9911796707
TMI Blog2017 (12) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... ng since the matter is sub-judice. Since the Hon'ble NCLAT, vide its order dated 6.11.17 has interalia directed as not to give effect to resolution on the issue till the disposal of case, now the Company is free to take appropriate decision in accordance with law duly following principles of natural justice. It is also relevant to point out here that the petitioner being whole time Director, and in receipt of remuneration from the Company along with other directors, cannot plead ignorance of affairs of the Company. The petitioner is yet to be removed from the position of Director. As per section 166 of Companies Act, 2013, a Director of a Company, subject to provisions of the Act, shall act in accordance with articles of the Company and shall act in good faith in order to promote the objects of Company for the benefit of its members as a whole and in the best interest of Company, its employees, shareholders, shall exercise her duties with due and reasonable care, skill and diligence etc. The conduct of petitioner being promoter Director, Whole Time Director taking huge remuneration as stated supra, not only failed in her statutory duties as assigned to her but also resorting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany was promoted by Mrs. Proddaturi Malathi, the Petitioner herein, Mr. Proddaturi Rama Krishna, the Respondent No. 5 and Mr. Sekhar Pendam, the Respondent No.2. 3) The Company's shareholding pattern at the time of incorporation till date is as under: a) At time of incorporation: S. No Shareholder Name No. of Shares of each Amount Percentage of shares 1 Sekhar Pendam 5,000 50,000 49.95% 2 Proddaturi Malathi 5,000 50,000 49.95% 3 P. Rama Krishna 10 100 0.10% Total 10,010 1,00,100 100% (b) The Company's shareholding pattern as on 31.03.2015 as per the Annual Return for the year ended 31.03.2015 was as under: S. No Shareholder Name No. of Shares of ₹ 10/- each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. No Shareholder Name No. of Shares of ₹ 10/- each Amount Percentage of shares 1 Proddaturi Malathi 42,875 4,28,750 14.29% Total 42,875 4,28,750 14.29% f) Shareholding details of Respondents group (after impugned allotments dated 30.09.2015 and 26.11.2016) is as under S. No Shareholder Name No. of Shares of each Amount Percentage of shares 1 Sekhar Pendam 2,08,615 20,86,150 69.51% 2 Salalitha Parsha 48,510 4,85,100 16.17% 3 Mallesham Mekala 100 1,000 0.03% Total 2,57,225 25,72,250 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company. In fact, there were no invitations for Board meetings and general meetings held. Being a closely held company, with good faith, the Petitioner has signed on some papers given by the Respondent No. 2. The Petitioner and the Respondent No. 2 are the business associates with equal ratio of partnership in about 3(Three) Partnership Firms such as M/s. S R P Logistics, M/s. Sree Freight Forwarders and M/s. SRP Farms. Therefore it is an understanding and known fact and condition stipulated by the both the parties orally, morally and legally that there should not be any deviation of shareholding or any share in any partnership of business firm without the knowledge of the other party. The Respondent No. 2 has violated such terms and conditions only with an intention to have a personal gain to him and to his wife with an ulterior motto to gain control over the Company. 9) The petitioner has requested numerous times to allow her to go through and inspect the books of accounts, minutes books and statutory registers including attendance registers for board meetings and general meetings, register of members, Register of Directors, register of Director shareholding, register of tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the scheduled time. The venue of the BoardMeeting is nothing but the residence of Smt. S. Kavitha Rani, Practicing Company Secretary, who is shown as invitee in the notice of the Board Meeting. When the Petitioner tried to enter into the venue of the Board meeting, the Respondent No. 2 and his henchmen objected the Petitioner to enter in to the premises, abused the petitioner with filthy and un-parliamentary language and threatened the Petitioner if she entered in to the premises, she has to face the dire consequences. The Petitioner was compelled to leave the premises. To avoid the physical tussle and not to have any bodily injuries, on the advice of the wellwishers, with a heavy heart of standing throughout till 12.30 P.M. as an affected party, though the Petitioner is thought of approaching the police authorities, on the advice of well-wishers and legal experts, left the premises with a view to approach this Hon'ble Tribunal for relief and justice. 11) It is stated that the Petitioner has received a notice of Extraordinary General Meeting dated 15.03.2017, which is going to be conducted on 10.04.2017 with an agenda to transact the business for removal of Mrs. Proddatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mallesham Mekala, the Respondent No. 4 as an Additional Director at the Board Meeting held on 26.11.2016 without issue of notice for Board Meeting to the Petitioner is not valid and his appointment is against the provisions of Section 173(3) read with 173(4) of the Companies Act, 2013. The above act is mismanagement and it is only to gain control over the Board which is against the interest of the Petitioner. 17) It is therefore, contended that above series of the oppressive acts of the Respondents 2 3 would cause an equitable ground to wind up Company but it will be prejudicial to the interest of the Petitioner as well as the 1 st Respondent Company. Therefore, the Petitioner has filed the present petition by seeking the relief as mentioned supra. 3. The Company petition is opposed by the respondent No. 1 and 2 and their contentions, in brief, are as follows: 1) The petitioner has come out with unclean hands by not disclosing that she was all along consenting party as a whole time Director of the Company, on this count alone the petition is liable to be dismissed. 2) The Company was incorporated in 2003 and it is engaged in the Customs Clearance, Freight Forwarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reason aforesaid we agree with the findings of the Tribunal that the appellant(s) cannot rake up any issue which is barred by limitation i.e., of a period which is three years prior to the date of filing of the Petition. 