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TMI Blog2019 (5) TMI 1635X X X X Extracts X X X X X X X X Extracts X X X X ..... nce dated 4.3.2013 in favour of 3rd respondent was signed by Mr. Jai Bhagwan Gupta on the basis of Resolution dated 12.8.2010 as he was authorised by 5th to 8th Respondent, as in the books of GIDC the names of the erstwhile directors were on record and only they could sign the conveyance deed. It is to be noted that Board of Directors take a decision through Resolutions and the decisions could be taken by the Board of Directors to authorise any body not necessarily the Member of the Board of Directors so that follow up action on the Board Resolution can be taken to logical conclusion. Once decision to dispose off the property has been taken by the Board and in terms of MOU ex-Directors has already agreed to cooperate in the matter for transfer of property. In the light of the decision taken by Board, that the application signed by the ex-Directors can not be termed as illegal. We have perused the Board Resolution dated 1.8.2012 and the letter dated 15.2.2013 and we find no illegality in this. It is not disputed that the Power of Attorney was given in favour of the Bank by 1st appellant and 2nd respondent with the power to sell, transfer, assign, handover possession and to cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Director on 28.7.2010 and 2nd respondent vacated his office as Director of 1st respondent w.e.f. 1.10.2010 as his appointment was not regularized by the Members of 1st respondent at the AGM held on 30.9.2010. 4. It is stated that the 1st appellant and 2nd respondent entered into Memorandum of Understanding dated 16.11.2010 with 6th, 7th, 8th and 9th Respondent by virtue of which 6th, 7th, 8th and 9th Respondent handed over the possession of Dyeing and Printing Unit situated at Plot Nos 263 and 266 at GIDC, Sachin, Surat alongwith other assets and liabilities w.e.f. 16.7.2010. By executing the said MOU, 6th to 9th Respondent relinquished and/or released all their rights, title and interest in the business and assets of 1st respondent. Pursuant to execution of the said MOU the 5th to 9th respondents sold their entire shareholding to the appellants and 2nd respondent, their family members and their associate companies which is event from the Annual Return made upto 30.9.2011 of 1st respondent. It is stated that on executing the MOU, 6to 9th Respondent made an application to 10th respondent to transfer the land of 1st respondent situated at Sachin, Surat in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the Respondent Nos 5 to 8 executed an Authority Letter dated 15.2.2013 (Page 177) in favour of Mr. Jaibhagwan Gupta on the basis of purported Board Meeting of 1st respondent dated 12.8.2010 authorising him to sign deeds, documents, and papers required in connection with transfer of immovable property situated at Plot No.263 and 266, Road No.2, GIDC, Sachin, Gaabheni, Taluka Ghoryasi, Distt. Surat. It is next stated that 1st respondent through 2nd respondent executed a Memorandum of Understanding and Agreement to Transfer deed 15.2.2013 (Page 179) thereby transferring immovable property for ₹ 2,46,13,881/- being the outstanding bank loan and interest amount and all other outstanding dues of relevant department whose NOC is required. 9. It is stated that on 19.2.2013 the 3rd respondent made payment of aggregate amount of ₹ 2,43,13,881/- through RTGS to Bank against Machinery Loan Account No.834177 and the Bank vide letter dated 23.3.2013 intimated 1st appellant that the said loan account had been closed on 19.2.2013. It is stated that the 1st respondent has huge cash in hand, bank balance, investment, deposits, inventories, trade receivables and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the loan was taken from the Bank and no other person was ready to give bank guarantee, therefore, 3rd respondent gave his personal guarantee for the term loan and cash credit sanctioned by the Bank. It is also stated that the appellant has not produced any evidence that his signatures was forged by 3rd respondent in the Resolution passed by the Board of Directors on 1.8.2012. It is also stated that if the company fails to pay outstanding loan amount of the Bank then the guarantor is liable to pay the said amount. It is stated that the bank loan was paid by the 3rd respondent and the plot of land was transferred in his name after following due process of law. 12. After hearing the parties, learned NCLT passed the impugned order dated 16.8.2017. The operative portion of the impugned order is as under:- 79.Petitioners failed to place material on record to establish the alleged acts of oppression and mismanagement. The allegation of syphoning of funds by respondent No.2 has also not been established. Moreover, respondent No.2 gave explanation stating that Income Tax refund amount of ₹ 15 lakhs has been credited to the loan accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... top the transfer of plot. 10th respondent also stated that a resolution dated 1.8.2012 (Page 334 Vol 2) duly signed by Appellant No.1. Appellant No.1 sought these documents from 10th respondent but the same was denied and then appellant No.1 sought these documents RTI and the same were supplied but by then the final order was passed by 10th Respondent on 28.3.2013 and the property was transferred in the name of 3rd respondent. 16. The appellant stated that the transfer application signed by R5,6,7, 8 in favour of 1st and 2nd appellant is a legal document, because 5th to 8th respondent after getting their 100% consideration from 1st and 2nd appellant signed the transfer application dated 6.4.2011(Page 146). It is stated that neither the 10th Respondent or any legal body can cancel the above said transfer application form. It is stated that only 1st appellant and 2nd respondent have legal rights to deal with the above said transfer application. 17. The appellant stated that the resolution dated 17.7.2012 (Page 337 Volume 2) relating to the inspection of records of the company is after thought. It is stated that the Hon ble CLB vide order dated 13.6.