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TMI Blog2013 (4) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... n the State of Orissa. It is submitted that the said project was in the advanced state of implementation, but the implementation agreements have been completed on December 3, 2010 and the other formalities like pollution clearance, etc., have been received and the company was in the stage of approaching the IREDA for the financial assistance in the matter. Due to widespread fraud, forgery and other related and allied criminal activities undertaken and perpetuated by respondents Nos. 2 to 5, the affairs of the company are being conducted in a manner prejudicial to interest of the petitioners and public interest thereto, and are also oppressive to the petitioners and are thus being grossly mismanaged. It is submitted that the act of forgery and fraud was first perpetuated by respondents Nos. 2 and 3 with the active aid and assistance of respondents Nos. 3 and 4 on April 14, 2011, when they forged the resignation letter of petitioner No. 2 from the board of directors of the company and thereafter, the said respondents Nos. 2 and 3 approached one Jyotirmoy Mishra, Company Secretary residing at Bhubaneswar, Orissa and using the stolen digital signature of petitioner No. 1, uploaded the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntment of N. Mahadevi and Narsing Rao Chowdary on the MCA website with the digital signature of N. Venkateshwar Rao. It is further submitted that the learned court of the hon'ble First Additional Metropolitan Sessions Judge, City Criminal Court, Hyderabad, Andhra Pradesh, swayed by this affidavit aforesaid supra, was pleased to grant anticipatory bail to respondents Nos. 4 and 5 but however rejected the bail application of respondent No. 3 herein. It is humbly submitted that petitioner No. 1 herein has applied to the High Court of Judicature in the State of Andhra Pradesh in C R. L. P. No. 9546 of 2011 for the cancellation of the said bail under the provisions of section 439(2) of the Code of Criminal Procedure, 1973 and the matter is being heard by the hon'ble High Court of Andhra Pradesh, at Hyderabad. It is further submitted that respondent No. 3 herein moved the Andhra Pradesh High Court for anticipatory bail and again filed the said false affidavit of Jyotirmoy Mishra. The Andhra Pradesh High Court by its order dated August 9, 2011, was pleased to grant anticipatory bail. It is humbly submitted that later on August 22, 2011, when the said Jyotirmoy Mishra was confronte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f of the respondents respectfully submitted that the company petition is not maintainable either on facts or on law as the petitioners have approached the hon'ble Company Law Board with unclean hands by suppressing all the material/relevant facts and have also gone a step further trying to adduce averments in the guise of facts with oblique intentions and ulterior motives and the present company petition deserves to be dismissed in limine as the subject-matter is sub-judice. He submitted that the petitioners filed O.S. No. 99 of 2011 and I.A. Nos. 1718 and 1719 of 2011, agitating similar issues seeking similar prayers for redressal of the disputes, which are pending disposal before the hon'ble court, the factum of which is deliberately not presented before this Bench. It is submitted that the main object of respondent No. 1 is to carry on the business of establishment construction, operation, maintenance and development of Electric Power Stations in the name of the company or others, at the place or places in India or abroad to generate power from any of the conventional and/or non-conventional sources of energy, viz., thermal, hydel wind, solar, etc. as opposed to what h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the increase of share capital was on account of the financial needs of the company as mandated by the requirement of financial institutions for extending assistance to the company for the purposes of carrying on its business. The paid-up share capital of the company has been increased from ₹ 1,00,00,000 to ₹ 1,59,00,000 by way of allotment of 5,90,000 shares of ₹ 10 each. 4,00,000 shares had been issued in favour of respondent No. 4 and 1,90,000 shares had been issued in favour of respondent No. 3 as opposed to what has been stated by the petitioners. The requisite board resolutions have been filed at the behest of petitioner No. 1 with digital signature provided by him to Mr. Jyotirmoy Mishra. It is submitted that petitioner No. 1 has been removed from the position of director by way of board resolution dated June 21, 2011 and the said resolution had been provided to Mr. C. Venkat Reddy to upload the same in Form 32 on the website of Ministry of Company Affairs. Respondent No. 2 has provided her digital signature and had authorised Mr. C. Venkat Reddy to upload the same. It is submitted that the word audacity used by the petitioners is trying to impute motives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnecine disputes in the management of the company is no basis to allege oppression and mismanagement on the part of the respondents. The petitioners have not produced a shred of evidence to even suggest that respondent No. 1 company ceased to be a viable commercial entity and, therefore, the allegations of the petitioners ought not to be considered. It is humbly