A. Bandopadhyay - (1.) IN this order I am considering CP No. 450/2011 filed by petitioner Nos. 1 to 6 against the respondent -company in the name of Alliance Engineers (P.) Ltd. and 4 other respondents under sections 111, 186, 235, 397, 398, 399, 502, 403, 406 and 407 of the Companies Act, 1956 ('the Act'). Briefly stated the facts of the case are as under, as per averments made in the petition: (i) Alliance Engineers (P.) Ltd., respondent No. 1 -company (the company), was incorporated on 26th March, 1946 as a limited company and subsequently converted into a private limited company, limited by shares under the Act. As per the records available from the MCA Portal, the registered office of the company has been indicated as 67B, Netaji Subhas Road, Kolkata -700 001. (ii) As per the latest available balance sheet for the financial year ending on 31st March, 2008, the authorised share capital of the company is Rs. 5,00,000 divided into 50,000 equity shares of Rs. 10 each and the issued, subscribed and paid -up share capital of the company is Rs. 2,46,000 divided into 24,600 equity shares of Rs. 10 each. (iii) The petitioners are all individuals holding 39 per cent shares (shareholders but not yet registered as members) of the company as per the following details: (iv) The respondent No. 1 is the company, i.e., Alliance Engineers (P.) Ltd. and respondent Nos. 2 to 4 are directors of the respondent No. 1 -company. The respondent No. 5 is the Bank which has given loan to respondent No. 1, i.e., the company and accordingly, the respondent No. 1 has created a charge on its assets in favour of respondent No. 5. (v) Altogether there were 40 members being shareholders of the company, out of which 28 of the members were employees of the company. Amongst the member employees being 28 in all, 6 such employees were directors of the company. (vi) The company was in very bad financial position and had various liabilities including dues pertaining to 28 employees aggregating to Rs. 28,16,000 and the secured loan of more than Rs. 1,25,00,000 outstanding with the West Bengal State Co -operative Bank Ltd. The loan has been secured long back by creating a charge on the property being 83B, Chetla Road, Kolkata 700027, with effect from 30th August, 2005. (vii) In order to ensure the payment of all dues to the employees of the company and repayment of the bank loan, the aforesaid 6 directors of the company approached respondent Nos. 2 to 4 to take over all assets and liabilities including the dues of the employees and outstanding secured loan in respect of the company and manage affairs of the company in the best interest of all stakeholders. Accordingly, memorandum of understanding ('MoU') dated 10th February, 2009 was entered into as per decision taken on 31st January, 2009 whereby, the then existing directors resigned from the Board of directors and handed over the control of the company to respondent Nos. 2 and 4, in pursuance of the same, 5 out of the 6 directors resigned from the Board of the company with effect from 31st January, 2009. The respondent Nos. 2 and 4 were appointed as additional directors in the Board with effect from 31st January, 2009. It was agreed that the payment as per clause 12 of the MoU will be met by respondent Nos. 2 and 4 within 1st April, 2009. As per the said clause of the MoU, a group of employees will resign and take the package as mutually agreed in every quarter of the year and total package should not exceed Rs. 95,00,000 and an advance amount of Rs. 75,000 per head of existing workers and employees will be paid within 1st April, 2009. However, respondent Nos. 2 and 4 failed to make the payments as promised in the aforesaid MoU. (viii) It has been alleged by the petitioners that respondent Nos. 2 and 4 took control of the assets, records, documents, etc., of the company, but failed to address the promise of payments in respect of the employees and the Bank. (ix) Since respondent Nos. 2 to 4 failed to discharge their obligations under the MoU, 28 employees of the company approached Guru Forging and Agrico (P.) Ltd. ('Guru Forging') and petitioner No. 1 to bail them out of the trouble and financial crisis which arose in the instant case. Guru Forging is the claimed owner of the property being 83A, Chetla Road, Kolkata 700027, which is next to the property of the company at 83B, Chetla Road, Kolkata 700027. Guru Forging happens to be a closely held private limited company owned and managed by the petitioners. (x) As per averments made by the petitioners, Guru Forging along with the petitioners finally accepted to take over the assets and liabilities of respondent No. 1 -company due to proximity of the property of Guru Forging and respondent No. 1 -company and started negotiation with the bank. An amount of Rs. 97,000 per head and another Rs. 1,00,000 per person aggregating to Rs. 28,16,000 was paid by Guru Forging to all 28 employee -members of respondent No. 1 -company towards the dues of such employees. The petitioner No. 1 along with family members purchased 10,295 shares from 28 member -employees of respondent No. 1 -company. (xi) Petitioner No. 1 visited the registered office