9911796707
TMI Blog2020 (10) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... pany on May 24, 2002 as a private limited company. It became a public limited company with effect from May 27, 2005 the present name (CIN : U92490TG1994PLC018659). The company was established, inter alia, with the main object of manufacturing, producing, distilling and generally dealing in alcohol based chemicals, rectified spirits, denatured spirits, etc., for industrial use. The manufacturing unit set up in an area spread over about 70 acres of land owned by the company in village Elkatur in the District of Chittoor. Its authorised capital was Rs. 21,00,00,000 divided into 2,10,00,000 equity shares of Rs. 10 each. The issued, subscribed and paidup share capital was Rs. 10,85,00,000 comprising of 1,08,50,000 equity shares of Rs. 10 each. The company was being managed by respondents Nos. 2 (holding 22,75,480 shares) and 3 (holding 12,00,000 shares). Between themselves and another entity owned by them namely, Ammana Equity Fund P. Ltd. (53,96,520 equity shares) they held 82 per cent. of the shareholding of the company. In the year 2003 the company availed a loan of Rs. 11,67,00,000 from State Bank of India. The 70 acres of land at village Elkatur was offered as security for the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts by July 18, 2014 as indicated earlier, the bank on September 4, 2014 issued a "no dues certificate" of closure of all the loan accounts and release of charge on the securities as well as the corporate guarantee offered by Ammana Equity Funds P. Ltd., for the loan the same day. On March 7, 2014 pursuant to the agreement, respondents Nos. 2 and 3 transferred the entire shares (53,69,520) of Ammana Equity Fund P. Ltd. in favour of the petitioner. The shares bore distinctive numbers 0000001 to 5369520 vide share certificate Nos. 63 and 82 to 91. Respondent No. 2 transferred his 22,75,480 equity shares bearing distinctive numbers 53695217 to 6179520 vide share certificate No. 18 to 21 ; distinctive numbers 6429521 to 6455520 vide share certificate Nos. 24 and 25 ; distinctive numbers 6485521 to 6730520 vide share certificate Nos. 28 to 35 ; distinctive numbers 6785521 to 7300520 vide share certificate Nos. 38 to 56 ; distinctive numbers 7300521 to 7380000 vide share certificate No. 76 ; distinctive numbers 8610001 to 8620000 vide share certificate No. 70 and distinctive numbers 9000001 to 9590000 (not pleaded. This belonged to KML Datapro) to the petitioner. The allotment and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... false statements, with the intention of defrauding the petitioner and depriving him of his legitimate position in the company. 5. Similarly, the transfer of shares (on March 7, 2014) had not been reflected in the annual returns of the company for the year ending March 31, 2014. After taking over physical and operational control of the company and its assets the petitioner got his name entered as authorised representative of the company in the revenue records. He also took other steps in the nature of obtaining licences and clearance from the Forest, Pollution and Excise authorities on payment of requisite fees. He also made substantial investments for protection and development of the company's lands. The statutory auditors in cohort with respondents Nos. 2 and 3 withheld information as to the status of the petitioner and his son in the records. Only on March 10, 2015 the petitioner on engaging the services of the professional company secretary came to know that misleading and fraudulent forms were uploaded into the Ministry of Corporate Affairs (MCA) portal and meeting had been conducted without taking him into confidence. It also came to light that respondents Nos. 4 and 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct respondent No. 9, i. e,. Regional Director, Ministry of Corporate Affairs, South Eastern Region, Hyderabad to submit the inspection report made by his office consequent to the inspection of the records of respondent No. 1-company. (vi) Pass an order directing the Central Government to initiate prosecution against respondents Nos. 2, 3 and 8 under sections 447 and 448 of the Companies Act, 2013. (vii) Pass an order appointing an independent chartered accountant to audit the accounts of respondent No. 1-company and prepare and finalize the balance-sheet and profit and loss account reflecting the true and fair view of the financial position of respondent No. 1-company after taking into the account the repayment of the loan to State Bank of India by the petitioner. (viii) Pass an order directing the Institute of Chartered Accountants of India to initiate appropriate disciplinary proceedings against respondent No. 8 for professional misconduct. (ix) Pass an order appointing an independent chairperson to convene, call and hold the annual general meeting for the year 2013-14 at which the appointment of the petitioner and his son as directors of respondent No. 1- company sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orandum of understanding with the petitioner on March 7, 2014. The petitioner agreed therein to repay the dues of the State Bank of India in lieu of transfer, in his favour, of shares of respondents Nos. 2 and 3. Respondents Nos. 2 and 3 handed over blank share certificates to the petitioner and the petitioner took possession of the factory and the associated equipment. He, however, did not repay the whole of the dues of the State Bank of India. Under continuous pressure from the bank. Respondents Nos. 2 and 3 had to repay the loan amount by selling their personal assets including their residential