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TMI Blog2020 (10) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial to the interests of the Petitioner, granting all consequential reliefs. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) The Petitioners No. 1 is Public Limited Company, registered under the provisions of the Companies Act, 1956 with Registrar of Companies, Mumbai bearing CIN No. U65900MH1996PLC099704 and its registered office situated at 713, Raheja Centre, Free Press Journal Road, Nariman Point, Mumbai - 400021. It is also a Non-Banking Financial Company registered with the Reserve Bank of India. The Petitioners Nos.2to 4 are nominee the Directors of the Respondent No. land they are also Directors of the Petitioner No. 1 Company. (2) M/s. Ramsons Vikram Private Limited (hereinafter referred to as the 'Respondent No. 1) is incorporated on 10th November 2015 under the name and style of "VS Infra Private Limited" as private Limited Company with the Registrar of Companies, Bengaluru. On 15th April 2019, the name of the Respondent No. 1 was changed to the present name "RamsonsVikram Private Limited" with CIN No. U70101KA2015PTC084043. The registered office of the Respondent No. 1 is sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner No. 1 at face value of Rs. 10/- each and the entire project would be taken over by the Petitioner No. l. Further, as the R1 Company was not in a position to comply with above term of payment, the Respondent Nos. 1 & 2 has sought extension of time to make the said payment. Further, the erstwhile shareholder Vikram Structures Private Limited (Respondent No. 7) executed a Pledge Agreement dated October 07, 2016 in favour of Petitioner No. 1 in respect of 5,100 shares representing 51% of the R 1 Company and the Respondent No. 1 is also a party to the said Pledge Agreement. (5) Despite the repeated assurances and promises, Respondent No. 1 was not able to pay the agreed sum to the Petitioner No. 1 till December 2016. Therefore, on the expiry of the specified period of 60 days, the entire shareholding of the R 1 Company was transferred to the Petitioner No. lfor consideration of Rs. 10/- each, details are as follows: Sr. No. Transferor No. of Shares Cheque No. Consideration Amount Paid Date of Transfer 1. Aishwarya G. Byrareddy 1 3288 Rs. 10/- 03.12.2016 2. ManjunathRavindra 2,500 3290 Rs. 25,000/- 03.12.2016 3. Vikram Structures Pvt. Limited 6,499 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e documents maintained by the R1 on 19.06.2019 at 11:00 am. Accordingly, the authorised representative of the Petitioner No. 1 visited the R1's registered office for inspection of the documents, however, the inspection of documents was denied to Petitioner No. 1's authorized representative and R2 assured the Petitioners that all the requisite information and documents will be directly sent to the Petitioners within seven (7) days as the same is not available with the Respondent No. l. Since no documents were received, the Petitioner No. 1 addressed another letter dated 12.07.2019 to the Respondents requesting them to provide inspection of all the documents and records when its representatives visit the office of R 1 Company. However, the R2 wrongfully and mischievously, by letter dated 17.07.2019 falsely contended that the representatives of the Petitioner No. 1 did not visit on scheduled date for taking inspection of the documents, therefore Petitioners are not entitled to any inspection of documents under law. (7) The Petitioner No. 2 issued a public notice on 19.07.2019, informing the public at large of the deceptive attempts of the R2 in dealing with the subject prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protect his right as a Shareholder of the Petitioner No. 1 and Director of the Respondent No. 1 and also to prevent continuous act of oppression and mismanagement by the Respondents, which if not prevented, would result in causing serious prejudice to the Petitioners and Respondent No. 1. The Petitioners have made out a prima facie case in their favour and against the Respondents. (9) Further, the conduct of the R1 Company is mismanaged by the Respondent Nos. 2 and 3, detrimental to the interests of the Petitioners. The Managing Director in charge of the day to day affairs of the R 1 Company are under the fiduciary duty to act for the benefit of the Company. Further to satisfy the requirement of Section 241, it is enough to establish that there was a likelihood of the affairs of the Company being conducted in a manner prejudicial to the interests of the R1 Company. 3. The Respondents No. 2 & 8, have filed the counter statement of objections dated 17.09.2019 by inter alia contending as follows: (1) The petition is filed by misrepresentation of facts and using fabricated documents, and is liable to be dismissed in limine. (2) The Petitioners are not shareholders in the R1 Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure has been forged. This itself clearly shows the manipulation and fabrication on the part of the Petitioners which clearly an illegal and false attempt on part of Petitioners. (4) In continuation of a Facilitation Agreement dated 06.10.2016 in question, R1 entered into a Joint Development Agreement (JDA) with the owners of the property for developing the property. Since there was a dispute on the Kharab land and there was a claim on the property, the Joint Development Agreement could not be acted upon by the R 1 Company, as it was at a risk of being terminated. Further, the tenure of the Joint