2020 (8) TMI 647 - AT - Companies Law

Oppression and Mismanagement - restraint them from convening any board meetings without proper representation of the Appellants and to stop them from selling the properties of the Respondent Company or create any encumbrances upon the property - HELD THAT - The Extra Ordinary General meeting as ordered by NCLT be convened after convening the Board Meeting and giving proper notice in accordance with provisions of Companies Act, 2013. After approval of the Board, the specific agenda with statement in accordance with section 102 of Companies Act, 2013 to consider the proposal to sell the property based on Auction through the newspaper and online modes be placed before Extra Ordinary General Meeting. An Independent Administrator be appointed by the NCLT in order to have a proper voting by poll and not by show of hands and all material facts in relation to sale of the property be placed in the Extra Ordinary General Meeting and all the deliberations are properly recorded. Based on the decision of Extra Ordinary General meeting the sale of property of the Company, if approved, be acted upon. The requirement of the Appellant herein to be the joint signatory to an agreement to sell or to a sale deed according to the impugned order is therefore removed. The NCLT is to review Independent Administrator s report for proper disposal of the cases at hand - matter remanded back to NCLT, Hyderabad.

Summary

Issues:
1. Validity of resolution passed in board meetings and general meetings.
2. Allegations of oppression and mismanagement.
3. Compliance with Companies Act, 2013 regarding appointment of directors and share transfers.
4. Notice requirements for meetings and shareholder approvals.
5. Dispute over property ownership and sale.

Issue 1: Validity of resolution passed in meetings
The appeals were filed against the order of the National Company Law Tribunal (NCLT) challenging the validity of resolutions passed in board meetings and general meetings. The Appellants alleged that the Respondents took actions to increase their control over the company without informing the Appellants. The NCLT approved the resolutions, leading to the appeals.

Issue 2: Allegations of oppression and mismanagement
The Appellants accused the Respondents of oppression and mismanagement, seeking to declare the meetings invalid and restrain the Respondents from certain actions. The NCLT, however, approved the resolutions, prompting the Appellants to appeal the decision.

Issue 3: Compliance with Companies Act, 2013
The Appellants argued that the Respondents violated the Companies Act, 2013 by appointing directors without proper notice and forging meeting minutes. They also alleged unauthorized filings with the Registrar of Companies and property usurpation. The Respondents defended their actions, stating compliance with the Act and the company's Articles of Association.

Issue 4: Notice requirements and shareholder approvals
Disputes arose over notice serving for meetings and shareholder attendance. The Respondents claimed proper notice serving and shareholder consent for asset sales, while the Appellants contested the validity of these procedures.

Issue 5: Dispute over property ownership and sale
The Respondents invested in the company and purchased properties, leading to disagreements over property ownership and sales. The NCLT directed the convening of an Extraordinary General Meeting (EGM) with specific procedures to address the property sale issue, removing the requirement for the Appellants to be joint signatories.

In conclusion, the Appellate Tribunal remanded the matter back to the NCLT, Hyderabad, for further proceedings, emphasizing the proper conduct of the EGM and the appointment of an Independent Administrator for fair decision-making.