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TMI Blog2018 (1) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany, he cannot file Form No. 32 on 09.02.2005 with Registrar of Company. Therefore, the same is liable to be seaside with directions to the Registrar of Companies (Respondent No. 9) not recognise the same. It is also relevant to point here as stated supra, the resignation of Respondent No. 5, transfer of shares in question etc are affirmed by way evidence given by the second respondent before a court of law in OS No.931 of 2006. The contention of the respondent the evidence given in a suit cannot be relied upon in other proceedings like in the present proceedings cannot be accepted. - CP NO. 69/2009 And TP NO. 43 (HDB)/2016 - - - Dated:- 9-11-2017 - MR. RAJESWARA RAO VITTANALA, J. For The Petitioner : Milind G. Gokhale, Sr Counsel, N. Madhusudan and Hari Krishna, Advs. For The Respondent : Dr. S.V. Rama Krishna, Jitender Kumar Kedia, Managing Director and Arun Kumar Malani, Adv. ORDER Per : Rajeswara Rao Vittanala, Member (Judicial) 1. The present Company petition bearing CP No. 69 of 2009 (TP No.43/HDB/2016) is filed by Smt. Anitha Kedia, under sections 397 398 r/w 402 403 of the Companies Act, 1956, against Shruti Agro Farms Limited and 10 oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d separate letters dated 07.04.2004 by expressing their intention to resign from the post of Directors of the Company with immediate effects due to their other pre-occupations and engagements which need total attention and thus requested to accept the same. (6) Accordingly, the resignations of Respondent Nos. 2 to 4 have been accepted on 09.04.2004, and they had also disinvested their holdings in the Company. The Respondent No. 5 (Gulzarilal Kedia), as Additional Directors of the Company with effect from 09.04.2004. Accordingly Form No.32 was also filed before the Registrar of Companies duly signed by the existing Director namely Mr. Jitender Kumar Kedia during April, 2004. (7) Subsequently, Mr. Rajesh Kumar Agarwal was appointed as Addl Director of the Company with effect from 11.12.2004. Te Respondent No.5 also resigned from the Board of Directors of the Company vide his resignation letter dated 18.12.2004 and the same was duly approved, accepted. Accordingly, the above changes were duly intimated to the ROC by the Company by filing Form 32 dated 3rd January, 2005. So after resignation of respondent No. 2 to 5, only the Petitioner and her husband namely Mr.Jitender Kumar Ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the share transfer Form No. 160491 executed on 09.04.2004 from the Respondent No.3 to the petitioner. The share transfer Form No.034596 executed on 30.01.2004 showing the transfer of 13,000 no. equity shares from the Respondent No.4 to the Petitioner. The share transfer Form No. 160488 executed on 09.04.2004 showing the transfer of 15,600 no. equity shares from the Respondent No.8 to the Petitioner. The share transfer Form No. 160484 executed on 09.04.2004 showing the transfer of 4,000 no. equity shares from the Respondent No. 11 to the Petitioner. Accordingly, the petitioner is total holding 17,40,159 equity shares in the Respondent No.1 Company. (2) Respondent No.2 has filed a fake and fabricated Form DIN-3 dated 01.12.2007 affixed by the Digital Signature of the Respondent No.2 and Company Secretary Mrs. Rakhi Agarwal and showing the email of the Company as [email protected], which was never been authorised by the Respondent No.1 Company, to appoint Respondent No.5 as Independent Director of the Respondent No.1 Company along with Form DIN-2 showing the email id of the Respondent No.2 s Company [email protected] as the email of Respondent No.5 with the appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents cannot take any advantage in this regard. 4. The petitioner has filed a rejoinder dated 24th April, 2017 by contending as follows: (1) It is stated that the Respondent No.4 herein (Mr.Ajay Kumar Kedia) representing the Company by name M/s. Kedia Overseas Ltd., has filed a Suit bearing O.S.No.931 of 2006 against the erstwhile Director of the Petitioner Company by name Dr. Rajesh Agarwal and M/s. Shubham Transoceanic Private Limited claiming rights over the property held by the Petitioner Company, which was alienated by the Petitioner Company in favour of the said Shubham Transoceanic Private Limited. That during the course of the cross examination in the said suit, Ajay Kumar Kedia has categorically admitted that the Respondent No. 5 herein, vide his letter dated 18.12.2004 has resigned from the post of additional Director of the petitioner Company and his shares in the Company also stands transferred to the petitioner as per the exhibits filed with the said suit. And the suit is pending on the file of the Hon ble 1st Additional District Judge, Ranga Reddy District at LB Nagar. (2) It is further stated that the Company has neither passed any resolution authorizing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain as Director of the Company, effective from 05.02.2005 and the same was also brought to the knowledge of the ROC through the relevant form. (3) It is further stated that the Respondent No.5, who