Renu Singh vs M/s IDIO Construction & Industrie (India) Limited

Balraj Joshi, Member (Technical)

This Court convened through hybrid mode.

The Petitioners have filed this Company Petition challenging several actions taken by Respondent Nos. 2 to 6 in respect of the affairs of the Respondent No.1 Company. The principal challenges in the petition are to the appointments of Respondent Nos. 2 to 6 as Directors of the Company; appointment of Respondent no.2 as Managing Director; the cessation of the Petitioner No.1 as a Director; and other acts of oppression and mismanagement including usurpation by Respondent Nos. 2 to 6 of registered office, assets, properties and bank accounts of the Company.

Submissions of Mr. Ratnanko Banerji, the learned Senior Counsel appearing on behalf of the Petitioners

This is the second round of litigation instituted qua the Respondent No. l Company. Earlier, a Company Petition had been filed before the Company Law Board, Kolkata Bench by Tirumala Infrabuild Private Limited under, inter-alia, sections 397 and 398 of the Companies Act, 1956 which was registered and numbered as C.P. No. 145 of 2013. The said Company Petition was thereafter transferred to this Tribunal and ultimately, C.P. No. 145 of 2013 was dismissed by this Tribunal by an order dated 07 June 2018. The said order was thereafter challenged before the Hon'ble NCLAT in an appeal registered and numbered as Company Appeal (AT) No.235 of 2018.

During the pendency of the appeal before the Hon’ble NCLAT, the principal parties in the appeal amicably settled their pending disputes and differences and had entered into a Memorandum of Settlement ("MoS") dated 10 March 2022. The MoS was executed on behalf of all the concerned parties except the Respondent Nos. 32 to 36 in Company Appeal (AT) No.235 of 2018 (who are impleaded as Respondent Nos. 2 to 6 in the present petition before this Tribunal).

By and under the MoS, the disputes were settled with the parties mutually agreeing to, inter-alia, the following:

a. The shareholding structure of Respondent No.1 Company as on 09.11.2011 would be restored.

b. The Board of Directors of the Company would be reconstituted with six Directors to be nominated by the settling parties.

c. Respondent Nos. 2 to 6 herein namely, Awadhesh Kumar, Harendra Singh, Baleshwar Singh, Uday Kumar and Niranjan Kumar Maurya would be removed from the Board of Directors of the Company.

Based on the MoS, an order dated 30 May 2022 was passed by the Hon'ble NCLAT whereby the Company Appeal (AT) No.235 of 2018 was allowed to be withdrawn, in terms of the conditions enumerated in the MoS dated 10 March 2022.

Despite notice and several opportunities given, the Respondents have remained absent and were set ex-parte as recorded in the order dated 10 June 2022.

Regarding the appointment of Respondent Nos. 2 to 6 herein as Directors of the Company, it is submitted that the purported appointments were made without notice to the Petitioners who control the majority shareholding of the Company and that the purported appointments were in contravention of the provisions of the Companies Act, 2013. The Respondent Nos. 2 and 5 were appointed purportedly on the strength of a Board Resolution passed on 19 April, 2019. As to the Respondent Nos. 3, 4 and 6, from the Master Data of the Company appearing on the Ministry of Corporate Affairs Portal, it appears that they were appointed on 20 May 2019.

The Minutes of Board Meeting dated May 20, 2019, at which Respondent no.2 was purportedly appointed as Managing Director, are signed by Respondent Nos. 3 and 4 also. The Petitioners submit that they have not been served proper notice for any such Board Meetings.

The appointments of Respondent Nos. 2 to 6 are illegal since there is no approval by the shareholders at any general meeting of the Company of such appointments. There is also no notice given to the Petitioners of any such purported board meetings or for any general meeting in this regard.

The Petitioners have also further challenged the cessation of Petitioner No.l's directorship at a purported Annual General Meeting of the Company dated 30 September 2019. The notice dated 09 September 2019 with respect to the AGM dated 30 September 2019 does not contain any agenda for retirement of Petitioner No.1 as Director. From the resolution dated 30 September 2019 disclosed in the petition, it does not appear that any shareholders of the Company even attended the general meeting and the extract of the resolution passed for retirement of Petitioner No.1 from the Board is only signed by Respondent No.2 in his capacity as Managing Director.

The Respondent Nos. 2 to 6 do not hold any shares in the Company and thus, none of them have any right to vote on any resolutions at any general meeting. It is also the Petitioners' specific case that the Respondent Nos. 2 to 6 have fraudulently entered into the Company after the death of the Petitioner No.1's husband, Late Krishna Nand Singh on October 15, 2019. Late Krishna Nand Singh was one of the founder Directors of the Company and held 65.93% shareholding of the Company.

Findings

The MoS was submitted before this Bench during the hearing of the Company Petition.

In view of the aforesaid facts and the Memorandum of Settlement dated 10 March 2022 and the order dated 30 May 2022 passed by the Hon'ble NCLAT, we accept the terms and conditions of the Memorandum of Settlement and the parties to the Memorandum of Settlement are at liberty to effect necessary changes in the books and records of the Company in accordance with the matters agreed in the Memorandum of Settlement, including the restoration of shareholding position as on to 9.11.2011, and to file appropriate returns and forms with Registrar of Companies, Bihar.

The Registrar of Companies, Bihar shall accept filing of all forms that are required to be filed in terms of the aforesaid directions. It is made clear that since Respondent Nos. 2 to 6 are hereby removed as Directors, the Petitioner No.1 who stands reinstated as a Director, is hereby authorized to file all requisite forms including forms DIR-12 to reflect the changes in the Board of Directors and forms to reflect changes in shareholding structure of the Company, and the same shall be accepted by Registrar of Companies, Bihar.

Regarding the reconstitution of the Board of Directors as recorded in the Memorandum of Settlement dated March 10, 2022 in clause 3.9 (i) thereof, the Petitioners are at liberty to convene a general meeting of the Company in compliance with the provisions of the Companies Act, 2013 for such purpose.

Nothing herein above shall be deemed to be approved or granted which is otherwise impermissible in law.

Leave is granted to the parties to approach this Tribunal for redressal in case of breach of any directions contained in this order.

Further in view of the above settlement, C.P No. 191/KB/2021 is disposed of accordingly.

A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.