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TMI Blog2019 (11) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... stainable and the allegations of oppression and mismanagement made were found to be not proved. NCLT held the other Company Petition No. 1/2016 filed by the respondents to have become redundant. The present appeal arises out of the dismissal of the Company Petition No. 36 of 2014. 2. Briefly stated the appeal is more reproduction of the Company Petition and the reply filed by the respondents with arguments. The appellant claims that the Respondent No. 1 M/s. UBC Engineers Pvt. Ltd. (the Company) was incorporated on 20th April, 2005 and the registered office is situated at Plot No. G-36, Sector 20, Belapur, Navi Mumbai-400614. (Case put up before NCLT appears to be that Respondent No. 2 was having proprietary concern "United Building Company and Appellant and Respondent No. 3 were employees who joined respondent No. 2 and Company was incorporated). In was incorporated to carry on business of undertaking various civil construction contracts. The company is registered as a Government Contractor with the Military Engineer Services (MES) and is undertaking various projects of MES. The projects were being carried out at Kochi and Colaba, Mumbai. It is stated that (and not disputed) that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the appellant the other Directors have interest and the company is bearing expenses of those firms by them using the stationery, staff, salary etc; f) Sixthly, Rs. 1.50 crores were siphoned off from the company by Respondent No. 2 towards material and labour of construction of his Bungalow at Plot No. 144, Sector 21, Kharghar, Navi Mumbai; g) Seventhly, Rs. 15 lakhs was siphoned off by Respondent No. 2 for addition and alteration work of a Bungalow at Kochi owned by his wife. Here also, manpower and construction material at the cost of the company was used; h) Eighthly, loan of Rs. 24,10,000/- was given to M/s. Unibuild Engineers, a partnership firm in instalments in which Respondent No. 2 to 4 are partners. Section 185 of the Companies Act, 2013 (Act in short) was violated. Loan was given although the company itself was taking various loans from Banks for its functions. 3. The appellant further claims that on 12th March, 2014 he wrote an e-mail to Accountant, Respondent No. 5, that his particulars had not been shown in Form No. 20B. The appellant met Respondent No. 2 on 18th March, 2014 and questioned the irregularities. The Respondent No. 2 made counter allegations again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal are general leaving it for us to search the details from various documents which have been later filed by the appellant and also the respondent. Coming back to the Arguments, Diary No. 8649 compilation of documents was filed by the appellant and the Learned counsel for the appellant referred Page 57 as the letter dated 1st April, 2014 sent by Respondent No. 2, Managing Director, claiming the letter to be on behalf of the Board of Directors. The arguments is that there was no authority given to Respondent No. 2 to send such letter making allegations against the appellant. Reference is then made to (Page 58) Notice dated 7th April, 2014 calling EOGM on 29.4.2014 with Explanatory Statement (Page 59). Although the appellant claims that he did not get sufficient opportunity to respond to the notice proposing to remove him as Director, his letter dated 22.4.2014 (Page 60) shows that he responded with great details including invoking the provisions of the Companies Act making various allegations which are now found in the Company Petition and the appeal. The learned counsel for the appellant referred to Page 67 of his Compilation which was addressed to Respondent No. 5, the accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter such cancellation of the agreement in favour of the company, Respondent No. 2 started taking rent from the company for the use of the premises by the company. It is also argued that the respondents were part of certain partnerships which were operating from the premises of the company and for which the appellant had filed police complaint. 8. Learned counsel for the appellant referred to his compilation (Page 218) where there is a purchase order from the letterhead of the company to one Nirmal Agency asking for supply of various construction articles at the site of the company with the address shown as 144, Sector 21, Kharghar, Navi Mumbai. The argument is that at Kharghar the company did not have any site and this address was of the house of Respondent No. 2 and this document shows articles being supplied at the site of house of Respondent No. 2 and thus there was siphoning of funds of the company. Learned counsel referred to appeal Page 57 which is part of the copy of the company petition where the allegations were made in sub para (g) that more than Rs. 15 lakhs were siphoned off by Respondent No. 2 for addition and alteration work of the Bungalow at Kochi which