9911796707
TMI Blog2018 (8) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... or. When the company had only two directors, and shareholding was equally divided between the two groups, prima facie, fairness required consultation with the original petitioner to ask if he would nominate a person of his choice. This does not appear to have been done. We are concerned with the interest of the Company because in the CP No.401(ND)/2017 which has been filed by the appellant after the present petition, NCLT has passed the order dated 15.11.2017 (Annexure A filed with counter affidavit, Diary No.2704) and where it is recorded that it was not in dispute that the business of the company under the Respondent No.2 i.e. the present original petitioner had prospered over the years. Keeping in view this provision, prime consideration for NCLT should have been and which is now our consideration because of this appeal is that the interim order needs to concentrate on regulating the conduct of the company’s affairs on such terms and conditions as are just and equitable. Now when we are disposing this appeal, we find the operative order of the impugned order was not correct as it was in the nature of final orders which could not have been passed at the interim stage. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant settled a trust namely Wacziarg Family Trust, the beneficiary of which were Mr.Romain Wacziarg and his children. The trust is the holder of 25% shares in 1st respondent. Therefore, the appellant effectively represents 50% shareholding in the 1st Respondent. The appellant was appointed as a Director of 1st Respondent at the AGM dated 30.9.2014 and thereafter only two directors namely appellant and 2nd respondent are on the Board of 1st respondent. 3. In October, 2017 the appellant came to know from independent sources that the 2nd respondent s office as a director in 1st respondent had become vacant on account of 2nd respondent having become disqualified under Section 164(2)(a) of the Companies Act, 2013. 4. Appellant acting in furtherance of her obligations under Section 174(2) of the Companies Act, 2013, appointed 3rd respondent on 12.10.2017 as an Additional Director to ensure the smooth functioning of the 1st respondent who s board consisted of only one director as the office of 2nd respondent became vacany by operation of law. 5. On 16.10.2017, appellant received copy of Company Petition No. 348(ND)/2017 filed by 2nd respondent before the National Company Law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing order:- Learned Sr. Counsels for the Petitioner have prayed for grant of ad-interim relief. Attention of this bench is drawn to the alleged acts of illegality attributed to Respondent No.2, whereby, she is stated to have unilaterally inducted Respondent No.3 as an Additional Director of the Respondent No.1 company, without convening a proper Board Meeting. This was done on the alleged misconception that the Petitioner had been disqualified as a Director in this case. Notice of this Bench is drawn to a letter dated 12.10.2017, whereby it has categorically been affirmed by the office of the ROC, that the petitioner s representation was considered and his disqualification has since been recalled. Referring to the impugned acts in this case, it is argued that the decisions taken by the newly constituted Board is tainted with illegality, being in complete violation of the provisions of law, as the Additional Director was appointed by Respondent No.2 in her individual capacity and her decision was communicated by an email. Further, it is averred that even in such an event where a sole Director is on the Board, an EGM can be called for passing a Resolution of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s functional. The appellant further stated that the office of the 2nd respondent as a director in 1st respondent became vacant by operation of law. 10. The appellant further stated that the RTI, on which the 2nd respondent is relying upon, from the Ministry of Corporate Affairs merely states that the disqualification has now been removed and does not specifically state that the disqualification was void ab initio. 11. The appellant next states that the Learned Tribunal should see the malafide action of 2nd respondent who intentionally and deliberately withheld information about his disqualification as a Director from the Appellant. 12. The appellant stated that the Learned Tribunal has erred in holding that disqualification of 2nd respondent cannot strip him of his rights. The appellant further stated that the Learned Tribunal has failed to provide any reasons for arriving at this finding. 13. The appellant stated that the Learned Tribunal by ordering Status Quo ante 12.10.2017 be restored, all decision subsequent to 12.10.2017 and thereafter are hereby set aside has set aside all decisions taken on 12.10.2017 including but not limited to the appointment of 3rd resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is a well reasoned and speaking order. Appellant was unable to given explanation as to how the appointment of Additional Director can be made vide an email as against in a Board Meeting. 20. 2nd respondent stated that the appellant herein in addition to instant appeal, as a counter blast, has also filed a Company Petition bearing C.P. No.401(ND)/2017 on the ground that the appellant herein was being disallowed by the 2nd respondent to participate in the affairs of the 1st respondent. The Learned Tribunal has issued notice and granted some interim reliefs to the appellant. 