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TMI Blog2019 (8) TMI 1776X X X X Extracts X X X X X X X X Extracts X X X X ..... car and free 4 BHK residential accommodation and he has assured on behalf of the company that the same will be continued as long as she is director of respondent No. 1-company. Therefore, the petitioner is not put to any hardship by respondent No. 1-company. The petitioner has failed to make out any case so as to exercise powers conferred on the Tribunal under section 242 of the Companies Act, 2013 - Petition dismissed. - C. P. No. 290 /BB/ 2018. - - - Dated:- 1-8-2019 - RAJESWARA RAO VITTANALA (Judicial Member) and DR. ASHOK KUMAR MISHRA (Technical Member) Arun Kumar , Senior Counsel, and Kashyap N. Naik for the petitioner. A. Murali and Andre Peter for the respondents. ORDER C. P. No. 290/BB/ 2018 is filed by Ms. Vidhya Achu Roy (hereinafter referred to as the petitioner ) under sections 241, 242 and 243 and other applicable provisions of the Companies Act, 2013 against respondents Nos. 2, 3 and 5 for oppression and mismanagement of respondent No. 1-company, namely, M/s. Suraj Mani Engineers P. Ltd. (hereinafter referred to as the respondents ) by, inter alia, seeking ; to supersede the board of directors and reconstitute it and an administrator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. 1-company. (5) The petitioner and respondent No. 2 are husband and wife. Respondent No. 2 along with his two other friends was initially a share holder of the company known as Ambient Systems P. Ltd., which was engaged in distribution of air conditioners and it was registered in Kerala. Right after the marriage of the petitioner and respondent No. 2, all the three shareholders of Ambient Systems P. Ltd., has to put in ₹ 1,50,000 (rupees one lakh fifty thousand only) each, in the said company as working capital. It was the petitioner who had put ₹ 1.5 lakhs towards share of respondent No. 2. Even though the working capital contribution was made in the name of respondent No. 2, the funds were provided by the petitioner. (6) During 2001, the petitioner and respondent No. 2 moved to Ban galore as respondent No. 2 wanted to start a branch of Ambient Systems P. Ltd., in Bangalore. The petitioner was working full time with the company at that point as its accounts manager. In 2004, she took a break as the first child of the petitioner and respondent No. 2 was born. (7) During in 2005, respondent No. 2 took over the Bangalore branch of the Ambient Systems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-company took the residential apartment at Flat No. 3133, Sobha Petunia, Veeranapalya, Nagvara Post, Bangalore-560 045 and its furniture and fittings on lease from its owners. This lease was taken for the petitioner, respondent No. 2 and their children for their family residence. This rental agreement and the agreement for hire was being renewed by respondent No. 1-company regularly every 11 months. As the petitioner and respondent No. 2 having severe issues in their marriage, respondent No. 2 had already planned to leave and abandon the petitioner and his children, the second respondent not only planned this separation, but has also has been meticulously taking over all control of respondent No. 1-company over the last couple of years, using the profits for his own personal needs and completely depriving the petitioner of her rights in respondent No. 1-company. (10) It is stated that respondent No. 2 started taking decisions in the company without the knowledge and approval of the petitioner. Unknown to the petitioner and without informing her, despite the petitioner being the 50 per cent. shareholder and also a director, respondent No. 2 has been taking out large sums of mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y her legal advisor, and also requesting the financial statements of the company. Respondent No. 2 replied vide e-mail dated March 3, 2018 stating that the financials are not yet ready as we are hearing to the close of financial year . In the same e-mail, he also stated that the petitioner's legal adviser is not allowed to participate in the meeting. The petitioner attended the meeting on March 7, 2018 and at this meeting the petitioner submitted a letter requesting for copies of all financial documents. This was also followed up by an e-mail dated March 7, 2018 sent to respondent No. 2. She again followed up on the request to inspect the accounts along with her auditor on March 28, 2018. Despite these letters, the documents requested were not provided to the petitioner nor was she allowed any inspection. (13) It is stated that the petitioner received another notice dated March 22, 2018 calling for another board meeting on March 29, 2018. The agenda for this board meeting was to approve the incentive pay for respondents Nos. 2 and 3 and to discuss the renewal of the lease for the residence of the petitioner and respondent No. 2. The petitioner sent a response vide e-mail da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management and oppression have been committed by respondents Nos. 2 and 3. There have been gross violations of the articles of association of respondent No. 1- company by respondents Nos. 2 and 3, who are the persons in control. Such violations are continuing from the day-to-day and are being committed to the prejudice of respondent No. 1 and its shareholders, of whom the petitioner is a 50 per cent. shareholder. The effect of each of such violations is such that the company and its shareholders are continuing to be affected every day. (16) It is further stated that respondents