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TMI Blog2015 (7) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... acity of the mortgage Deed. In respect to the holding of general body meeting, the company is duty bound to convene its meetings as per law, however non holding of meetings as required under law is violation of the provisions of the Companies Act, and the company and its officers will be in default. In this regard sufficient provisions have been made in the Companies Act, 1956 to take necessary action against the company and its officers in default. The petitioner has not made out any prima facie case regarding to this relief. Other allegations / reliefs requested - I do not see any malafides with respect to the transaction between the R1 Company and R8. Even the petitioner has admitted the fact that the 8th respondent had advanced the amounts to M/s. Maxworth Home Ltd. Therefore the allegations made by the petitioner against these respondents are baseless and liable to be rejected. With regard to the appointment of respondents 5 to 7 as directors of the R1 Company is concerned, the company stated that the respondents 5 to 7 have been appointed by the company as directors as per the procedure and necessary Form 29 and 32 have been filed with the concerned ROC. The petitioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RAHARI, J. For The Petitioner : Shri. R. Ponmani Kandan, for A.K Mylsamy Associates ORDER The present petition is filed under section 398 read with section 402 and 403 of the Companies Act, 1956 praying this Bench various main reliefs as prayed in para VIII of the petition. The counsel appeared for the petitioner narrated the brief facts of the case. It is submitted that the petitioner hold 31.700 shares out of the total paid up capital of ₹ 5,00,000/-. The subscribers to the Memorandum and Articles of Association of' the company are as described hereunder: a. Duraibabu b. K.P Suresh Kumar c. A. Velmurugan d. D. Pasupathy e. D. Pandian f. S. Moorthy 2. It is stated that the R1 Company in its usual course of business obtained a general power of attorney on 31.05.2000 from Kamakshi Land Developers a partnership firm, to develop its property situated at Koppa Village, Jigani I lobli, Anekal Taluk, Karnataka measuring an extent of 7 acres and 23.80 guntas. The said 7 acres and 23.80 guntas are set out in the power of attorney as item l to 4 since they situate in different survey numbers viz. S Nos. 118, 119, 120 and 121 in Koppa Village, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de enquiries which revealed that all is not well with the management of the company by the respondents 2 to 7. 3. The petitioner thereafter made enquires with the company which revealed that already the 9th respondent released an advertisement on 29.12.2004 in Deccan Herald pointing out that the company and Maxworth Home Ltd had executed various sale deeds numbering about 14 alleged to have been registered at the office of the Sub Registrar Anekal, Bangalore in its favour and the 9th respondent contemplating to initiate suitable action on the parties trying to sell the very same property situated in S.No.118, 119 and 121 of Koppa Village, Jigani Hobli. Anekal Taluk. The petitioner with great difficulty was able to obtain the sale deeds alleged to have been executed in favour of 9th respondent by the company representing as power of attorney of Kamakshi Land Developers. It is surprising to note that one Mr Thangachan Thomas has executed the sale deed on behalf of the company as authorized signatory. The enquires made by the petitioner reveals that Thangachan Thomas was not authorized by the Board of the company to execute any sale deed on its behalf pursuant to power of attorn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner has not received any balance sheet for the year ending 31.03.2004. So far as the shareholders are concerned they have been kept in dark about the holding of the Annual General Meeting and the financial position of the company. The petitioner understands and believes the same to be true that there are two sets of directors styling themselves as directors and acting on behalf of the company, one without the knowledge of the other and their activities are detrimental to the interest of the petitioner and the company and its shareholders. As set out earlier one set of directors (respondents 2 to 4) have executed sale deeds in favour of 9th respondent and another set of directors have executed sale agreements and deposited the title deeds in respect of the property for which the company has obtained power of attorney from Kamakshi Land Developer. Both the group of directors have received payments while executing the sale deeds and the sale agreements apart from availing loan to the extent of ₹ 20 lakhs from 8th respondent by deposit of title deeds of the property, for which the company has obtained general power of attorney from Kamakshi Land Developers. Several lakhs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormed to Kamakshi Land Developers. The 8th respondent, as agreed, paid a sum of ₹ 10 lakhs to Maxworth 1 Tomes Ltd. The amount was paid in the name of Maxworth Homes Ltd, as requested specifically by the company and apart from the above payment a sum of ₹ 1.17,636/- has been paid by the 8th respondent on behalf of other respondents to one K.P Iyyer. However, the company is liable for the repayment and to secure the financial assistance by the 8th respondent, the company deposited the original title deeds with R8 and the same are in the custody of 8th respondent and agreed to execute sale deed in respect of the vacant land admeasuring an extent of 12,200 Sqft in Bannergatta as and when required. The respondents 5 to 7 have been appointed by the company as directors legally and as per procedure and that the necessary Form 29 and 32 have been filed with the Registrar of Companies, Madras by the authority as required under the Companies Act. Thus the respondents 5 to 7 are duly appointed directors of the company. Only after noting Advertisement released on 25.02.2005 in Indian Express, the company has suddenly come to the knowledge of the O.S No.417/05 filed by the 8th resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he connivance of Thangachan Thomas and 9th respondent, which was not known to the company or the earlier Board. Hence the petitioner cannot blame the company and its directors for the fraud played by Thangachan Thomas in collusion with 9th respondent, as if he was authorized to execute the sale deed on behalf of the company. The 9th respondent being a scheduled bank should have verified the title deeds and got it satisfied whether the said Thangachan Thomas has been authorised or empowered to execute the sale deed on its behalf. It is true, as set out earlier, the company availed a loan of ₹ 20 lakhs from the 8th respondent and it deposited the title deeds of the property as security. Further it is submitted that this respondent has negotiated with the 8th respondent and paid the amounts borrowed from it. The 8t' respondent agreed to withdraw the suit. The allegation is that there are two sets of directors, each of them are functioning without reference to others is false. The company is entitled to deal with the property which it has obtained general power of attorney from Kamakshi Land Developers. 