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TMI Blog2015 (5) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... P (which was SAP's HUF business). In time, both businesses were transferred to incorporated companies. Kumudam Publications Pvt. Ltd. which was SAP's HUF business was incorporated on 31.12.1971 and Kumudam Printers Pvt. Ltd. being AJP's HUF business, was incorporated on 26.06.1972. In the year 1990, P. Varadarajan (PV) was inducted into the Board of the Company as a Director, Subsequently, after the demise of SAP in 1994, his widow A. Kothai (P-2) (AK) was appointed as the Managing Director. AJP was inducted into the Board of the company and made responsible for the editorial division and in so doing given the position of 'Honorary Editor' and PV was put in charge of the finance and administration of the company. Also PV and P. Srinivasan (PS) (R-3) were made one-third shareholders of the company for no consideration, which they transferred to Imprint Tech India Ltd. (R-4 company). It must be noted that both PV and PS as on date, hold no shares in the company. Further, in September 2001, pursuant to a scheme of amalgamation of Kumudam Printers Pvt. Ltd. into Kumudam Publications Pvt. Ltd. (the company) sanctioned by the High court of Madras, the former company w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his shows the self-seeking intent of R-2 and his disinterest regarding the benefit of the company. It is noteworthy that all such Board Meetings were attended by AJP and resolutions relating to enhancement of PV's remuneration signed by him. After investigation the Police also filed a final report as no case for forgery of such Board resolutions was made out. Be that as it may, in the Board meeting held on 22.12.2018 for considering the annual accounts of the company for the year ending 31.03.2008 despite objections raised by AJP and AK relating to unjustified remuneration by PV, using his casting vote PV got the accounts approved. 7. In the year 2002, the company gave an undertaking to the Government of India for availing concessional rates of excise duty for the import of machineries under the Export Promotion Capital Goods (EPCG) scheme. One of the conditions of the license granted by the Directorate General of Foreign Trade (DGFT) included the earning of US$ 45,65,880.25 foreign exchange, initially within a period of 8 years, then extended to 10 years in 2010 and to 12 years in 2012. Under the managing directorship of PV, defaults were made due to which the company had to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich R-4 company was to transfer its shareholding of 33.39% in favour of AJP and AK and R-2 and R-3 were to resign as Directors of the company. The MoU was not implemented as PV and PS (on behalf of Imprint Tech) wrote a letter to AJP and A. Kothai stating that MoU has expired in view of efflux of time and even otherwise because of the shareholding issues it has become incapable of performance. 10. PV also convened a Board Meeting on 2009.2011 with the agenda of discussing the legal implications of the shareholding of AJP in the capacity of a foreign citizen and also, to discuss the issue of editorial position held by AJP in the company. Even though AJP and AK refrained from attending the meeting, R-2 cancelled the entire shareholding of P-1, excepting 200 shares held by AJP being in violation of FDI policy, FEMA and its regulations and guidelines issued by the Ministry of Information & Broadcasting and retained the cancelled shares in an escrow account. The Board resolved cancellation of issue and allotment of 3,09,430 shares to AJP, and for treating transfer of 23,010 shares to AJP as null and void, and consequent rectification of register of Members, purportedly leaving AJP with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and keeping in abeyance the amended articles or the AOA was also passed. A communication to this effect was sent by the Petitioners to PV on 27.09.2011. 12. To counter this, on 02.01.2012 another Board Meeting was convened by PV for the ouster of Petitioners from Directorship of the company due to their non-attendance in three consecutive Board Meetings dated 20.09.2011. 10.10.2011 and 02.01.2012. A resolution ousting the Petitioners from directorship was passed and consequently R-2 filed form 32 with the Registrar of companies regarding cessation of the petitioners as Directors. 13. It is contended by the Petitioners that the above-mentioned harsh, burdensome and oppressive acts by the Respondents were with the sole intention of hijacking the management of the company and to oust the Petitioners from the company. 14. In view of the foregoing, the Petitioners have prayed for the following reliefs:- (a) To regulate the conduct of the affairs of the company in future; (b) To delete clauses 3(a), 32 and 39(b) of the AOA as being harsh and oppressive to the interest of the Petitioners and consequently amend the AoA; (c) To declare the resolution passed at the purported board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleadment of Respondent Nos. 1 to 3 herein as co-Respondents. A perusal of the order dated 27.02.2012 passed in SLP Civil No. 6358/6383 of 2012 by the Supreme Court of India also leaves no room for any doubt that the Plaintiffs were at all times aware that the Respondent Nos. 1 to 3 herein were necessary parties to the civil suit No. 7554/2011 yet deliberate non-impleadment of R-1 to R-3 in C.S. No. 7554/2011 shows that the conduct of the plaintiff in C.S. No. 7554/2011 lacked probity. It is also to be noted that C.S. No. 7554/2011 though withdrawn no liberty to pursue the proceeding before the C.L.B. was sought or granted. 19. A perusal of the plaint in C.S. No. 7554/2011 leaves no room for doubt that there is commonality in the cause of action for the present petition and the suit. At several places in the pleading in suit Smt. A. Kothai, P-2 herein/Plaintiff has reiterated that the enquiries/investigation by the Directorate of Enforcement into the validity of acquisition of shares by AJP pursuant to amalgamation and the decision taken at the board meeting dated 20.09.2011 being sub-judice before the Directorate of Enforcement and at a crucial stage the Plaintiff did not wish to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting held on 20.09.2011. It is also pertinent to note that in such letters the Petitioner has suppressed material facts relating to the aspects (acquisition of shares through amalgamation for consideration) touching the validity of his share holding in R-1 company. It would therefore be appropriate to await adjudication by the Directorate of Enforcement upon the validity of the acquisition and subsequent cancellation of 3,32,440 shares held by P-1 in the company. 21. It is also pertinent to mention that O.S. No. 139/2012 filed by the petitioner No. 1 before the High court of Madras for specific performance of the MOU dated 15.08.2010 providing for the exit of R-2 and R-3 from the company also discloses complete commonality of cause of action in such suit and the present petition without an iota of doubt. Besides seeking specific performance P-1 had also sought reliefs for declaring the resolution passed in the Board meeting held on 10.10.2011 and 02.01.2012 as null and void. Such reliefs have also been claimed in the present petition which seeks to nullify Form No. 32 relating to cessation of P-1 and P-2 from the Board of Directors of the company with effect from 02.01.2012, i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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