4) The respondents have also relied upon the judgment rendered in Abdhul Rahim vs. Md. Azimuddin (AIR 1965-Patna-156), in support of their contentions that while admitting signed some blank papers, is now denying every signature of her and it is nothing but blowing hot and cold in same breath. They relied upon para (8) of the judgment which reads held as under: (8)... There is a certain amount of peril for the party who takes absolutely inconsistent pleas grounded on different and contradictory facts, and while leading evidence in support of them he will have to blow hot and cold in the same breath which is bound to shake confidence in the truth of his allegations. For such reasons, inconsistent defences that will depend upon contradictory facts are not generally permitted . 5) Mere denials of signature of petitioner, after signing relevant proceedings in question of Board Meetings are not all tenable. In this regard, the respondents relied u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26.11.16, and on the contrary, she has participated in it, and consented for decisions taken during the meeting. And she never made any complaint so far either to the Company or to the respondents regarding this allotment. She has attended meetings subsequently. 4. Heard, Shri. V. Venkata Rami Reddy, learned counsel for the Petitioner, Shri. S. Chidambaram, PCS for Respondent Nos. 1 2 and Smt. C. Shilpa, learned counsel for Respondent No. 5. The learned Counsel for Respondent No.5 merely submits that she has filed only Vakalat without any counter and submit that she would file written arguments. The learned counsel for the Petitioner and the learned PCS for Respondent No. 1 and Respondent No.2 are permitted to file their written arguments. 5. Mr. Venkatarami Redddy, while reiterating various averments made in the petition has further submitted that transfer of shares of Respondent No. 5 to Respondent No. 3 is in violation of Section 108 of the Companies Act, 1956, and Article 14 and 15 of the Articles of Association of the Company. The Annual Return filed for the year 2006 also did not indicate the transfer of shares during year 2005 and 2006. The original documents have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Company which is totally against the interest of the Petitioner. By denying the documents filed by the respondent, the petitioner sought inspection of documents and for forensic examination of Rule 43 of NCLT Rules, 2016. 7. Mr. Chidambaram has also reiterated various averments made in the reply and prayed the Tribunal to dismiss the petition and also produced original records relating to the case. 8. By perusing pleadings of both the parties, the following main issues apart from other minor issues arise for consideration: i. Whether Board meetings dated 30.09.2015 and 31.10.16 were properly conducted in accordance with law, and if so what is effect of decisions taken during those meetings: ii. Whether the allotment of shares made on 26.11.2016 to Respondent No.2 and Respondent No.4 are valid or not; iii. Whether appointment of Respondent No.4 as Additional Director of the Company in the Board Meeting held on 26.11.2016 is legal; iv. Whether the removal of the petitioner as Director of Company is valid in law since the petitioner is life time Director of the Company; v. If so, what is the relief petitioner is entitled for 9. The basic facts which are relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to provisions of Act. 4) It is also not dispute that every Company including the present Company registered under provisions of the companies' act 1956/2013 is ultimately governed by its provisions and all articles of a Company should be in consonance with provisions of Companies Act. 5) As per said Article, the the Board of Directors may allot or otherwise dispose of the same or any of them to such persons etc. In the instant case, it is not in dispute that. P.Rama Krishna was holding 10 equity shares at its incorporation of the Company itself. And these shares have been transferred to the respondent No. 3, who is the Director of the Company, as early as 2005 and it was also noted by the Board meeting held on 04.04.2005, in which the petitioner was also present. It is not in dispute that said Rama Krishna did not challenge transfer his shares till date. In pursuant to said transactions, several material developments have taken place in the Company since the respondent No. 2 3 are husband and wife respectively and constituted majority. The petitioner has no locus standi to question said transfer and she is also estopped from questioning it. Moreover, it is admitted p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was also allotted 17,880 equity shares apart from the second and third respondent. It is not in dispute that the share application money was pending in the books of the company. The Company has also filed a copy of the Ledger enclosed to Balance in question with respect to share application money in respect of the petitioner, respondent No. 2, 3. Therefore, it is clearly established that based on the pending share application money, the shares were allotted. 8) The record discloses that the petitioner is a whole time Director and is in receipt of remuneration for the service rendered to the Company. The balance sheet as on 31 March 2015 discloses that the share application money of ₹ 842,601 is with the Company carrying forward previous balance sheet as at 31.03.14. As per the income tax returns filed for assessment year 2015-16 ₹ 540,000, was paid for petitioner; ₹ 16,20,000 for Second respondent and ₹ 5,60,000. for third respondent. Similarly as per Income tax Returns for the assessment year 2016-2017, the petitioner was paid ₹ 540,000/- respondent No. 2 3 were also paid ₹ 17,40,000, 6,00,000/- respectively. 9) We have compared the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Company or she has expressed her readiness to buy increased shares at the relevant point of time. The petitioner after accepting additional shares has now come by rising baseless grounds. The petitioner has admittedly did not raise any dispute during the meetings held on 30.09.15. The petitioner having participated after having due notice has come to this Tribunal by simply denying her signature on every meeting, which is against her interests. As stated supra, the petitioner failed to substantiate bald denial of her signature on the impugned proceedings with any other corroborative evidence. So, the petitioner cannot seek any further investigation into her false allegation of forgery on documents in question. 