of the company to meet respondent Nos. 2 to 4 and discuss the matters amicably, but was surprised to see that no registered office of the company existed at the subject address and there was another party in the subject premises who claimed that they have purchased the same from respondent Nos. 2 to 4 and paid huge sum to them for the same. (xii) The petitioners sent all the duly executed share transfer forms (Form 7B) along with all the original share certificates and all other relevant papers to the company at the available registered address vide letter dated 30th April, 2011 by Speed Post with acknowledgement due, on 2nd May, 2011. The aforesaid final request letter for transfer of shares was returned back by the post office undelivered. The transferors have confirmed that they have transferred full, complete and undisputed title in the subject shares to the petitioners after the MoU became infructuous and the full consideration has been stated to have been received in this regard. (xiii) Respondent No. 2 has wrongly filed Form No. 2 with the Registrar of Companies ('RoC), West Bengal under his own digital signature showing an allotment of 25,400 equity shares to his own self on 5th January, 2010 and has also appointed respondent No. 3 as additional director of the company with effect from 5th January, 2010. (xiv) Respondent Nos. 2 to 4 have to call, hold and conduct annual general meetings ('AGMs') of the company with respect to financial years ending 31st March, 2009, 31st March, 2010 and 31st March, 2011 and to file the accounts and annual returns of the company with RoC, West Bengal. (xv) It has been alleged by the petitioners that respondent Nos. 2 to 4 are acting only for vested interest and are attempting to scrap the petitioners from all matters of importance concerning the company. It has been apprehended that the valuable properties/assets of the company have been/are in the process of being alienated and/or sold and/or transferred. (xvi) It has also been alleged that respondent Nos. 2 to 4 have taken away all the books of account, registers, records, documents, papers, etc., pertaining to the affairs of the company and at present no such books of account and documents are available with the petitioners or the transferors. Based on the above facts, the following main challenges have been raised by the petitioners in the instant petition: (a) MoU dated 10th February, 2009 entered into by respondent Nos. 1, 2 and 4 with the transferors was not adhered to by the respondents and they fail to pay the consideration as indicated in para 12 of the said MoU to the transferors. (b) In spite of failure to adhere to the terms of the MoU, respondent Nos. 2 to 4 took over the entire management and control of respondent No. 1 -company. (c) Respondent No. 2 signed Form No. 2 for allotment of 25,400 shares to his own self in order to create artificial and illegal majority. No money has been received by the company for the purported allotment of 25,400 shares to respondent No. 2. (d) After buying 10,295 equity shares being 39 per cent of the paid -up share capital of the company by paying due consideration to the transferors, the petitioners sent the duly executed share transfer deeds along with the share certificates to the company, but respondent Nos. 2 to 4 failed to take any steps to register the same. (e) Respondent Nos. 2 to 4 illegally sold off the registered office of the company and no Form 18 was filed for shifting to the new registered office. (f) The last AGM was held in 2008 and thereafter no AGMs have been held in 2009, 2010 and 2011. (g) Filing of balance sheet is mandatory regardless of whether AGM has been held or not under section 220(2) of the Act and the offence is punishable under section 162 of the" Act. The respondents have failed to file the balance sheet of the company for the aforesaid years, i.e., 2009, 2010 and 2011. (h) The Board of directors comprised of respondent Nos. 2 to 4, all being additional directors, have ceased to function in office way back on 30th September, 2009, but still they are representing themselves as directors. (i) The respondents have continuously avoided online recording of the charge created on the property of the company (being 83B, Chetla Road, Kolkata 700027) in favour of the West Bengal State Co -operating Bank Ltd. for loan amount of Rs. 75,00,000, presently aggregating to more than Rs. 1,25,00,000 including outstanding interest. However, as per index of charges at MCA Portal, no such charge appears against the assets of the company. (j) The sole purpose of wrongful and illegal acts of respondent Nos. 2 to 4 is to usurp the control of the company for their personal benefit and to convert the company into a shell or in the alternative, to transfer the assets and business of the company to third party.
