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TMI Blog2020 (6) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... he land being substantially the entire Assets of the Company. It is very much evident that Members are free to file a petition/application if he or she is adversely affected or the interest of the Company is prejudicially affected, he or she is authorized to file petition/application under the Companies Act, 2013. The NCLT/NCLAT is the specialised agency to look into the impact on the members/company. Hence, there is a need to provide proper opportunity to the aggrieved members to present the genuiness or otherwise of the documents in relation to the provisions of Section 241 of the Companies Act, 2013 - matter remanded for appropriate consideration by the NCLT, Chennai Bench. - Company Appeal (AT) No. 323 of 2019 - - - Dated:- 29-5-2020 - Jarat Kumar Jain, Judicial Member, Balvinder Singh And Dr. Ashok Kumar Mishra, Technical Member For the Appellant : S. Santanam Swaminathan and Ms. Ashima Sachideva, Advs. For the Respondent : Shangarmurli and R.V. Balakrishnan, Advs. JUDGMENT DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER 1. The Appellant and her husband are the only two shareholders of the Respondent No. 1 Company. The Appellate has alleged that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that Respondent No. 3 had even unilaterally and illegal cancelled the registered gift deeds executed in favour of the Government transferring approximately 4.80 crore in the layout prepared. It was submitted that the District Collector Trichy, and the Inspector General (Registration) has also issued letters in this regard calling into question such unilateral cancellation of the gift. 7. The Appellant has submitted that the Board Resolution dated 4-9-2014, power of attorney executed and illegal sale deed executed by the Respondent No. 3 all suffer from fundament flaw is that ultra vires the Memorandum of Association of the Company as it is against the object of the Company. Apart from this Appellant was not given opportunity to file Rejoinder. 8. It was also submitted that selling substantially the whole of the undertaking requires shareholder approval in accordance of the Company Act, 2013 and alone on this ground, the Application needs to be allowed. 9. The Respondent has submitted that he has purchased a land approx. 16.33 acres and these lands were the agricultural land and they have paid the amount of ₹ 6.25 crore to the Company for entering into a joint dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant wish to file a rejoinder affidavit but the NCLT refuse to allow her to do so and subsequently reserved the judgment. Since the Companies Act, 2013 provides for restrictions on powers of the Board to sell or dispose of the whole or substantially the whole of undertaking of the Company; Hence, the approval of shareholders through Extra-Ordinary General Meeting was required for selling the land being substantially the entire Assets of the Company. Extract of Section 180 of the Companies Act, 2013 is given hereunder: 180. Restriction on powers of Board.-(1) The Board of Directors of a company shall exercise the following powers only with the consent of the company by a special resolution, namely:- (a) to sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking of the company or where the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings. Explanation.-For the purposes of this clause- (i) undertaking shall mean an undertaking in which the investment of the company exceeds twenty per cent. of its net worth as per the audited balance sheet of the preceding financial year o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, including conditions regarding the use, disposal or investment of the sale proceeds which may result from the transactions: Provided that this sub-section shall not be deemed to authorise the company to effect any reduction in its capital except in accordance with the provisions contained in this Act. (5) No debt incurred by the company in excess of the limit imposed by clause (c) of sub-section (1) shall be valid or effectual, unless the lender proves that he advanced the loan in good faith and without knowledge that the limit imposed by that clause had been exceeded. Section 241 and 242 of the Companies Act, 2013 are given hereunder: PREVENTION OF OPPRESSION AND MISMANAGEMENT 241. Application to Tribunal for relief in cases of oppression, etc.-(1) Any member of a company who complains that- (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or (b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of any agreement between the company and any person other than those referred to in clause (e): Provided that no such agreement shall be terminated, set aside or modified except after due notice and after obtaining the consent of the party concerned; (g) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property made or done by or against the company within three months before the date of the application under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference; (h) removal of the managing director, manager or any of the directors of the company; (i) recovery of undue gains made by any managing director, manager or director during the period of his appointment as such and the manner of utilisation of the recovery including transfer to Investor Education and Protection Fund or repayment to identifiable victims; (j) the manner in which the managing director or manager of the company may be appointed subsequent to an order removing the existing managing director or manager of the company made under clause (h); (k) appointment of such number o ..... 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