9911796707
TMI Blog2020 (10) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,62,492 fully paid-up Equity Shares, being 36.7% of the total equity share capital of Respondent No. 9. Applicant No. 1 is associated with Respondent No. 9 for the last 28 years and is the Managing Director of Respondent No. 9 w.e.f. 15.11.2017. 3. The main allegation in the Application broadly relates to: i. That the Sirur family are undertaking and managing the activities of Respondent No. 9, without involving Applicant No. 1 and 3 in the recent past. ii. That the Sirur family wants to only gain personally and with an ulterior motive and their ultimate object is to shut down/shift the operations of Respondent No. 9, slowly and gradually. iii. That considering the arrangements and quasi-partnership between the Applicants and Mr. Shyam Sirur, when the Applicants demanded to convert their Class B Equity Shares of Respondent No. 9 to Class A Equity Shares of Respondent No. 9, Respondent No. 1 refused to do so, in-spite of specific decision of the Board of Directors of Respondent No. 9. iv. That the Sirur family and particularly Respondent No. 3 is a non-technical person and not capable of handling the operations of Respondent No. 9, in a professional and in a manner which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution is passed to change the designation of Applicant No. 1 from that of the Managing Director to that of a Non-Executive Director, Order may kindly be passed to declare such act as illegal and/or to stay the implementation of such resolution, till final disposal of the said petition. f. Respondent No. 1 to 3, be directed not to incur legal expenditures from the resources of Respondent No. 9 till the decision in the said petition and in this Interlocutory Application. g. To order for appropriate costs to be paid by the Respondent No. 1 to 3, to the Applicants. h. All incidental and consequential reliefs, as may be deemed fit, by this Tribunal, in the facts and circumstances of the present case and/or in the present circumstances, may kindly be granted. Submissions by the Respondents: 7. The Respondents submit that no ad-interim reliefs should be granted to the Applicants, as prayed for in the Application, on the following grounds: I. The NCLT cannot exercise its discretionary powers to substitute its judgement with the wisdom of the Board of Respondent No. 9. The Respondents mention that the Section 169 of the Companies Act, 2013 ("Act") (Section 284 of the Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing the Applicants on September 8, 2020 and October 8, 2020 did not grant any ad-interim reliefs and listed the matter for November 24, 2020. It is submitted that, with the sole intention of re-agitating the previously denied reliefs, the present Application has been filed by the Applicants to abuse the process of law and undermine the order dated August 6, 2020 of this Hon'ble Tribunal. Therefore, the Application should be dismissed at the outset as the reliefs have been decided on merits by this Hon'ble Tribunal and an appeal to the same is presently pending before the Hon'ble NCLAT. 11. The Respondent No. 1 to 4 & 7 in their reply to the Interlocutory Application states that; a. The entire genesis of filing this present company Petition arises, from a disagreement of the Respondent Nos. 1 to 4 & 7 to mandatorily buy out the Petitioner. As the Petitioner was unsuccessful in forcing the Respondent Nos. 1 to 4 & 7 to buy him out, the Petitioner has approached this Hon'ble Tribunal. b. It is also submitted that admittedly there were talks between the parties for a possible buy-out of the Petitioner's shares in Respondent No. 1, which seem to have failed. c. The Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 14. This Bench also notes that against the order of NCLT Mumbai, the Applicants filed a Company Appeal No.143 of 2020 on 01.09.2020 before Hon'ble NCLAT. It is pertinent to note here that Hon'ble NCLAT even after hearing the Applicant on Sept 8,2020 and again on 08.10.2020 did not grant any interim relief and has listed the matter for 24.11.2020. This Bench has no doubt in its mind that the Applicants are mainly agitating in the present IA on the same set of issues in which relief has been denied by NCLT Mumbai on Aug. 6, 2020 and no stay has been granted against that Order by Hon'ble NCLAT. 15. In view of the above, this Bench has no doubt in its mind that the relief sought by the Applicant regarding his non-removal as Managing Director of Respondent No. 9 till a final decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Krishna Properties and Facilitators Pvt. Ltd. and Ors, decided on 9.12.2015, where the Company Law Board has observed that: "9. Now I deal with the issue No. 3: The grievance of the petitioner is that he was continuing as managing director of the R1 Company and he was allegedly removed from the post of managing director in a Board meeting held on 07.07.2005. The respondents contended that the petitioner was removed due to his contacts with some anti-social elements and his attitude to bring disrepute to the company and its management and therefore the company decided to remove him from the office of managing director in the company's Board meeting dated 07.07.2005. As held by the Hon'ble Supreme Court in the matter of Dale & Carrington that the articles of a company are its constituent document and are binding on the company and its directors. Therefore the above articles are binding on the company, on the directors including the petitioner who was continuing as a director of the company. The petitioner himself produced annual returns for the year ended 31.12.2005 wherefrom it is evident from the list of directors annexed along with the annual returns shows that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director. (7) In my view, the application for injunction is pre-mature for several reasons. The calling of the meeting for the purpose of removing the Managing Director and Joint Managing Director must be distinguished from the factual removal of these persons from the office. If a meeting is called and these persons are not removed at that meeting, then the plaintiffs and present appellants can have no grievance. If a mere discussion is held at a meeting called for the purpose just indicated, then the plaintiffs can have no grievance. The only. grievance that the plaintiffs can possibly have is when a resolution of Board of Directors is actually passed to remove the Managing Director, Director and the Joint Managing Director from their respective offices. Then it may be argued that such resolution is ultra vires being beyond the power of the Board of Directors. I do not at all decide here whether it will be ultra-virus or whether it will will be within their power. The starting point for there being jurisdiction in the Court is not when the Board of Directors decide to have a meeting, but when the Board of Directors actually take some positive action on the proposed resolution. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
