9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 1018 - AT - Companies LawLegality of transfer of shares - change of designation of Petitioner from Managing Director to Executive Director - legality of BOD meeting - Held that - The Respondents themselves through Respondent No.2 filed Form 32 on the basis of meeting dated 25.09.2011 changing the designation of Petitioner from Managing Director to Executive Director. There is yet another Form 32 submitted by Respondent No.2 purporting to state that the Petitioner was Director and was now being designated as Executive Director. This form is based on some meeting dated 15.11.2011. The Minutes record that the Petitioner Ayoli Abdulla, who has been Managing Director, his designation needs to be changed from Managing Director to Director, w.e.f. 15.11.2011. This would be against the Minutes dated 25.09.2011 (Annexure A9 Page 207) where Respondent No.4 had been designated by these three as Managing Director w.e.f. 25.09.2011. If the Respondents were treating the original Petitioner, still as Managing Director or Director, admittedly they never gave any Notice of any such meetings to the original Petitioner. They blow hot and cold in the same breath. In the face of these documents put up by them, Respondents also claim that as Petitioner transferred all his shares on 27.04.2011, he ceased to be Director in view of Articles of Association and no Notice was required to be given to him. Reading of these various minutes and the forms submitted at the hands of Respondent No.2 and the case put up by Respondents shows that the documents are not beyond suspicion. It is the case of the original Petitioner that after coercing him to sign the forms, the Respondents with the help of Respondent No.2 went on submitting Forms to the ROC and it was only when in the Civil Suit, the Respondent No.4 filed Affidavit that he came to know about what Respondents were up to. Coming to the question of coercion of the original Petitioner, we have purposely referred to the Company Petition and Reply of the Respondents which was filed in NCLT, in some details and we have purposely reproduced portions from the Affidavit of Respondent No.4 which he had filed in the Civil Suit and we find by referring to these details that the pleadings themselves (including what the Respondents have claimed), disclosed that the Petitioner was coerced to sign the transfer forms. Had it been a normal execution of forms, there would not have been so many questionable acts on record. It is not the case of Respondents that Petitioner transferred the shares for any consideration. There is no good reason for him to simply give up his control as Managing Director. There is substance in the claim of Petitioner that due to valuable property involved in Civil Suit, Respondents tried to take over. We discard defence that silence of Petitioner after 27.04.2011 till filing of Petition should be held against him regarding claim of co-ercion. There is substance in what Petitioner has argued that although he was co-erced to sign the forms, he did not react immediately as he was rest assured that without his involvement no Board Meeting could be held. The Respondents are changing stands even where some time they say there was General Body Meeting of Meezan Group where shareholders of different companies of alleged Meezan Group had assembled and sometime they referred to Board Meeting of Respondent No.1 Company. We have already mentioned there is no material to show that there was any validly called Board Meeting on 27.04.2011. For such reasons, we do not find that there is any error in the Impugned Judgement and Order passed by NCLT. The NCLT has rightly allowed the Company Petition and set aside the transfers purportedly made to Respondent No.4 and further transfers they made inter se themselves. The NCLT rightly restored the original Petitioner as Managing Director and the further directions it has given to ROC for ignoring the findings done under the digital signature of Respondent No.2. We do not wish to interfere.
Issues Involved:
1. Legitimacy of the share transfer by the original Petitioner. 2. Validity of the Board Meetings and resolutions. 3. Allegations of coercion and undue influence. 4. Compliance with the Articles of Association and Companies Act. 5. Locus standi of the original Petitioner to maintain the petition. 6. Validity of filings with the Registrar of Companies (ROC). 7. Restoration of the original Petitioner as Managing Director. Detailed Analysis: 1. Legitimacy of the Share Transfer by the Original Petitioner: The original Petitioner claimed that he was coerced into signing share transfer forms on 27.04.2011. The forms presented were dated 15.11.2010 and were used on 27.04.2011, violating Section 108(1A) of the Companies Act, 1956, which mandates timely stamping and usage of transfer forms. The Tribunal found that the forms were invalid as they were not used within the specified time frame. 2. Validity of the Board Meetings and Resolutions: The Tribunal scrutinized the minutes of the Board Meetings held on 27.04.2011, 15.05.2011, and 28.05.2011. It was noted that the meetings were conducted without proper notice to the original Petitioner, who was still the Managing Director. The Tribunal observed that the meetings were held by an illegally constituted Board and that the resolutions passed were not in compliance with the Articles of Association. 3. Allegations of Coercion and Undue Influence: The original Petitioner alleged that he was coerced into signing the share transfer forms under threat. The Tribunal found substance in the claim of coercion, noting that the Respondents themselves had described a "restive nature of the community at large" and the involvement of an outsider, Panakkadu Hameed Ali Shihad Thangal, in the meetings. The Tribunal concluded that the transfer of shares and the subsequent resolutions were a result of coercion and undue influence. 4. Compliance with the Articles of Association and Companies Act: Article 16 of the Articles of Association requires the previous sanction of the Board of Directors for any share transfer. The Tribunal found that no such sanction was obtained for the purported transfer of shares to Respondent No.4. The Tribunal also highlighted that the Board Meetings and the resolutions passed were not in compliance with the Articles of Association and the Companies Act. 5. Locus Standi of the Original Petitioner to Maintain the Petition: The Tribunal noted that the original Petitioner had been the Managing Director and held 500 shares, equivalent to 50% of the issued share capital. The Tribunal held that the original Petitioner had the locus standi to file the petition, as the purported transfer of shares was not valid. 6. Validity of Filings with the Registrar of Companies (ROC): The Tribunal found that the filings made under the digital signature of Respondent No.2 were invalid. The Tribunal directed that the documents filed by the Respondents after 27.04.2011 be declared null and void. 7. Restoration of the Original Petitioner as Managing Director: The Tribunal set aside the transfers of shares and the subsequent appointments of Respondents as Directors and Managing Director. The original Petitioner was restored to his position as Managing Director with effect from 27.04.2011. Conclusion: The Tribunal allowed the Company Petition, setting aside the transfers of shares and the resolutions passed by the illegally constituted Board. The original Petitioner was restored as Managing Director, and the filings made by the Respondents with the ROC were declared null and void. The Tribunal also directed the Registrar of Companies to check the records of the Company and take suitable action if necessary. The appeal was dismissed with costs of ?50,000/- to be paid by each of the Appellants to the original Petitioner.
|
