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TMI Blog2018 (6) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... deed and for executing sale in his own name/favour, he can only do after prior disclosure to all other Directors/Board of Directors as per Section 297 of the Companies Act, 2013. In this case his authority has been validly withdrawn by passing a valid resolution and he is continuing to execute sale deed, therefore, the conduct and behavior of the person is a relevant factor. The next point raised by the appellant is that the company petition was dismissed only due to FIR and the said FIR stands stayed by High Court in 2015. The point raised by the appellant is not acceptable. On going through the impugned order we observe that the company petition has dismissed on various points. The Tribunal has given his findings on each of the points raised by the appellants in the company petition. We observe from the record that proper notice was given to the directors for holding of Board Meeting on 2.5.2013 and the proof of despatch of the said notice has been placed at Page No.538 of the Appeal Paper Book. It appears that the appellant No.1 chose to remain absent in the Board Meeting held on 2.5.2013 as he was aware that proper procedure of law has been complied with and there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation to the sellers of the land but the Appellant No.1 resisted the same. This triggered a lot of disputes amongst the directors and the directors were divided on this issue and Respondent No.2 mustered the support of other respondents directors to get elected the Chairman of the Board and Respondent No.1. A Resolution dated 2.5.2013 was passed by the Board of Directors of Respondent No.1, without notice to appellant No.1, authorising Respondent No.2 to execute conveyance deeds on behalf of company. The Appellant No.1 submitted that even after passing the said alleged resolution dated 2.5.2013, copy of which was not served to appellant No.1, the appellant No.1 continued to execute the conveyance deeds after 2.5.2013 till 19.7.2013. The appellant executed 12 conveyance deeds selling 1039.59 sq mtrs of land and deposited the money with the Respondent No.1. The appellant No.1 purchased plots from Respondent No.1 at the same price per square meter at which the plots were sold to outsiders and the sale proceeds were duly credited in the account of Respondent No.1. Later on the appellant No.1 received copy of the minutes and resolution passed on 2.5.2013. Appellant No.1 also got a copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission that amounts to acts of oppression/mismanagement in the affairs of Respondent No.1. a) Falsification of minutes of Board Meetings and General Meetings violating Section 118; Non-compilation of financial statements for the financial years 2011-12, 2012-13, 2013-14 and 2014-15 as mandated under the provisions of Section 129 of the Companies Act, 2013. b) Non holding of annual general meetings. c) Denial of inspection of registers and records to the shareholders/directors. d) Acting as director without valid appointment. e) Forging of the physical signature of the petitioner director and the digital signature. f) Harassment of individual director by other directors acting in concert. g) Holding of illegal extraordinary general meetings and trying to pass resolution without the authority of law. 06.After hearing the parties, the Tribunal dismissed the company petition and held as under: 48. In view of the above discussion, this Tribunal holds that petitioner No.1 fail to establish alleged acts of oppression and mismanagement said to have been committed by respondents in the conduct of the affairs of the first respondent company. 49. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her stated that Respondent No.1, as per the FIR, accounted for a sale of ₹ 37,92,300/- in the FY 2012-13 and showing the same as recoverable from appellant No.1. Learned counsel for the appellant stated that an amount of ₹ 96,51,800/- mentioned in the same FIR was wilfully omitted to be recorded both in sales as well as recoverable amount in the FY 2013- 14 by the Respondent No.1. 12.Learned counsel for the appellant No.1 stated that Respondent No.1 has not filed annual returns for the FY 2011-12, 2012-13, 2013-14 and 2014-15 within the time stipulated under the Companies Act, 2013. 13.Learned counsel for the appellant No.1 stated that EGM was held on 20.5.2017 without convening a Board Meeting for the same to consider the alleged requisitions purportedly received from the shareholders for the removal of Appellant No.1 from the directorship of Respondent No.1. Learned counsel for the Appellant No.1 stated that no notice was issued to Appellant No.1 and the Respondent No.1 did not consider the submission of Appellant No.1. 14.Learned counsel for the appellant No.1 submitted that Respondent No.1 does not maintain any registered office as alleged in the site at 3/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors of the Respondent No.1 for initiating criminal proceedings for raising fake resolution. 19.Learned counsel for the Respondent stated that the appellant No.1 run away from the company after siphoning of huge funds of the company in 2011 with all books of accounts and documents of the company. 20.Learned counsel for the Respondents stated that the appellant No.1 produced false and concocted unsigned copy of minutes of R1 company which is at Page No.322-324 of the Appeal Paper Book. Further the appellant No.1 has transferred/sold plots of land in his own favour/third parties and did not deposit the amount in the company s account even after knowing fully well that his authority to execute sale deed for and on behalf of the company has been withdrawn. The list of such plots is given at Page No.329 of the Appeal Paper Book. 21.Learned counsel for the Respondents submitted that the appellant No.1 is making false statement that he never received Notice of Board Meeting at which his Authority to execute sale deed for and on behalf of the company is withdrawn. Learned counsel for the Respondents submitted that notice of Board Meeting and proof of dispatch were submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing from the company. When he was informed about the Meeting, the appellant No.1 cleverly chose to remain absent and the required quorum was present in the Meeting, Respondent No.2 was elected Chairman of the Board, R1 company and to give/change authority relating to execution of sale deed was validly given to Respondent No.2. Therefore, the appellant No.1 has no right to question about the resolution passed in the said Meeting. However, the appellant No.1 knowing fully well that his authority has been validly withdrawn still he continued to execute the sale deed. We observe from the record that the appellant No.1 has executed 12 sale deeds subsequent to Meeting dated 2.5.2013 and out of these 12 sale deed, he executed 7 sale deeds in his own name (Page 329 of the Appeal Paper Book). Even if he has the authority to execute the sale deed and for executing sale in his own name/favour, he can only do after prior disclosure to all other Directors/Board of Directors as per Section 297 of the Companies Act, 2013. In this case his authority has been validly withdrawn by passing a valid resolution and he is continuing to execute sale deed, therefore, the conduct and behaviour of the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did nto communicate with the auditors since 2013. In the EOGM held on 19.4.2016 itself M/s T.R. Mody associates were appointed as statutory auditors. The statutory auditors in the first instance prepared accounts for the year 2015-16 and, thereafter finalised the accounts for the years 2011- 12 to 2014-15. No doubt, such practice of finalising the accounts for the year 2015-16 without finalising accounts for previous years is against the established practice but in the given facts and circumstances when there are disputes between Directors and when there was non-cooperation from the management and the Directors, non-finalisation of accounts cannot be treated as a ground of mismanagement and more so it cannot be alleged by a Director of the company. Petitioner No.1 being Director of the first respondent company is equally responsible for nonfinalisation of accounts of the first respondent company from 2011-12 to 2014-15. This point is answered accordingly. Non-filing of accounts within time is punishable under the Companies Act and it is for the regulating authority to take action against the company. Therefore, it cannot be treated as a ground of mismanagement in the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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