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TMI Blog2017 (6) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... the five members of the first respondent company. Therefore, second respondent is also eligible to file CP 6 of 2016. Whether petitioner committed acts of oppression and mismanagement as alleged by second respondent? Whether second respondent committed acts of oppression and mismanagement as alleged by petitioner? - Held that:- In both the petitions, there are no acts of oppression or mismanagement. However, there appears to be a dispute between the petitioner and second respondent. There appears to be some difficulty in the functioning of the first respondent company because of the conduct and attitude of the petitioner in CP 15 of 2016. Fact remain that the petitioner also invested amount in the first respondent company. It is to be noted that petitioner was also removed from the employment of the first respondent company Thus it may not be possible for the petitioner in CP 15 of 2016 to continue as a member of the first respondent company. Therefore, petitioner in CP 15/16 if he is willing, he can sell his shares to other shareholders in the first respondent company for a fair value as on the date of filing of the petition CP 6/16 determined by mutual agreement or by an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent 2 being in employment of the said firm could not be partner in the other firm. Accordingly, partnership firm was established viz. Biosync Scientific (Biosync) on 21.07.2003 with capital and profit ratio as under:- Sl. No. Name % 1 Viral L. Vaishnav (petitioner) 33 2 Mrs. Vinita R. Vaishnav (wife of R-2) 33 3 Pratap Survey (Friend of R-2) 33 4. During 2003 to 2005, 2nd respondent mismanaged affairs of Biosync Scientific and siphoned huge amounts to his account and by making use of the said funds increased share capital of his wife in Biosync Scientific. Respondent 3 also entered as 4th partner with 10% share in September, 2003 thereby share of petitioner was reduced to 10% in 2005 in Biosync Scientific. 2nd respondent after his retrenchment infused funds which he had siphoned from his employer into Biosync Scientific and took total control of Biosync Scientific in collusion with respondent 3. Thereafter, Biosync Scientific was converted into a private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent and respondents 3 to 8. Because of the raise in the share capital and allotment of bonus shares, percentage of the petitioner in the paid up share capital became to 5% only, instead of 15%. 8. It was agreed by second respondent that petitioner shall be employed as Project Manager with monthly remuneration of ₹ 75,000/- from August, 2011. 9. Second respondent withdrew ₹ 45.00 lacs from the bank account of first respondent company and the same was informed by 3rd respondent by way of SMS. Third respondent also informed the petitioner that payment of salary to the petitioner has been stopped. Petitioner was terminated from the employment in the first respondent company from 01.04.2016. Petitioner, having no other go, addressed letter to 2nd respondent and first respondent company to furnish statutory information about the shareholdings in the first respondent company and other information. Respondents refused to furnish any information to the petitioner as against the provisions of Companies Act. Respondents also not issued share certificates to the petitioner in respect of 1.00 lac equity shares. It is stated by petitioner that compliance certificates for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second respondent did not allow him to exercise his legitimate rights. 11. Petitioner requested to cancel new set of Articles of Association of the first respondent company adopted at the so called EEOGM convened and held on 03.12.2015. According to the petitioner he visited registered office the first respondent company on 12.09.2016 for inspection of statutory records but second respondent did not allow him to see the statutory records. Second respondent obtained signature of the petitioner on the acknowledgement without mentioning the documents that made available. Compliance certificate dated 08.08.2011 issued for financial year ended on 31.03.2012 clearly show that share certificates and allotment of securities were not made available for verification. It is also stated that the compliance certificate dated 08.08.2011 also discloses that the company has deposits from persons other than its members, Directors or their relatives. 12. Petitioner alleged convening of Annual General Meeting on 28.09.2016 even before time fixed for the meeting. With a view to attend the meeting, petitioner reached at the venue before time, but the second respondent did allow petitioner to go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 and reply in CP 15 of 2016, in brief is as follows:- 15 . Second respondent is promoter director of the first respondent company. Second respondent along with family members holds 90% shares of the first respondent company since incorporation. Paid up share capital of the first respondent company is 2.00 crores divided into 20.00 lacs equity shares of ₹ 10/- each. Second respondent is holding 9.90 lacs equity shares of ₹ 10/- each i.e. 49.5% of the shareholding of the first respondent company. Shareholding pattern of the first respondent company, according to second respondent is as follows: - No. Name of shareholder Relationship with petitioner Shares % of holding 1 Rajesh L. Vaishnav 2nd respondent 990000 49.50 2 Vinita Rajesh Vaishnav Wife of 2nd respondent (Respondent 8) 474000 23.70 3 Parth Rajesh Vaishnav Son of 2nd respondent (Respondent 5) 33600 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner, every time, while taking inspection, used to visit second respondent. On 12.09.2016 petitioner took inspection and on 13.09.2016 petitioner sent an email. Second respondent is ready to purchase shares of the petitioner at book value. 