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of loans, transfer of 1st respondent property etc. Board resolution dated 14.9.2012 passed for disposal of 1st respondent land for discharge of outstanding loans to bank. It is stated that Board Resolution dated 15.10.2012 (Page 340) was passed as the business activities was stopped and loan is not repaid then in such case if guarantor repays the loan then the legal rights of the property would transfer to him. It is next stated that full payment of outstanding loans to bank was made by 3rd respondent on 19.2.2013 and thereafter on 21.2.2013 the appellant started objections against transfer of loan to 3rd respondent. It is stated that during 14.9.2012 to 19.2.2013, the appellant had no objections about transfer of land and was waiting for discharge of loan by 3rd respondent. It is stated that after discharge of loan by 3rd respondent, the appellant started objection to bank against release of title deeds, to 10th respondent seeking non-execution of lease/transferring lease in favour of 3rd respondent, filed civil suit, filed Special Civil Application in Gujarat High Court, filed FIR and thereafter filed CP No.58/2013. It is stated that the Board Resolutions dated 17.7.2012, 1.8.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that after payment of entire loan to the Bank on 19.2.2013, the appellant started objecting and writing to Bank, 10th respondent and filing civil suit in Gujarat High Court. 25. It is stated that the appellant was only interest in the immoveable property of 1st respondent acquired by 3rd respondent would be evident from the submissions made by the appellant before Hon ble Company Law Board, recorded in the order dated 19.5.2014 that 1st appellant who was present in person on 15.5.2014 undertook to pay the dues together with up to date interest to 3rd respondent which he has paid to the Bank subject to the conditions that the 3red respondent returns back the assets of the company. 26. We have heard the parties and perused the record. 27. The appellant argued that that the Board Resolution dated 12.8.2010 and Authority letter dated 15.2.2013 (Page 177) is forged and illegal and it is signed by Resigned Directors. Appellant further argued that the Resolution dated 12.8.2010 is not there in the compliance certified issued by Practicing Company Secretary for FY 2011. 28. Learned counsel for the respondent argued that Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors were on record and only they could sign the conveyance deed. It is to be noted that Board of Directors take a decision through Resolutions and the decisions could be taken by the Board of Directors to authorise any body not necessarily the Member of the Board of Directors so that follow up action on the Board Resolution can be taken to logical conclusion. Once decision to dispose off the property has been taken by the Board and in terms of MOU ex-Directors has already agreed to cooperate in the matter for transfer of property. In the light of the decision taken by Board, that the application signed by the ex-Directors can not be termed as illegal. 30. The appellant argued that 1st appellant and 2nd respondent on 16.11.2010 (Franking on 22.12.2010) signed Memorandum of Understanding and Undertaking Agreement with 6th to 9th respondent. According to MOU, 1st appellant and 2nd respondent acquiring the entire share capital of 1st respondent from 6th to 9th respondent alongwith the industrial undertaking together with land, building, plant and machineries and other assets described in the said MOU. Appellant further argued letter dated 15.2.2013 (Page 184 Vol 1) is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t respondent was in heavy losses and 10th respondent s transfer fee and Registry charges was approx. ₹ 20 lakhs. Respondent further argued that the loss in 2011-12 was ₹ 1,21,73,888/- and 1st appellant was in the management of the affairs of 1st respondent and no steps were taken by 1st appellant to arrange for the transfer fees. 35. We have heard the parties on this issue. It is not disputed that the 1st appellant was in the management of the affairs of 1st respondent and, during the year 2011, 1st respondent was in heavy losses. It is for both the 1st appellant and 2nd respondent to take steps for transfer of plot in their names. We observe that both are liable for not transferring the plot in their names. 36. Appellant argued that the Resolution dated 1.8.2012 was notarized on 4.12.2012. Appellant argued that if the existence of Resolution was on 1.8.2012 then why it was not produced at the time when Power of Atorney was given to the Bank. 37. Learned counsel for the respondent argued that Resolution dated 1.8.2012 is not notarizd but attested by notary. 2nd respondent was solely authorized by this Resolution. The foren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank did not accept the said Resolution and asked 2nd respondent to withdraw the Resolution. The said Resolution was withdrawn by 2nd Respondent on 17.10.2012 as accepted by 2nd Respondent in the letter given by 2nd Respondent to 10th Respondent. 43. Learned counsel for the Respondent argued that the Resolution dated 15.10.2012 is not forged as it was given to Bank by 1st appellant and 2nd respondent. Learned counsel for the Respondent further argued that 1st appellant in his rejoinder (Addl. Documents by 2nd Respondent, Diary No.3729, Pg67, para 38) confirms the passing of the Board Resolution dated 15.10.2012 and also admits the power of attorney dated 15.10.2012 to sell the land. Counsel further argued that the Resolution accepted by 1st appellant gives the right to the bank to transfer the property for recovery of the loan and first preference should be given to 3rd respondent to pay the loan amount and if 3rd respondent accepts and repays the loan amount then the property should be transferred to 3rd respondent. 44. We have heard the parties on this issue. We have gone through para No.38 of Addl Documents filed by 2nd respondent vide Diary No.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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