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TMI Blog2023 (2) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other significant documents establishing that any allotment or transfer of shares were made with the consent of the 1st Respondent or the legal heirs of Late Shri S.M. Mohan Lal. There is no Balance Sheet which has been filed by the 1st Appellant Company with the ROC and neither is there any record produced for having called any Annual General Meeting after issuance of notice to the Respondents about the purported sale - As per the Articles of Association of the Company, no person can become a shareholder in the 1st Appellant Company without the consent of the existing shareholders. A perusal of the documentary evidence on record establishes that the Respondents are entitled for ₹ 51% Shareholding, in the Company and the Memorandum of Understanding s in question, specifies that the above percentage, is to be maintained and the initial lease period of 11 years in question will not have any bearing. This ₹ 51% Shareholding, has to be maintained and without the Consent of the Respondent, who are holding ₹ 51% Shareholding, no Transaction, can be entered into by the Company, which would effectively dilute the Shareholding of the Respondents. At the cost of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llment of other conditions. It is further noted that the Balance Payment was to be made after 11 years. Thus, Respondent No. 1 has made the Balance Payment as Sale Consideration to KIADB on 27.07.2011, when the Sale Deed was executed in favor of the first Appellant. On 12.10.1998, Mr. S.M. Mohanlal requested KIADB to change the constitution of the firm from sole Proprietorship Concern to a Private Limited Company under the name and style of M/s. Regal Machine Tools Private Limited which was acceded by KIADB subject to the condition that Mr. S.M. Mohan Lal should hold 51% Shares of the Company till the expiry of lease period of 11 years. It is submitted that on 19.08.1994, the Appellants had requested KIADB for execution of the Sale Deed and KIADB had communicated that the Sale Deed shall be executed only if the original Allottee, Mr. SM Mohanlal continues to hold 51% of the Shareholding but there was no response to the request of the Appellant. It is submitted that finding no recourse, the Appellant approached the Hon ble High Court of Karnataka vide Writ Petition No.20762/2019 seeking direction for execution of Sale Deed in respect of the said premises . The sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, this Certificate cannot be relied upon. Learned Counsel for the Appellant argued that the proposal of purchasing 2,243 Equity Shares for consideration of Rs.53,83,200/- was made by the Respondents and the first Appellant entered into an MoU on 01.07.2011 with Respondents 1 to 4 and the said consideration amount was handed over vide Cheque No.582870 dated 31.08.2011, but it was never presented and was returned to the Respondent. Therefore, no transaction for purchasing 2,243 Equity Shares has ever been concluded. On 23.02.2012 an Extraordinary General Meeting ( EGM ) was called by the Appellant with an agenda to sell the property of the Company and a Resolution was passed by 91% of voting. On 11.12.2012, Respondents 1 to 4 filed a Petition before the Company Law Board ( CLB ) Chennai Bench bearing C.P. No.106/2022 under Sections 111, 235, 237, 397, 398, 402, 406, 542 543, for relief against Oppression and Mismanagement. On 28.12.2017, the third Respondent filed a Complaint CC No.224/2014 before the Special Court for Economic Offences at Bangalore. It is submitted that the Appellants had agreed with 51% of the Shares to be allotted to the Complaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eunder it was submitted that Respondents 1 to 4 owns 51% of the Shares for the first Appellant Company and the second Respondent is the Director thereof. The NCLT had rightly held that the Appellants had removed the Respondent a lifetime Director, in contravention of the Articles of Association and has set aside the EGM. It is contended by the Learned Counsel for the Appellant that the Appeal is barred by Limitation , and that the Appellants had obtained successive Certified Copies of the Impugned Order i.e., on 24.04.2019 30.04.2019 whereas the actual date of receipts of Certified Copy is stated as to 26.03.2019 and having received the Certified Copy way back on 26.03.2019, the Appellants failed to approach this Tribunal on time and only to cover the delay filed Certified Copies which were obtained later on. It is submitted that this Appeal is also preferred on behalf of Appellants 2 to 5, but the same is not supported by any Affidavit or signature on the Vakalatnama and that second Appellant is disqualified from being a Director under Section 164 of the Companies Act, 2013, (hereinafter referred to as The Act ) by the Hon ble High Court of Karna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohan Lal. There is no Balance Sheet which has been filed by the 1st Appellant Company with the ROC and neither is there any record produced for having called any Annual General Meeting after issuance of notice to the Respondents about the purported sale . 8. As per the Articles of Association of the Company, no person can become a shareholder in the 1st Appellant Company without the consent of the existing shareholders. 9. It is also seen from the record that the Writ Petition No. 20762/2009 filed by the Appellants against the 5th Respondent without arraying the other Respondents as parties for seeking execution of the sale deed, was disposed of with a direction to consider the request of the 1st Appellant Company in accordance with law and upon fulfilment of the other necessary conditions relating to execution of sale deed. The 5th Respondent had communicated to the Company that without the family members of Late Shri S.M. Mohan Lal holding 51 % shares and one of their family members being on the Board , the request for execution of any absolute sale deed, cannot be considered. This Tribunal is also conscious of the fact that as on the date of filing of Writ Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had addressed a letter dated 25.05.2011 to KIADB and certificate dated 01.06.2011 was issued by Shri NN Yuvaraj and Associates, Chartered Accountants which reads as under: This is to certify that Mrs. Kaushy Mohall al wife of Mohan Lal S.M, aged about 67 years residing at No. 36, 5th Cross, Nandidurga extension, Bangalore acquired 2243 equity shares of Regal machine Tools Company No. 39, 5th Cross, Bommasandra Industrial area, Bangalore on 05.05.2011. Further in addition to these her family members were holding 579 equity shares. Hence as on 31.05.2011 she and her family members were holding 579 equity shares. Hence, as on 31.05.2011 she and her family members put together holds 2822 equity shares being 51%. This certificate is issued after verification of required documents produced before me. Kindly, accept this certificate and do the needful. 14. It is reiterated that the main objective of the `Memorandum of Understanding , was for `Allotment of Land , in the name of the `Company , by `KIADB and Cheque No.582870 dated 31.08.2011 for Rs. 53,83,200/-, was for consideration for the `Shares to be issued, but the same was conditional . A perusal of the documentary evide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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