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TMI Blog2015 (12) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter, referred to as 'Mekuba'], represented by its shareholders and directors, having an authorized capital of Rs. 50 Lakhs consisting of 50,000 equity shares of Rs. 100/- each, entered into a Foreign Collaboration Agreement on 02.6.1997 with the respondents 2 and 6, viz., Wynn's Belgium NV and one Paul Middel from Dubai respectively, agreeing to incorporate the first respondent company Wynn's Mekuba India Private Limited [hitherto called 'Company'] and accordingly, it was incorporated on 24.6.1997 in accordance with the Foreign Collaboration Agreement. The authorized capital of the first respondent company is Rs. 35 Lakhs. Under the Foreign Collaboration Agreement, which is marked as Annexure - D, the parties agreed to set up a Joint Venture Company to manufacture and market a wide range of additives for automotive oils and fuels, viscosity improvers, anti-knock preparations for gasoline and diesel engines, emission control products and anticorrosion preparations for automobiles and other engines and also provision of associated and incidental services. 5. As per the Foreign Collaboration Agreement, the second respondent Wynn's Belgium holds 51% equity shares while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that after receipt of the report of Deloitte, Wynn's Belgium, without convening a Board Meeting, withdrew its nominee and did not take any steps to find out the correctness of the report of Deloitte despite their endeavour to provide all the information to Deloitte. Subsequently, Deloitte also resigned its office as statutory auditor of the company by its letter dated 23.01.2008 without completing the audit. 8. In such situation, Wynn's Belgium filed C.P. No. 154 of 2007 seeking to wind up the Company on the ground that it was unable to pay its debts. This Court, by order dated 21.01.2008, directed the Company to pay a sum of Rs. 15 Lakhs per month on or before 15th of every month, till the entire outstanding is liquidated, commencing the first instalment from 15.3.2008. In pursuant to the same, to show the bona fide, the Company credited Rs. 10 Lakhs to the account of Wynn's Belgium. The main grievance of the petitioners is that Wynn's Belgium, with a view to enter into the market in India and sell its products under the brand and trade name of Wynn's, has initiated extreme steps of terminating the collaboration agreement, which is wrongful and detrimental to the interest of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d respondent Wynn's Belgium also filed another application being C.A. No. 2 of 2014 under Regulation 44 of the Company Law Board Regulations 1991 seeking for a direction to the Company to include the agenda for discussion in the 17th AGM on 27.9.2014, the matter of appointment of Mr. Tim Margriet Georges Verhaeghe and Mr. Jose Berasategui, being its nominees, as directors of the Company and also to appoint a neutral Observer to oversee the proceedings of the AGM. 13. The Additional Principal Bench, Chennai, of the Company Law Board, while declining to interfere with the powers of the shareholders to be exercised in the AGM, by order dated 26.9.2014, directed the Company to consider the appointment of nominees of the second respondent as one of the agenda in the 17th AGM on 27.9.2014 besides appointing one Kanna, Bench Officer of the Bench as Independent Observer to oversee the proceedings and adjourned the C.A. to 20.11.2014. 14. That being so, the petitioner Mekuba filed an application being C.A. No. 3 of 2014 on 17.11.2014 before the Company Law Board praying for interim injunction restraining the second respondent's nominees, viz., Tim Margriet Georges Verhaeghe and Jo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Company. 19. For better appreciation of the case, before going into the merits, it would be relevant to re-produce Section 160 of the Act:- "160. Right of persons other than retiring directors to stand for directorship.-- (1) A person who is not a retiring director in terms of section 152 shall, subject to the provisions of this Act, be eligible for appointment to the office of a director at any general meeting, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty-five per cent. of total valid votes cast either on show of hands or on poll on such resolution. (2) The company shall inform its members of the candidature of a person for the office of director under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of Section 160 of the Companies Act, 2013, the Company Law Board, having recorded a specific finding that the provisions of Section 160 of the companies Act, 2013 were not complied with, dismissed the challenge of appointment of nominees in C.A. No. 3 of 2014 and also directed the first respondent Company to file necessary e-forms to implement the resolutions. 22. At this juncture, it would be worthwhile to refer to Company Application No. 2 of 2014 filed by the second respondent Wynn's Belgium before the Company Law Board wherein in paragraph 4, it has sought for the relief of dispensing with 14 days notice. The relevant passage in this regard is usefully re-produced hereunder:- ".... In light of the aforesaid circumstances, it is essential that this Hon'ble Bench issues a direction to the Respondent No. 5 to include additional agenda items with respect to appointment of Mr. Tim Margriet Georges Verhaeghe and Mr. Jose Berasategui as nominee directors of the Applicant on the Board of the Company, in the notice dated August 19, 2014 convening the seventeenth annual general meeting on September 27, 2014 dispensing with 14 days notice requirement in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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