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TMI Blog2019 (4) TMI 1802X X X X Extracts X X X X X X X X Extracts X X X X ..... which allows a company to pay remuneration to its Non-Executive Director(s) either by way of a monthly payment or at a specified percentage of the net profits of the company - The Company is, however, not obligated to remunerate its Non- Executive Director(s). The respondents are legally expected to maintain status quo in respect of the petitioner position as being Executive Chairman/ Director as on 31.10.2013 - So far as the removal of directorship of the Petitioners 1 and 2 are concerned, they cannot be removed pursuant to an interim order dated 31.10.2013 passed by the then Company Law Board without informing to and without having express permission from the then Company Law Board / or from this Court. The present application can be disposed on this short ground, without going into details of other controversy involve in the present Company Petition, by directing to the respondent to restore back the position of petitioner in the directorship of the company with all attended benefits including the remuneration, which was being paid to them on 31.10.2013 and further not to make any change in their remuneration or other attending benefits or terms and condition of their di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P-2) and son of P-I, had been appointed as Whole-time Director on the board of the Company on 2nd April 2007, Copy of Form 32 (for appointment of Director) is produced as Annexure-1. 4. The Original Petition challenged the siphoning of funds by the respondents, illegal allotment of shares and illegal appointment of directors on the board and illegal removal of Mr. Vivek Jetly (P- 2) from the board of directors. The original petition sought reliefs to allow P-2 to act as whole-time director inter alia with other reliefs. 5. The then Hon'ble Company Law Board bench granted some interim relief to Mr. Vivek Jetly (P-2) vide its Order dated 31.10.2013 which read ... however, the resolution to the extent removing the Petitioner as director will not be implemented until the next date fixed . Thus, P-2 has continued to be a whole-time director on the Board of the Company along with P-1. A copy of the Interim Order from the Hon'ble Company Law Board is placed as Annexure-Il. 6. The P-1 is a founder Director of the Company, working as Executive Chairman and he was being paid monthly remuneration of ₹ 30,000 per month as being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r reference. Annexure- VI. 10. It is further contended that consequent to the admission of the present Company Petition No. 116 of 2013 by the then Hon Me Company Law Board, is the Director's Remuneration payable to PI and P2, the R2 was malafidely stopped and is kept in abeyance. 11. It is also alleged that the R-2 deliberately stopped the remuneration since institution of this matter so as to cause financial damage to P-1 and P-2 and thus to exercise his dominance in M/S. Sudama Chemtech Private Limited through majority directors from Lyall Group. This is an intentional harassment with malafide motives to demoralize Petitioners and paralyze them financially and morally. 12. On making follow up and insisting upon the R-2 to pay the unpaid director's remuneration, the R-2 arbitrarily denied to pay the same and orally pressurized the Petitioners to withdraw first the present petition. 13. Hence, this IA seeking for above stated prayers. It is further contended that NCLT possess necessary power under the provisions of Section 242(2) which reads as under; 242. Power of Tribunal (1) Without prejudice to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equally not getting any salary/ remuneration from the company. (3) It is further contended that the fund of company and income cannot be utilized for making payment of remuneration to such persons who are not contributing anything nor rendering any services to the company. So far as the resolution for removal of the petitioner is concerned, it has been restrained by the Company Law Board. It is further stated that the Company is operating smoothly except to some hindrances/ hurdles as being created by the Petitioners, which includes to instigate the company's Bankers against the Company's Management by creating pressure for recovery of Banking Dues and not to sanction any additional funds, Further to provoke the Labourers against the Company Management, etc. (4) Hence, it is contended that by making payment of remuneration or claiming remuneration since 2013 is nothing but to deregulate the Company. It is also alleged that the Directors, who have not made contribution and nor rendered any services to the company since long and who remain absent from the work of company have approached this Tribunal during the course of hearing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any and to put the company into financial loss. The present application is filed with unclean hands. (5) It is further contended that under the Income Tax Act, the salary / remuneration to a non-functional director of the company is not allowed to be debited from Company's Fund nor can be shown as business expenditure. In this respect meeting of the Board of Directors was convened on 16.10.2013, in accordance with provisions of the Companies Act and decisions were taken for the benefit and interest of the Company's affairs, hence, the Respondent Company has rightly decided to not to pay any remuneration / salary to any non-functional directors. (6) It is further submitted that the Board of the company through necessary resolution stopped payment of remuneration to all its Non Functional and Non-Executive Directors and filed relevant forms with Registrar of Companies by making the change in their designations from Executive to Non-Executive Directors, within stipulated time. It is further contended that the petitioners are aware of such change, but remained silent for all these years, but abruptly filed the present application in the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eculiar circumstance of the present case, it was incumbent upon the respondents to maintain status quo with regard to the status of the directorship of the present petitioner along with attended benefits to them. However, it is alleged that despite the above stated direction, the respondents have stopped making payment of remuneration of directorship to the petitioners, who claims themselves to be full time director and executive chairman of the company, which is the main issue involved in the present petition for consideration of this Tribunal, even though, this is being disputed by the respondent. 8. It is a matter of record that the then Company Law Board, further in its subsequent order dated 20.03.2014 read with order dated 31.10.2013 had observed that the Board Meeting of the company may take place, but resolution, if passed, with respect to withdrawal of the car given to the petitioner will not be implemented till the next date of hearing that gives such impression that the then Company Law Board was pleased and conscious enough to maintain equilibrium in the affair of the company as well as to maintain status quo with regard to alleged proposal f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board without informing to and without having express permission from the then Company Law Board / or from this Court. 11. Hence, we are of the view that the present application can be disposed on this short ground, without going into details of other controversy involve in the present Company Petition, by directing to the respondent to restore back the position of petitioner in the directorship of the company with all attended benefits including the remuneration, which was being paid to them on 31.10.2013 and further not to make any change in their remuneration or other attending benefits or terms and condition of their directorship until further order. 12. We further made clear that our aforesaid direction/ order is subject to the final outcome of the main Company Petition and we have not conclusively decided the eligibility of salary/remuneration to a non-executive non-functional director. The issue of the illegal/unauthorized removal of petitioner from the directorship of the company alongwith these issue shall be dealt along with in accordance with the law, while hearing and disposing of the main Company Petition. 13. With the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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