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TMI Blog2016 (12) TMI 1427X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to his acts in the company. To know as to whether R3 siphoned the funds of the company, the Chartered Accountant is directed to inspect the accounts and file his report within two months from hereof. As to remuneration. R1-company is directed to pay remuneration as agreeable to the Chartered Accountant. R3 has asked this Bench to investigate the whole affairs of the company, forgetting R3 is neither a shareholder nor a director in the company. For he being nobody in the company, he cannot seek any relief u/s 397 and 398 of the Act. Therefore, no investigation has been ordered in relation to the affairs of the company as asked by R3. For having R2 filed affidavit today, R3 has asked time to file reply to the affidavit. Since this Bench has not gone against R3 basing on the averments of the affidavit filed by R2, the reply by R3 to R2 reply will not make any difference to the findings made by this Bench because this case has been decided solely on the ground that the petitioner's consent was not there, either for appointment of R3 as director or for the alleged transfer of shareholding from R2 to R3. For these two reasons, the allegations inter se in between R2 and R3 do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levelled against him, submits that R3, his real brother, in connivance with company's Chartered Accountant, misused his digital signatures for the purpose of uploading Form DIR-12 and an Investor Complaint form dated 19.7.2014. R2 states that neither R3 was appointed as Director of R1-Company nor there was any meeting convened on 4.5.2014 and that the alleged Form DIR-12 dated 10.5.2014 was filed without the knowledge, consent, approval or authority of R2 and that R2 had never tendered his resignation from directorship of the company. R2 further submits that there was no Board meeting convened on 6.5.2014 therefore, the question of acceptance of any alleged resignation does not arise. 7. R2 submits that since R3, who is his real brother, was jobless, he helped him by allowing access to Dadhikar Fort hotel in his absence. This Hotel is run by R1-Company. R3, in greed to acquire the hotel, started planning a conspiracy and appointed himself as director of the company. R2 submits that R3 has unauthorisedly changed the content of the website of R1-company and has wrongly claimed himself as founder of Dadhikar Fort hotel: these changes were done unilaterally by R3 without the kn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner and R2 requested R3 that since the company was a brain child of R3, he should invest money in the company and own it. Then R3, in the interest of the company, invested his earned money of ₹ 10,00,000 on 5.2.2014. That in continuation of original plan, annual general meeting ('AGM') was duly convened wherein R3 was duly appointed as full time director. In that meeting, R2 presided as Chairman. R3 submits that R2, to get the shares held in trust on behalf of R3, executed a Gift Deed transferring shares to the extent of 3,05,000 equity shares of ₹ 10 each. And on the same day, the original share certificates along with duly signed Share Transfer Deeds were submitted in the office of the company. Simultaneously, as part of the aforesaid understanding, R2 resigned as director and his resignation was accepted by the Board. In this regard, R2 also issued public notice and declared all the rights with regard to his holding including de-jure management of the company vested with R3. 13. R3 further submits that the petitioner has indulged in mismanagement and fraud by siphoning funds of the company and due to the petitioner's activities, the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een shown as appointed as director in the company by the petitioner and R2, unless such a transfer that is purported to have taken place between R2 R3, is approved in the Board meeting as per Articles 7 8? For nothing being in place to prove R3 has become director of the company and shareholding transfer approved in a Board constituted of the petitioner and R2, therefore, R3 appointment as director and purported transfer of R2 shares to R3 cannot be construed as valid in the eyes of law, because approval of the Board is mandatory to the above acts. And it is also not the case of R3 that the petitioner participated in the Board meetings or general meetings. 18. When a specific allegation is there in the petition that no Board resolution, no general meeting appointing R3 as director or approving transfer of shareholding from R2 to R3 in a private company, it is the bounden duty of the other side, as stated under Order 8, Rule 5 6(iii to v) of Code of Civil Procedure ('CPC') to specifically deny the same. The parties not supposed to make any evasive denial or no denial. In such a case, non-denial or evasive denial made by the other side will amount to admission from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company detrimental to the interests of the shareholders, definitely it will amount to oppression and mismanagement. R3 managing the affairs of the company without being a director and shareholder of the company rather amounts to fraud. 23. The case of R3 is, he has been managing the affairs of this company for last one year, supporting the same, he has placed some correspondence with banks and other persons saying that he is a director of the company conducting the affairs of the company and the petitioner has all along not raised any objection, therefore, the counsel of R3 says he shall not be removed from the directorship and the acquiescence from the petitioner's side blowing R3 continuing in the director position for more than one year is sufficient enough to allow R3 to continue as director in the company. 24. For having R3 failed to show any document showing that the petitioner consented R3 to become director or conceded his continuance as director, it does not even amount to acquiescence. That apart, the petitioner's case is that he is not residing at the place the hotel is residing at Mandwana which is 200 km away from Alwar where his business is loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by R3. Since R3 is no body in the company, he has no right to operate bank account and conduct the affairs of the company; he is answerable to his acts in the company. To know as to whether R3 siphoned the funds of the company, the Chartered Accountant is directed to inspect the accounts and file his report within two months from hereof. As to remuneration. R1-company is directed to pay remuneration as agreeable to the Chartered Accountant. 30. R3 has asked this Bench to investigate the whole affairs of the company, forgetting R3 is neither a shareholder nor a director in the company. For he being nobody in the company, he cannot seek any relief u/s 397 and 398 of the Act. Therefore, no investigation has been ordered in relation to the affairs of the company as asked by R3. 31. For having R2 filed affidavit today, R3 has asked time to file reply to the affidavit. Since this Bench has not gone against R3 basing on the averments of the affidavit filed by R2, the reply by R3 to R2 reply will not make any difference to the findings made by this Bench because this case has been decided solely on the ground that the petitioner's consent was not there, either for appointment o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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