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TMI Blog2019 (6) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... he 1st respondent unless he is able to carry the majority shareholders with him. Therefore, there is no force in the arguments of appellant and the same is rejected outrightly. We are of the view that non providing the copy of the Power Purchase Agreement relates to operation of the company and does not come under oppression and mismanagement. Appeal dismissed. - COMPANY APPEAL (AT) NO. 40 OF 2018 - - - Dated:- 22-2-2019 - Mr A. I. S. Cheema, Member (Judicial) And Mr Balvinder Singh, Member (Technical) For The Appellant : Mr. B. Suyodhan, Advocate For The Respondents : Mr. Harinath Reddy, Mr. Mithun Shasnak, Advocates JUDGEMENT MR. BALVINDER SINGH, MEMBER (TECHNICAL) The present appeal has been filed by the appellant under Section 421(1) of the Companies Act, 2013 being aggrieved by the impugned order passed in Company Petition No.43/241/HDB/2017 filed in National Company Law Tribunal, Hyderabad Bench, Hyderabad (NCLT in short) whereby the Company Petition has been dismissed vide impugned order dated 12.12.2017. 2. The brief facts of the case are that the 1s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance. 4. It is stated that 2nd respondent, mother of the appellant, being head of the family was Chairperson of 1st respondent and also exercising exclusive cheque signing powers. 5. It is stated that the appellant observed certain irregularities in bank account operation and when he brought it to the notice of the 2nd respondent, the 2nd respondent got offended and for her own reasons she started avoiding the appellant and not cooperating with him. It is stated that the 2nd respondent being under undue influence of some self centered persons and misleading her with false information and trying to wedged huge gap in the natural relationship between the mother and sons with deep rooted conspiracy of somehow getting rid of the appellant from the affairs of 1st respondent. 6. It is stated that to succeed in their designs, 1st to 3rd respondent indulged in creation of fake EGM Resolution as if the 3rd respondent was shown to have been appointed as a Director of the 1st respondent at a purported EGM on 2.11.2016 which was not held. It is stated that a Form No.DIR-12 was uploaded on 30.11.2016 to this effect. It is stated that 2nd respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties the NCLT passed the impugned order dated 12.12.2017. Relevant para of the impugned order is as under:- 20. It is settled principle of law that the Courts/Tribunal will not, in general, intervene at the instance of shareholders in matters of internal administration; and will not interfere with the management of a Company by its directors so long as they are acting within the powers conferred on them under the articles of the Company. And the internal disputes between the shareholders is to be made the subject matter of an action by shareholders, which is laid down as early as 1843 in the celebrated case of Foss Vs Harbottle. (Fos Vs Harbottle (1843) 2 Hare 461.) 21. The Hon ble Supreme court of India, in the case of Rajahmundry Electric Supply Corporation Ltd Vs Nageshwara Rao (1956) 26 Comp. Cas. 55 (S.C.) 196 SCJ 310; 1955(2) SCR 1066: AIR 1956 SC 213, is observed as follows: The courts will not, in general, intervene at the instance of shareholders in matters of internal administration and will not interfere with the management of a company by its directors so long as they are acting within the powers conferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Hon ble Appellate Tribunal may deem fit and proper in the facts and circumstances of the case. 11. The appellant stated that he was appointed as Director of 1st respondent on 26.11.2009 and later on he was appointed as Managing Director of the 1st respondent on 29.3.2010. The appellant further stated that he was authorised by 2nd respondent to execute lease agreement on behalf of 1st respondent with IDCO on 21.1.2015 (Page 154-155). 12. The appellant stated during the course of discharging his function as Managing Director, he observed certain irregularities in operating the bank account of 1st respondent and when the issue was taken up with 2nd respondent she got offended and with the help of 4th respondent, has conceived a plan to create certain documents and thereby removed the appellant from the directorship. The appellant stated that 3rd respondent was inducted as Director in EGM dated 2.11.2016. The appellant stated that he never received any notice with regard to the alleged EGM dated 2.11.2016 and the appellant being a promoter shareholder as well as the Managing Director of the Company had no knowledge of any EGM being held. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material before the Hon ble Tribunal to establish or even suggest that he has been a victim of Oppression and Management 20. We have heard the parties and perused the record. 21. Learned counsel appearing on behalf of the appellant argued that no notice was submitted by 2nd respondent calling for an EGM and no such notice has been placed on record by 2nd respondent and no proof of service of such notice to any of the shareholders is placed on record to establish issuance of notice. Learned counsel for the appellant further argued that the appellant being the Managing Director of the company and also shareholder of 1st respondent had no knowledge of the alleged EGM being held on 2.11.2016 22. Learned counsel for the respondents argued that the said Meeting was held in terms of the provisions of Companies Act, 2016 and the appellant was very well of the said Meeting. 23. We have gone through the company petition filed by the appellant before the NCLT. We observe from para 4.6 at Page 63 of the petition which states as under: To succeed in their designs, the Respondent No.1 to 3 indulged in creation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot receive the notice for the meeting or he did not attend the said Meeting. He simply stated that he did not pass any resolution on 2.11.2016 appointing 3rd respondent as director. Therefore, it appears that the appellant is apparently against the appointment of 3rd respondent as Director of 1st respondent but this will not amount to prove that he was not informed or was not aware of the Meeting and the said Meeting was not held in terms of provisions of Companies Act, 2013. Apart from this, considering the shareholding of parties as noted in para 2, (which includes Respondent No.3), Respondent had no fear not to serve Notice on Appellant for holding EGM. Thus the argument that the Notice was not given has no substance. 24. Learned counsel for the appellant stated that the certified true copy of the extracts of Resolution passed at the EGM dated 2.11.2016 is signed and attested by the 2nd respondent with the stamp/seal of Dr. Rama Krishna Prasad Housing (P) Ltd. It is argued that Dr. Rama Krishna Prasad Housing (P) is the only a shareholder in the 1st respondent and the alleged requisitionist who had called for an EGM. The alleged extract of Resolution dated 2.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st respondent unless he is able to carry the majority shareholders with him. Therefore, there is no force in the arguments of appellant and the same is rejected outrightly. 30. Learned counsel for the appellant argued that the appellant being a shareholder of the company is entitled to peruse and have a copy of the Power Purchase Agreement which the respondents are claiming to have entered into with NTPC. Inspite of several requests made by the appellant the same has not been provided till date with the same. 31. Learned counsel for the respondents argued that 1st respondent company has been granted all requisite permission to start a power plant. NTPC has issued a Power Purchase Agreement. Till now the company has been able to meet its expenses by funds mobilised by 2nd respondent. 2nd respondent is securing a financial partner to commence the operations. Thus there is no scope for any mismanagement of the account of 1st respondent as alleged or at all. 32. We have heard the parties on this issue. We are of the view that non providing the copy of the Power Purchase Agreement relates to operation of the company and does not come unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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