5. The respondents 5, 6 and 7 tiled a memo dated 10.08.2005 stating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by this respondent as collateral security and the same was accepted by this respondent. However, the 1st respondent company referring to their earlier letter dated 05.06.2002 had vide their letter dated 15.06.2002 addressed to the respondent requested to release the said sum of ₹ 20 lakhs to M/s. Maxworth Home Ltd. Whileso M/s. Maxworth Home Ltd vide their letter dated 15.07.2002 addressed to this respondent informed that they had allotted various plots at Bannerghatta, Bangalore measuring about 12,200 sqft for a total sale consideration of ₹ 20,13,000/-. Subsequently, M/s. Maxworth Home Ltd vide its letter dated 5.07.2002 addressed to the respondent sought for payment of ₹ 20 lakhs towards allotment of plots measuring an extent of 12,000 sqft in Bannerghatta, Bangalore and requested the respondent to pay a sum of ₹ 16 lakhs to Mis. GIC Housing and Finance Ltd and a sum of ₹ 4 lakhs to M/s. Maxworth Home Ltd. In terms of the above letter, and in terms of the letter dated 15.06.2002 addressed by the 1st respondent company, the 8th respondent had paid a sum of ₹ 10 lakhs to M/s. Maxworth I tome Ltd, the receipt of which M/s. Maxworth home Ltd ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rghatta, Bangalore in LA No.1 of 2005 and the same was published in Indian Express dated 25.02.2005. In the meanwhile, the present petition has been filed by the petitioner. It is surprising that the petitioner who stated to be a shareholder holding 31,700 equity shares was silent for all these years without any action until the publication of the advertisement in Indian Express on 25.02.2005 by this respondent. It is stated that this respondent is a bonafide mortgagee of the property of the R1 Company and after verification of all the required documents released the amounts to the R1 Company after receiving the title deeds of the property as collateral security. It is stated that the dealings between the first respondent and the 9th respondent are not within the knowledge of this respondent and this respondent is not bound by the same. This respondent being a bonafide lender and is entitled to rely upon indoor management of the company. It is further stated that the petition is not maintainable as against this respondent and the petition should be dismissed. 7. Heard the counsel appeared for the petitioner. None appeared for the respondents. From the perusal of attendance cum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oid, non-est in the eye of law; (E) Declare the alleged sale agreements said to have been executed by the 5th respondent on behalf of the company in favour of S. Shekar (10th respondent), S. Sundar (11th respondent) and C. Chokkalingam (12th respondent) as null and void; (F) Appoint an Auditor to investigate the conduct of the respondents 2 to 7 and to surcharge them, who are solely responsible for the diversion of the company's funds to their benefits; (G) Appoint an Administrator forthwith to take charge of the assets of the company 8. Now I deal with each relief: With regard to prayer (D) is concerned, the petitioner sought direction from this Bench to declare the alleged equitable mortgaged created by the respondents 5 to 7 in favour of respondent No.8 is concerned this Bench does not have the jurisdiction to go into the veracity of the mortgage Deed. With regard to the prayer (G) is concerned, the petitioner sought direction from this Bench to appoint an Administrator forthwith to take charge of the assets of the company. The status of the company is not aware to the Bench whether the company is functioning and carrying out any business and whether the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise dispose of etc. While so M/s. Kamakshi Land Developers executed a power of attorney empowering the R1 Company to sell its property situated at Koppa Village, Jigani Hobli, Anekal Taluk, Karnataka measuring 7 acres and 23.80 guntas. The contention of the petitioner is that under the said power of attorney the company or any other person authorised by the Board of R 1 Company is authorised to sell or otherwise dispose of the schedule property by way of sale, in whole or in proportion. From the records it is clear that as per the power of attorney the R l is entitled to divide land into plots, develop and sell the same. There is no dispute that the respondent No.8 advanced monies to Ws. Maxworth Home Ltd on behalf of the R I Company and the documents pertaining to the immoveable property of the R1 Company have been deposited with the respondent No.8 as collateral security for the amounts advanced to M/s. Maxworth Home Ltd. The respondent No.8 in its counter affidavit stated that it has paid a sum of ₹ 10 lakhs to Mis Maxworth Home Ltd and ₹ 8 lakhs to GIC Housing and Finance Ltd and ₹ 2 lakhs to M/s. Maxworth Home Ltd. The respondent No.8 further stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty in its favour even prior to filing of the suit. The Bench is of the view that the transaction between the R1 and R9 is a concluded contract. Therefore, the averments made by the petitioner in this regard are not sustainable. With regard to the other sale deeds executed by the company and its authorised persons are concerned. the petitioner has not made out any prima facie case against the respondents. Therefore the averments and allegations made by the petitioner cannot be sustained on mere statement without producing any documents in its support. Therefore, I do not see any merit in the case. Further the petitioner sought declaration from the Bench that the sale deeds executed in favour of 9th respondent and respondents 13 to 15 are to be declared as null and void is concerned, apparently the sale deeds have been executed in the year 2004 and in the year 2002. As per section 402 of the Companies Act, 1956 this Bench has power to set aside the sale deeds if found illegal after adjudication of the matter. However as per sub section (f) of Section 402 one has to challenge the said sale/ transaction within a period of three months from the date of the said sale execution before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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