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TMI Blog2017 (10) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2 to 4 on 17.01.2010 has not been included in the Articles of Association and in case of breach of the terms of such understanding, the petitioners cannot take their redressal by recourse to company Tribunal under Sections 397-398 of the Companies Act, 1956 or at present under sections 241-242 of the Companies Act, 2013. Coming to the terms of MoU petitioner shall provide ₹ 20.00 lacs as unsecured loan without interest and arrange for ₹ 150.00 lacs working capital from Citi Bank. According to the respondents’, because of the petitioners unintended promise they lost an opportunity of getting working capital facility from the existing bank State Bank of India and other banks. It is the case of the petitioners, inspite of their best efforts they could not get working capital limits of ₹ 150.00 lacs from Citi Bank on the ground that the norms of the first respondent company do not fit in with the norms of Citi Bank. Therefore, all said and done it is also a breach on the part of the petitioners. Petitioners themselves pleaded that without necessity of funds, respondents started insisting them to invest further funds. Therefore, the investments by petitioner is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each being the 50% of equity participation in the first respondent company. 03. On 11th March, 2010 the Board of Directors of the first respondent company allotted 329850 equity shares of ₹ 10/- each being the 50% holding in the first respondent company to the petitioners. But, respondents deliberately mentioned the number of equity shares in Form 2 of return of allotment only 310,000 equity shares instead of 3,29,850 equity shares of ₹ 10/- each to keep the holding of the petitioners 1 to 6 below 50% in the first respondent company and to gain control of the company. However, respondent No. 1 issued share certificates of 3,29,850. This shows the intention of respondents in reducing the shareholding of petitioners 1 to 6. Petitioners have also given unsecured loan of ₹ 1,65,52,452/- to the first respondent company and the same is reflected in the audited balance sheet of the first respondent company for the financial year 2012-13 thereby petitioners have given ₹ 1,98,50,952/- by way of equity and unsecured loan. On 25th March, 2010 petitioners No. 1,2 and 4 were appointed as Additional Directors in the first respondent company. 04. In spite of making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 to Halol Police Station complaining about the aforesaid activities of respondent No. 1. From the mails exchanged between petitioners and respondents, petitioner came to know that respondents have opened account in the name of the first respondent company in Dhanlaxmi Bank without consent and knowledge of existing bankers State Bank of India and against the norms set out by Reserve Bank of India. The said account was opened by respondent No. 2, 3 and 4 to siphon the money of the first respondent company. On 03.07.2010 in the Board Meeting a resolution was passed for opening bank account with Dhanlaxmi Bank without giving any notice to the petitioners. In the last page of the resolution names of the petitioners were not mentioned deliberately. Forged documents were sent to the bank. The bank statement of Dhanlaxmi Bank clearly shows that the funds of the first respondent company were siphoned into the personal accounts of respondents. Petitioners wrote a letter dated 23.08.2010 to the existing Bankers State Bank of India, Vadodara requesting to stop transactions of the first respondent company pointing out the fraud played by the respondents in opening account in Dhanlaxmi Bank. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners for financial assistance but on the other hand it is the petitioners who approached respondent No. 2 and persuaded him to increase production of barrels and assured to increase working capital by way of equity participation and loans. In the interest of first respondent company, respondent No. 2 placed the matter before the Board of Directors of the first respondent company and it was accepted and approved by the Board. In the meeting held on 17.01.2010 assets of the first respondent company were valued at ₹ 360.00 lacs and it was agreed between the parties that both the groups will have equal participation for the capital of the first respondent company. Petitioners group was required to bring in ₹ 180.00 lacs towards their contribution. Petitioners group will also provide interest free loan of ₹ 20.00 lacs and would also arrange for working capital facility from Citi Bank for a sum of ₹ 150.00 lacs. Composition of the Board of Directors were agreed to be made by equal representation of each group. As agreed the first respondent company reconstituted its Board of Directors and petitioners No. 1, 2, 4 and 6 were appointed as Additional Directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Annual General Meeting of the shareholders of the first respondent company was held for the year 2009-10. In the meeting the petitioners opted not to continue as Directors of the first respondent company and did not seek reappointment. Respondents denied the allegations that the petitioners were removed as Directors. Petitioners insisted for the share certificate for ₹ 1,98,430/- for the purpose of record and, therefore, share certificates without sign and without affixing common seal of the company were issued on heavy insistence of the petitioners only making it clear to them that those shares are invalid. Petitioners filed Criminal Case against the respondents in Halol Police Station. Respondents No. 2 to 5 approached Hon ble High Court of Gujarat and obtained interim relief against their arrest. Respondents made complaint to DGP. DGP, Gujarat ordered in-depth investigation against the concerned Police Officer and the matter was duly investigated by Vigilance Department, Gandhinagar. After thorough investigation Vigilance squad found that Police Inspector registered false FIR against Respondent Company and requested District Superintendent of Police to take action aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 40.00 lacs from the profit portion of petitioners of subsequent years ₹ 40.00 lacs - NA 04 ₹ 20.00 lacs immediately (interest free loan and repayable after two years) ₹ 20.00 lacs - after 2 months On time 05 ₹ 150.00 lacs immediately as working capital finance from Citi Bank or from personal source Paid ₹ 88,99,250/- only within 3 months, from their personal sources Approx. 