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TMI Blog2022 (6) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... inter alia seeking the following prayers: I. To declare that the acts of the Respondent No. 2 and 3 are oppressive and prejudicial to the interests of the 1st Respondent Company and the Petitioner. II. (a) The Board of Directors of the Company be superseded and an Administrator and/or Special Officer be appointed to take charge over the management and affairs of the affairs of the Company and of all books, papers, records and documents of the Company as well as its assets and properties; (b) Alternatively, a Committee be constituted by this Hon'ble Board consisting of the representatives of the petitioners to function as such Administrator and/or Special Officer for management and control of the affairs of the company on such terms and conditions as to this Hon'ble Tribunal may seem fit and proper; III. To direct the Respondents to allot 75,000 Equity Shares of Rs. 100/- each to the Petitioner as against the allotment of 75,000 6% Non-Cumulative Non-Convertible Preference shares allotted to the Petitioner on 7/9/2010; IV. To set aside the transfer of 75,000 Equity Shares from the Petitioner to the 2nd Respondent that were illegally transferred on 4/4/2011 and conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the money and infused the said amount vide Cheque No. 952451 dated 23.08.2010 drawn on South Indian Bank. The 1st and 2nd Respondents who were also the 1st Directors of the R1 Company assured that Equity Shares would be allotted to the Petitioner for the amounts invested by her. 5. It is also stated that the 2nd Respondent visited the house of the Petitioner in Trivandrum with some documents and obtained signatures of the Petitioner on various documents stating that it was for the purpose of allotment of Equity Shares of the company, and believing and trusting the 2nd Respondent's words, the petitioner signed some papers. 6. It is further stated that later the 2nd Respondent once again approached the Petitioner and informed the Petitioner that for the purpose of obtaining Broadcasting License from the Ministry of Information and Broadcasting, the Company needs to show assets worth Rs. 2.50 crore. The Petitioner immediately offered her personal properties worth Rs. 2.50 crore in order to enable the Company to obtain the license from the Ministry. At that time also the 2nd Respondent obtained the signatures of the Petitioner in a few more documents stating that the same was req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner suffered a loss of Rs. 75 lakh and on the other hand, the Respondents, without investing any money have become the majority shareholders in the Company. 9. It is also stated that the 2nd Respondent had taken Rs. 1.50 crore from Petitioner's investment and Rs. 9.55 crore worth of assets for providing financial security and also as the start-up capital of the company with the promise that it would also be considered as the petitioner's share capital in the company. However, after investing the money the Petitioner was told by the Respondents that she was appointed as Director of the Company and that her name is shown in all the diaries of the company. In the diary published by the company from 2012 to 2016, it is shown that the Petitioner is the Director and Vice - Chairman of the company. Though the Petitioner was shown as Director in the diaries, the Respondents do not seem to have appointed the Petitioner as a Director formally and filed the form with ROC. The petitioner states that by showing the diaries, the Respondents were cheating her. Apart from that, by not allotting 1,50,000 Equity Shares of Rs. 100/- each, the 2nd and 3rd Respondents also transferred 75,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents have illegally changed the composition of the Shareholding Pattern and have taken complete control of the Company. COUNTER FILED ON BEHALF OF THE 1st TO 3rd RESPONDENTS BY THE 2nd RESPONDENT 13. The 2nd Respondent submits that 1st Respondent Company was promoted and incorporated by the 2nd and 3rd Respondents in 2010. Till date, the 2nd and 3rd Respondents have exclusively managed the 1st Respondent Company and are the sole Directors. The 1st Respondent Company commenced commercial activities in the year 2011 with a total investment of Rs. 27,00,00,000/- out of which on 23.08.2010, a sum of Rs. 1,50,00,000/- (5.5%) was remitted by the Petitioner. The Petitioner was initially allotted 75,000 equity shares of Rs. 100/- (Rupees hundred) and 75,000 preference shares of Rs. 100/-. The Application for the issue of preference shares is dated 22.08.2010. The decision of the 1st Respondent Company is applicable to all the investors other than the 2nd and 3rd Respondents, who were the promoters and was to allot shares to them at premium of Rs. 660/- per share. The Petitioner transferred her 75,000 equity shares to the 2nd Respondent on 02.04.2011. The Petitioner was thereafter