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TMI Blog2017 (6) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of the pleading, it transpires that the total statements are self-contradictory and appears to be made with an intention to pressurise the Company for some collateral benefit and to interfere in the smooth running of the Company. Further, on perusal of the minutes of the meeting dated 9-7-2011, wherein the issues of retiring Directors including the petitioner, was discussed and the son of the petitioner, namely, Shri Divyendu Guha was present and the same is also admitted by the petitioner. Thus, the very statement creates shadow of doubt and unbelievable story, when admittedly, the petitioner himself expressed his desire to leave/retire from the Company and for the said purpose, negotiating with the Company. Under such situation, it will be wrong to say that the petitioner has been wrongfully removed under Section 283(1)(g) of the Companies Act, when admittedly, the petitioner has not taken any leave even after receipt of letter from the respondent(s). It is needless to mention herein that the settled proposition of law is that in fiduciary capacity within which the Directors have to act, enjoins upon them a duty to act on behalf of the company with outmost care and skill and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no 33 of the petition from clause no.8(a) to 8(s). The Respondent No. l is the company running in the name and style of Project Electrical Industries (India) Private limited, (hereinafter referred to as 'said company') the registered office of the company is situated at 109, Agarwal Garden Road, Behala, Kolkata-700034. The said company at all material time was and still is dealing in the business of manufacturing buying selling and dealing in High Voltage Isolator (A.B switches) Control panel. Terminal Power Connectors, distribution board, knife switches Motor Control Centres etc. The authorised share capital of the Company is ₹ 2,00,000/- (Rupees Two lacs only) divided into 2000 shares of ₹ 100/- each. Subsequently, as on 31-03-2010, the authorised share capital of the said company has been increased to ₹ 5,00,000/-(Rupees Five lacs only) as on 31-03-2010 and the holding of shares by the petitioner is 1000 shares of ₹ 100/- each. 1. The petitioner was the Promoter Director of the respondent no. 1, Company and the Respondent nos. 2,3 and 4 are directors and shareholders of the respondent company and on or before 15.12.2010 shareholding of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as the relation deteriorated day by day and the atmosphere was not congenial to act and perform as directors of the company. Hence, the petitioner was mentally prepared himself to leave the Respondent No. l, Company and started negotiation with R-2, 3 and 4 for settlement to get exit from the Company. Admittedly, the proposal for settlement negotiation was held in the month of March, 2011 with the petitioner and on 1-7-2011, the petitioner appointed M/s. KN Chatterjee & co. Chartered Accountant as per para (xv). The petitioner stated that the first meeting for settlement of claims of the petitioner, was held on 9-7-2011 wherein, his son was also present. Again, the petitioner submitted in para XVII "that on 16-01-2012, the second meeting with the respondent(s) No. 2, 3 and 4 was held and accordingly, on 9-2-2012, Shri A Chatterjee, the Bank approved Valuer, made valuation of the properties". The petitioner further alleged that the Respondent Nos. 2, 3 and 4 instead of accepting the valuation of Bank's Valuer, appointed one Mr. KN Kumar & Associates Pvt. Limited, who submitted the report on 3-3-2012 at the dictates and direction of Respondent Nos. 2, 3 and 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies). The Petitioner was given three consecutive notices of Board meeting and it was duly received but the petitioner deliberately didn't attend the Board Meeting which compelled the respondent(s) to remove him from the Board of Director as per the provisions contained in section 283(1)(g) of the Companies Act,1956. The petitioner, therefore, has failed to make out any case which would warrant interference by this Bench/Tribunal. The petition doesn't disclose any case of oppression and mismanagement. 