(2.) AS against the above challenges and the various issues raised by the petitioners, the replies on behalf of the respondents, in brief, are as under: (i) The petitioners are strangers and have illegally purchased shares from some ex -employees/workers of respondent No. 1 -company without any authority or prior intimation. The impugned shares have been purchased contrary to the provisions of memorandum and articles of association of the company. (ii) The petitioner No. 1 with the help of ex -workers, captured the factory premises of respondent No. 1 -company at 83A, Chetla Road, Kolkata 700027. The tenancy right of respondent No. 1 -company on the aforesaid premises has been seriously affected due to illegal acts of petitioner No. 1 in collusion with ex -workers. The valuable property of respondent No. 1 -company, i.e., hypothecated stocks and plant and machinery of respondent No. 1 -company have been removed and misappropriated without any authority and due process of law. Against such acts of petitioner No. 1, respondent No. 1 through respondent No. 3 had lodged specific complaint against petitioner No. 1 and other offenders to the Police authorities, Minister in -charge, other officials of Government of West Bengal and RoC, West Bengal and the officials of the West Bengal State Co -operative Bank Ltd. (iii) The petitioners created various disturbances by not allowing the present management to enter the factory premises of respondent No. 1 -company at 83A and 83B, Chetla Road, Kolkata -700027 and caused mischief, theft or misappropriation of stocks, machineries and valued papers and documents from factory premises. (iv) The present company petition has been lodged by the petitioners not for any valid reason, but to put unnecessary harassment to the respondent -company and its managing director with ill and arbitrary motive to grab the property of the respondent -company for their vested interest. (v) The transferors of shares to the petitioners as well as Guru Forging have not been made parties to the present proceeding and, thus, the instant petition is adversely hit by the principle of non -joinder of parties and the petition is not maintainable on this point alone. The alleged transactions on account of transfer of shares from the former workers are totally vague and manufactured and the same cannot be entertained by any court or authority thereof including the hon'ble Company Law Board ('CLB'). (vi) The petitioners are not shareholders of the respondent -company and their names do not appear in the register of members and on this ground alone, the petition is liable to be dismissed. (vii) The present petition is also otherwise not maintainable on the ground that the factory premises of the respondent -company allegedly owned by the petitioners, through Guru Forging, b)' way of purchase has not been established because such property has been allegedly acquired without intimation by letter of allotment either from the said Guru Forging as purchaser thereof or the concerned landlord, viz., Shri M.N. Mukherjee and his other 3 brothers giving the purported approval. The relevant issue is a subject -matter of civil dispute and such civil dispute can only be entertained by the civil court for which hon'ble CLB has no jurisdiction to adjudicate on this issue. (viii) One criminal case being Chetla PS Case No. 95/2011 is pending, wherein Shri Kishori Lal Agarwal, petitioner No. 1, is main accused along with other accused persons and without considering the said criminal case by the concerned Magistrate of Criminal Court and result thereof, this hon'ble CLB is otherwise not entitled to pass any adverse order which may affect proper trial of the said criminal case. (ix) So far as the petitioners' allegation that they made necessary approach to the respondent -company for allowing application for recognition as shareholders, the documents relating thereto in support are false, fabricated, manufactured and upon verifying the same, no relief can be entertained by this hon'ble Board. The share scrips are frivolous and the signature part therein has been unlawfully done. (x) The petitioners have no intention to run the factory because at the very outset the petitioners have removed the machinery and other articles to make the passage free and the main intention of the petitioners is to promote the property after grabbing the land by hook or by crook. (xi) From the backdrop of the above, it would be evident that the respondent -company has not committed any illegality nor indulged in any act which can cause any demur to any party paving the way for filing the instant petition before CLB asking several reliefs which are fictitious in form and nature and, therefore, the petition deserves to be dismissed with costs. In addition to the above, respondent Nos. 2 and 3 claiming to be the directors of respondent No. 1 -company filed CA No. 342/2011 dated 20th September, 2011 wherein briefly the following grounds have been raised challenging the maintainability of CP No. 450/2011: (i) By adopting false statements and fabrication of false documents, the petitioners preferred the instant case against the present respondent Nos. 1 to 3 before hon'ble CLB without any valid cause or purpose other than to grab the properties of respondent No. 1 -company by causing forceful interference of arrangement of the company. (ii) The present petition is badly hit by the principle of non -joinder of the parties and consequently, the petition is not