12) The above circumstances clearly shows that the petitioner failed to make out a even prima facie case to make an investigation into the affairs of the Company and the petitioner has not come with bonafide reasons and clean hands to seek equitable relief in the present Company petition. Therefore the company petition is liable to be rejected. 10. In the light of above discussion of the case, the specific issues raised and relief asked in the present Company pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings and she was given adequate opportunity to express her voice but she being in minority position cannot dictate terms to people in majority by raising un-tenable and un-substantial grounds. It is true that Section 62 of the Companies Act, 2013 has to be taken into consideration, while allotting new shares/ transfer of shares. Section 62 of the Companies Act, 2013 says that shares which are proposed to be increased by the Company should be offered to the existing shareholders in proportion. In this context, it is relevant to advert the minutes of Board meeting held on 30.09.2015. In this meeting Mr. Shekar Pendam (Respondent No.2), Chairperson and the petitioner were present and following resolution has been approved: Confirmation of the Minutes of Last Board Meeting: The Minutes of the previous Board Meeting were placed before the Board and same were signed and confirmed. INCREASE IN AUTHORISED CAPITAL: The Chairman has informed the Board about the fact of approval of alteration of Memorandum of Association and Articles of Association by the members at the Annual General Meeting held on 30.09.2015. After due discussions the following resolutions were pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y signed papers and handed over the same to respondents and having admitted signing papers thereby accepting her signature on the papers in question, she cannot turnaround and denied for its misuse. Once admitted to have signed papers, she is estopped from questioning it later saying that intention was different. She has not substantiated that allegation with any corroborative evidence. It is no doubt that Rule 43 of NCLT Rules,2016, empowers the Tribunal to make such exercise in the interest of justice if facts of particular case warrants such exercise and it cannot be resorted merely at the request of parties without primafacie making out case for the same. Rule 43 is extracted below: 43. Power of the Bench to call for further information or evidence. - (1) The Bench may, before passing orders on the petition or application, require the parties or any one or more of them, to produce such further documentary or other evidence as it may consider necessary:- (a) for the purpose of satisfying itself as to the truth of the allegations made in the petition or application; or (b) for ascertaining any information which, in the opinion of the Bench, is necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement. (2) If a company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default, including liquidator of the company, if any, shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. (3) The provisions of these sections shall apply to- (a) Special resolution; (b) Resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions; (c) any resolution of the Board of Directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director; (d) resolutions or agreements which have been agreed to by any class of members but which, if not have been eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd a copy thereof to the director concerned, and the director, whether or not he is a member of the company, shall be entitled to be heard on the resolution at the meeting. (4) Where notice has been given of a resolution to remove a director under this section and the director concerned make with respect thereto representation in writing to the company and requests its notification to members of the company, the company shall, if the time permits it to do so,- (a) in any notice of the resolution given to members of the company, state fact of the representation having been made; and (b) send a copy of the representation to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representation by the company). and if a copy of the representation is not sent as aforesaid due to insufficient time or for the company's default, the director may without prejudice to his right to heard orally require that the representation shall be read out at the meeting: Provided that copy of the representation need not be sent out and the representation need not be read out at the meeting if, on the application ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as regular Director of the Company. However, the same was not given effect to till date due the case is pending before this Tribunal and then before Hon'ble NCLAT. Again a notice dated 10 th April, 2017 was issued proposing to conduct a meeting of Board of Directors of the Company to be held on 22 nd April, 2017 at 10.00. The petitioner, while accepting the receipt of said notice on 13.4.17, has addressed a letter dated 15 th April, 17 by interalia requesting to defer it to a later date since the matter is subjudice. However, it is stated by the Company that proceedings for removal of petitioner are kept pending since the matter is subjudice. Since the Hon'ble NCLAT, vide its order dated 6.11.17 has interalia directed as not to give effect to resolution on the issue till the disposal of case, now the Company is free to take appropriate decision in accordance with law duly following principles of natural justice. 12. It is also relevant to point out here that the petitioner being whole time Director, and in receipt of remuneration from the Company along with other directors, cannot plead ignorance of affairs of the Company. As stated supra, the petitioner is yet to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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