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2023 (8) TMI 490 - AT - Companies LawEnhancement of authorized share capital by resolution - Validity of Annual General Meeting held on 05.10.2017 - validity of Form DIR-12 in respect of appointment of 3rd and 4th respondents - compliance with Section 61(1) of the Companies Act, 2013 or not. HELD THAT - A perusal of the material on record shows that the Petitioner had sent an e-mail dated 26.09.2017 objecting to the AGM held on 28.09.2017 and on 03.10.2017 the Petitioner/Appellant received a Notice that the AGM would be held on 05.10.2017. Another notice was also received on 07.10.2017 calling for a Board Meeting on 14.10.2017 only to add more number of Members. It is contended that the 2nd respondent has filed INC-22 with the Registrar of the Companies, authorizing the shifting of the office from its registered office which is based on the meeting said to be conducted on 05.10.2017, against which act the Petitioner/Appellant had lodged a Complaint with the Police. On 13.10.2017, the Petitioner received an e-mail informing that due to the administrative reasons, the meeting was postponed to 18.10.2017. It is seen from the record that the Company Petition was filed on 25.10.2017 - It is seen from the record that the Company Petition was filed on 25.10.2017. It is the case of the Petitioner/Appellant that the 2nd Respondent had digitally signed and filed the DIR-12 on 04.11.2017 showing that the 3rd and 4th Respondents were appointed as Directors in the AGM held on 05.10.2017. Enhancement of the Authorized Share Capital on 31.03.2016 - HELD THAT - It is seen from the record that the extract of the Resolution Anx.R6 in which the Petitioner and the 2nd Respondent had signed, establishes the enhancement of the Authorized Share Capital. The Financial Statements of the Assessment Year of 2015-16, 2016-17 showing the enhanced share capital further substantiates that the enhanced share capital was accepted by the Petitioner as the Anx-4 document shows that these Financial Statements have been duly signed by the Petitioner, the 2nd Respondent and the Auditor of the Company. Therefore, this Tribunal agrees with the finding of the NCLT that the enhancement of the Share Capital of the 1st Respondent Company, vide a Company Resolution dated 31.03.2016, is valid. A perusal of the material on record shows that there is some strained relationship between the two Directors viz. the Petitioner and the 2nd Respondent. A notice dated 07.09.2017 was issued to the Petitioner adhering with the statutory compliances of convening the AGM before 30.09.2017 and the Petitioner/Appellant is informed that the said AGM is scheduled to be held on 28.09.2017 - A Board Meeting was once again called on 14.10.2017 for approving the Financial Statements and the Directors and Auditor s report. Once again the Appellant did not attend the Board Meeting held on 14.10.2017. The record shows that the Petitioner owns 10% shares and the Minority Shareholder and had not attended the Board Meetings held on 28.09.2017, 05.10.2017 and also on 14.10.2017, despite service of notice, and therefore, now belatedly cannot raise the contention that the induction of the 3rd and 4th Respondents as Directors, is invalid, filing of the financial statements is non-est and that the very meetings have to be declared as illegal. There are no legality or infirmity in the well-reasoned order of the NCLT, Kochi Bench and therefore this Appeal is dismissed.
Issues Involved:
The issues involved in the judgment are: 1) Validity of enhancement of authorized share capital 2) Validity of Annual General Meeting 3) Validity of Form DIR-12 for appointment of respondents Validity of Enhancement of Authorized Share Capital: The Appellant challenged the legality of enhancing the authorized share capital from Rs.1 lakh to Rs.20 lakhs on 31.03.2016. The Appellant argued that the Tribunal failed to consider the legality of this enhancement and the consequent amendment to the Memorandum of Association. However, the Tribunal found that the resolution signed by the Appellant and the 2nd Respondent, along with financial statements showing the enhanced share capital, validated the enhancement, leading to the dismissal of the appeal. Validity of Annual General Meeting: The Appellant raised concerns regarding the legality of various meetings, including an Extraordinary General Meeting (EGM) held without proper approval, an Annual General Meeting (AGM) with inadequate quorum, and a Board Meeting allegedly conducted without compliance. Despite receiving notices for these meetings, the Appellant did not attend, leading to the appointment of 3rd and 4th Respondents as Directors. The Tribunal concluded that the Appellant's absence at these meetings prevented them from challenging the appointments and the meeting proceedings, resulting in the dismissal of the appeal. Validity of Form DIR-12 for Appointment of Respondents: The Appellant contested the appointment of 3rd and 4th Respondents as Directors based on Form DIR-12 filed showing their appointment in an AGM. However, the Tribunal found that the Appellant's non-attendance at the relevant meetings and failure to challenge the appointments in a timely manner rendered their objections belated. As a result, the Tribunal upheld the validity of the appointments and dismissed the appeal. In conclusion, the National Company Law Appellate Tribunal, Chennai, upheld the legality of the enhancement of authorized share capital, validated the proceedings of the Annual General Meeting and appointments of Directors, and dismissed the appeal due to the Appellant's lack of timely objections and non-attendance at crucial meetings.
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