18. Basing on the pleadings of both the parties and rival contentions, the following points emerge for determination:- (a) Whether petitioner is eligible to file CP 15 of 2016? (b) Whether second respondent in CP 15 of 2016 is eligible to file petition CP 6 of 2016? (c) Whether petitioner committed acts of oppression and mismanagement as alleged by second respondent? (d) Whether second respondent committed acts of oppression and mismanagement as alleged by petitioner? (e) To what relief? 19. Whether petitioner is eligible to file CP 15 of 2016? CP 15 of 2016 is filed by Viral L. Vaishnav who is holding 5% of the paid up share capital of the first respondent company. According to petitioner, there are only five members in the first respondent company as on the date of filing of the petition and, therefore, he is eligible to file this petition. Even according to the second respondent, there are only five sharehold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... increase in the share capital or allotment of bonus shares to respondents 5 and 8. Therefore, this Tribunal cannot pass any order cancelling the EOGM and Board Meeting held on 25.08.2011 and cancel allotment of 4.80 lacs equity shares allotted as bonus shares. 23. Another aspect raised by petitioner is that, his services as Project Manager was illegally terminated with effect from 01.04.2016. Fact remain that, petitioner was employed as Project Manager in the first respondent company. The fact remain that, petitioner was paid handsome salary for the services rendered by him in the first respondent company. According to second respondent, acts and conducts of the petitioner became prejudicial to the interest of the company and oppressive to all the members and to the interest of the company. According to the second respondent, petitioner was also given agency to deal with the products of first respondent company in the market in the name of a firm MAX BIOCARE , but because of oppressive and intolerable acts of the petitioner, first respondent company ultimately terminated the petitioner from employment and also cancelled rights of distribution of first respondent company's p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce sheet of the EOGM dated 03.12.2015 vide annexure B to the reply in CP 15 of 2016. A perusal of annexure B show that petitioner also attended EOGM dated 03.12.2015. Therefore, the allegations of the petitioner that EOGM dated 03.12.2015 was held without giving him. any notice and without his knowledge shares of Abhishek Masalawala was transferred to respondent 2 does not merit acceptance. Amendment of the Articles of Association also took place in the EOGM held on 03.12.2015. A perusal of annexure 14 to CP 15 of 2016 show that, form No. MGT-14 was filed with Registrar of Companies. The notice of meeting was despatched on 05.11.2015 and resolution was passed on 03.12.2015. In the said meeting it was resolved to alter Memorandum of Association of the company and explanatory statement to the said EOGM for adopting a new set of Memorandum of Association and Articles of Association needs consent of shareholders by way of special resolution has become necessity. Amendment to the Articles of Association took place in the EOGM dated 03.12.2015 and it was attended by the petitioner and, therefore, it cannot be said that amendment to the articles were illegal. 26. One more issue ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at petitioner instead of inspecting statutory records, made hue and cry and made scenes in the first respondent company. Therefore, there is no substance in the allegations made by the petitioner that he was denied statutory information required to be given to him. 28. Petitioner also alleged that there are several variations between the copies of minutes supplied to him and resolutions filed with the Registrar of Companies. In fact, the petitioner has narrated such discrepancies in his petition and those discrepancies are between the copies furnished to the petitioner and documents filed with Registrar of Companies and they are not so material in nature they would make this Tribunal to come to a conclusion that the resolutions are manipulated. 29. Now, coming to the acts of oppression and mismanagement alleged by the second respondent against the petitioner. Those allegations appear to be more in the nature of public nuisance or criminal acts and harassment which cannot be treated as oppression and mismanagement. 30. Quarrels between two brothers who happens to be members of the first respondent company cannot be by any stretch of imagination be concluded as the acts of o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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