submitted that the increase of share capital and consequent allotment of 7,00,000 equity shares was valid. The increase of share capital was on account of the financial needs of the company as mandated by the financial institutions for extending assistance to the company for the purposes of carrying on its business. The paid-up share capital of the company was increased from 15,90,000 to 22,90,000 by way of allotment of 7,00,000 shares to N. Prashant Rao, N. Pushpaiata and N. Mahadevi. The increase and allotment was done in accordance with law. The resolution passed for increase in the share capital is being filed as annexure R6 hereto. Notice was issued to the petitioners herein. A copy of the notice issued and the acknowledgment card are being filed together as annexure R7 hereto. It is submitted that the increase in shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners suppressed the proceedings pending before the civil court and the hon'ble High Court respectively in this company petition. The allegations made in the company petition before the High Court, and in the suit before the civil court and in the present company petition are similar. The petitioners have not sought any liberty from the High Court and the civil court, therefore, the allegations made therein stand abandoned. In support of his case, learned counsel for the respondents has relied upon the following decisions: (1) AIR 2003 Raj 319 : in the matter of (Hari Ram v. Lichmaniya (Civil Writ Petition No. 1002 of 2003) paragraph 30. (2) [1998] 93 Comp Cas 939 (CLB) : in the matter of (Abani Bhusan Bhattacharya v. Ericsson India P. Ltd. (C.P. No. 22 of 1997) paragraph 8. (3) [1998] 94 Comp Cas 825 (CLB): in the matter of (Pradip Kumar Sengupta v. Titan Engineering Co. P. Ltd. (C.P. No. 35 of 1993) paragraph 16. (4) [2008] 141 Comp Cas 172(CLB) in the matter of (Ms. Heena Dutt v. Chavi Designs P. Ltd.). (5) [2007] 137 Comp Cas 709 (CLB) in the matter of (Woodbriar Estate Ltd. v. V.N.A.S. Chandran, (C.A. No. 101 of 2005 in C.P. No. 53 of 2004). 4. In view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e permission of this Bench the petitioners filed an amended company petition on January 30, 2013. The respondents have filed preliminary objections and counter to the amended company petition on February 11, 2013. The core allegations of the petitioners are that the respondents have forged the resignation letters and fabricated the records of the company whereby petitioners Nos. 1 and 2 were shown as resigned from the board of directors of the company. Further, the petitioners alleged that the respondents have allotted 4,00,000 shares on May 12, 2011, 1,90,000 shares on May 17, 2011 and 7,00,000 shares on October 19, 2011. Except these reliefs there are no other reliefs sought by the petitioners in this company petition. All the pleadings have been completed in the matter and the petition is ripe for final hearing. While matters stood thus, the respondents have raised a preliminary objection that the petitioners suppressed material facts before this Bench that they have filed suit being O.S. No. 99 of 2011, I.A. Nos. 1718 and 1719 of 2011 agitating similar issues and seeking similar reliefs and the same are pending. Further, the petitioners have filed C.P. No. 184 of 2011 before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verred that the First Additional MSJ was pleased to grant anticipatory bail to respondents Nos. 4 and 5 and rejected the bail application to respondent No. 3. Further, at paragraph 14 it is averred that respondent No. 3 moved the Andhra Pradesh High Court for anticipatory bail. At paragraph 15 it is averred that on August 22, 2011, the said company secretary was the victim of systematic fraud and deception of the respondents. Further, at paragraphs Nos. 16 and 17 it is stated that the petitioners approached IRDEA on August 19, 2011, for not granting any financial assistance to the company and averred that the company has now been embroiled in internal strife and being fraudulently run by a section of members. I have perused the plaint in O.S. No. 99 of 2011. The company is a first plaintiff and petitioners Nos. 1 and 2 herein are the second and third plaintiffs respectively in that suit. The defendants therein are third, fourth and fifth respondents herein, and the fourth defendant therein is the Registrar of Companies, Hyderabad. I am of the view that except defendant No. 4 who is a statutory authority, all others are common parties. At paragraph 4 of the plaint, the petitioners a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re that court and in this proceeding before this Bench. The petitioners therein in that petition averred at paragraph 6 regarding forgery, fraud perpetuated by respondents Nos. 2 and 3 therein with the active aid and assistance of respondents Nos. 3 and 4 therein and fabricated the minutes of the meeting of the board of directors and stolen the digital signature of petitioner No. 1 and filed the resignation of petitioner No. 1. At paragraph 7 it is averred that on April 27, 2011, respondents Nos. 2 to 5 created and fabricated the minutes of the board of directors showing the induction of respondent No. 4 as director. At paragraph 8 it is averred that on May 5, 2011, respondents Nos. 2 to 5 created and fabricated the minutes of the meeting of the board of directors by showing induction of respondent No. 5 as director. At paragraph 9 it is averred that on May 12, 2012, respondents Nos. 2 to 5 created and fabricated the minutes of the board of directors by showing issue of 4,00,000 shares to respondent No. 4. At paragraph 10 it is averred that on May 17, 2011, respondents Nos. 2 to 5 created and fabricated the minutes of the board of directors by issuing 1,90,000 shares to respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e replica of the present company petition, except the reliefs. Paragraphs Nos. 