was owned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a Sale Deed on 9th June, 2005, we had noticed that the contents were in the nature of Agreement of Sale. Even regarding consideration the contents mentioned say that the Builder agreed to sell and the purchasers agreed to purchase (para 3) at total construction (should be consideration) of Rs. 17,50,000/-. As parties, this document had signatures only of the Respondent No. 2 one in his individual capacity and second as Managing Director of the Company. The reverse document of Deed of Cancellation also has signatures only of the Respondent No. 2 in two capacities. This time, of course, it was mentioned that the purchaser had earlier paid Rs. 17,50,000/- by way of full and final payment in the Agreement for Sale dated 9th June, 2005 which were now being returned as it is and the receipt was recorded for having received said refund of advance payment made to the purchaser. Ordinarily if the Company has received possession even under an Agreement, we would expect the Directors to protect the possession. However, here it would be necessary to refer to the facts of the matter to consider if we should interfere. Counsel for Respondents referred to his convenience Compilation Page 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant in Company Petition filed on 15th May, 2014 may have to be ignored. Thus we reject the allegations made by the appellant with regard to transfer of registered office of the company; his grievance regarding substitution of the same with MES as well as the allegations regarding agreement to sale and the deed of cancellation. We will not look into such stale claim in the face of conduct of the appellant himself. The appellant earlier never had difficulty when such documents were executed and belated grievances made are rejected. There is no substance in the excuse that he was looking after projects only and did not know what was happening in the Company affairs. 11. It is the grievance of appellant that after Deed of Cancellation, respondent No. 2 started taking rent for the premises of G-36, Belapur, Navi Mumbai from where the company was functioning. Learned counsel for the Respondents referred to this grievance as Allegation No. 5 in the Convenience Compilation and referred to copies of documents filed at Page 59-62 and submitted that the records of the company in the shaper of Balance Sheet as on 31st March, 2012 which shoed the appellant also to be one of the signatories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. Learned counsel for the respondents referred to this allegation of the appellant as Allegation No. 7(A) which was made before NCLT and regarding which explanation is given in the Convenience Compilation read with pleadings and documents. Learned counsel pointed out the pleadings of respondents in this regard submitted in NCLT (Convenience Compilation Page 84) and submitted that Respondent No. 2 had not siphoned any money for the construction of his Bungalow at Plot No. 144, Sector 21, Kharghar. According to the Respondents there was audit of the accounts of the company in 2011-12 and 2012-13 and no objections on this count were raised. Referring to the invoices being relied on by the appellant the defence is that in 2012 a Company by name Terex Noell, a US based company, proposed respondent company for grant of distributorship and representative agreement. It is stated that negotiations took place in 2012 and 2013 and one of the condition put by the US based company was that the respondent company should have a godown and distributorship office somewhere near JLNP and upcoming Navi Mumbai airport. Respondent company was locating premises and the premises at Shop No. 23, Plo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 in NCLT, to demonstrate that if the loan was given, it was returned with interest within three weeks. This also happened before the Company Petition was filed. It would not be appropriate for us to given undue weightage to this instance. We do not find substance in the various allegations made by the Appellant to be such so as to treat the same as oppression or mismanagement. 16. Record shows that the Respondents initiated action against the appellant to remove him as Director. The respondents have given various instances of misconduct to claim that the appellant indulged in anti-company activities. When the appellant stood on technicalities regarding time the respondents appear to have sent fresh notice dated 3.5.2014 and EOGM came to be held on 6.6.2014. Before this the appellant had filed the Company Petition on 15.5.2014. The NCLT looked into this aspect and did not find fault with the removal of the appellant from the post of Director. We do not find any reason to disagree with the NCLT. In fact, we have gone through the other finding also which have been recorded by the NCLT with regard to the various allegations made by the appellant and those allegations did not find fav ..... 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