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TMI Blog2010 (9) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... ist. (III)Declare that the board resolution dated 12-6-2009, appointing Mr. Ajit Chitaman Bhagwat and the consequent Form No. 32 as null and void . (IV)Declare that the board resolution dated 12-6-2009, changing the registered office of the company and the consequent Form No. 18 as null and void . (V)Declare that the board resolution dated 18-9-2009, removing Mr. Sridhar Reddy Kanumuru as a director and consequent Form No. 32 dated 26-10-2009, as null and void. (VI)Declare that the board resolution dated 30-9-2009, allotting 500 shares to Mr. Bhagwat and consequent filing of Form No. 2 as null and void . 2. Shri R. Murari, learned counsel for the petitioner while initiating his arguments has submitted : (1)The company was incorporated on 14-6-2006, as a private limited company with an objective of developing Telecom Packet Switching Technology and subsequently to commercialise the technology by creating a "Telecom Backbone Overlay Packet Switching Network" (Active Telecom Infrastructure). The potential customers of the first respondent-company are customers like BSNL, Tata Tele-Services, Aircel, etc. (2)The first petitioner is the promoter of the company and its chairman and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness in Mexico. Therefore the issue of shares to them were kept pending. (6)In addition to not complying with the terms of the memorandum of understanding and equity share purchase agreements, respondent Nos. 2 and 3 also started diverting and siphoning off the funds of the company. During an internal audit, it was discovered that nearly Rs. 91.18 lakhs was mismanaged and the company funds from its bank accounts were transferred to Victor Hotels and Motels Ltd., in Goa, a gambling company. When questioned, respondent No. 2 has turned hostile. (7)From 23-2-2009, onwards, respondent No. 2 has started a series of well planned and plotted acts of oppression and mismanagement with a clandestine intent of usurping the management of the first respondent-company and to throw-out and get-rid-of petitioner No. 1. These acts were in three folds. (8)Respondent No. 2 held board meeting on 1-1-2009, chaired by him and this meeting was claimed to be held at Hyderabad where four directors were present; as per the Forms filed by the second respondent with the Registrar of Companies. Mr. Rajesh Chharia, one of the four directors who claimed to be present at this alleged board meeting, has hims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... que of Rs. 3 crores dated 28-2-2009, being the date of payment of the said amount as promised by the company. (c)A "deed of hypothecation" was executed on 14-2-2009, without the knowledge of the board of directors, by respondent No. 2 in favour of respondent No. 3 and a charge was created in favour of respondent No. 3, by filing a Form No. 8 with the Registrar of Companies on 23-2-2009, with the "promissory notes" and "letter of intent" as its enclosures. The deed of hypothecation clearly indicates that each and every asset and intellectual property of the company is charged to respondent No. 3, the wife of respondent No. 2 and a director of the respondent-company. (12)From the above chronology of events and dates, it is clear that the false and fictitious documents, the letter of intent, promissory notes and deed of hypothecation were created by respondent Nos. 2 and 3 to lend legitimacy to the filing of Form No. 8, creating a charge in favour of respondent No. 3 and to usurp the management of the company. The usurping is quite evident from the fact that respondent No. 2 was actively negotiating the sale of the company's assets, patents and the technology having illegally create ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners and the directors at any point of time. Without the presence of the first petitioner, Mr. Sridhar Reddy Kanumuru and his wife Mrs. Soudhamini Kanumuru, the respondents cannot conduct any board meeting and as such the alleged board meetings and the consequent board resolutions are nothing but false and fabricated materials. Thus, the allotment of 500 shares to the fourth respondent Mr. Bhagwat and Form No. 2 filed in respect of allotment is null and void and to be set aside. (17)Respondent No. 2, by the way of these three planned acts, with no respect for law, no respect for the orders of this Hon'ble Board and using concocted documents has indulged in a series of oppressive acts by filing six different forms with the Registrar of Companies at three different points of time, has completed his planned process of usurping the company in terms of the shareholding, taking control and ownership of the assets and removing petitioner No. 1 as the director/managing director of the first respondent-company. (18)After asking for a series of extensions for filing of the counter for the company petition, counsel for respondent Nos. 2 and 3 withdrew stating that he is not getting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to act in the best interests of the company and in a fiduciary capacity and if they do not do so, their actions are liable to be set aside. The Company Law Board therefore has ample power to pass such an order. He submitted that section 397 which deals with the acts which are oppressive provides in sub-section (2) that if the Company Law Board would find that an act was prejudicial to public interest or oppressive of any member or members and winding up was not the solution and then, the Company Law Board may, with a view to bringing to an end of the matters complained of make such orders as it thinks fit. Section 398(2) contains the similar wording. Therefore, both these sections are very widely worded and empower the Company Law Board to make any order that it thinks fit with a view to bring to an end the matters complained of. This apart, from the fact that the order must have a nexus to bring an end to the matters complained of, no other restriction is placed on the powers of the Company Law Board. (i)Section 402 sets out the powers of the Company Law Board on an application under section 397/398. Section 402 is prefaced by the words "without prejudice to the generality of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of resignation has been attached to Form No. 32 and neither has any such document been filed in these proceedings though for a while the respondents were represented by a counsel. This is therefore, a fraudulent act and clearly oppressive on the petitioners. 3. Heard the arguments on behalf of the petitioner. It is a fact that the company and two others have been arrayed as respondents initially. From time to time the petitioners filed applications to implead additional respondents in various company applications. On the direction of the Bench, the petitioners have sent notices to all the respondents. However, all the notices have been returned with the postal remark "refused" and "unclaimed". Thereafter, this Bench treated the service of notice as sufficient and impleaded all the additional respondents and posted the matter on 2-3-2010. The amended petition was also filed on 1-3-2010. It is on record that the matter has been adjourned to 29-3-2010, 31-3-2010 and finally to 30-4-2010. 4. It is on record that Shri Cibi Vishnu, learned counsel appeared for respondent Nos. 2 and 3 initially and subsequently reported no instructions. Though the respondents have knowledge of the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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