Nos. 2 and 3 are illegally running the affairs of respondent No. 1 by treating the same to be their sole proprietary concern. The acts on the part of respondents Nos. 2 and 3 clearly established that the continuance of the present management of respondent No. 1 is detrimental to the interest of respondent No. 1 and its shareholders including the petitioner. There is a complete break-down of the democratic machinery in running the affairs of respondent No. 1-company. There is complete lack of trust between the shareholders of the company and there exists a complete impasse and a stalemate solution, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that she was the wife of respondent No. 2 and for no other reason. Despite the position accorded to the petitioner in respondent No. 1-company as a director, there was no investment whatsoever on part of the petitioner in the running of the business of respondent No. 1-company. (5) It is also stated that respondent No. 1-company was built by respondent No. 2 from the ground. He managed all day-to-day operations of the company and worked tirelessly to build its loyal clientele. Respondent No. 2 also took it upon himself to properly mentor and train the employees and staff of respondent No. 1-company, and thus earned a good name for himself amongst clients and employees alike. In fact, respondent No. 3 started in the company as one such mentee, who soon rose to the position of a director in respondent No. 1-company through his tireless efforts, unparalleled technical expertise and tremendous business acumen. (6) It is further stated that respondent No. 1-company is a well-man aged, profit making company, and is regarded as a reliable and good vendor in the HVAC industry. The company's success can be attributed to the principles on which it has been run by respondents Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bedroom residential apartment at Flat No. 3133, Sobha Pentunia, Veeranapalya, Nagvara PO, Bengaluru-560 045 with their children, the father of respondent No. 2 and the mother of the petitioner. The residential apartment was leased by respondent No. 1-company for the use of the managing director of the company. Due to the petitioner's reluctance towards taking care of the aged and ailing father of respondent No. 2, he and his father were forced to move out of the residential apartment. It was decided by a majority of the board of directors of respondent No. 1-company that the lease of the residential apartment, which was meant for the use of the managing director of the company, ought not to be renewed. Hence, they prayed the Tribunal to dismiss the petition. 4. Heard Shri Arun Kumar, learned senior counsel for the petitioner and Shri A. Murali, learned counsel for the respondent. We have carefully perused the pleadings of both the parties and extant provisions of the Companies Act and law on the issue. 5. Shri Arun Kumar, learned senior counsel for the petitioner, while reiterating various averments made in the company petition, as briefly stated supra, has further stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013-14 was ₹ 2,328.67 lakhs, 2014-15 was ₹ 3,208.07 lakhs, 2015-16 was ₹ 2,979.06 lakhs, 2016-17 was ₹ 3,575.98 lakhs and 2017-18 was ₹ 4,876 lakhs (provisional accounts under audit and finalisation), which establish that affairs of respondent No. 1-company runs on sound principles contrary to allega- tions made by the petitioner. It is also not in dispute that the petitioner was given proper notices even for recent board meetings held on March 7, 2018 and March 29, 2018 wherein the petitioner has participated and expressed here views/dissent. The grievance of the petitioner is that her concerns were not accepted during the board meetings and not furnished requisite documents as asked for. In fact the petitioner being directors is under fiduciary duties towards the company and she cannot maintain the instant petition unless her directorship is under threat. 8. As per article 6(b) of the articles of association of respondent No. 1- company, the first directors of the company are Mr. Suraj Mani (respond- ent No. 2) and Ms. Vidhya Achu Roy (petitioner herein). As per article 6(c), the directors are not required to hold any qualification shares. Articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reholding of the petitioner is concerned, it is stated that it is only proposal. Moreover, a company is empowered to take any decisions as per law. 11. So far as the order dated May 22, 2007 passed in C. P. No. 10 of 2002 by the Company Law Board, Principal Bench in C. P. No. 10 of 2002 in Ms. Heena Dutt v. Chavi Designs P. Ltd. [2008] 141 Comp Cas 172 (CLB), as relied upon by the petitioner, is concerned, the facts and circumstances of this case are not applicable to the instant case. In that case, the petitioner was thrown out of the company, there is deadlock in the company affecting the affairs of company to a larger extent resulting profit making company into loses company, since only petitioner and her husband are only two directors of the company, there are criminal cases filed by them against each other ; no statutory compliance has been done by company under the Companies Act, Income-tax Act, 1961, etc. Neither the balance-sheet has been filed nor has annual report nor profit and loss account been filed for more than five years. In the instant case, admittedly, those circumstances are lacking except both the petitioner and second respondent are wife and husband. And the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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