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TMI Blog2017 (7) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... torship of the company and the petitioner is appointed as Director-cum-Managing Director of the company who shall perform his duties diligently to run the day to day affairs of the company smoothly along with R2 who is directed to render all assistance and support to the newly appointed Director-cum-Managing Director. Further, 1st Respondent company shall not allow third party to use the goodwill of the company for the benefit of third party. The petitioner is also forbidden to compete with 1st Respondent company in any manner, so that the company could grow in future. Accordingly, the petition is disposed of. - T.C.P. NO. 113 of 2016, AND C.P. NO. 23 of 2013 - - - Dated:- 7-6-2017 - MR. ANANTHA PADMANABHA SWAMY, AND CH MOHD SHARIEF TARIQ, JJ. For The Petitioner : Ms. V. Gowri For The Respondent : Respondent : Ms. Srivarshini, V. Mahesh and Ms. Manjula Devi ORDER CH. MOHD SHARIEF TARIQ, MEMBER (JUDICIAL) :- (ORAL) 1. The company petition No.23 of 2013 was filed under Sections 397,398,402,403 and other applicable provisions of the Companies Act, 1956 against the 1st Respondent company viz. M/s. P.T. Mathai Construction Company Private Limited and 5 other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster Account of the company was transferred from time to time to three individual current accounts again in the name of the company but operated only by three respective Directors through sub-accounts. The money required for carrying out individual work falling within the scope of individual Director was transferred from the master account to the sub-account from where individual Director will administer the sub-account vis-a-vis projects falling within his scope. The Director within whose scope the project fallen used to prepare various reports including the work-in-progress, financial statements, etc. and consolidate for circulation to the company record. In other words, each Director has been functioning as individual cost and profit centres and individual cost/profit centre would be must to arrive at the consolidated figures of the company. 3. It is also averred in the company petition that by successful execution of the Government projects, the company earned a very good reputation in the market and becoming a force to reckon with and was amazed by any other company in terms of its track record in the State of Kerala. So, in the normal course of business, the company had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties completely stopped. The petitioner was not invited to any Board meeting or general meeting and was advised by the father (R2) not to come to the premises of the company. 5. The allegation that has been levelled by the petitioner against 3rd Respondent is that he started dealing with the properties mortgaged with the bank and effected sales therefor, with the intention of complicating security enforcement by the bank against collateral of 3rd Respondent with the bank. It has further been alleged by the petitioner that even at this stage, the 3rd Respondent was not looking at completion of the projects, accounting for monies realised from the projects, to the company and consequently to the bank and settling the Overdrafts but was siphoned out the funds and also defaulting in completing the projects. In these circumstances, the petitioner addressed series of letters in June 2, 2012 to the bankers, and also R2 and R3 placing on record the objection of the petitioner to the conduct of the respondents. The petitioner alleges that R2 and R3 allowed the track record, reputation of R1 company to be used by third party and have sought to divert projects which were to be awarde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginally, was increased from time to time. For the purpose of OD security of the directors' immovable properties were provided. As Directors have also furnished some of their properties as collateral security and they are jointly and severally liable, because the total profit or loss is the total profit or loss of the company. It has also been admitted that even assuming that because of any delegation the work is managed by the Directors separately, it is only for the purpose of execution of the work. The Directors are given remuneration by way of salary for the services rendered by them to the company and the total salary paid to the petitioner during the year ending 31.03.2011 was ₹ 7.5 lakhs. It has also been admitted that in addition to the OD account, the company is also operating five other accounts with South Indian bank Ltd., MG Road, Ernakulam and the said accounts are accounted in the books of company from which it is clear that accounts are for and on behalf of the company and withdrawals from the said Accounts are accounted in the books of company, it cannot be considered as drawn by any of the Directors which could be confirmed from the books of account. It ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pendent bids against 1st respondent company in contracts bids as a competitor. Therefore, any person or individual who comes without clean hands is not entitled to any remedy, it has been asserted in the counter. In relation to the contract with 5th Respondent, it has been stated that the same has already been concluded and cannot be interfered with. The counter filed on behalf of the 1st Respondent company also makes a mention that there is no OD so much so of ₹ 16.45 crores by 3rd Respondent and even if there is any liability, the same is the liability of the company which is not the liability of any particular Director. In the premises, it has been averred in the counter that there is no deficiency whatsoever in the management. The petitioner has never been denied of any participation either in decision making or in the financial affairs and the company and its Directors are collectively responsible for the execution of the projects and the individual's role is purely supervisory. It has been prayed in the counter that the company petition did not disclose any cause of action and therefore, the petitioner is not legally entitled to any of the reliefs prayed for. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork of construction as per the object of R1 company falling within the scope of each individual Director and the money was to be transferred from the Master Account to the sub-account from where each individual Director will administer their respective sub-accounts, for purpose of the Project falling within their scope. In other words, each Director function as an individual cost and profit centre. It is on record that while the petitioner and R2 have completed their projects successfully, R3 was not in a position to complete the projects allotted to him. Not only this, some of the work contracts were cancelled; because the projects being handled by R3 could not progress as per the time line specified. R3 has also overdrawn from his sub-account to the tune of ₹ 16.48 crores as on 31.03.2012, defaulted in completing several projects which has caused losses to the company. The plea of the petitioner is that he performed well and completed the projects allotted to him and brought profit to 1st Respondent company whereas huge losses have been incurred by 1st Respondent company on account of the projects undertaken by R3. Therefore, the petitioner could not be made liable for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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