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TMI Blog2019 (7) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... is not the issue raised in the instant petition by the son. However, the son can hardly maintain the company petition which is filed by making various acts of oppression and mismanagement by his father (Shri Arun Bhat). However, Mr. A. Mayuresh Bhat (son), after getting transmission of the shares of his father, he may claim his rights basing on such transmission, in accordance with law. Moreover, the son is prima facie holding 4 per cent. shares by contributing share capital of ₹ 2,00,000 and share application of ₹ 42,100 and also stated that he is hardly involved in the affairs of the company by attending the annual general meeting/board meetings as contended by the respondents. Therefore, he cannot maintain instant petition filed by his father, under section 397/398 of the Act, 1956. The petitioner failed to substantiate the acts of oppression and mismanagement as alleged by him in the company petition and some of reliefs as sought in the main company petition are also not tenable and cannot be granted. However, the legal heir can claim transmission of shares of his father by submitting necessary documents to respondent No. 1-company and thereafter, the company has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ka. Its authorised share capital is ₹ 50,00,000 divided into 50,000 equity shares of ₹ 100 each and the issued, subscribed and paidup share capital is ₹ 50,00,000 divided into 50,000 equity shares of ₹ 100 each. The main objects of the company, in brief, are to engage in the business of hotels, tourist cottages, tourist resorts, clubs, resorts, holiday homes, etc., along with providing all related services such as tour operator services. (2) The petitioner and the second respondent has entered into three memorandum of understandings dated October 18, 1999, August 14, 2001 and January 18, 2003 relates to formation of incorporation and distribution of shares, investments, appointment of directors, etc., of respondent No. 1- company, wherein, inter alia, agreed that shareholding between the peti tioner and second respondent would be in the ratio of 48:52 respectively and there are five directors comprising two from the petitioner and three from the second respondent. Accordingly, the petitioner and his son Mayuresh Bhat and respondents Nos. 2 to 4 are directors of the company. (3) The petitioner has been carrying on the business of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Obtaining Hotel Licence for the resort which is running without licence for last 10 months ; (d) Non-payment of luxury tax of ₹ 2,65,316 and demanding the same to be reimbursed by Anubhav Tours ; (e) Luxury Tax collected from Anubhav Holidays 85 others in terms of other service charges were not paid to the Government ; (f) Total failure in management of the company in all aspects. With reference to the above referred issues, the petitioner had written number of letters all dated November 22, 2005 to respondent No. 2 who is the MD which were not answered. (8) Respondent No. 2 who is the MD of the company and his family, who form the majority of directors with share of 52 per cent. have mis managed the entire operations of the resort and contravened the provi sions of all laws and have rendered the company bankrupt with huge losses for last 3 years. It was agreed in the board meeting dated November 21, 2005 that the respondents would provide the copies of the minutes book to the petitioner. It was also, inter alia, agreed that the annual accounts for the year 2004-05 to be submitted individually to all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s bank account with Saraswat Bank, Hubli Branch is being operated by respondent No. 2 with his single signature and this account had been irregular and various cheques issued had bounced for about 33 times and the bank balance was below the minimum balance requirement for about 12 times. Apart from having account in Saraswat Bank, Hubli Branch, respondent No. 2 has opened number of bank accounts in the name of respondent No. 1-about five bank accounts as detailed below : (1) Syndicate Bank (2001)-Yellapur (2) KDCC Bank (2002)-Yellapur (3) State Bank of India (2005)-Yellapur (4) Ankola Urban Bank (2007)-Yellapur (5) Canara Bank (September 21, 2007)-Bhagwati. Except for the bank accounts with the Syndicate Bank and State Bank of India, all other above referred bank accounts were being operated by respondent No. 2 with the requirement of single signature. All these bank accounts were opened with the resolutions, which were only signed by respondents Nos. 2 and 3 without intimation to the petitioner. The bank accounts with State Bank of India and Syndicate Bank, which require joint signature involving peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner himself had agreed to procure the necessary materials required for the construction of the resort, he had instead of personally procuring the said materials had outsourced the said work to third persons and that this resulted in the delay in the execution of the project and also it had resulted in increase in expenditure on respond ent No. 1-company. During the entire period of five years, respondent No. 2 had personally supervised the entire construction of the resort, land scaping of the gardens and other activities and only due to the sole efforts of respondent No. 2, which resulted in the resort coming to a good shape. (b) It is stated that respondent No. 2 had sold only 2 (two) acres out of approximately 22 (twenty-two) acres of land owned by him. The remaining land, which surrounded two/2 acres of land, in which the resort was constructed were in the nature of plantation and which increased the beauty of the resort, thereby bringing the resort in the nature of jungle lodges and these lands were owned by respondent No. 2 and that he has allowed respondent No. 1-company to enjoy and utilize the facilities that were available in the surrounding land withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No. 1-company has unautho risedly filed Form 32 in respect of appointment of his wife Smt. Sheela Bhat as additional director of respondent No. 1-company with the Registrar of Companies, Bangalore. During the 5th annual general meeting held on September 30, 2005 the members of respondent No. 1-company had taken a decision not to regularize the appointment of Smt. Sheela Arun Bhat as additional director of the company. The petitioner refused to attend the said annual general meeting even though the notice of the said annual general meeting had been sent to him for the reasons best known to him. (f) It is stated that the neither the petitioner nor his son Shri Mayu resh Bhat, who is one of the directors in respondent No. 1-company, have furnished to respondent No. 1-company, the DIN-2 Form, which needs to be filed with the Registrar of Companies, Bangalore and that without the same the annual accounts/returns cannot be filed with the Registrar of Companies, Bangalore. In fact, Shri Mayuresh Bhat has been disqualified to continue as director of the company, in view of his failure to attend three consecutive board meetings, as stipulated under section 283(1)(g) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in a position to attend the meeting. Thus, these acts clearly goes to prove that the petitioner is more concerned about the development and welfare of only his company, viz., Anubhav Holidays and he is not bothered about respondent No. 1-company. Though the petitioner had requested respondent No. 2 to convene an extraordinary general meeting to discuss the issues regarding respondent No. 1-company, he has failed to attend the same. (k) It is stated that till date, neither the petitioner nor his son Shri Mayuresh Bhat has disclosed their interest in other companies as required under section 299 of the Companies Act, 1956 and that as per the provi sions of the said section, any person, who violates the same, shall stand automatically disqualified from continuing as director of the company and that respondent No. 1-company has not taken any action against the peti tioner and his son for violation of the provisions of the said section. 5. Heard Shri Rajath Bharadwaj, learned counsel for the petitioner, and Shri K. Venkat Ramani, learned counsel for the respondent. We have carefully perused the pleadings of both the parties and the extant provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been created so that the funds can be diverted from the respondent-company. It is stated that the diversion of business through Malenadu Holidays owned by respondent No. 2 clearly shows that the respondents should not be allowed to buy the shares or get the benefit of a share valuation done. On the contrary, giving the shares to the petitioner would ensure that the com pany runs well and is able to clear all its dues on account of his experience in the said field and his standing in the market. (d) He also relied upon the following judgments in support of their case : (i) Sudershan Singh Sethi v. Sakhi Resorts and Farmlands P. Ltd. [2015] 190 Comp Cas 349 (CLB). (ii) Suresh Kumar Sanghi v. Sanghi Bros. (Indore) Ltd. [2008] 141 Comp Cas 17 (CLB). (iii) Ms. Heena Dutt v. Chavi Designs P. Ltd. [2008] 141 Comp Cas 172 (CLB). (iv) Ramesh Chander Bammi v. Pindi Road Links P. Ltd. [2008] 141 Comp Cas 236 (CLB). (v) Jagjit Singh Chawla v. Tirath Ram Ahuja Ltd. [2004] 119 Comp Cas 385 (CLB). (vi) Vinod Kumar Mittal v. Kaveri Lime Industries Ltd. [2000] 100 Comp Cas 66 (CLB). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhat, who is the son of late Shri Arun Bhat, is not interested in the day-to-day affairs of respondent No. 1- company, and this is proved by the fact that he has not attended any single board meeting since the date of incorporation of the company, and in fact, he is disqualified to continue as director as stipulated in the provisions of Companies Act, 1956 and the Companies Act, 2013. 9. In the light of the above pleadings of both the parties, the main points for consideration, in the instant company petition, especially in the light of original petitioner is no more, are as follows : (1) Whether the alleged acts of oppression and mismanagement made in the petition, are substantiated by the deceased petitioner to grant any relief. (2) Whether those acts of oppression and mismanagement is still maintainable, at the instant of the son of the petitioner, as legal heir since he is not part of those acts and oppression and mismanagement alleged to have been made by the original petitioner. 10. As stated supra, the petition has been filed by the father of the petitioner by making various acts of oppression and mismanagement, which inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y petition, they should also being continuous harsh and burdensome leading to the conclusion that the directors action lack in probity and those grounds should justify winding up of the company under the just and equitable clause. The main company petition is filed by Mr. Arun Bhat, by making various allegations as per his knowledge and sufferings at the hands of directors of the company. However, unfortunately, the original petitioner (Mr. Arun Bhat) died on August 1, 2016. Therefore, Mr. A. Mayuresh Bhat has filed I. A. No. 19 of 2016, under rule 53 of the National Company Law Tribunal Rules, 2016, by, inter alia, prayed to implead him as the legal heir of the deceased petitioner Mr. Arun Bhat. Though the application was opposed by the respondent, that the Mr. A. Mayuresh Bhat (son) was not holding 24 per cent. of the shares in respondent No. 1-company and he holds only 4 per cent. and he never attended any board/annual general meetings convened by the company, the Tribunal allowed I. A. No. 19 of 2016 vide order dated February 16, 2017 by permitting to implead as legal heir of the original petitioner as a legal heir. However, the Tribunal only permitted him to implead by leaving ..... X X X X Extracts X X X X X X X X Extracts X X X X
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