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TMI Blog2018 (2) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Sale Deed bearing document number: 22588 of 2015 dated 3rd Nov 2015 and doc. No. 29066/2016 dated 04-11-2016 as null and void and not binding on the Respondent No.1 company, which is a result of corporate fraud played upon by Respondent Nos. 2,3,4,7&8. c. To punish the Respondent No.2 to civil prison and penalty for wilful violation of Sections 167(1), 447 and 448 of the Companies Act, 2013. d. To punish Respondent No. 2, Respondent No. 3, Respondent No. 4 and Respondent No. 7 for Breach of Trust, cheating, fraud, money laundering, misappropriation of funds, knowingly violating and contravening the Companies Act, 2013 and wilfully supporting the above illegal activities etc. 2. The Brief facts of the case, which are relevant to the issue in question, are as follows: (a) Katta Corp Pvt Limited (hereinafter referred to as Company) was initially incorporated under the Companies Act, 1956 on 21st July 2006, by the promoter Directors namely Katta Srinivasa Rao (Respondent No. 3), Katta Jagadeesh (Respondent No. 2) and Sridhar Gopinathan. (b) The Petitioner and Respondent No. 3 are related to each other and both living in the USA. On the request made by the Respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reckoned as contravention under FEMA and would attract penal provisions. The Respondent No. 1 Company influenced by Respondent No.3 concealed and gave false information, thereby breached the trust reposed by the Petitioner. (f) The Respondent No.3 being majority shareholder of Company by holding of 58% of the total paid up capital is remotely controlling it from USA. The Company has purchased agricultural lands in Survey No. 65/8 to the extent 5.00 acres, situated at Ghattupally Village, Maheswaram Mandal, R.R. District under a registered sale deed bearing Doc No. 16292/2006 dated 28-09-2006 and another agricultural land in Survey No. 468/3/B, 468/3/C and 468/3/D, extent Ac 3.00 situated at Nadergul Village, Saroornagar Mandal, R.R. District, under a registered Sale Deed bearing Doc No: 11103 of 2008, dated 24-10-2008. After the said purchase of agriculture lands, the petitioner was made to understand by the Respondent No. 3 that the agricultural land at Nadargul is embroiled in legal litigation and therefore, no activity could be undertaken. (g) In order to put a quietus to the said un-usual interference by third parties, the Company has filed a Civil suit O.S. No. 633 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. To the utter shock and dismay the Petitioner found out' that Respondent Rs. 4 deposited this cheque in the Account of Katta Prasanna Lakshmi in the State Bank of India, Padmarao Nagar Branch, IFSC Code: SBIN0002772, Hyderabad and the cheque was cleared on September 30th, 2015. Katta Prasanna Lakshmi is the first Indian Wife of Respondent No. 3 and the mother of Respondent No. 4. The Petitioner sent multiple mails to Respondent No. 4 and also sent a letter on 10th May 2016, but there was no response. This clearly proves beyond doubt the criminal intent and connivance of Respondent Nos. 2, 3 and 4 to openly breach the trust and rob and cheat this Petitioner using Respondent No. 1 Company. (j) It is stated that as per the ROC, the Respondent No. 2 was appointed as Director on 31st December 2013, who is the elder brother of Respondent No. 3, without any notice to this Petitioner as a Director. The Respondent No. 5 (ROC) records also reflected that Respondent No. 4 was also appointed without any notice of the Petitioner. Around the year 2009, the Respondent No. 2 was asked to resign by Respondent No. 3, because of his serious misdeeds in the Respondent No. 1 Company and his resign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. To convene the EGM to pass the resolution to remove the Respondent No. 2 as Director. This Notice of the meeting of the Board of Directors was sent by Respondent No. 4 to the 3 Directors on record viz. Petitioner, Respondent No. 4 and Respondent No. 2. However, the Board meeting was conducted without his presence even though the Respondent No. 4 had knowledge about his presence in India. So Company has resorted to brazen and open acts of Oppression and Mismanagement with a sole intention of defrauding and cheating the gullible investors like the petitioner. (n) The Petitioner further submits that he received a . mail on 3rd August 2015from Respondent No. 4 (referring himself as Director in Katta Corp Private Limited). The Petitioner was never informed of the appointment of Respondent No. 4 as Director. The Respondent No. 4 sent a mail on 3rd August 2015 from: [email protected] and mentioned the subject as - EGM and had a file attachment named: EGMKatta.pdf. This was a Notice to Members calling for an Extra Ordinary General Meeting to be held on 26th August 2015 at 9.30AM 1ST. The Agenda of the meeting was to remove Respondent No. 2 from the position of the Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g documents of the acts of misappropriation, siphoning of company funds using another Software Company iServiceGlobe Private Limited, Hyderabad owned by Respondent 3, illegal Money laundering, Oppression and Mismanagement by the entire Katta Family and the undisputable glaring and open contraventions and non-compliance with the provisions of Companies Act, 2013, no action was taken by the Respondent No. 5. (p) As a law-abiding person, the Petitioner informed the Respondent No. 1 company about the conviction of Respondent No. 2 and his continuance with the open influence and remote directions of Respondent No. 3 and purported acts of discharging of duties as director/managing Director are null and void, illegal and pre-judicial to the interest of the company and its investors, liable for criminal prosecution and penalty. The Respondent No. 1 Company miserably failed to take any steps in that regard. (q) It is stated that the Company has made illegal transfer of the Agricultural land situated at Nadergul by the Respondent Company No. 1, represented by Respondent No. 2, in favour of Respondent No. 7, Smt. Gade Saraswathi Devi, under registered Doc No. 22588/2015 dated 3-11-2015, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from August 2015 and decisions are taken unilaterally without informing and consulting the Board and Shareholders, which is a clinching act of Fraud, Cheating, Misappropriation and Oppression and Mismanagement. (r) As matter stood thus, the petitioner through email dated 29-11-2016 issued by Respondent No. 3 came to know that Respondent No. 2 entered into fraudulent transaction in respect another asset held by the respondent No. 1 Company at Ghattupally Village, Maheshwaram Mandal. The said email reveals that Respondent No. 2 made huge money by entering into illegal transaction with respondent No. 9. (s) In the above circumstances, the Petitioner is left with no other remedy except to approach this Tribunal for redressal of his grievance of Breach of Trust, Cheating, Fraud, Money Laundering, Oppression and Mismanagement by the Respondent No. 1 Company through Respondent Nos. 2, 3, 4 and 7. 3. The Respondents Nos. 3 and 4 have opposed the Company petition by filing a Common counter dated 14-Feb-2017. The following are their main * contentions in the counter: i. The petition itself should not be numbered by the Registry since the Power of Attorney filed along with the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to sell his shares to the Respondent No. 3. However, he demanded that the amount be paid in USD. Subsequent to the investment made by the petitioner, the rupee depreciated substantially against the USD, (exchange rate was 1 USD= Rs. 39 at the time of invest became 1 USD= Rs. 67 when the petitioner offered to sell his shares). As this demand was not accepted, the Petitioner started nurturing a grudge against the Respondent No. 3, and began making a barrage of complaints of mismanagement and fraud against the Respondent No.1 Company, its directors and the Respondent No. 3. vii. The petitioner was a Director on the Board of Respondent No. 1 Company since 2008. He participated through audio conference in many of the Board Meetings of the Respondent No.1 Company. He has also attended the Board Meetings, when he was in India and he even signed the statutory filings for the years 2011-12, 2012-13, 2013-14. The averments made in Para 4 relating to the non-issuance of share certificates by Respondent No. 1 Company acting through Respondent No. 3 are baseless and patently false. It is Mr. Sridhar Gopinathan, who was the Managing Director of the Respondent No. 1 Company and all the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved a show cause notice on 31-03-2016 and the same was replied with evidence that the petitioner's allegations were baseless and without facts. Further, the Respondent No. 1 also sent a legal notice to Sridhar Gopinathan who served as Managing Director Kattta Corp until 7th January 2014 to come forward and submit the accounts for some of the allegations that the Petitioner made in the complaint. Till date no, response has been received Mr. Sridhar Gopinathan. The petitioner also complained against the Respondent No. 3 to ROC, who issued show cause notice to the Respondent No. 3 to his US address on 29th April 2016. The show cause notice was replied by the Respondent No. 3 and given elaborate evidence showing that the allegations made by the Petitioner were false and baseless. Thereafter, the Registrar of Companies forwarded the responses of both the Respondent No. 1 and Respondent No. 3 to the petitioner along with their evidences and asked the petitioner to provide his explanation. It was learnt that till date the Petitioner has not furnished his explanations to the ROC. The allegations of siphoning of funds, oppression, money laundering etc. are baseless and patently false and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural lands