Development Agreement has also come to an end. It was the duty of the Petitioner No. 1 to resolve all contentious issues for the purpose of ensuring that the Joint Development Agreement is carried out. The Petitioner No. 1 has failed to perform its part of the contract. Since the Petitioner No. 1 failed to resolve the contentious issues and disputes, the property could not be developed and the JDA is at a threat of termination. Hence, the Petitioner does not get any right under the Facilitation Agreement and on the contrary, the R 1 Company is entitled to claim damages for the loss sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the problems were within the knowledge of the Petitioners and the petitioners did not do anything to resolve the problems. When the basic contract, JDA was at a risk of getting terminated, the question of enforcing or trying to enforce the Facilitation Agreement does not even arise. (8) It is further stated that behind the back of the Respondent No. 8, thePetitioners have credited Rs. 10/- to her Bank Account. Respondent No. 8 was not even aware of the receipt of Rs. 10/- in her bank account since she did not get any notification through SMS. The SMS message for crediting of amounts get reflected only if the transactions are above Rs. 500/-. The manipulation and crediting of Rs. 10/- came to her notice only after filing of the present petition by the petitioner. No share transfer deeds have been signed, no consent was given to transfer the shares by the R8. The petitioners have pre-planned everything and transferred the face value of the shares to Respondent No. 8's Bank account and very conveniently forged the share certificate and share transfer deeds of Respondent No. 8. (9) Further, neither the Respondent No. 2 nor the Respondent No. 8 have ever executed any share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The fabrication and manipulation can be seen from the documents and analysing the same. The R1 Company incorporated on 10.11.2015 and the subscribers to MoA of the R 1 Company were R7 and R8. However, the share certificate produced by the Petitioner shows 6499 shares is not correct. Further the date of issuance of Share Certificate is left blank and it is without the authentication of Secretary or Authorised Persons. The table showing the detail of the share certificate after subscription of shares is mentioned below: Sl. Members Shareholding (Equity Shares) 1 Vikram Structures Private Limited 9,999 2 Aishwarya G. Byrareddy 1 TOTAL 10,000 It can be seen that the pledge agreement is franked and stamped on 07.10.2016 at Shivajinagar, Sub Registrar and on the very same day even the share certificate has been franked and it clearly shows the fabrication of share certificate. It is to be appreciated that the Share certificate at 117 ought to have been issued within 60 days from the date of incorporation and not on 07.11.2016. Further the Share Certificate is created for the purpose of creation of pledge agreement to the petition. 3) The share certificates produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l with the Respondents.The Petitioners have misused the power and authority given to them by the Company in good faith. (3) Further, as per the provisions of Companies Act 2013, the Petitioners have been served notice of Board Meeting on 19.07.2019 to hold the Board Meeting on 27th July 2019 which is clear 7 days' notice as per the provisions of Companies Act 2013. Further the provisions of sub-rule (2) of Rule 23 of Companies, (Management and Administration) Rules, 2014, reads as follows: "The notice referred to in sub-rule (1) shall be sent by members to the company not earlier than three months but at least fourteen days before the date of the meeting at which the resolution is to be moved, exclusive of the day on which the notice is given and the day of the meeting." The 14 days' notice shall be given by the Member to the Company before the date of General Meeting and the Member gave the Notice to the Company on 10th July, 2019 and the Board has decided to convene a Board Meeting to schedule the Extra Ordinary General Meeting. The Notice for convening the General Meeting on 19th August, 2019 was served on 27th July, 2019 and hence, the Company, Board and Member who ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of hearing i.e. 16.08.2019 pursuant to a compromise petition, the R 1 Company confirmed the cancellation of its JDA and GPA in relation to itsScheduled Property with effect from January 2018. (4) While the Rl, R2 and R8 have not disputed the existence of the Pledge Agreement, the Third and Seventh Respondents in their statement of objections stated that the Second Respondent has 'gone behind their back' and executed the Pledge Agreement without authorization. Such a stand of the R3 and R7 is merely an afterthought, and is completely untenable. The Third and Seventh Respondents have stated that the documents produced by the Petitioners have been fabricated and forged, and that the Pledge Agreement has been executed by R2 'behind their back'. Yet, no action has been taken by any of the Respondents against the R2 for the alleged acts of fabrication and forgery of documents. All such documents have been executed/certified to be true by the Second Respondent, and no action has been taken by the other Respondents against the Second Respondent for playing this alleged fraud on them. The Respondents have hastily in less than two months from the date of first request from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Fourth and Fifth Respondents and their parents, revoked the said JDA as well as the general power of attorney dated 07.10.2016, by way of their letter dated 22.01.2018. 