7. It is further submitted by the respondent(s) that the petitioner did not attend the Board meeting because the petitioner was not interested to continue in the Company. The petitioner, all along wanted to exit from the Company. The petitioner has deliberately written various false letters to statutory authorities (as also admitted by the petitioner) which resulted in reduction of repute and goodwill of the Company. The petitioner filed the petition with collateral purpose so as to pressurize the company and/or to destabilise the company for wrongful gain. On the other hand, the minutes of the meeting dated 09.07.2011, reflects that his son (Dibyendu Guha) was present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33 (ii) M.S. Madhusoodhanan v. Kerala Kaumudi (P.) Ltd. [2003] 46 SCL 695 (SC). (iii) Dale & Carrington Investment (P.) Ltd. v. P.K. Prathapan [2004] 54 SCL 601 (SC). (iv) Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad [2005] 57 SCL 476 (SC). (v) Kamal Kumar Dutta v. Ruby General Hospital Ltd. [2006] 70 SCL 222 (SC). (vi) V.S. Krishnan v. Westfort Hi-tech Hospital Ltd. [2008] 83 SCL 44 (SC). (vii) Bagree Cereals (P.) Ltd. v. Hanuman Prasad Bagri [2001] 105 Comp. Cas. 465 (Cal.). (viii) Hanuman Prasad Bagri v. Bagress Cereals (P.) Ltd. [2001] 33 SCL 78 (SC). (ix) Gulabchand Chhotalal Parikh v. State of Gujarat [1965] 2 SCR 547 (x) Union of India v. Nanak Singh [1968] 2 SCR 887 (xi) State of Punjab v. Bua Das Kaushal [1970] 3 SCC 656 (xii) State of Tamil Nadu v. State of Kerala [2014] 12 SCC 696. 9-10. Heard the learned counsel appeared for the respective parties, perused the pleading, documents and citations relied upon by them. There is no dispute with the case law cited but each case turns on its own fact. After analysing the pleadings, the following issues are felt for consideration and the same need to be addressed : (a) Whether the Petitioner No. 1 remained absent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany for some collateral benefit and to interfere in the smooth running of the Company. Further, on perusal of the minutes of the meeting dated 9-7-2011, wherein the issues of retiring Directors including the petitioner, was discussed and the son of the petitioner, namely, Shri Divyendu Guha was present and the same is also admitted by the petitioner. Thus, the very statement creates shadow of doubt and unbelievable story, when admittedly, the petitioner himself expressed his desire to leave/retire from the Company and for the said purpose, negotiating with the Company. Under such situation, it will be wrong to say that the petitioner has been wrongfully removed under Section 283(1)(g) of the Companies Act, when admittedly, the petitioner has not taken any leave even after receipt of letter from the respondent(s). It is needless to mention herein that the settled proposition of law is that in fiduciary capacity within which the Directors have to act, enjoins upon them a duty to act on behalf of the company with outmost care and skill and due diligence and in the interest of the company. They have a duty to make full and honest disclosure to the Company. 12. Further with regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the appeal were dismissed. 14. There is allegation and counter allegation levelled by both side but on close scrutiny of the pleading, prayer and documents relied upon by both side, it is clear that the petitioner himself, admittedly, was not interested to continue with the company and consequent upon which the settlements were entered into and on being not satisfied with the result, the petitioner has filed the instant case, under sections 397 and 398 with a sole intention to pressurise the company with mala fide intention when the allegation is purely directorial in nature. Furthermore, the allegation in the pleading and prayer made in the petition is only in respect of meeting of Board of Directors held on 8.9.2010, 29.09.2010 and 15.12.2010 whereby a resolution was taken on 15.12.2010 to remove the petitioner but the same cannot be tenable in as much as, even after the receipt of letter from the Respondent No. l, Company, as admitted, the petitioner has failed to give any reply showing the cause of absence and thereafter several negotiation/settlement meetings held between the petitioner and respondent(s) wherein his son and wife were also present in the meeting an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t section. The person complaining of oppression must show that he has been constrained to submit to a conduct which lacks in probity, conduct which is unfair to him and which causes prejudice to him in the exercise of his legal and proprietary rights as a shareholder. 16. In Private Limited company, the conduct of the affairs of the company is governed more by relationship between the shareholders, sometimes by on unwritten understanding or convention rather than by the law or the article; it is based on mutual trust and confidence. When the mutual trust and confidence is eroded, it triggers dispute and tug of war begins. When the internecine squabbles reach the peak, the living together becomes almost impossible which in most cases affects functioning of the company. In this scenario, often the majority shareholder acts in a high handed manner, in relation to any matter touching upon or affecting the 4 company and all shareholders, perfectly consistent with law or the company's articles of association and there leaves no flaw in regard to compliance with the law or the articles with regard to that act; however, underneath the act lies some ulterior motive and the act is desi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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