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TMI Blog2023 (6) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... and were not convened as Article 87(iii) of the AoA and that their nominee Director was not present only because due process of service of Notice was not followed. It is seen from the record that the Board Meetings dated 02.11.2009, 10.11.2009 25.10.2010 which the Appellant is strongly contesting are illegal, null void, are the dates falling in between the aforenoted admitted Board Meetings and being a majority Shareholder the Appellant has failed to adduce any evidence in support of his case that these Board Meetings were not conducted as per procedure of Law specifically taking into consideration that Mr. Jason Van Hoong, who has based in Singapore and China has not chosen to attend a single Meeting either personally or through video conference. This Tribunal is of the view that the Appellant has not denied the submission of the Respondent before the NCLT regarding the entries in the passport of Mr. Jason Van Hoong standing testimony to the fact that he had never attended any of these Meetings in India. It is stipulated in Section 283 of the Act that if a Director absents himself from three consecutive Meetings of the Board of the Directors or from all Meetings of the Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mp. App. (AT) No. 248 of 2019/TR) TA No.72/2021 (Comp. App. (AT) No. 247 of 2019/TR) - - - Dated:- 14-6-2023 - [ Justice M. Venugopal ] Member ( Judicial ) And [ Ms. Shreesha Merla ] Member ( Technical ) For the Appellant : Mr. P. H. Arvindh Pandian , Sr. Advocate Mr. Aditya Kumar , Advocate For the Respondents : Mr. Bharath , Advocate for R1 to R3. Mr. Kirit S. Javali , Advocate for R4 JUDGEMENT [ Per ; Ms. Shreesha Merla , Member ( Technical ) ] : 1. Challenge in these Appeals viz. TA Nos.71 72/2021 (Comp. App. (AT) Nos. 247 248 of 2019) is to the Impugned Order dated 26.07.2019 in C.P. No.07/2013 (T.P. No.43/2016) and C.P. No.09/2015 (T.P. No.71/2016), passed by the NCLT (National Company Law Tribunal, Bengaluru Bench), whereby and whereunder the NCLT has dismissed both the Company Petitions. 2. Facts in brief are that C.P.07/2013 was filed by the Petitioner / Appellant herein before the Company Law Board, Chennai under Sections 397, 398, 399, 402, 406 542 of the Companies Act, 1956 (hereinafter referred to as the Act ) seeking to declare the Meetings of the Board of Directors of the first Respondent Company/M/s. MetroCorp Infrastructur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany in favor of the fourth Respondent. It is submitted that the Mortgages mentioned MetoCorp Samsara Housing Private Ltd. which is a family owned Company under the direct control and management of R-2 R-3 as the receiver of the Mortgaged Funds. 6. The Appellant has challenged four impugned Board Meetings 02.11.2009, 10.11.2009 25.11.2009, on the ground that no Notice was issued to the Appellant and further despite several directions by the NCLT vide Orders dated 11.12.2018, 10.01.2019, 05.02.2019 25.02.2019, the second and third Respondents have failed to provide any documentary evidence of Notices having been served. 7. It is submitted by the Learned Sr. Counsel for the Appellant that the Mortgage Board Meetings were not convened as per the AoA as Article 87(iii) of the AoA states that the quorum for the Board Meetings requires two Directors with at least one Director each from the Promotors and the Appellant. If the quorum is not present within 120 minutes specified for the Board Meetings, it will have to be adjourned for seven days after the original date of the Meeting. If the quorum is not present again in the adjourned Meeting within 30 minutes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money trail of payment to MetroCorp Samsara Housing Pvt. Ltd. 10. It is submitted that NCLT has failed to take into account that the documents filed by Respondents are fabricated as it can be seen from the Notice dated 24.06.2013 for convening a Meeting on 30.07.2013 was issued by the second Respondent in his capacity as a Director and on the same date the alleged Notice was issued by Members for convening an EOGM under Section 169(6) of the Act signed by R-2 and addressed to the Board. 11. There were no statutory filings made to the Registrar of Companies ( RoC ) for increase in Share Capital, shares issued to Shareholders, transfer of shares or appointment of new Directors. NCLT has erroneously held that since the Appellant was a majority Shareholder in control of R-1, R-2 could not have carried out the oppressive Acts as detailed by the Appellant . It was not considered by NCLT that if a majority Shareholder is reduced to a minority by oppressive Acts of the Company, the said Act is termed oppressive by themselves. Learned Counsel placed reliance on the following Judgements in support of his submissions: IL FS Trust Co., Ltd. Vs. Birla Perucchini Ltd. (2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the continuous effects of such oppressive acts, to undo the effects and to regulate the affairs of the R-1 company in future, the present petition deserves to be allowed. A clear case of oppression has been made out, the conduct of the respondents have been harsh, burdensome, against probity and good conduct. Once conduct is found to be oppressive under Sections 397 and 398, the discretionary power given to the Company Law Board under Section 402 to set right, remedy or put an end to such oppression is very wide. The Respondents have been involved in continuous acts of oppression against the Petitioners and the present petition deserved to be allowed in favour of the Petitioners. 