9911796707
TMI Blog2020 (8) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... se. No evidence has been brought forth to make the change in authorisation to operate the bank account as a colourable exercise. Therefore, this contention has no weight. The other allegation regarding the construction of buildings and superstructures using the funds of the company, without any approval of the Board and the competent authority was also rightly been dealt by the NCLT as Appellant had not placed any evidence on record to prove the construction. This is an isolated incident and in order to invoke provisions of Oppression and Mismanagement the acts of oppression must be harsh and wrongful. An isolated incident may not be enough for grant of relief and continuous course of oppressive conduct on the part of the majority shareholders is, thus, necessary to be proved. The NCLT, Chennai has rightly held that the allegations made by the Appellants are baseless - impugned order upheld. - COMPANY APPEAL (AT) NO. 299 OF 2019 - - - Dated:- 24-6-2020 - (Justice Jarat Kumar Jain) Member (Judicial), (Mr. Balvinder Singh) Member (Technical) And (Dr. Ashok Kumar Mishra) Member (Technical) For the Appellant : Dr. K.S. Ravichandran PCS For the Respondent : Mr. R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate. 6. Appellant No. 1 also submitted that no such Board Meeting was conducted on 22nd August, 2016 and no notice was received by the Appellant No. 1. Such meeting per se invalid and liable to be set aside. 7. Appellant No. 1 also submitted that he raised his objection and he also informed the bank vide his letter dated 30th August, 2016 that he was not a party to the said resolution. He further requested the bank not to honour any instruments and instructions until further notice. Thereafter State Bank of India ( the Bank ) wrote a letter dated 8th September 2016 to the company asking for certain clarification as to the objection letter dated 30th August, 2016 of the Appellant No. 1. 8. Appellant further submitted that the bank has abruptly closed the issue and sent a letter dated 9th September, 2016, in reply to the letter dated 30th August 2016 of the Appellant No. 1. The bank accepted the alleged board resolution dated 22nd August 2016 and closed the issue, advising the Appellant No. 1 to approach the very same persons who had oppressed the Appellant No. 1. 9. Appellant No. 1 further submitted that he has given his personal property worth more than 5 crores as coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1 also submitted that on 26th September 2017 the Appellant No. 1 sent an email to the Board of Directors of the Company, recording all his objections with respect to the AGM proposed to be held on 30th September 2017. The Respondents without considering the objections raised by the Appellants conducted the AGM on that date and also filled the Form AOC-4(XBRL) with ROC on 26th October 2017. 15. The Appellant No. 1 further submitted that since his personal properties have been given as collateral to the credit facilities sanctioned to the company. The State Bank of India sent a letter dated 29th August 2017 to the Appellant No. 1, requesting him to sign and return the arrangement letter and other documents. The Appellant No. 1 in his reply dated 6th September 2017 to the Chief and Relationship Manager of the State Bank of India objected that the Board Resolution passed on 22nd August 2016 is not valid and a case is pending before NCLT, Chennai Bench challenging the validity of the Board Meeting held on 22nd August 2016 and other allegations against the other directors of the Company, thereafter the Appellant No. 1 is not inclined to sign the documents until the disposal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misused such power or misappropriated any funds. On the contrary the performance of the company has significantly improved year to year. 23. It is further pleaded on behalf of the Respondent No. 1 that the compony vide Article 1, specifically adopted Regulation in Table A of Companies Act, 1956 Regulation 70 of Table A vest power in the Board to determine who shall operate the bank account of the company. 24. It is further stated that under the revised mandate any two directors of the company can sign the cheque. This is democratic arrangement. What Appellant No. 1 wants is concentration of power and authority in himself and wants to be autocratic. Even in past, there have been instances when the company has authorised directors other than Appellant No. 1 to operate accounts. Therefore, Appellant cannot claim any exclusive right to operate bank account. Minority shareholder claiming exclusive right to operate bank account and contending that not allowing such operation, amounts to oppression is in extreme argument. 25. It is also submitted on behalf of the Respondent No. 1 Company that Appellant No. 1 attended the meeting, and CCTV footage was also submitted. The Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents are not signed. The Appellant by his conduct caused SBI to increase interest rate as a penal step owing to non-execution of documents, as evidenced by Statement of Accounts and eventually company had to move from SBI to a new banker excluding the petitioner from requirement of personal guarantee and his personal property security and the sanction advice issued in this regard. 31. It is further stated by Respondent No. 1 that on alleged construction in Poramboke land, confirmation by Chartered Engineer/approved Surveyor that there is no encroachment but only compound wall is constructed and the reason is that there were serious undulation leading to injury to cattle and personnel. And also it is for the appropriate local authority of State Government to take action and no such action is taken till date which would evidence that the Respondents are not guilty of any misdeed. 32. Respondents denied the allegations that all other directors or the respondent No. 1 Company are related to each other. It is denied that there is any fraud or act of oppression that has been committed or that there is any intent to side-line the Appellant. 33. Respondents further contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the construction of buildings and superstructures using the funds of the company, without any approval of the Board and the competent authority was also rightly been dealt by the NCLT as Appellant had not placed any evidence on record to prove the construction. This is an isolated incident and in order to invoke provisions of Oppression and Mismanagement the acts of oppression must be harsh and wrongful. An isolated incident may not be enough for grant of relief and continuous course of oppressive conduct on the part of the majority shareholders is, thus, necessary to be proved. 37. The contention of the Appellant that during the financial year 2017-18, an amount of ₹ 48,41,801/- has been written off as bad debts, while in the previous year it was nil and the details as to identity of the party, whether related party or otherwise is not disclosed. NCLT rightly observed that the decision of the Board of Directors to write off the bad debt is a commercial decision, which does not warrant any judicial interference. 38. In view of the above observation and discussion, we are of the opinion that the NCLT, Chennai has rightly held that the allegations made by the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
