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TMI Blog2019 (4) TMI 1894X X X X Extracts X X X X X X X X Extracts X X X X ..... dated January 16, 2019 passed by this Tribunal in C. P. No. 3638 of 2018 to the additional respondents Nos. 319 and 320. M. A. No. 1576 of 2019 2. It is stated in the application that due to the continuous failure of the Infrastructure Leasing and Financial Services Ltd. (IL and FS)-respondent No. 1, to service its debt and imminent possibility of contagion effect in the financial market, the applicant-petitioner, at the request of Department of Economic Affairs, filed Company Petition No. 3638 of 2018 under sections 241 and 242 of the Companies Act, 2013 before this hon'ble Tribunal, inter alia, seeking suspension of the then board of directors of respondent No. 1 and further seeking restraint on alienation of movable and immovable properties of the respondents named therein during the pendency of investigation into the affairs of respondent No. 1 and its subsidiaries, which had been ordered to be carried out by the Serious Fraud Investigation Office (SFIO) vide order dated September 30, 2018 under section 212(1)(a) and (c) of the Companies Act, 2013. 3. The petitioner further states that this Tribunal, vide order dated October 1, 2018 passed an order whereby the then board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Hari Sankaran, Arun K. Saha, Ravi Ramaswami Parthasarthy, Vibhav Kapoor, K. Ramachandra, R. C. Bawa, Pradeep Puri, S. Rengarajan and Mukund Sapre, to disclose their moveable and immovable properties/assets, including bank accounts, lockers owned by them in India or anywhere in the world, including jointly held properties. Further direction is being issued against the abovementioned respondents Nos. 2, 3, 9 and 313 to 318 restraining them from mort gaging or creating charge or lien or creating third party interest or in any way alienating, the moveable or immovable properties owned by them, including jointly held properties. The abovementioned respondents are further restrained from dealing with the securities in any company till the next date of hearing." Copy of the order dated December 3, 2018 is annexed herewith as annexure A-5. 2. That the order above dated December 3, 2018 still subsists. However, it is submitted that this hon'ble Tribunal considered the orders above dated December 3, 2018 in another application M. A. No. 126 of 2019 in Company Petition No. 3638 of 2018, and after hearing passed the following directions vide orders dated January 16, 2019. "20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irections issued by this hon'ble Tribunal vide order dated December 3, 2018 Ramesh C. Bawa (respondent No. 315 in C. P. No. 3638 of 2018) filed a declaration dated December 21, 2018 before this hon'ble Tribunal, disclosing the moveable and immovable assets owned by him including jointly held properties and information relating to bank accounts and lockers maintained with the various banks. The said information was also forwarded by the applicant-petitioner vide letter dated December 31, 2018 to the IBA for circulation amongst all banks and to ensure compliance of the order dated December 3, 2018 passed by this hon'ble Tribunal. Action taken report was also requested from the IBA. Copy of the declaration dated December 21, 2018 filed by Ramesh C. Bawa (respondent No. 315 in C. P. No. 3638 of 2018) is annexed herewith as annexure A9. Copy of the applicant-petitioner's letter dated December 31, 2018 to IBA is annexed herewith as annexure A10. 5. That the applicant-petitioner is now in receipt of the letter dated April 16, 2019 from its subordinate office of the Regional Director (Western Region), wherein multiple instances of wilful disobedience of the order dated De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it may kindly be seen that there have been withdrawals from the account over and above the withdrawals of Rs. 2 lakhs per month, allowed by this hon'ble Tribunal vide its order dated April 16, 2019. (f) Furthermore, the office of the Regional Director, (Western Region) also received an e-mail dated April 12, 2019 from Axis Bank, wherein the bank had simply submitted the bank statements, but later on, confirmed that the bank had marked debit freeze on both active account Nos. 007010100451192 and 007010100452007. However, despite the debit freeze been marked on both accounts, the said accounts have been operated by Mr. Ramesh C. Bawa (respondent No. 315 in C. P. No. 3638 of 2018) in clear disobedience of the order dated December 3, 2018 issued by this hon'ble Tribunal. Furthermore, despite the order above dated December 3, 2018 having being brought to the notice and knowledge of the Axis Bank, the said orders of this hon'ble Tribunal have not been honoured, and the Axis Bank has allowed operation of the accounts by Ramesh C. Bawa (respondent No. 315 in C. P. No. 3638 of 2018). (g) Furthermore, as per transaction log times received from Axis Bank, Rs. 1 crore was withd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt orders against Bawa. It is, therefore, most humbly submitted that the family members of Ramesh C. Bawa, i. e., his wife Mrs. Asha Kiran Bawa and his daughter Ms. Akansha Bawa are both beneficiaries of the misfeasance by Ramesh C. Bawa (respondent No. 315 in C. P. No. 3638 of 2018) in the mismanagement of affairs of respondent No. 1. Therefore, it is imperative that Mrs. Asha Kiran Bawa and Ms. Aakansha Bawa be arrayed as respondents Nos. 319 and 320 in the original Company Petition No. 3638 of 2018 as they are also necessary and proper parties in the matter, being beneficiaries of the misfeasance committed by Ramesh C. Bawa (respondent No. 315 in C. P. No. 3638 of 2018). 