was Chairman of the Company had never appointed Mr. Rajesh Kumar Agarwal as Director from 11.12.2004 and his appointment was made without knowledge of other Directors supported 22 shareholders. Mr. Rajesh Kumar Agarwal sold away the property of the Company admeasuring in area of Ac. 1-30 Gts in favour of another Director of the Company. And a suit for cancellation of the said registered document was filed before the II ASJ, R.R. District vide O.S.No.2196 of 2007 which is pending for adjudication. (4) The allegations that the fabricated the Form No. 32 is filed with the ROC is denied as the same is also creation of the petitioner with the support of her husband. (5) It is admitted that the petitioner and Jitender Kumar Kedia are Directors of the Company. The affairs of Company are being handled by husband of the petitioner, and he was entrusted such responsibility by Respondent No.2 and other Directors of the Company with a fair opinion and confidence that he would discharge his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no one can be appointed without his knowledge, being a Chairman. It is alleged that Mr. Jitender Kumar Kedia has deceived him by taking signatures on the blank papers and they were mis-utilised it for his selfish benefits. In order to avoid using the papers signed by him, he has also caused a public notice in Vaartha (Hindi and English) on 22nd July, 2009. He also agreed that the Company is under the control of petitioner and her husband. The petitioner and the Respondent No.1 are not calling for General Body Meeting or Monthly Board Meetings to discuss any affairs of the Company. He has also admitted that he does not have any record to substantiate his contentions/allegations against the petitioner as well as the Company since entire records are in the possession of Company headed by the Jitender Kumar and the petitioner. 9. Smt. Anitha Kedia (R-6) W/o. Mahesh Kumar Kedia (respondent No. 2) has also filed a separate counter dated 30th November, 2009 by inter alia stating that she was unwarrantedly dragged into this case and she is only shareholder in the Company, and she was not concerned with any activities of the Company. She is interested to safeguard her investment in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the above dates at the request of the parties for one reason or the other. After concluding the arguments by the parties, they have also taken time to file their gist of arguments. 13. I have heard Shri. Milind G Gokhale, learned Senior Counsel along with Hari Krishna Madhusudhan learned counsels for the Petitioner, Shri. Jitender Kumar Kedia, Managing Director of the Respondent Company Shri. Arun Kumar Malani, learned counsel for the Respondent Nos. 2 to 8, 10 11. I have also perused all the pleadings of parties, along with material papers filed in their support and the extant provisions of Companies Act, 1956/2013. 14. Shri.Milind G Gokhale, the learned Senior Counsel for the Petitioner, at the time hearing of case, while reiterating various averments made in various pleadings submitted from the inception of filing case, has further submitted as follows: (1) The Respondent Nos. 2 to 8 have filed their individual counters, but no counter is filed on behalf of Respondent Nos. 10 11. However Respondent No.4 representing himself and also representing others, under GPA had filed an application bearing CA No.94 of 2017. However, the CA is neither maintainable in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04. (6) Mr. Rajesh Kumar Agarwal was appointed as Additional Director on 11-12-2004 and Respondent No. 5 (Mr. Gulzarilal Kedia) resigned on 18-12-2004 which was duly filed with ROC vide Form 32. The AGM dated 30-09-2005 clearly reflects that Respondent No.5 was appointed as director on 09- 04-2004 and resigned on 18-12-2004. The letter dated 18-02-2003 sent by Gulzarilal Kedia (R-5) to ROC also clearly shows that he has resigned on 18-12-2004 and he has never appointed Respondent No. 2 6 as Additional Directors. The notarised affidavit of Respondent No. 5 dated 08- 08-2013 shows that he has resigned. In addition, the Respondent No. 4 has also admitted the signature of Gulzarilal Kedia on the said resignation letter in his cross-examination made in O.S. No.931/2006 also admitted the impugned share transfers. (7) The respondent No. 2 to 5 having ceased to be Directors of the Company as stated supra, they don t have locus standi to interfere with the affairs of the Company and all the actions taken by them as impugned in the Company petition and the resultant actions are liable to be declared to be illegal and non-est in the eye law as they wrongful, burdensome and prejudice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e alleged date of unregistered sale deed the registered office of the Company was at Krupa Market, Malakpet and subsequently in the year 2004 the registered office is shifted to Bahadurpura and whereas in the purported sale deed the future address of the registered office is mentioned which clearly reflect that the said unregistered sale deed is fabricated on old stamp papers just before the revalidation in the year, 2008 and in fact the said unregistered sale deed never