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 of the present company petition are same as paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 15, 18, 19, 20, 21 and 22 of winding up petition. However, the reliefs sought in O.S. No. 99 of 2011 are mostly similar as in the present petition. Therefore, it is evident that both the petitions were pending when the present company petition was filed on October 3, 2011, meaning thereby that all the averments as made in the present petition and the reliefs were sub-judice and Subject-matter of consideration of the respective courts. Whether those courts were competent to deal with those issues is not the subject-matter of the present company petition. This Bench being a quasi-judicial authority will also take note of the conduct of the parties, more particularly the petitioners in the present proceedings, who have chosen to ventilate their grievances before such courts prior to filing of the company petition before this Bench with similar averments and reliefs. This Bench will also take note whether the petitioners approached this Bench with clean hands and without sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of C.P. No. 184 of 2011. The averments as made in C.P. No. 184 of 2011 and as made in the present company petition are similar in not seeking permission from the respective courts for prosecuting the instant company petition, and amounts to abandoning the claims, averments and allegations made therein. Learned counsel for the respondents contended that by not seeking permission from the respective courts in continuing the instant company petition before this Bench where similar allegations, averments have been made and similar reliefs sought to the extent the petitioners abandoned their claims and thus estopping them from prosecuting the present company petition. Learned counsel for the respondents relied upon some citations on the principles of Code of Civil Procedure, i.e., Order 23, rules 1, 2, 3 and 4. The High Court of Hari Ram v. Lichmaniya, AIR 2003 Raj 319 : , held that (page 329 of AIR 2003 Raj): It is immaterial whether plaintiff files another suit with respect to the subject against the same party during the pendency of his earlier suit or after withdrawal of the earlier suit without leave of the court to file fresh suit, consequence is the same and, i.e., abandonment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act or any other law, guided by the principles of natural justice and shall act in its discretion. The CLB in its decision in Woodbriar Estate Ltd. v. V.N.A.S. Chandran [2007] 137 Comp Cas 709 was of the view that (page 721 of 137 Comp Cas): The provisions of the Civil Procedure Code, though inapplicable, yet, the principles enunciated therein are made applicable to the proceedings before the Company Law Board . Also in Ms. Heena Dutt v. Chavi Designs P. Ltd. [2008] 141 Comp Cas 172(CLB) was of the view (page 180 of 141 Comp Cas): ...while it is true that Order 1, rule 10 though strictly cannot be said to be applicable in a proceeding before the Company Law Board, the principles analogous thereto can be adopted by the Board for proper and effective adjudication of the pending dispute . Therefore there is no quarrel in applying the principles analogous to the Code of Civil Procedure to the proceedings before this Bench. This Bench in Abani Bhusan Bhattacharya v. Ericsson India P. Ltd. [1998] 93 Comp Cas 939 : was of the view that if the petitioner did not disclose the fact of initiating any of the proceedings in the petition which is the requirement of the Company Law Board Regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question to decide is whether in such a circumstance, the second suit is barred or not. 8. As noticed above, sub-rule (4) of rule 1 of Order 23, of the CPC precluded the plaintiff from instituting a fresh suit where the earlier suit was withdrawn or abandoned without permission of the court. It is clear that the prohibition is in regard to the institution of a fresh suit after the earlier suit on the same cause of action had been withdrawn without the leave of court. But, where the subsequent suit was pending when the earlier one was dismissed as withdrawn, abandoned or as not pressed, the provisions of Order 23, rule 1, in terms, would be inapplicable. 13. Even though the provisions of the Code of Civil Procedure are not applicable, however, the principles analogous to the Code of Civil Procedure are made applicable to this Bench. In the present case, the petitioners suppressed the material facts, hence the said facts are more bearing i.e., suppression of material facts and not approaching this Bench with clean hands. As stated supra, it is the endeavour of the Bench to prevent the abuse of process of law. When the suit and company petition were pending before the civil cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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