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TMI Blog2021 (11) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... icles of Association. Therefore, the Petitioner has made prima facie case for grant of interim stay of resolution passed in EOGM dated 31.05.2021. 4. It is observed that Respondent No. 2 has acted ultra vires of the powers conferred under Articles of Association. Therefore, this Bench is of the considered view that the implementation of the Resolutions passed in the board meetings on 12.03.2021, 31.03.2021, 06.05.2021 & 31.05.2021 have also been consequently stayed pending final disposal of the Company petition. 5. Counsel for the Respondent is directed to file reply within six weeks as sought by him by duly serving the copy to the other sides. The Petitioner is directed to file rejoinder, if any, within 2 weeks thereafter. List this matter on 21.10.2021." 2. The facts giving rise in the instant Appeal are as under: i) The present Appeal is being filed by Appellant No. 1 through Appellant No. 2 authorized by the Board Resolution dated 09.08.2021 (Annexure A-2 at page 80 of the Appeal Paper Book) with Appellant No. 2, Appellant No. 3 and Appellant No. 4. ii) Further case is that on 27.08.2003, the Appellant No. 1 was incorporated and registered under the Companies Act, 1956, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant No. 1 held a Board Meeting wherein the Appellant No. 2 in the capacity of Chairman placed before the Board proposal to co-opt Appellant No. 3 as an Additional Director on the Board of Directors of Appellant No. 1. Thereafter, the Appellant No. 2 presented before the Board, the reasons for his proposal and stated how the Appellant No. 3 has gained a lot of expertise and has achieved the targets in the past 15 years in the capacity of Sales Head, thereby taking the Appellant No. 1 to a greater height. x) Further case is that considering Appellant No. 3's past association and contribution in the capacity of Sales head for more than 15 years, Board of directors unanimously passed the resolution in the meeting for appointment of Appellant No. 3 as an Additional Director in Appellant No. 1 in accordance with the provisions of Section 161(1) of the Companies Act, 2013, read with Article 28 of the Articles of Association of the Appellant No. 1 with effect from 17.09.2019. The Respondent attended the Board Meeting held on 17.09.2019 and consented for the appointment of Appellant No. 3 as an Additional Director while signing on the true copy of the resolution passed in the board m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -7 at page 131 to 132 of the Appeal Paper Book). xvi) Meanwhile, a Notice for the Board meeting no. 4/2020-21 dated 12.03.2021 along with agenda and proposed resolution was issued by the Appellant No. 2 via mail to all the Directors including Respondent with the proposed agenda, inter alia, to consider request received from Appellant No. 2, existing shareholder of the Appellant No. 1 to split his share certificate and to issue new share certificates in Form SH-I [Annexure A-8 (Colly) at page 133 to 137 of the Appeal Paper Book]. xvii) Further case of the Appellant is that the 1st EOGM of the Financial Year 2021-22 was conducted on 31.05.2021 which was attended by the Appellant No. 2, Appellant No. 3 and Appellant No. 4 and the Respondent did not chose to attend the EOGM despite advance notice served to him. xviii) Further case is that the Respondent filed a Company Petition dated 09.06.2021 before Hon'ble National Company Law Tribunal, Mumbai bench under Section 241-242 of Companies Act, 2013 against the Appellants alleging mismanagement and oppression in the functioning of the Appellant No. 1 by Appellant No. 2 in connivance with Appellant Nos. 3 & 4 and Consultant PCS of Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Counsel for the Respondent during the course of argument and his Reply Affidavit submitted that the Respondent is a founder director and shareholder of Medsynaptic Pvt. Ltd. and holds 40% of the total paid up share capital of the Appellant Company which was incorporated in 2003 with two shareholders and two directors only i.e. Appellant No. 2 and the Respondent herein. Ever since the incorporation of the Company, it had been running on a quasi-partnership basis where the two sole shareholders of the Company i.e. the Appellant No. 2 and the Respondent, were also the Directors of the Company who were jointly responsible for running the affairs of the Company and making decisions related to the functioning of the Company. 9. It is further submitted that the Appellant No. 1 Company is a private Company that was incorporated on 27.08.2003 and is registered at Registrar of Companies, Pune and there have been two shareholders who are also the Directors of the Company since its inception. For the last 18 years, the number of shareholders was always two and similarly, the percentage of shareholding was always in the ratio of 60:40 i.e. the Appellant No. 2 held 60% shares whereas the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25. The number of Directors shall not be less than Two and shall not be more than Twelve. 26. The First Directors shall be: 1. DR. ASHISH PRAKASH DHAWAD 2. DR. PRASSHANT KRISHNARAO LAHANE The First Directors appointed by the Articles of Association shall not be liable to retire. However they shall hold office until they resign or cease to hold office on account of death/incapacitation or otherwise become disqualified to hold such office in accordance with the provisions of Companies Act, 1956. The directors appointed from time to time by the Company shall be liable to retire at every Annual General Meeting of the Company and shall be reappointed unless otherwise decided by the members. However the members may be passing special resolution appoint directors not liable to retire at a General Meeting. (Emphasis Supplied) 15. It is further submitted that the Ld. NCLT passed the interim order on 19.07.2021 (Impugned Order) as per Article 26 of the Articles of Association makes it evidently clear that the "First Directors" i.e. the Appellant No. 2 and the Respondent herein, cannot be removed from the Board of Directors of the Appellant Company unless any one of the three cond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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