6. It is further stated that the proposed respondents are necessary and property parties to the original company petition and as such it is essential they be arrayed as respondents Nos. 319 and 320 in Company Petition No. 3638 of 2018. It is imperative that immediate action against these persons be taken, in order to effectively support the investigation already being carried on into the affairs of respondent No. 1 and its subsidiary companies, through the Serious Fraud Investigation Office. 7. Based on the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, 2014 to appoint independent directors on the board of the subsidiaries, jointly controlled entitles, associates and jointly controlled operations of respondent No. 1. The applicant has further sought dispensation with the requirement under the second proviso to section 149(1) read with rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014 to appoint women directors on the board of the subsidiaries, joint controlled entitles, associates and jointly controlled operations of respondent No. 1. 14. The applicant states that respondent No. 1 has a large number of group companies across various sections such as energy, transportation, financial services, etc., who are arrayed as respondents Nos. 12 to 313 to the company petition. The petitioner is the Union of India, Ministry of Corporate Affairs through the Regional Director (Western Region), respondents Nos. 2 to 9 are the erstwhile directors of respondents Nos. 1, 10 and 11 are officers of respondent No. 1 and are currently the Chief Financial Officer and company secretary at respondent No. 1 respectively. 15. By the present application, respondent No. 1 seeks an order for dispensation to appoint indep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at least two independent directors on its boards of directors. Further, important committees of the board of directors, such as the audit committee and nomination and remuneration committee, require majority and half of the directors on the committees, respectively to be independent directors. 21. The applicant further stated in the application that section 149(6) of the Companies Act, 2013 provides the eligibility criteria for an independent director and excludes a "nominee director." Therefore, the newly appointed directors of respondent No. 1 may not qualify as "independent directors" when appointed on the boards of group companies of respondent No. 1 as they may be construed to be nominee directors of respondent No. 1. 22. Schedule IV to the Companies Act, 2013 sets out the role and responsibilities of an independent director. Given the financial condition of respondent No. 1 group and the situation prevailing across respondent No. 1 group, the newly appointed directors are unable to find independent directors to be appointed on the board of directors of its group companies. 23. It is further submitted that the essence of the appointment of an independent director is that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also the argument advanced by director (prosecution) on behalf of Union of India and perused the record. It is pertinent to mention that in the petition filed on behalf of Union of India under sections 241 and 242 of the Companies Act, 2013, the then existing board of directors of respondent No. 1 was superseded and nominee directors of the Central Government were appointed to take over the control and affairs of the company. Since the company is facing the precarious and critical financial conditions and since the moratorium order has been passed by the hon'ble National Company Law Appellate Tribunal, in such a situation, it is difficult to find out independent directors and woman directors to be appointed. 30. We are of the considered view that the persons who have been appointed as nominee directors by the Central Government/Tribunal, or independent director, therefore, there is no need to appoint independent director during the moratorium period. It also appears that when the company is facing such a financial crisis/other problem, it may be difficult to find out eminent/suitable independent directors. In exercise of powers under section 242(2) and (4), we grant dispens ..... X X X X Extracts X X X X X X X X Extracts X X X X
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