89.00 lacs received late by one month approx. ₹ 61.00 lacs not received till to date 11. Respondents denied the allegation that they were sending cheques to respondents No. 2, 3 and 4 drawn in personal names. According to respondents, petitioners were briefed at the time of execution of MoU about the loan taken by the Respondent Directors in their personal names for funding the business of the first respondent company which is also reflected in the balance sheet as on 31.12.2009 and in spite of the same, petitioners made it an issue. Petitioners, for the reasons best kn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4) and certificate number 88 of 14922 to Mr. Vikesh I Patel (petitioner No. 2) were not considered by respondents for the purpose of voting held by respondents No. 2 and 3 and thereby deprived the rights of voting of the petitioner. It is stated in the affidavit filed by the petitioners that ordinary resolutions were not passed with requisite majority as mentioned in Section 114 of the Companies Act, 2013. 16. Admittedly, there was an understanding between petitioners and respondents No. 2 to 4 on 17.01.2010 in a meeting which took place in Mumbai. Minutes of the meeting held on 17.01.2010 was reduced into writing and it is filed as Annexure 2 along with the petition. Admittedly, in the said meeting the value of the first respondent company was arrived at ₹ 360.00 lacs. Admittedly, petitioners agreed to invest ₹ 180.00 lacs. Admittedly, it was further agreed by the petitioners to provide interest free loan of ₹ 20.00 lacs repayable after two years within a period of 1.5 to 2 months. Admittedly, petitioners agreed to arrange for working capital facility of ₹ 150.00 lacs from Citi Bank. Admittedly, as per the understanding on 16.01.2010, authorised shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare certificates were issued to them for the remaining 19850 shares, they were not shown in the return filed with the Registrar of Companies and those shares do not bear seal of the company. For this, explanation given by the respondents is that, for the record purpose on insistence by the petitioners, certificates in respect of 19850 shares were given without seal and authority of the company. This allotment of shares took place on 11.03.2010. Petitioners are alleging that although share capital money is paid officially, shares were not allotted in respect of 19850 shares. If, really petitioners were aggrieved for not allotting 32,3,29,850 shares, then they should have raised the said issue then and there itself. Moreover, unless it is specifically stated while making payment of ₹ 32,98,500/- it was paid towards share application money, it cannot be said that out of the amount paid by the petitioners ₹ 32,98,500/- is representing the share application money. As already said, according to the respondents, out of ₹ 100.00 lacs paid, ₹ 31.00 lacs is taken as share application money or as consideration for the shares allotted. Therefore, the grievance of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ression unless and until it is shown the funds of the first respondent company is not (sic) siphoned by the respondents into their personal accounts and to use for their personal purpose. In this angle no evidence is forthcoming from the petitioners. In the Chartered Accountants certificate it is certified that all the transactions done through Dhanlaxmi Bank are exclusively for the business activity of the first respondent company. 21. Admittedly, petitioners 1, 2, 4 and 6 were appointed as Additional Directors in the Board of the first respondent company on 25.03.2010. It is known to one and all that Additional Directors seize to hold their office on the date of Annual General Meeting of the respective year. Therefore, on 20.09.2010, in the Annual General Meeting Petitioners 1, 2, 4 and 6 ceased to be Directors and in order to continue petitioners No. 1, 2, 4 6 as Directors, they must have reappointed in the Annual General Meeting held on 20.09.2010. No such resolution was passed in the Annual General Meeting held on 20.09.2010. Even, according to the petitioners, such resolution could not be passed because petitioners are not having the required majority support of the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Act, 2013. 23. Coming to the terms of MoU petitioner shall provide ₹ 20.00 lacs as unsecured loan without interest and arrange for ₹ 150.00 lacs working capital from Citi Bank. According to the respondents , because of the petitioners unintended promise they lost an opportunity of getting working capital facility from the existing bank State Bank of India and other banks. It is the case of the petitioners, inspite of their best efforts they could not get working capital limits of ₹ 150.00 lacs from Citi Bank on the ground that the norms of the first respondent company do not fit in with the norms of Citi Bank. Therefore, all said and done it is also a breach on the part of the petitioners. Petitioners themselves pleaded that without necessity of funds, respondents started insisting them to invest further funds. Therefore, the investments by petitioner is not on the lines on which the understanding was entered between two parties. 24. In view of the aforesaid discussions, it can only be said that the petitioners failed to establish any act of oppression and mismanagement. In view of aforesaid findings, petitioner is not entitled to obtain any relief. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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