6. Heard Shri C.K. Nanda Kumar, learned Counsel for the Petitioners. Mr. Vivekananada B.S, Learned Counsel for the Respondents No. 1, 2 & 8 and Mr. Naman.G.Joshi, Learned PCS for the Respondent Nos. 3 & 7through Video Conference. We have carefully perused the pleadings of all the Parties and the extant provisions of the Companies Act, 2013, and the Rules made thereunder and the Law on the issue. 7. Shri. C.K. Nandakumar, learned Counsel for the Petitioners, after arguing the case, has also filed Written Submissions dated 05.06.2020 by inter alia stating as follows: (1) Aggrieved by the various acts of oppression and mismanagement being repeatedly committed by the Respondents, on 26.07.2019, the Petitioners filed the present petition under inter alia Sections 241, 242 and 59 of the Act seeking various reliefs. On the same day, in response to the notice and agenda dated 19.07.2019 convening the board meeting on 27.07.2019 received by the First and Second Petitioners, all the Petitioners issued a response by wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip of the R 1 Company is false and vague. (6) On a perusal of the minutes of the meeting of the Board of directors of Respondent No. 1 held on 27.07.2019, it may be observed that Respondent Nos. 2, 3, 5 and 6 were present at the said meeting. As per Agenda Item No. 7.1, the Company has taken on record the progress report in relation to the Scheduled Property. (7) Article 42(iii) of the Articles of Association of the First Respondent clearly provides that notices to general meetings have to be issued 'either in writing or through electronic mode'. Since the articles do not define 'electronic mode', reference is drawn to Rule 18 of the Companies (Management and Administration) Rules, 2014, which states that "electronic mode" shall mean any communication sent by a company through its authorized and secured computer programme which is capable of producing confirmation and keeping record of such communication addressed to the person entitled to receive such communication at the last electronic mail address provided by the member. Therefore, the articles of the First Respondent do not provide for oral notices at all. (8) He has relied upon the following judgements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n there is no share transfer, there can be no question of petitioner claiming to be member/shareholder of R1 Company. Further, after a gap of more than 2 Va years the petitioners have approached this Hon'ble tribunal acting as if they were not aware of the Annual returns. Further when authenticity of the document is in question, evidence needs to be taken and trial has to be conducted, which is not permissible before the Tribunal. Further, it would fall squarely within the realm of civil court since it involves the question of forgery, fraud, and other connected aspects. (2) As per section 3 (1) (b) of the Companies Act, 2013, the minimum Members required in case of private limited company is two. However, petitioner makes illogical claim of being 100% sole shareholder of R 1 Company. This apparent fabrication leaves no room and makes it clear that the Petitioners have tried to camouflage the entire facts and tried to prejudice the mind of the court. The question of seeking rectification of register does not arise at all since alleged Board Meeting Resolution dated 19/12/2016 is in dispute. In terms of section 59 of the Companies Act, 2013, only an aggrieved person, who is ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e share certificates are not belonging to those persons, who transferred as per Company records and the alleged transfer was never recorded in the registered.The case laws produced by the Petitioner are not relevant to the instant case. 10. By perusal of the pleadings of all the Parties involved, the following broad issues arise for consideration: a) Whether the Petitioner No. 1 deemed to be a shareholder of Respondent No. 1 Company, by virtue of Facilitation Agreement dated 06.10.2016, Pledge Agreement dated 07.10.2016 and Board's Resolution dated 19.12.2016 and other connected proceedings; b) Whether the removal of the Petitioner Nos.2 to 4 from the Directorship of the Respondent No. 1 Company, is in accordance with law or not; c) Whether the main Company Petition is maintainable U/s.241 of the Companies Act, 2013 at the instance of Petitioner No. 1. 11. As stated supra, cause of action arises basing on the Facilitation Agreement dated 06.10.2016, which was duly executed between the Petitioner No. 1 and Respondent No. 1 (as "Developer") represented by its MD, Mr. Vikram Prabhakar (Respondent No. 2). Relevant terms which reference to instant issue as contained in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilitator to the Developer without any interest thereon within fifteen (1') days of receiving written intimation from the Developer that the 5% of the total saleable super built area allotted to the Facilitator is complete in all respects and its readiness to deliver the same to the Facilitator. However, in case the development in the Schedule Property takes place in phases and the Developer hands over the Facilitator's entitlement in portions, the Facilitator shall be liable to refund the Security Deposit in stages, proportionate to the super built up area and the undivided share, right title and interest in the Schedule Property and car parking area, terrace area etc., that is handed over to it by the Developer. 