58. In view of the foregoing, C.P. No. 37 of 2004 stands allowed. The R-1 Company is hereby directed to restore the position of shareholding as reflected in its Annual Returns for the years 2002/2003 and allotment of shares to Respondents is hereby set aside, all Statements/ Statutory Forms filed in this regard with the ROC are held to be invalid, all resolutions passed in Board Meetings/ AGM/EOGM are hereby cancelled, the R-1 Company is hereby directed to rectify its Register of Members and Shares R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SPA ( Settlement Plots ). The consideration received from the sale of these Plots would be used to fund the purchase of the Appellant's shares under clause 2.3.5 of the SPA, the parties agreed that these Plots should not be transferred or disposed of in any other manner; that R-1 would execute an unregistered GPA for three Plots of lands in favour of the Appellant (Schedule C of the SPA) ( Appellant's Security ). R-1 would also execute a registered special power of attorney, which would give the right to the Appellant to register the aforesaid unregistered GPA. 14. The Settlement Agreement was subject to the completion of certain conditions as detailed in the SPA ( Condition Precedents ) and the Respondents and Purchaser were to provide documentary evidence regarding their completion to the Appellant: (i) Obtain permission from Bangalore International Airport Area Planning Authority for the sale of 52 Plots; (ii) Obtain nil-encumbrance certificates from appropriate authorities, which would confirm that no encumbrance exists on the Plots, and all other consents, governmental approvals, permissions, sanctions, and approvals as may be applicable and requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 29.09.2016, the Appellant as per Clause D has agreed to sell the shares in an as is where is condition to Sharadamba Developers Pvt. Ltd. As per Clause 12.2 of the MoU the parties have agreed that all arrangements and Agreements entered into between the parties prior to the MoU are all superseded. The Appellant and the first Respondent have agreed to resolve the subject matter by way of sale of shares and accordingly agreed to resolve the subject matter by making a Joint Application before the NCLT. Therefore, under these circumstances, nothing survived under this Appeal . 18. R-4, i.e., Rajesh Exports Ltd. submitted that M/s. MetroCorp Samsara Housing Pvt. Ltd. representing by its Managing Director i.e., R-2 approached this Respondent seeking ICD and upon conducting due diligence and following all required procedures, R-4 decided to give ICD to them upon the terms that MetroCorp mortgages its properties for securing the same. As per the ICD Agreement Rs.32,46,00,000/- was remitted to M/s. MetroCorp Samsara Housing Pvt. Ltd., subsequent to which MetroCorp passed Resolutions dated 02.11.2009, 10.11.2009, 25.10.2010 authorizing R-2 to create a Mortgage in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase II Projects under a new SPV and also convinced that MetroCorp should be converted into a Public Limited Company for investing in CCDs. MetroCorp was holding a development of rights of Samsara Project Housing Pvt. Ltd. in which Respondents 2 3 were holding 99.9% Equity, but after incorporation of the first Respondent Company, R-2 R-3 were compelled to part with 60% of the shareholding into one M/s. Quantum Reality Private Limited which was the front Company of Mr. Manish Parwani for holding their kick back stake in the Project; that though R-2 R-3 were inducted as Directors in the Company Quantum they were not allotted a single share. It is pleaded by the Respondents that despite repeated calls and requests to Mr. Manish Parwani and the employees of the Appellant / Petitioner for release of the second tranche, there was no response. 21. It is seen from the record that it is an admitted fact by the Appellants themselves that Board Meetings were conducted on 29.10.2008, 25.02.2009, 23.06.2009, 02.09.2009, 27.12.2010, 18.03.2011, 05.10.2011 17.10.2011, but it is the case of the Appellants that the four Board Meetings dated 02.11.2009, 10.11.2009 25.10.2010 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or is ceased to be a Director. The Additional Director, Mr. Surendar Singh, whom the first Respondent contended that was appointed illegally ceases to be an Additional Director after the next Annual General Meeting ( AGM ) of the Company. The contention of the Learned Counsel for the Appellant that no proper quorum was present in the instant case is not acceptable, keeping in view the fact that their nominee Director Mr. Jason Van Hoong had never attended the Meetings. Being a majority Shareholder with 75% Equity the Appellant has not given any substantial reasons as to how the second Respondent was left as the sole Director and their response to the letter dated 24.06.2013 addressed to Sh. Manish Parwani CEO of Pramerica India by R-2 and also the letter dated 02.06.2019 addressed to M/s. Victoria Sharpe Singapore raising the issue of collusion of Pramerica and its officials illegally usurping 60% of the Equity Stake in the Nirvana Project. The Appellants have not filed any material/documents in support of their contention that being a majority Shareholder they had taken all the steps to be lawfully involved in the Project through their Directors. 24. It is evidenced from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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