9911796707
TMI Blog2021 (1) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... tion here that even if this happens, they can at any time make representation for restoration to that effect according to the provisions of law. Application dismissed. - IA No. 1021 of 2020 and C.P. (IB) No. 975 of 2020 - - - Dated:- 6-8-2020 - Hari Venkata Subba Rao, Member (J) And Shyam Babu Gautam, Member (T) For the Appellant : Shrenik Gandhi, Advocates, Ankoosh Mehta For the Respondent : Shyam Kapadia, Advocate i/b Cyril Amarchand Mangaldas and Co. ORDER 1. This is an Interlocutory Application filed by the applicants for seeking interim reliefs from this Bench to protect the resources of the Cotmac Electronics Private Limited (hereinafter referred to as Respondent No. 09) and to ensure that its affairs are managed in a manner which is not prejudicial to the interest of the applicants. 2. The facts of the case are that the Applicant No. 01 is the Managing Director and Applicant No. 03 is the Executive Director of Respondent No. 09. All the applicants hold a total of 36.07% of the paid up equity share capital, in the form of fully paid up equity share of Class A and Class B Equity Shares of Respondent No. 9. 3. Respondent No. 09 is a company enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip between the applicants and the Sirur family, when the applicants demanded implementation of the decision regarding conversion of their Class B Equity Shares of Respondent No. 09 to its Class A Equity Shares, the Respondent No. 01 refused to do so. 9. Also, the decision of removal of Applicant No. 03 as the Executive Director appears to be managed and staged by the Sirur family only because (i) he questioned and siphoning of funds by them for their personal benefits; (ii) he objected to the shifting of operations of Process Automation Division (consisting of Foods and Beverages (F B) and Energy Division) to a particular location, as the objective of the Sirur family was to control the profitability of such divisions also to misuse profits/funds/resources of the profits of highly profitable divisions, developed and built by the Applicant No. 03 for Respondent No. 09. 10. Further the allegation that Sirur family has started threatening Applicant No. 01 that after Applicant No. 03, he would also be removed from the business and operations of Respondent No. 09, were made by the applicants. 11. Also, it was alleged that the Respondent No. 03 has been fraudulently accessing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can interfere if the majority of them think that the course taken by the Director, in a matter intra vires of the Directors, is not for the benefit of the company. Thus the counsel for the respondent made a submission that the courts have no jurisdiction to enter into the corporate liberty of the company and also that the EGM cannot be stayed. 14. The counsel for the respondent NO. 07 further referred to Sections 100 and 169 of the Companies Act, 2013. 100. Calling of extraordinary general meeting (1) The Board may, whenever it deems fit, call an extraordinary general meeting of the company. (2) The Board shall, at the requisition made by,- (a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting; (b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote, call an extraordinary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentation in writing to the company and requests its notification to members of the company, the company shall, if the time permits it to do so,- (a) in any notice of the resolution given to members of the company, state the fact of the representation having been made; and (b) send a copy of the representation to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representation by the company), and if a copy of the representation is not sent as aforesaid due to insufficient time or for the company's default, the director may without prejudice to his right to be heard orally require that the representation shall be read out at the meeting: Provided that copy of the representation need not be sent out and the representation need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Tribunal is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for defamatory matter; and the Tribunal may order the company's costs on the application to be paid in whole or in part by the director notwithst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005] 1 SCC 2122. (d) Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad [2005] 11 SCC 3143. (e) Kamal Kumar Dutta v. Ruby General Hospital Ltd. [2006] 7 SCC 6134. From the above decisions, it is clear that oppression would be made out: (a) Where the conduct is harsh, burdensome and wrong. (b) Where the conduct is mala fide and is for a collateral purpose where although the ultimate objective may be in the interest of the company, the immediate purpose would result in an advantage for some shareholders vis-a-vis the others. (c) The action is against probity and good conduct. (d) The oppressive act complained of may be fully permissible under law but may yet be oppressive and, therefore, the test as to whether an action is oppressive or not is not based on whether it is legally permissible or not since even if legally permissible, if the action is otherwise against probity, good conduct or is burdensome, harsh or wrong or is mala fide or for a collateral purpose, it would amount to oppression under sections 397 and 398. (e) Once conduct is found to be oppressive under sections 397 and 398, the discretionary power given to the Company Law Board un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular resolution need not be disclosed in the notice calling for the EGM. Also, passing of the resolution and the reasons thereof are not subject to judicial review. Thus, in the present suit what the Plaintiffs only intend to seek is an injunction against calling of the EGM. In this judgment of the Hon'ble High Court of Delhi, the judgment of the Hon'ble Supreme Court of India in the matter of LIC v. Escorts was cited and referred to. 2. Also, the prayer sought by the applicant that the director should not be removed can also not be granted as the Companies Act itself makes it clear that the power to remove the director is inherent and is a corporate decision which is correctly stated by the counsel for the Respondent No. 07. The applicants also mention their fear that they may be removed in the meeting scheduled for tomorrow. But we would like to mention here that even if this happens, they can at any time make representation for restoration to that effect according to the provisions of law. 3. Further, it is also observed that the applicant has a right to make representation as to his grievances but before doing so, he has filed this application. Also, the con ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