al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down by the Hon'ble Supreme Court of India in Dale and Carrington Investment (P) Ltd. And Anr. Vs. P.K. Prathapan and Ors. - AIR 2005 SC 1624 to the effect that conversion of the existing majority into minority or vice versa is by itself an act of oppression. The very intention and the motive behind the Company Petition are therefore to illegally, improperly misrepresent, and suppress facts and in the most unjustified and unreasonable manner take a controlling shareholding in the R1 Company, which even to the knowledge of the Petitioner is a flourishing business enterprise. They submitted that the Petitioner is guilty of willful laches, negligence, and misrepresentation as well as misleading averments in an attempt to illegally and improperly gain control over the R1 Company. 17. The learned counsel for the Respondents concluded the arguments and stated that the Petitioner cannot be permitted to be converted into a majority shareholder when admittedly she has never done anything in or in relation to the R1 Company except the initial investment of Rs. 1,50,00,000/. These Respondents have offered to buy out the Petitioner's shares at a valuation or on payment of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Company. Petitioner came to know about the allotment of Preference Shares in the year 2016 and immediately the Petitioner lodged a complaint with the Police Department and Crime No. 235/2016 was registered by Thodupuzha Police Station, Kerala against the 2nd and 3rd Respondents. The 2nd Respondent approached the Hon'ble High Court of Kerala by filing Crl. M.C. No. 1890/2016 for quashing the FIR which was dismissed by the Hon'ble High Court vide order dated 21.12.2016 and thereafter the 2nd respondent challenged the order of the Hon'ble High Court before the Hon'ble Supreme Court by filing SLP, which was also dismissed by the Hon'ble Apex Court vide its order dated 25.04.2018. 21. While considering the above circumstances in order to arrive at a clear conclusion in the matter, vide order dated 02.01.2020 this Tribunal directed as under:- "Learned counsel for the petitioner is present. Learned counsel for the respondents are represented by a proxy counsel. Both sides stated that they have filed memos suggesting names of chartered accountants. Counsel for the petitioner stated that he has no objection to appointing any one of them. In view of the submission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the 1st respondent company was realized by appropriating the credit balance in the account of Ms. Laly Joseph. The account of Ms. Laly Joseph was credited in the books of accounts of the company on 30.09.2011 by debiting the account of Mr. Nikesh Kumar, the 2nd respondent. It appears that this entry was shown in the books of accounts of the company to recognize the value of 75,000 equity shares with a face value of Rs. 100 each transferred by Ms. Laly Joseph in favor of Mr. Nikesh Kumar, the 2nd respondent, on 04.04.2011 for a consideration of Rs. 75,00,000/- (Rupees Seventy-Five Lakhs only). The statement shows receipt of consideration by the 1st respondent company for the allotment of 75,000 equity shares with a face value of Rs. 75,00,000/- (Rupees Seventy-Five Lakhs only) made on 07.09.2010 and 10,000 equity shares at a premium of Rs. 650 per share for a value of Rs. 75,00,000/- made on 30.09.2011 to Ms. Laly Joseph. It is also pertinent to consider the submission of the Chartered Accountant that facts or explanations stated in the report, could probably arise due to the non-receipt of the evidence in support of the identity (i.e., name) of the persons involved, from whose a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conduct of the affairs of the Company will not, normally persuade a Court to interfere in the matter and it is only when the court has reliable information before it, where the majority acts are against the provisions of the Articles of Association or the statute covering it, or makes any arbitrary use of the majority powers, resulting or likely to result in financial loss or where action could be characterized as unfair and improper, the court will exercise its powers under Sections 397 and 398 of the Companies Act, 1956". 27. From the above it is clear that if the majority acts are against the provisions of the Articles of Association or the statute covering it, or makes any arbitrary use of the majority powers, resulting or likely to result in financial loss or where action could be characterized as unfair and improper could have arisen only when Company starts its operations. The understanding or promises made between two parties before the incorporation of the company cannot be considered as an oppression and mismanagement in the Company under Section 241-242 of the Companies Act, 2013. 28. Taking into consideration of the facts and circumstances of the present matter it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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