2nd respondent stated that the impugned order has been passed in due consideration of law. 21. 2nd respondent stated that his name had appeared in the list of disqualified directors prepared by ROC on account of an apparent error. 2nd respondent further stated, without prejudice, that the said disqualification if at all was only in respect of company in which it had arisen and did not extend to any other company. 2nd respondent stated that he had never vacated his office in other companies except Ashok Brother Impex Pvt Ltd. 2nd respondent stated that he always remained the director of 1st respondent and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained from participating in the policy decision of 1st respondent, malafide refused to even share the policies of the company with the appellant. The same is recorded as part of the report of the Local Commissioner appointed at the request of the appellant by order dated 16.11.2017 in CP No.401(ND)/2017. 25. During the course of hearing 2nd respondent was given an opportunity to place certified copy of the application and concerned record/order from the office of ROC which formed the basis for issuance of RTI response dated 12.10.2017. 2nd respondent filed copy of RTI application dated 4.5.2018, RTI response bearing No.RTI/April 2018/PP/143 dated 16.5.2018. 26. We have heard the learned counsel for the parties and perused the entire record. 27. Learned counsel for the appellant argued that the Board of 1st respondent consists of two directors namely appellant and 2nd respondent. 2nd respondent was disqualified under Section 164(2)(a) of the Companies Act from being a Director from 1.11.2014 to 31.10.2021 by the Ministry of Corporate Affairs in September, 2017. 2nd respondent did not intimate 1st respondent and the appellant about his disqualification and continued to be di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation if at all was only in respect of company in which it had arisen and did not extend to any other company and the 2nd respondent has never vacated his office in other companies, except Ashok Brother Impex Pvt Ltd. Learned counsel for the respondent further argued that the appointment of 3rd respondent as director was not in accordance with law. Learned counsel for the 2nd respondent further argued that by RTI response, the ROC intimated that the matter was considered and the name of the 2nd respondent, which was wrongly put in the list of disqualified directors by the ROC, from the disqualified directors was removed. Learned counsel further stated that they have filed the certified copies of these documents as additional affidavit. 29. A perusal of the impugned order which we have reproduced in para 6 (Supra) makes it clear that at initial stage of the petition itself and even before the appellant-respondent could file reply the impugned order declared that it was a fact that the disqualification of the petitioner was an apparent error. Now in the company petition filed by the respondent/original petitioner it can be seen that the respondent was pleading by referring to deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the parties before us, it would have to be decided whether in fact and in law the disqualification had been incurred. 31. If the disqualification of original petitioner whether it was in fact and in law is yet to be decided, so is the question whether the appellant could or could not have legally appointed Respondent No.3 as Additional Director by sending off an email. The case put up by the appellant is that in view of Section 174 when she was the only director left she could appoint another Additional Director. Section 174(2) of the Companies Act, 2013 reads as under: ( 2) The continuing directors may act notwithstanding any vacancy in the Board; but, if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing directors or director may act for the purpose of increasing the number of directors to that fixed for the quorum, or of summoning a general meeting of the company and for no other purpose. If the above sub-section is perused when the quorum fell below the minimum required, in the meeting the decision which was required to be taken was limited to increasing the number of directors to that fixed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been passed at the interim stage. We intend to give directions so as to balance the equities between the parties. 33. For the above reasons we pass the following order:- The impugned order is quashed and in its place it is directed that the 2nd respondent-original petitioner will continue as director alongwith the appellant. The appointment of Respondent No.3 as Additional Director/Director is stayed. The decisions taken by original Respondent No.2 and 3 subsequent to 12.10.2017 are also stayed till the decision of the company petition. We request NCLT to appoint, during the pendency of the company petition, an independent Director to the company on remuneration similar to other directors who will ensure compliances by the Company with provisions of the Companies Act and Rules. The Independent Director would have casting vote in the meetings, (keeping interest of the company in view) in case of any disagreement between the original petitioner and original respondent No.2 of the company petition. 34. The observations made by us in this judgement relating to the dispute are on prima facie for the purpose of deciding this appeal and shall not weigh with the NCLT at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