at Ghattupally Village, admeasuring an area of Ac.5-00 guntas and at Nadargul admeasuring an area of Ac.3-00 guntas were purchased and there was no other business. It is also not in dispute that the said lands were purchased with the money invested by the petitioner. The property situated at Ghattupally still stands in the name of the Company. The impugned lands at Nadargul was illegally transferred to respondent No. 7 , who is none other than the Mother-in-Law of respondent No. 3 and the sale deed dated 3-11-2015 was executed by the 2nd respondent as Managing Director, even though he has resigned as Director from the Company with effect from 24-08-2015. Though it is an admitted fact that there was no money received by the Company for execution of the above sale deed, it is stated that Rs, 1,20,00,000/-was paid by the respondent No. 7. It is also not in dispute that respondent No. 7 has further transferred the same land in favour of Respondent No. 8 vide sale deed dated 4th November 2016. He further submit that the respondent No. 3 is also running another Company by name iServiceGlobe Private Limited in the office premises of the Respondent No. 1 Company. It is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brother with the sole object of protecting land and interest of the Company and its shareholders. Therefore, the Isolated Acts like sale of land in question cannot constitute oppression or mismanagement. 11. In the light of above pleadings of both the parties, the following issues arise for consideration in the present Company petition. 1) Whether the Company Petition is maintainable especially on the grounds that there was no proper GPA and not fulfilling requisite conditions prescribed under u/s. 241 of the Companies Act, 2013. 2) Whether the impugned transactions dated 3-11-2015 and 4-11-2016 is validly executed or not- 3) If so, what is relief a petitioner entitled for. 12. So far as the maintainability is concerned, the petitioner has filed a GPA properly executed in accordance with US law. The learned counsel for the petitioner has filed Apostle dated 23-6-2017 with Notarised Affidavits. On perusal, it is established that it is properly executed in accordance with Foreign Law fulfilling the conditions prescribed under Indian Law to file any case before Indian Courts. So G.Santhimathi Devi is duly authorized representative to prosecute the present case. So the allegati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in writing signed by all the Directors shall be effective for all purposes as a resolution passed at the meeting of the Directors duly called, held and constituted." 15.It is not in dispute that the Company has not done any major business except to purchase the above two lands at Ghattupally Village, Nadergul as contended the petitioner. Therefore, it is the paramount of the responsibility of the Company to take into confidence of all the shareholders of Company, while taking /transacting major business like selling of the Company's land apart from following extant provisions of Companies Act, 2013. It is also not in dispute that the Company is a Private Limited Company and it is bound by all the Provisions of Companies Act, 1956/2013. The main allegation raised by the Petitioner is with regard to violation of the AOA and also the provisions of Companies Act, 2013 in disposing of the Company's prime property situated at Nadergul, which is impugned in the present Company Petition. 16. It is also in dispute that the impugned sale deed was executed on 3-11-2015 by the Respondent No. 2 (Jagadees Katta) with designation as Managing Director of the Company, even though he was not a Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2013. The impugned sale deeds suffer serious legal consequences, which cannot be upheld by the Tribunal. The transactions made by second respondent, who is convicted and resigned is nothing but acts of oppression and mismanagement on the part of respondents as against the petitioners, who is also admittedly a director with substantial shareholding in the Company, as detailed supra. I am of the considered view that above circumstances would justify to order to Company to wind up but it would prejudice the interest(s) of the petitioner and the Company and other respondents and thus it is just and equitable to pass appropriate orders to put an end the affairs complained of by exercising powers under section 241 of Companies Act, 2013. The contention of respondent that in the absence of clear allegations/contentions made by the petitioner in the petition, the petition itself is not maintainable is not all tenable and it is hereby rejected. The Tribunal is fully empowered to pass appropriate orders basing on the contentions/allegations made in the petition. At the same time, the Tribunal cannot interfere in the decisions/matters taken in its ordinary course of business. 18. The alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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