2020 (12) TMI 28 - Tri - Companies Law

Application for withdrawal of petition - amicable settlement reached - removal of Directors from BOD and appointment of Directors - recovery of undue gains and secret profit made by respondent - regulate the conduct of affairs of the 1st Respondent -Company in future by superseding the present Board of Directors of the Company - maintaining of shareholding pattern - compulsory purchase by the Petitioner and his nominees of the shares, after due valuation. HELD THAT - In view of the settlement agreement between the parties and the withdrawal memorandum filed by the petitioner to withdraw the petition, nothing survives for further consideration in this matter. Petition dismissed as withdrawn.

Summary

Issues:
1. Removal of Respondent-Directors and appointment of new Directors.
2. Recovery of undue gains and secret profits.
3. Regulation of future conduct of the company.
4. Direction regarding shareholding pattern and transmission of shares.
5. Compulsory purchase of shares.
6. Imposition of costs for the Company Petition.

Analysis:

1. The petitioner sought the removal of Respondent-Directors and appointment of new Directors for proper management of the company until a new Board is constituted. The Tribunal was approached for this relief, emphasizing the need for a reconstituted Board through a General Meeting.

2. Another relief sought was the recovery of undue gains and secret profits made by certain respondents by siphoning off company funds and selling properties without proper valuation or member approval. The petitioner aimed to recover these profits and regulate future conduct to prevent such actions.

3. To regulate future conduct, the petitioner requested the supersession of the current Board of Directors and the appointment of a fresh Board through a General Meeting. Disqualifying certain respondents from directorship was proposed to ensure proper management of company affairs.

4. The direction was sought to maintain the shareholding pattern until the transmission of shares was completed as per applicable succession laws. Specifically, the transmission of shares originally held by a deceased individual was highlighted for proper registration by the company.

5. The petitioner also requested the compulsory purchase of shares held by specific respondents after valuation. The Tribunal was asked to allow this purchase, ensuring transparency and fairness in the transaction process.

6. Lastly, the petitioner sought the imposition of costs for the Company Petition. Legal expenses and related costs were to be addressed as part of the resolution. The Tribunal oversaw the settlement negotiations between the parties, leading to an amicable agreement and withdrawal of the petition, resolving all issues comprehensively.

This detailed analysis reflects the complex legal proceedings and the eventual settlement reached between the parties, highlighting the key issues addressed in the judgment by the National Company Law Tribunal, Kochi Bench.