existed as on the date mentioned in the said sale deed. The fabrication of the unregistered sale deed is further evident from the perusal of the recitals of the said sale deed wherein it is mentioned that the purported sale is effected as the Company was in dire need of financial support and in fact the perusal of the balance sheet of the Company for that particular year clearly reflects that the Companies capital was 52,00,400/- as on 31-03-2003 and reserves and surplus is shown as 52,88,012/- and further at page No.28 clearly shows that the Company has allotted 260020 fully paid up shares by way of bonus shares by capitalising the accumulated profits and as such the question of the Company being in dire financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of account of Company to look genuine. The evidence given in a cross-examination in a case cannot be relied upon in other cases. (3) It is further stated that transactions made by the Respondent No.2 are legally valid and the Respondent No.2 was director before resignation on 09-04-2004. (4) He has further submit that the Deputy Collector and Tahsildar, Rajendranagar Mandal, issued notice dated 06-06-2008 calling for objections over the sale deed dated 07-10-2003 and gift settlement deed No. 143/2008 and thereafter only they were accepted. Aggrieved by the said proceedings, Mr Jitender Kumar Kedia representing R-1 Company has filed an appeal before the Special Grade Deputy Collector Revenue Divisional Officer, Rejendranagar Division, Ranga Reddy District, against the order of the Deputy Collector Tahsildar, Rajendranagar Mandal Case No. C/6491/2012, final order was passed on 28-11-2015. It is stated that the finding in the order is that the Director of the firm (Dr Mahesh Kumar Kedia) has resigned on 07-04-2004 prior to which he executed the sale deed on 07-10-2003 in favour of Mr. Anil Kumar Jhunjunwala. Therefore it is submit that the sale deed is proper and the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lal Kedia (R-5) was appointed as Additional Director with effect from 09-04-2004 and subsequently Gulzarilal Kedia (R-5) has also resigned as Director vide letter dated 18-12-2004 (Annexure-A5) (Page 77) while stating that he wanted to resign with immediate effect due to his other pre-occupations and engagement which need total attentions and request for accepting the same. After accepting the resignation, an appropriate form under section 303(2) of the Companies Act, 1956 vide Form No.32 was filed with ROC duly intimating the resignation of Respondent No.5 and also intimating the appointment of Dr. Rajesh Kumar Agarwal as Additional Director (Page 78 79). 19. Mr. Gulzarilal Kedia (R-5) has addressed a letter to the Registrar of Companies (Page 46 Annexure/R10 along with material papers filed along with R-1 Counter) by stating that he was appointed as a Director in M/s Sruti Agro Farms Limited by his son Jitender Kumar Kedia as elderly person on 09-04-2004, and resigned from the Company on 18-12-2004, consequently the Company has also filed Form 32. However he finds his names still appearing as the Director with the ROC records and thus requested the ROC to remove his name fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Board by the articles. The corresponding provision viz. Section 161 of the Companies Act, 2013 reads thus: The articles of a Company may confer on its Board of Directors the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier. 21. The respondent Nos. 2 to 4, while admitting that they have resigned their posts of Directors of the Company, have merely contended that they have been re-appointed without substantiating their contentions in accordance with the said Articles of Association and the Company law. They have merely stated that they don t have records to substantiate their contentions since the entire records are under the control and possession of the Company headed by its Managing Director. The Respondent No. 5, too, has simply denied that he has resigned. However, the evidence as discussed above, clearly shows that he has resigned position of Director of the Company. Therefore, the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjunwala by transferring agricultural land admeasuring in area of Ac 2.35 gts in survey No. 504 (P) and 503. Admittedly, the property in question belongs to the Company and the Respondent No. 2 ceased to be a Director and there is no Board resolution to that effect. Therefore, these transactions are illegal and liable to be set aside. 24. It is also on record that the R-1 has filed a complaint to the ROC for filing fraudulent Form 32 on 03-11-2006 vide SR No. A0545800 on 09-02-2010. In pursuant to the above complaint, the Registrar of Companies has also issued notice vide reference No. RAP/PA/DROC (P)/2006 dated 08-12-2006 (Page 140 with CP) material papers by calling upon them to furnish the necessary document to prove their case. However they have not filed any document(s) to substantiate their bona fide of their transactions. 