2022 (5) TMI 319 - Tri - Companies Law

Illegality committed by Respondents 2 to 4 in collecting various commission amounts from various broadcasters - seeking to disclose on oath the exact nature of arrangement - direction to respondents herein to produce copies of the interconnection agreements that they have executed with various pay channel companies - HELD THAT - The relief sought for by the applicant, who is the petitioner in the main Company Petition is two-fold. On one stretch he wants to produce various documents by the respondents and on the other stretch he wants to stay the operation of the Annexure A10 minutes of the Board meeting held on 17.07.2021. After going through the records, it is learnt that there is a dispute between the applicant and the respondents. The applicant was the Chairman of the 1st respondent Company for some time and he is well aware of the transaction in the company during the period of his Chairmanship. Without objecting to at that time, now he has come forward with this application after his removal from the Chairmanship stating that whatever is happening in the 1st Respondent company is against the interests of the 1st respondent company. These issues are pending consideration in the main Company Petition and a separate order is not necessary now as to whether mismanagement is there in the 1st Respondent Company. These matters will be considered at the time of final disposal of the Company Petition. Moreover, the respondents in their counter stated that they are ready to disclose an oath the exact nature of the arrangements they have with various Broadcasters and produce all the documents and when demanded by this Tribunal. They are also ready to produce the copies of various interconnection agreements executed by the 1st Respondent company. In view of the submission of Respondents, they are directed to produce the aforesaid documents in a sealed cover before this Tribunal during the time of final hearing of the Company Petition. At this moment it is not necessary to stay the operation of Annexure A 10, by which certain decisions have been taken in the Board of Directors Meeting held on 17.07.2021, such as the outsourcing of maintenance of accounts of the Company, to outsource the procurement of the set-top boxes in bulk and also to increase the shares. Application dismissed.

Summary

Issues:
- Allegations of illegal collection of commission from broadcasters by respondents 2 to 4.
- Mismanagement of the company by respondents 2 to 4.
- Dispute regarding outsourcing of accounting and revenue collection.
- Jurisdiction of the Tribunal to entertain complaints related to regulatory violations.
- Allegations of tampering with evidence by respondents 2 to 4.
- Removal of the applicant from chairmanship and subsequent legal actions.

Analysis:

1. Illegal Commission Collection: The applicant filed an application seeking reliefs against respondents 2 to 4 for disclosing the nature of arrangements with broadcasters and producing interconnection agreements. Allegations were made regarding illegal collection of commission from broadcasters, violating regulations by the Telecom Regulatory Authority of India. The applicant highlighted evidence of such illegal activities, leading to a criminal case against respondents 2 to 4.

2. Mismanagement Allegations: The applicant argued that respondents 2 to 4 mismanaged the company by accepting proposals against objections, leading to outsourcing of accounting and revenue collection. The applicant contended that these actions were detrimental to the company's interests, prompting legal action to address the alleged mismanagement.

3. Jurisdictional Issue: The respondents argued that the Tribunal lacked jurisdiction to address regulatory violations and suggested approaching the Telecom Regulatory Authority of India for such complaints. This raised a jurisdictional challenge regarding the Tribunal's authority to adjudicate matters related to regulatory compliance.

4. Tampering with Evidence: Allegations of tampering with evidence by respondents 2 to 4 were raised, indicating potential criminal and civil wrong actions. The applicant claimed that such actions were outside the purview of the Companies Act, necessitating legal recourse through a civil court.

5. Chairmanship Dispute: The respondents countered the applicant's claims, stating that the applicant's removal from chairmanship was justified due to irregularities in accounts maintenance. The respondents highlighted that the applicant's legal actions were retaliatory, following his removal from the company's leadership position.

6. Tribunal's Decision: After considering the arguments and evidence presented, the Tribunal dismissed the application, emphasizing that the issues raised would be addressed during the final disposal of the main Company Petition. The respondents were directed to produce relevant documents during the final hearing, indicating that the Tribunal would assess the allegations of mismanagement and regulatory violations comprehensively at that stage.