2018 (2) TMI 1451 - Tri - Companies Law

Manner of holding of 44th Annual General Meeting of the shareholders of the company - non compiling with the provisions of the Companies (Management and Administration) Rules, 2014 - oppression or mis-management - Held that - Filing of the instant petition is simply an abuse of the process of the Court and to harass the company and its management. Except the name of respondent No.5 Mr.Sudhir Avasthi, there is not even remote reference to the role of respondents No.2 to 4 and in what capacity, they have been impleaded. Name of respondent No.2 as a Director of the company appears in the Report Annexure P-4 sent to BSE. In order to support the contention that the company has not complied with the provisions of the Companies (Management and Administration) Rules, 2014, the petitioner has not appended with this report, copy of Form No.MGT-15, prescribed in the aforesaid Rules, which the company is required to file with the Registrar of Companies. In the absence of filing of such form, it is not possible to accept the contention raised by the petitioner. In any case, if there is any violation, the remedy is not to file a petition before the Tribunal, but before the appropriate authority for violation, if any, of the provisions of the Companies Act, 2013 and the rules framed thereunder. The only requirement of Section 96 of the Act is holding of AGM of the company each year, which has been complied with. The manner in which the meeting has been conducted cannot be raised as a question before the Tribunal. It is simply alleged in the petition that the petitioner was present through his representative and certain other shareholders present also raised objection, but the name of any such person, has not been mentioned. The petitioner has not disclosed the name of his representative present in meeting nor any affidavit of the said representative to support this allegation. The petitioner has also stated that shareholders were threatened by the management at the time of voting, but it is not the case of the petitioner that any complaint with the concerned police station was lodged to support this assertion. Non-compliance of certain provisions, the same may amount to an offence or an act of oppression or mis-management for which the requisite percentage of the shareholders is necessary to maintain a petition under Section 241 of the Act. Section 244 of the Act deals with the right of the members to file a petition on the ground of oppression and mis-management. The instant petition is, therefore, dismissed at the preliminary stage with exemplary costs of ₹50,000/-

Summary

Issues:
Challenge to the manner of holding the 44th Annual General Meeting (AGM) of a listed company, Allegations of non-compliance with provisions of Companies Act, 2013 and Rules framed thereunder, Request to declare the AGM as void and conduct a fresh AGM supervised by the Tribunal.

Analysis:
The petitioner, a shareholder of the respondent company, raised concerns regarding the conduct of the 44th AGM. The petitioner, being an aged person from Kolkata, participated through a representative and filed a proxy form. However, the Board of Directors was absent, and resolutions were adopted without a vote, leading to objections from the petitioner and other shareholders present. The petitioner sought to invalidate the AGM and its resolutions, requesting a fresh AGM under Tribunal supervision.

Upon careful review, the Tribunal found the petition to be an abuse of process and an attempt to harass the company. The petitioner's claims of non-compliance with specific Act provisions were deemed unsubstantiated. The Tribunal noted the absence of essential details and supporting evidence, such as the representative's identity and any police complaints regarding alleged threats during the meeting.

Regarding statutory requirements, the Tribunal highlighted that Section 96 mandates the annual AGM, which was held, and Section 97 applies only in cases of AGM non-compliance. The Tribunal also referenced Section 107 on voting procedures, noting discrepancies in resolutions due to a director's disqualification. The Tribunal emphasized that shareholder actions for non-compliance typically fall under Sections 241 and 244, requiring specific shareholder percentages for petitions on oppression and mismanagement.

Ultimately, the Tribunal dismissed the petition at the preliminary stage, imposing exemplary costs on the petitioner for filing with an alleged ulterior motive. Citing Section 420, the Tribunal directed the petitioner to deposit the costs within two months, warning of consequences for non-compliance. The order's communication was mandated to both the petitioner and the Registrar of Companies for necessary action.