25. In the light of above facts and circumstances of the case, it is to be held that the respondent Nos. 2 to 5 having ceased to be Directors of the Company and also divested their investment by way of shares in Company, they have no locus standi to interfere in the affairs of Company. Therefore, all the impugned transactions made by Respondent No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in question, and perusing the records, upheld the registration made in favour of M/s Shubham Trsoceanc Pvt. Ltd. and also held that the property is in possession and enjoyment of M/s Subham. It also proves that the respondent No. 2 is resorting to various illegal things in the name of Company. 28. While the present Company petition is pending, and intervention application bearing CA No. 125 of 09 is filed by Kailash Narayan Bhangadia, under regulation 44 of CLB Regulations 1991 by inter alia contending that he was illegally divested of his shares totalling 1,15,849 equity shares of ₹ 10- each by the petitioner and Jitender Kumar, MD, and thus prayed the Tribunal to implead him as one of the respondents to the Company petition. He has further contended that aggrieved by the said act of illegal transfer of his shares, he has also filed CP No. 43 of 2009. After considering the issue, the CLB vide its order dated 11th November, 2010 allowed the application impleading him as one of the respondent to the Company petition. Aggrieved by the said order dated 11.11.2010 of the CLB, the petitioner filed WP No. 5431 of 2011 before the Hon ble High court of judicature of AP Hyderaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that it was just and equitable that the company should be wound up, and (iii) that the winding up order would unfairly prejudice the applicants. By virtue of section 10E(1A), the CLB, being creature of law, shall exercise and discharge such powers and functions as may be conferred on it under the Act or any other law. The CLB, in exercise of the inherent powers under Regulation 44, not being a substantive provision, cannot go beyond section 10E(1A) and consequently no order can be made providing for any matter on just and equitable ground under section 402(g), in the event of not making out any case of section 397/398. 31. The scheme of Sections 397 to 406 in Chapter VI of Part VI of the Companies Act, 1956 constitute a code by itself for granting appropriate relief to oppressed minority share-holders, a power of the widest amplitude. (Cosmosteels Private Limited Vs.Jairam Das Gupta [AIR 1978 Supreme Court 375]). The court has very wide remedial powers if it concludes that the petition is well founded. Whatever remedy is sought by the petitioner, the court has to consider what order is appropriate at the time of the hearing and not what was appropriate at the time the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns brings out two aspects: first, the very wide nature of the power conferred on the court, and, second, the object that is sought to be achieved by the exercise of such power, with the result that the only limitation that could be impliedly read on the exercise sought to be achieved by those sections and, beyond this limitation which arises by necessary implication, it is difficult to read any other restriction or limitation on the exercise of the court s power. Further, Sections 397 and 398 are intended to avoid winding up of the Company if possible and keep it going while at the same time relieving the minority shareholders from acts of oppression and mismanagement or preventing the Company s affairs from being conducted in a manner prejudicial to public interest and, if that be the objective, the court must have the power to interfere with the normal corporate management of the company and to supplant the entire corporate management, or rather mismanagement, by resorting to non-corporate management which may take the form of appointing an administrator or a special officer or a committee of advisors etc, who would be in charge of the affairs of the Company. The court could even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body can convey a better title than what one has. In the instant case, as discussed above, the respondent Nos. 2 to 5 have transacted several transactions, which are impugned in the present Company petition, without any authorisation of the Company. Therefore, the impugned transactions are liable to declared as illegal and void ab initio. Since the beneficiaries of impugned transactions are made parties and heard. The Tribunal can pass orders about its validity. Since the properties transferred, as per the impugned proceedings, admittedly belong to the Company, the Tribunal is empowered to examine the validity of impugned property transactions. 36. In view of the above facts and circumstances of the case, and in the interest of justice, and by exercising powers conferred on the Tribunal, under Sections 397 and 398 r/w 402 and 403 of the Companies Act, 1956 R/w Section 241 and 242 of Companies Act, 2013, the Company petition bearing CP.No.69 of 2009 (TP No.43/HDB/2016) is disposed of with the following directions: (1) Hereby declared that the respondent Nos 2 to 4 herein ceased to be Directors of the Company with effect from 9.04.2004, and they have also ceased to be members o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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