Sumer Dutt And Another vs Doon Industries & Agencies Private Limited And Others

Rajesh Dayal Khare, Member, Judicial

The present petition has been filed under Sec 242/ 244 of the Companies Act 9013 read with NCLT rules, 2016 against the oppression and

mismanagement in the affairs of the Respondent No. 1 company.

As per the averments made in the petition, at the time of incorporation of the company, the first directors as mentioned in the Articles of

Association were Sr. Ramesh Chand Jain, Smt. Shail Dhingra and Smt. Sundesh Bala. Later the Sharelioiding of the Respondent Company has

changed hands from its first directors by way of sale which was effected by means of Share Transfer Forms under Section 108(1A) of the

Companies Act, 1956. Accordingly, the share certificates were also prepared and the shares were duly transferred to various persons and all the

shares of the Company ultimately came to be purchased by the Petitioners no.1 and 2.

Accordingly, Sumer Dutta “referred to as petitioner No. I†came to hold 2290 shares out of total 2300 shares and was appointed as a whole

time director on 05.12.2007 and remained as director till 05.08.2014 and then he resigned from the directorship under Section 168 of the Companies

Act, 1956 and Sanjay Lakhotia “referred to as petitioner No. 2†became the holder of the remaining 10 shares of the company and was

appointed as a director on 20.09.2009 in the Respondent Company, who also resigned from directorship on 05.08.2014 along with Petitioner No.1.

Thus, the Petitioners being the only directors and shareholders of the Company have been duly filing the Annual Returns and other required

financial statements on behalf of the Respondent Company.

Itis further submitted that the Petitioner filed copy of Form 20B for the filing of Annual Return for the financial year 2013-14 which was submitted

before the Registrar of Companies on 30.06.2014. Further stated that they have also duly filed Form 23AC for filing the Balance sheet and the other

financial documents with the Registrar of Companies.

Further submitted that as the Petitioners were desirous of selling their stake in the Company, has entered into certain negotiations with Respondent

No.2 and 3 and in August 2014 and they enter into an unwritten agreement that on the payment of Rs.20,00,000/- (Rupees Twenty Lacs Only), the

Petitioners no. | and 2 would transfer its entire shareholding in favour of the Respondents No.2 and 3. It was also agreed that initially a payment of

Rs.2,30,000/- (Rupees Two Lacs only) would be made, upon which the petitioners would resign from directorship and after the payment of the

balance amount of Rs.17,70,000/- (Rupees Eighteen Lacs only) the shares held by the Petitioners would also be transferred in the name of the

Respondents. Accordingly the Respondents paid the initial amount of Rs.2,30,000/- anid according to the terms of the unwritten settlement the

Petitioners resigned from their posts of Directors with effect from 05.08.2014 under Section 168 of the Companies Act and Jitendra Prasad Verma

“referred to as Respondent No. 2†was nominated as the Director of the Respondent Company. However, the Respondent failed to make the

payment of the balance amount of Rs.17,70,000/- (Rupees Eighteen Lacs Only) and resultantly the sharcholding of the Company was not transferred

by the Petitioners, who continued to own the entire shareholding of the Company.

It is further submitted that as on 20.06.2018, the respondents have filed the ea Return for the Financial year 2014-15 by filing Form No. MGT-7, as

well as the financial statements and other mandatory documents before the ROC, where in, they have shown themselves not just as directors of the

Respondent Company but also as shareholders and further removed the name of the petitioners.

It is further submitted that the transfer of shares are done illegally and fraudantly as there is no certificate showing the transfer of shares in favour

of the Respondents filed before the ROC. Thus aggrieved by the act , the petitioners who are indeed 100% shareholders of the company has called

for an Extra Ordinary General Meeting for passing the resolution for removal of the Respondents No.2& 3and thus issued a special notice dated

05.09.2016 to the Board of directors to move the Resolution for removal of Respondent No. 2 & 3 as directors and to fill that casual vacancy so

arising by the appointment of Petitioner No. 1 & 2 respectively.

Further Respondents were also issued letters dated 09.09.2016 by the company to file their representation against their removal as directors and the

notice scheduling the General meeting of the shareholders of the Respondent Company on 10.10.2016, for passing ordinary resolution for removal of

Respondent No. 2 & 3 and appointment of Petitioner No. 1 & 2 as directors were duly published but respondents have neither respond to the notice

nor attended the meeting.

Further respondents have changed the address of the company and in the month of November, increased the subscribed shareholding of the

company from 2,30,000/- to Rs. 10,00,000/ without any intimation to the petitioners.

Thus contended that the Respondent-Directors have sought to illegally deprive the petitioners of their legitimate share-holdings in the

respondentcompany and have thereby committed serious act of oppression and mismanagement by manipulation of records and committing a breach

of trust of the petitioners.

Further it is matter of record that the notices were issued to the respondents which were duly served to the respondents by post as well as paper

publication was also made which shows that service was sufficient upon the respondents but inspite of various opportunities being granted, the

respondents chose not to appear and thus on | 1.12.2019, the matter was fixed ex partee hearing.

After hearing the learned counsels for the parties and pursuing the documents annexed there with, this Tribunal observes that as the share transfer

form annexed as Annexure P-2 of the petition reflects that the entire shareholding has been srinetarted to the petitioners from its first directors and

further the share certificates are still in possession of the petitioners and has not been transferred to anyone which is evident from the fact that there is

no share transfer form or any share certificate filed before the ROC showing transfer of shares in favour of the respondents, thus it shows that the

petitioners are still holding entire100% shares of company.

In view of the above facts and circumstances this tribunal is of the view that +t is clear that there are instances of oppression and mismanagement

in the company as although the petitioners have resigned from the directorship of the company by means of Form DIR-12 but reducing, their

shareholding from 100% to 0% is an oppressive act on behalf of the respondents.

Thus, the respondents acts are held to be oppressive to the petitioner, and there has been mismanagement in the respondent company, hence the

petition deserves to be allowed.

Thus, this tribunal declare that the annual Report and records of the company submitted by the respondents for the FY 2014-15 filed with

Registrar of Companies, in which the respondents are shown as shareholders of the company is directed to be cancelled, Further reducing the

shareholding of the petitioners from 100% to nil and changing the registered address of the company without any intimation to the petitioners is

declared as void and illegal.

Further Registrar of Company (Kanpur) is directed to file compliance report within one month from the date of the order.

A copy of this order to be communicated to Petitioners, Respondents as well as to ROC (Kanpur).

Accordingly, the Petition stands disposed off.