution.
5. Allegations of mismanagement and oppression.

Detailed Analysis:

1. Territorial Jurisdiction of the Tribunal:
The primary issue addressed was whether the tribunal had the territorial jurisdiction to adjudicate the matter. The respondents argued for dismissal of the Company Petition No. 38/2016 on the grounds of lack of jurisdiction, citing the order dated 11-02-2016 by the Regional Director, Ministry of Corporate Affairs, which approved the alteration of the registered office from West Bengal to Uttar Pradesh. The tribunal, however, found that the procedural irregularities and lack of proper documentation regarding the shifting of the registered office warranted its jurisdiction over the matter.

2. Validity of the Extraordinary General Meeting (EOGM) Held on 17-02-2015:
The petitioners challenged the validity of the EOGM, alleging that due process was not followed and that they were not served any notice regarding the meeting. The tribunal noted that the respondents failed to provide proof of notice or any documentation to show that the EOGM was convened as per legal requirements. The tribunal concluded that the purported EOGM and any resolutions passed therein were not in accordance with the law.

3. Compliance with Legal Procedures for Shifting the Registered Office:
The tribunal examined the compliance with Section 13 of the Companies Act, 2013, and Companies (Incorporation) Rule 30, 2014, which outline the mandatory requirements for shifting a registered office. The tribunal found that the respondents did not produce the necessary documents, such as affidavits verifying the application, list of creditors, and proof of service of notice. The tribunal highlighted that the respondents' failure to adhere to these legal provisions rendered the shifting of the registered office from West Bengal to Uttar Pradesh invalid.

4. Service of Notice to Shareholders Regarding the EOGM and the Resolution:
The petitioners and respondent No. 4 contended that they were not served any notice regarding the EOGM or the resolution to shift the registered office. The tribunal found that the respondents did not provide any evidence to prove that notices were duly served to the petitioners and other shareholders. This lack of notice was deemed a significant procedural lapse, further invalidating the actions taken at the EOGM.

5. Allegations of Mismanagement and Oppression:
The petitioners filed the Company Petition under Sections 235, 397, 398, 402, 403, and 406 of the Companies Act, 1956, alleging mismanagement and oppression. The tribunal observed that the conduct of the respondents was prejudicial to the interests of the petitioners and constituted a violation of established legal principles. The tribunal emphasized the importance of equitable conduct and concluded that the respondents' actions were oppressive and unjust.

Conclusion:
The tribunal rejected the respondents' application (IA No. 20/2016) to dismiss the Company Petition and upheld the petitioners' challenge to the validity of the EOGM and the shifting of the registered office. The respondents' failure to comply with legal procedures and serve proper notice to shareholders was deemed prejudicial and oppressive. The tribunal retained jurisdiction over the matter, ensuring that the petitioners' interests were protected.