9911796707
TMI Blog2013 (12) TMI 1642X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are necessary concomitant to it, may it be in the nature.of auxiliary, incidental and ancillary to it. The first respondent company was initially promoted by the father of the petitioner, and later on Venkata Krishnam Raju Datla joined in, along with his HUF. That late Venkata Krishnam Raju Datla, is none other than the father-in-law of the petitioner. After the marriage of the petitioner with Dr Vijay Kumar Datla, petitioner's husband Dr Vijay Kumar Datla was inducted into the Board, and went on to become its Chairman and Managing Director on 01.05.1972, and continued in that position till his untimely demise on 20.03.2013. The petitioner and Dr Vijay Kumar Datla were blessed with three daughters, out of their wedlock, and they being respondent Nos. 2 to 4. That, petitioner and her husband promoted several companies, and in some of them respondents 2 to 4 were appointed as directors. That on 18.11.2000, R5 was inducted into the RI Company as a director, and since then the petitioner and her husband (Dr Vijay Kumar Datla) and the R5, were the only three directors on the Board of the RI Company. The petitioner's husband who was the Chairman and Managing Director of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany, came to know as to who were all involved in the said criminal acts of submitting false documents. That, the qualified certifier has certified the same, inspite of the fact that no such meeting took place nor there is any evidence to vouchsafe about that never held meeting. The petitioner has already given a police complaint against those two persons, and requested the police to investigate the matter and proceed further in accordance with law. That as a matter of fact, when no notice of any of those board meetings were ever served upon the petitioner nor any such meeting was convened by her, nor in-fact any such meeting ever took place, yet the false statutory disclosures were made, in the way of filing Form 32 online application. That when the petitioner along was the remaining director on the board of directors of the RI Company, then there arise no question of any meeting of the board of directors being convened by any one, muchless by the 5th respondent, since he had voluntarily resigned with immediate effect from 06.04.2013. Therefore the acts of the fifth respondent, when looked from any or all the angles, and in particular, the fact that, he hold no shares in the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Board of Director of the RI Company, but under protest, and in-fact the petitioner expressed her dissent to the very constitution of board, which is illegal. That inspite of concerted effort of the respondents 2 to 5, unable to break the resolve of the petitioner to save the RI Company engulfing itself into debt trapped being planned by respondents 2 to 5 and also to sell of the equity by inducting a P.E shareholder, for which already due diligence is in progress. That, these acts of the illegally constituted board is an ample testimony of affairs being conducted to the prejudice to RI Company, and it is needless to say that those acts are detrimental to the very existence of RI Company, and is also prejudicial to the interest of all stakeholders in the RI company. That the said respondents 2 to 5 as part of their mal intent and sinister design, and as a pre-emptive strike, they have started filing false police complaints against the petitioner and her servants and assistants, with over enthused assistance they are able to procure for extraneous consideration from he sinecure police officials. That, one such case is the FIR No. 157/2013 dated 8.10.2013, registered in the PS CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs and the decisions taken in those meetings are invalid. The R5 is not a director from 08.04.2013. He submitted that if the proposed AGM is allowed to continue, the appointment of respondents as additional directors will be ratified in that meeting and the transmission of shares will also be allowed to ratify. He requested the Bench to stay the AGM. He further submitted that the petitioner has signed the letter dated 15.04.2013 which was circulated to the employees of the company wherein it was stated that the appointment of her three daughters as directors of the company. In support of his case the learned senior counsel relief upon the following citations: (i) (1993) 2 SCC page 725 in the matter of Motiram Vs. Paramdev and Another (ii) (1997) 47 Company Cases page 652 (Mad) in the matter of S.S Lakshmanapillai Vs. ROC (iii) (2004) 51 SCL page 243 (Ker) in the matter of Mother care (India) Ltd Vs. Professor Ramasamy (iv) (1973) 2 SCC page 543 in the matter of Sri Parameshwari Prasad Gupta Vs. Union of India (v) AIR 1959 SC page 504 in the matter of Kishorilal Vs. Chaltibai. 4. The respondents 1 2 have filed a detailed counter to the petition. Shri PS Raman lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a niche for herself in the business as an entrepreneur and successful business women. The second respondent was deeply involved in all the major projects being undertaken by the RI along with her father and has played a significant role in contributing to the first respondent company and its success. It is submitted that Dr Vijay Kumar Datla promoted and groomed the second respondent to succeed him in managing the first respondent company. Dr Vijay Kumar Datla tragically passed away on 20.03.2013 after a prolonged period of illness. During such period and even prior thereto, the business of the company was largely being handled by the second respondent herein. After the demise of Dr Vijay Kumar Datla, his family members and the entities controlled by them constituting the shareholders of the company, conducted informal meeting amongst themselves for steering the company's future affairs and it was agreed that all the three daughters of Dr Vijay Kumar Datla, including the second respondent, be appointed as directors on the board of the RI Company. As the shares held by late Dr Vijay Kumar Datla were testamentary bequeathed in favour of the second respondent and since the second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors of the first respondent company. Mr G. V Rao thereafter proceeded to conduct a meeting of the board of directors at which Indira P. Raju (the 4th Respondent) was appointed to the casual vacancy of director caused by the demise of Dr Vijay Kumar Datla. After conferring and consulting with the petitioner and the 4th respondent who was inducted as a director and after taking their consent, the next meeting was fixed for the next day on 10.04.2013. Accordingly, a meeting was held on 10.04.2013 for the purpose of giving effect to the transmission of shares held in the name of Dr Vijay Kumar Datla to the