houses. Respondents Nos. 2 and 3, from the conduct of the petitioner, realised that the latter did not intend to run the factory and revive it but had an evil eye to usurp the 70 acres of land over which the company and its factory spread. The petitioner failed to honour his obligations under the memorandum of understanding dated March 7, 2014. Despite taking charge as an additional director, he did not conduct a single board meeting within 6 months till his term ceased on September 30, 2014. Respondents Nos. 2 and 3 had already resigned from the company's board and the petitioner di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are held by Mr. K. Sreedhar Reddy. Whereas the company has outstanding loan amounts payable to State Bank of India to the extent of approximately Rs. 10 crores. Whereas the company has been incurring losses and is experiencing severe financial and liquidity crunch and hence has been unable to raise further funds required by the company. I have approached the acquirer/investor with a request to infuse funds into the company for repayment of the bank loans and in consideration of the acquirer/ investor doing so I hereby declare and agree to transfer my entire shareholding held in my name, Ammana Equity Fund P. Ltd., and facilitate the transfer of 12,00,000 shares held by Mr. K. Sreedhar Reddy which in total represent 82 per cent. of the total paid-up share capital of the company. Whereas in view of the acquire/investor accepting my proposal and agreed to acquire my shareholding and that of my associates and friends subject to furnishing certain assurance, declarations and undertakings by me, I hereby furnish this declaration to assure the acquirer/investor and therefore now this declaration witnesses as follows : That upon the repayment of the bank loan to the extent of 50 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him within a period of 3 months from this date. However the costs of the same shall be borne by the second party." 10. And that of between respondent No. 3 and the petitioner is as follows : "Whereas the first party was a shareholder of the company titled M/s. Ammana Bio Pharma Ltd., Hyderabad, and has sold his share holding to the second party by execution of transfer deed on this date. Whereas the first party is desirous of further assisting and continuing in the project and proposes to purchases the shares of the other shareholders in the company. Whereas the second party has infused fresh capital into the company with such assurances from the first party. Now the memorandum of understanding agreed to as follows : The second party agrees to clear the loan liabilities of the company M/s. Ammana Bio Pharma Ltd., with SBI on this date. The first party agrees to buy out the shares of the following share holders for a total sale consideration of Rs. 90,00,000 (rupees ninety lakhs only) within one month from this date : Ramesh Athasniya 10,00,000 shares Anju Gaggar 2,50,000 shares Sunita Gaggar 2,50,000 shares The first party agrees to bring in further am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally stood in the name of KML Data Pro as already indicated. The petitioner has not been able to establish the nexus between respondent No. 2 and Data Pro. Though memorandum of transfer in respect of those shares indicate that they have been transferred to the petitioner, the petitioner has not been able to prove satisfactorily that the shares of the company were held by respondent No. 2 and they were duly transferred under section 56 of the Act to him. The board resolution dated March 7, 2014 does not speak of transfer of any shares by respondent No. 2 in favour of the petitioner. Therefore, the transfer of 53,69,520 + 11,50,000 (65,19,520) can only be approved. The contention of the respondent that the petitioner did not clear the whole of the loan amount would not have any consequence since as per the declaration dated November 6, 2011 the petitioner was entitled to transfer of share in his favour on clearing of 50 per cent. of the outstanding dues of the bank. There is no dispute that the petitioner has cleared more than 50 per cent. of the bank dues. As against 1,85,00,000 shares, the petitioner is held to have owned 65,19,520 shares. The petitioner accordingly is share- holde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 to 7 as directors accordingly would not be valid. Issue No. V is answered in the negative. Issue No. VI : 16. Despite holding 35.24 per cent. shares in the company the name of the petitioner was not shown in any of the annual returns as required under section 92(1) of the Act, subsequent to March 7, 2014. The investment made by the petitioner in the nature of clearing of liabilities of the company with the bank have not been shown in the annual returns. But the mala fides of the auditor cannot be inferred merely from the fact that the payments made by the petitioner were not reflected in the annual returns. Therefore, the allegation that respondent No. 8 perpetrated fraud cannot be accepted. Taking into consideration the discussions made above, the company petition can be disposed of with the following orders. Hence ordered. ORDER The company petition be and the same is allowed in part on contest. The petitioner is declared as the owner of 65,19,520 shares of respondent No. 1- company. His name shall be entered in the register of members and the register shall accordingly be rectified. The annual general meeting dated February 21, 2015 is held to be invalid. All consequential ..... X X X X Extracts X X X X X X X X Extracts X X X X
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