2020 (10) TMI 920 - AT - Companies Law

Oppression and mismanagement - non-service of notice - main issue raised by the appellant that he has not received notice for Board Meeting to be held on 20th January, 2020 at 4 PM and in the said meeting two directors have been appointed - Section 421 of the Companies Act, 2013 - HELD THAT - As the subject matter on the validity of the meeting held with due notice or not will be decided over a period of time. We have also notice alleged two Board Meeting are allegedly held on 20th January, 2020 at 12 Noon and after that, on the same day at 4.00 PM. The Appellant contends that he has received notice of only one Board Meeting scheduled to be held 12 Noon on 20th January, 2020. However, service of notice of a second board meeting is disputed, which can be decided finally along with the petition. Meanwhile we think it proper to stay the operation on the Resolution passed in the alleged Board Meeting held at 4 PM on 20th January, 2020. We further expect that hencefortgh the Company and its Director will communicate with each other with e-mail in addition to communication by normal channel made by the Company. This will end the controversy regarding service of notice. We also direct that till the decision of this case account of the Respondent Company will be operated by all the four directors, who were operating the account before the alleged board meeting dated 20th January, 2020. Appeal disposed off.

Summary

Issues:
1. Appeal under Section 421 of the Companies Act, 2013 against the order of National Company Law Tribunal, Kolkata Bench.
2. Allegations of oppression and prejudicial conduct in the affairs of the company under Section 241 and 242 of the Companies Act, 2013.
3. Interim relief sought by the appellant including injunctions and management direction.
4. Denial of interim relief by the Tribunal leading to the appeal.
5. Dispute over the Board Meeting notices and appointments of directors.
6. Arguments regarding the validity of Board Meetings and resolutions.
7. Allegations of freezing bank operations and fraudulent filing of returns.
8. Rejoinder and final decision by the Appellate Tribunal.

Analysis:
1. The appellant filed an appeal under Section 421 of the Companies Act, 2013 against the order of the National Company Law Tribunal, Kolkata Bench, declining interim relief. The case involved allegations of oppressive conduct and prejudicial affairs under Sections 241 and 242 of the Act.
2. The appellant sought various injunctions and management directions against the respondents, alleging misconduct in the company's affairs. The Tribunal denied the interim relief, prompting the appeal before the Appellate Tribunal.
3. The key dispute revolved around the Board Meeting notices and appointments of directors. The appellant claimed to have received notice for one meeting, while the respondents argued that notices for two meetings were sent together.
4. Both parties presented arguments regarding the validity of the Board Meetings, resolutions passed, and the appointment of additional directors. Allegations of fraudulent actions, freezing bank operations, and misleading filings were also raised.
5. The Appellate Tribunal noted the ongoing Company Petition and refrained from passing orders on the main relief sought. However, it stayed the operation of the resolution passed in the disputed Board Meeting and directed communication via email to avoid notice disputes.
6. The appeal was disposed of with directions to the National Company Law Tribunal to expedite the hearing and decide the matter on merit, emphasizing a fair and expeditious resolution in accordance with Section 422 of the Companies Act, 2013.