second respondent and also for appointing the R2 R3 as directors of the first respondent. Though the said meeting was convened with consent of all the directors including the petitioner, the petitioner had indicated her inability to be present and the said meeting was attended by the other two directors, being the 4th 5th respondents respectively. At this meeting, resolutions were passed effecting transmission of shares from Dr Vijay Kumar Datla to the second respondent and also appointing 2nd 3rd respondents as directors of the first respondent. The next meeting, as broadly ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.08.2013 purporting to complain about the inadequate notice and also raised other issues. That being so, in view of the previous complaint made in writing about the inadequacy of the notice, for the next board of director's meeting convened on 25.09.2013, a notice of the same was sent to the petitioner on 13.09.2013. The petitioner duly attended the said meeting convened on 25.09.2013 where too the petitioner was granted the full right of participation. On the said date, the petitioner addressed the board of directors and submitted a letter making various false, frivolous and untenable allegations. The petitioner's family members, who were on the board of directors of the I st respondent, also initiated various steps for amicably discussing the matter with the petitioner and were trying to find a resolution giving the petitioner certain managerial responsibilities in the company commensurate with her standing and position, both as director and as the wife of the former chairman and without diluting the management structure of the company. It is submitted that these discussions were held not just in a sense of conducting business, but were also held for the purpose of findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the ownership of the company in such cases only the petitioner can invoke the said provision. He further submitted that when the petition is not maintainable the Bench need not go into the merits of the case. The petitioner by her letter dated 15.04.2013 addressed to the employees acknowledge the appointment of daughters as directors. The petitioner cannot plead ignorance of the same. Further the petitioner addressed a letter dated 22.08.2013 to the Board of directors whereby it is presumed that she is accepting that there is a Board of the company. Further the petitioner attended the Board meeting held on 22.08.2013 therefore it is acquiesced. The petitioner approached this Bench in a last minute after waiting more than eight months. The learned senior counsel submitted that the AGM should not be stopped and it is a mandatory in law and requested the Bench not to stay the AGM. In support of his case relied upon the decision reported in (1976) 46 Company Cases page 613 (Mad) in the matter of T. Murari vs. State. 7. Shri S. Niranjan Reddy, learned senior counsel appearing for the respondent No.5 submitted that the fifth respondent has withdrawn his resignation letter at the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2013 was postponed to 18.12.2013. The crux of the issue is that the 5th respondent convened the Board meeting on 09.04.2013 and appointed the 4th respondent as director in the vacancy caused due to demise of Dr V K Datla and further meetings held on 10.04.2013 and I I .04.2013 wherein the 2nd 3rd respondents were appointed as additional directors of the company. It is an admitted fact that the petitioner and her husband Dr Vijay Kumar Datla and 5th respondent were the directors of the company. Since the company is an unlisted public company and three directors should be on the Board to constitute the quorum as per law. After the demise of Dr Vijay Kumar Datla the company was having only two directors i.e. the petitioner and the 5th respondent. It is also an admitted fact that the 5th respondent resigned from the Board on 06.04.2013 and the company has received the resignation letter from the 5th respondent. It is stated that the petitioner and the respondents 2 to 4 requested the 5th respondent to continue as director of the company in view of his long association with Dr Vijay Kumar Datla. The 5th respondent withdrawn his resignation letter on 09.04.2013 and the company has re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is unequivocal that the petitioner recognized the respondents 2 to 4 as directors and the second respondent as the managing director of the company. In the minutes of the Board meeting held on 22.08.2013 it was recorded that the petitioner had expressed her dissent and recorded that she has not assigned any reason for her dissent. The 5th respondent in his elaborate letter dated 30.10.2013 addressed to the petitioner had stated that he informed the petitioner regarding convening of the Board meeting on 09.04.2013 and taken consent for convening the Board meeting on 10.04.2013 and intimation was given for the Board meeting dated I I .04.2013. The petitioner having received the withdrawal letter from the 5th respondent has not expressed either accepting or rejecting the resignation. One of the points raised by the learned senior counsel for the petitioner is that mere addressing a letter to the employees of the company cannot be treated as estoppel of raising the issue and relied upon a judgment of the Apex Court in that regard. The point for consideration in this case is that the petitioner has filed the present petition under section 409 of the Companies Act, 1956. As per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 409 of the Act was of the view that the object of the section 4()9 is to prevent a change in the Board by outsiders acquiring the shares of a company. In the present case as discussed above the petitioner is the mother of respondents 2 to 4. The petitioner is continuing as Executive Director of the company. The respondents 2 to 4 are the daughters of the petitioner. Moreover it is an admitted fact that the second respondent was working in the company for the last 15 years and she is very well acquainted with the affairs of the company. Further it was stated that the second respondent got several accreditions from various organisations from all over the world for the services rendered in the RI Company. In the AGM scheduled to be held on 18.12.2013 the company is going to transact the business as stated in the notice. From the notice it is seen that there are no changes going to take place by passing the resolutions more particularly change in the management or the ownership and there is no takeover by the outsiders. Since the AGM is a mandatory in law I am not inclined to stay the AGM. It is an admitted fact that the petitioner got the notice for the said AGM. The petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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