3.3 If the Owners, Former Developers and the Developers herein do not complete transaction contemplated herein and are unable to execute the agreements mentioned in Para 1.1 the Facilitator will refund the Security Deposit received from the Developers within 15 days of receiving a notice from the Developers to that effect. 4. Definitive Agreements: 4.1 Upon the Developer entering into the Sharing Agreement with the Owners and the Former Developer, the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Developer fails to perform its part of the contract in spite of the Facilitator complying with and performing the terms of this Agreement, the Facilitator shall be entitled to enforce Specific performance. 12. In pursuant to the above Agreements, the Petitioner No. 1 and Respondent Nos. 1 and 7, represented by Mr. Vikram Prabhakar, as Managing Director, has executed Pledge Agreement dated 07.10.2016, which inter alia states as follows: "In order to secure payment of the aforementioned Facilitation Fee, the Company has agreed to pay to the Pledge a refundable deposit of Rs. 25,00,00,000 (Rupees Twenty Five Crores) out of which Rs. 15,00,00,000 (Rupees Fifteen Crores) ("Deposit Amount") was due and payable on this date. The Company, not being in a position to pay the Deposit Amount on this date has requested the Pledgor and the Pledgor has agreed to enter into this Agreement and pledge 5,100 shares owned by it in the Company constitution 51% of its total issued and paid up share capital, and undertake certain other security obligations to ensure payment of the Deposit Amount. In light of the above, the Parties have agreed to enter into this Pledge Agreement to secure the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hings required, including filing of necessary forms with the Registrar of Companies to facilitate the appointment of such Directors into the Company. On payment of the Deposit Amount, all three (3) of the Pledgee's nominees shall resign from the directorship of the Company. (PLEDGOR) For Vikratn Structures Private Limited (PLEDGEE) For Mentor Capital Limited (Company) For vs. Infra Private Limited The Total shares of the Respondent No. 7 are 5100 Equity Shares at face value of Rs. 10/- held by the Pledgor in the Company constituting 51% of its Issued & Subscribed Share Capital." 13. In pursuant to the above two (2) Agreements, the Board of Directors of the Respondent No. 1 Company at their meeting held on 19.10.2016, has passed unanimous Resolution, which reads as below: "CERTIFY TRUE COPY OF THE RESOLUTION PASSSED AT THE MEETING OF THE BOARD OF DIRECTORS OF V S INFRA PRIVATE LIMITED HELD AT 11.00 A.M. ON MONDAY 19o?= DECEMBER, 2016 AT THE REGISTERD OFFICE OF THE COMPANY SITUATED AT FIRST FLOOR, No. 22, 5o?= MAIN ROAD NEAR BAPTIST HOSPITAL, BANGALORE - 560024, INDIA. The Chairman informed the Board that Company has received share transfer request, accompani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer the entire holding (100,000 shares) of vs. Infra Private Limited at face value i.e. Rs. 10 per shares to Mentor Capital Limited and Mentor Capital can take over this projects. Further we assured you that we will make the payment at the earliest. Regards, For and on behalf of vs. Infra Private Limited VikramPrabhakar Managing Director DIN-02086814." 15. All the Agreements i.e., Facilitation Agreement and Pledge Agreement dated 06.10.2016 and letter 07.10.2016, have been duly executed by the authorized signatory of the Respondent Nos. 1 & 7, namely Mr. Vikram Prabhakar (Respondent No. 2). However, the Respondent No. 2 contemptuously denying everything including his signature by alleging fraud, forgery, misrepresentation for the first time in his Reply, without raising those issues before filing the instant Company Petition. It is for the Respondents to take appropriate civil/criminal action if the Petitioners are resorting to such type of frauds. Instead of doing so, they are making baseless allegations in the instant Petition. 16. The above facts and circumstances of the case shows even though the Petitioner has rendered substantial services to the Respondents an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res." 19. In terms of said Facilitation and Pledge Agreements and as per said Articles of Association, all conditions required to be fulfilled for transfer of shares stand fulfilled, at least in respect of 51 % of shares held by Respondent No. 7 at the time of Pledge Agreement and the second Respondent cannot deny it and the Respondent No. 1 Company is bound to register the name of Petitioner No. 1 in the Register of Members of R 1 Company. Even subsequent consideration for transfer of shares was paid by the First Petitioner to the Respondent. The contention of the Respondent Nos.2 and 7 that the amount paid by the Petitioner No. 1 towards consideration of the share price value of the Transfer of Shares is not towards consideration for transfer of shares is not at all tenable and same is liable to be rejected. It is bounden duty of the Respondent No. 1 Company to register the names of the Petitioner No. 1 in the Register of Members. Moreover, it is not the case of the Petitioner that the Transfer of Shares in question was rejected by the Company, so as to give cause of action to the Petitioner to file any Petition/Application, U/s.58 or 59 of the Companies Act, 2013. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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