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TMI Blog2019 (8) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... al, as a general principle, do not enter into internal affairs of the company unless a serious prejudice is caused to minority shareholders, contrary to law. Therefore, in order to strike a balance between majority and minority shareholders, it is necessary to intervene in the issue to the extent of removing the petitioners from the position of directors of the company. It is a fit case to exercise powers conferred on the Tribunal, under section 402 of the Companies Act, 1956 read with section 241/242 of the Companies Act, 2013 to pass appropriate orders in order to put an end to the affairs of the company. We hereby set aside the removal of the petitioners from the position of directors of respondent No. 1-company, and consequently their positions as directors are hereby restored - respondents are hereby directed to convene a board meeting of the company, within a period of two months, after duly serving appropriate notices to all petitioners, and to transact usual business by resolving their other issues if any. - C. P. No. 51 of 2014 and (T. P. No. 64 of 2016 ). - - - Dated:- 30-1-2019 - RAJESWARA RAO VITTANALA Judicial Member and DR. ASHOK KUMAR MISHRA Technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint family but due to bad company of colleagues in the company, and outside, respondent No. 2 started turning against the family members, when the true and fairness of the operations of the company including financial transactions were questioned by the petitioners. (c) Respondent No. 2, even though living together with the family members, without the knowledge of any of the petitioners, has started one more company by name Shreeambe Labels P. Ltd. and started diverting the orders from Bindu Labels P. Ltd., to Shareeambe Labels P. Ltd. None of the petitioners even though directors were aware of this matter. Only on receipt of mails from customers for clarification by Mr. Thrimurthy Put tanarayanappa (petitioner No. 2), the matter of diverting the orders has come into light. Some mails were sent from Bindu Labels e-mail id and for which the purchase orders were diverted to Shreeambe Labels P. Ltd., as per the policy of the company, only company e-mail id has to be used for communicating with the clients, where as the mail was sent from [email protected] for the mail which customer has forwarded for clarification. Salpl in the above id stands for Shreeambe Labels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meet ing on August 27, 2014 and appointed Mr. Thrimurthy Puttanarayanappa as chairman and passed a resolution for change in the authorized signatories to the bank account and submitted the same to the bank. Before the petitioners submit the resolution passed by the board of directors, respondent No. 2 approached the bank for not changing the authorized signatories. The bank manager after receiving the copy of minutes and resolution passed by the Board, has stopped the operations of the account and sent the document received by both the parties for a legal opinion and the issue is yet to decide. (g) It is stated that there are about 100 workers in the company and their salaries approximately come about ₹ 12 lakhs per month and as the account is not operating everything is been struck, which is affecting the company and causing the key workers/employees to leave the positions, as the matter of authorized signatory to the bank account was pending for more than one week, the petitioners approached the Deputy General Manager of Syndicate Bank at the Regional Office, Bangalore and the officer has directed the bank manager to provide the bank statement and to re-look th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, claimed that they are entitled for the reliefs as prayed for, in law as well as in equity under sections 397, 398, 402 and 403 of the Companies Act, 1956. 3. The respondents have filed their objections dated October 28, 2014 by, inter alia, contending as follows : (a) The petitioners have not approached this hon'ble Tribunal with clean hands, and have suppressed the fact that petitioners Nos. 2 and 3 have incorporated another company with the name of M/s. Bindu Labels (India) P. Ltd., on July 23, 2014 with the same object and operating in exactly the same field as respondent No. 1-company. (b) The petitioners are abusing the process of law and are also mismanaging the affairs of the company. The company is a going concern and running under the management of respondent No. 2, who is holding majority shares in it. There is no deadlock requiring any interference by the Tribunal. Therefore, it is not liable to be wound up and thus they are not entitled for any relief. (c) The shareholding pattern of the first respondent-company is as under : Sl. No. Name of shareh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the factory premises constructed on property bearing Nos. 54, 55 and 56, Srigandha Kavalu, Sunkada Katte, Bangalore as a lessee. The property, on which the registered office and factory are situated, is owned by the second respondent and the second petitioner herein. The owners had constructed factory buildings comprising two floors with 15 HP power and water facilities on the property owned by them and had leased out the buildings as one composite building to the first respondent-company under a rental agreement dated November 7, 2002. The first respondent-company was paying a monthly rent of ₹ 25,000. With the passage of time, additional floors were added to the building and additional power connection was also obtained from BESCOM for running the factory. At present, the factory building comprises ground plus two upper floors and a terrace floor. The factory building is equipped with 80 HP power connection and other facilities. As the first respondent-company is owned by the numbers of the same family, the parties had not executed a lease deed renewing the tenancy on fresh terms after the expiry of the initial period of lease. Notwithstanding the same, the first responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered office of the company. By a letter dated August 23, 2014 addressed to the board of directors of the first respondent- company, the second respondent dissented to holding of the meeting at the residence and also stated that the notes on the agenda were not enclosed with the notice convening the meeting. The second respondent also dissented and change in the authorized signatories to the company's bank account. (i) The second respondent also issued a notice dated August 23, 2014 to the board of directors of the first respondent-company for convening an extraordinary general meeting of the company under section 100(2) of the Companies Act, 2013 for removal of petitioners Nos. 2 and 3 as directors of the company. The second respondent raised several grounds for removal of the said directors including holding of a board meeting without notice to the second respondent to pass a resolution for the purpose of providing a no objection certificate for the incorporation of the new company. It was requested that notice seeking convening of an extraordinary general meeting be taken up as an agenda in the board meeting to be held on August 27, 2014. (j) The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the petitioner, while reiterating of the contentions raised in the company petition, has further contended that the second respondent still continuing the acts of oppression and mismanagement in the affairs of company, while the instant case is still pending. Therefore, it is a fit case to invoke the jurisdiction of the Tribunal to pass appropriate orders, in order to put an end to the affairs of the company. It is further contended that the acts of removal of minority directors, appointment of his wife as director and transfer of 10 shares to her, etc., are contrary to rules and constitutes acts of oppression and mismanagement. 6. Shri S. Sriranga, learned counsel for the respondent, while reiterating various averments made in the statement of objections as briefly stated supra, has further, inter alia, contended that the petitioners have not come to the Tribunal with clean hand to seek equitable relief under the Act, and they have suppressed various vital facts to the issue, while making allegations against the new company incorporated by the second respondent, they have suppressed the incorporation of a new company by petitioners Nos. 2 and 3 and made various bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector shall summon the meeting of the board of directors at any time subject to section 285 of the Companies Act. (b) At the meeting of the board of directors, all matters shall be decided by majority of votes. In case of any equality of votes, the chairman of the meeting shall have a second or casting vote. (c) The director in their meeting shall ordinarily dispose of all matters connected with the company. But they may dispose of any matter or class of business by circulation of draft resolution together with necessary papers if any, among all the directors and confirm their decision at subsequent meeting. 9. As stated supra, the petitioners and the second respondent are first and permanent directors of the company. Therefore, they cannot be removed by the impugned proceedings and the alleged resignation of the first petitioner is also denied. In this regard, the first petitioner, namely, Puttanarayanappa Nadikeraiah, has addressed a letter dated September 18, 2014 to Mr. Nagaraj P. (respondent No. 2), by, inter alia, intimating that he came to know about his alleged resignation when he made a public inspection of documents of the company, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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