maintainable. (iii) The petitioners have not incorporated the names of transferors as party and the alleged transaction of transfer of shares from the former workers are totally vague and manufactured. Further, the alleged transfers of shares are illegal and void because these are contrary to the provisions of memorandum and articles of association of the company. (iv) In the present case, the hands of the petitioners, especially that of petitioner No. 1. viz., Shri Kishori Lal Agarwal, are not clean because petitioner No. 1 with the help of former workers and union leaders during the period of left front government captured the factory premises of respondent No. 1 -company at 83A, Chetla Road, Kolkata -700027 and removed and misappropriated valued hypothecated stocks and plant and machinery without any authority and due process of law and such conduct of the petitioners, especially petitioner No. 4, is not fair and due to such circumstances, the petitioners are not entitled to get any relief sought for. (v) The tenancy right in respect of factory premises of respondent No. 1 -company at 83A, Chetla Road, Kolkata -700027, has been seriously affected due to unlawful and forceful interference of petitioner No. 1 with the help of former workers and union leaders by not allowing the present management of the company to enter the factory premises for a substantial period of time against which several complaints have been lodged with the police authorities (copies enclosed). (vi) By paying money to the former workers, revealed from the money receipts (copies enclosed), the petitioners took possession of the factory premises of the respondent No. 1 -company illegally and wrongfully by deceiving the respondent -company. (vii) The petitioners claiming the shareholders of Guru Forging and Agrico (P.) Ltd., who had purportedly claimed to be the owner of factory premises at 83A, Chetla Road, Kolkata 700027, had taken wrongful possession of the said premises by causing eviction of respondent No. 1 -company without any notice and authority thereof and, thus, the petitioners are guilty of property grabber with the help of money power. (viii) Against the mischievous acts of the petitioners and the former workers and main leaders, criminal case has been instituted by the concerned jurisdiction of Chetla Police Station case No. 95/2011 and as per notice under section 91 of Code of Criminal Procedure, 1973 ('Cr.P.C.') served on 23rd August, 2011, the present respondents have complied with the said notice along with all papers and documents. (ix) The petitioners have suppressed about the judgments of two court cases relating to the tenancy rights of the factory premises at 83A, Chetla Road, Kolkata -700027, one order in TS No. 82/1998 preferred by landlord as plaintiff and another appeal preferred by plaintiff/landlord in TA No. 88/2005, wherein it has been held in the appellate order that the defendant [Alliance Engineers (P.). Ltd.] is a tenant under the plaintiff (Shri Manmatha Nath Mukherjee) in respect of the suit property being premises No. 83A, Chetla Road, Kolkata -700027, and not a lessee. The tenancy of the defendant is governed by the provision of West Bengal Premises Tenancy Act. Based on the above grounds, the maintainability of the instant CP No. 450/2011 has been challenged.
(3.) IN reply to the above grounds taken by the respondents in the aforesaid application, the petitioners have made the following averments, in brief: (i) It has been denied that the instant petition is without any valid cause or purpose but to grab the property of respondent No. 1 -company and forceful interference in management of the company. (ii) It has been further submitted that the petitioners are competent parties to file the present petition and they have all the rights and necessary shares required to file the instant petition. Respondent Nos. 2 to 4 in the main petition have no locus or status to represent the company and that they are not directors of the company from any perspective but self -proclaiming themselves as directors and they do not possess any consent or mandate to represent themselves in this manner. (iii) The transfer of shares to the petitioners is perfectly legal and in compliance to the provisions of the memorandum and articles of association of the company. The transferors have already transferred the subject shares to the petitioners and they are competent to do so in compliance to the relevant provisions of the memorandum and articles of association of the company. (iv) The petitioners have denied the allegations made by the respondents that with the help of former workers and union leaders during the left front government, the petitioners captured the factory premises and removed and misappropriated hypothecated stocks and plant and machinery. The petitioners have subjected the respondents to strict proof to substantiate the allegations made by them against the petitioners. (v) Respondent No. 1 -company has failed to pay rent for consecutive periods and this has affected the right of tenancy and the respondents have purposely suppressed this fact and the petitioners have asked the respondents about the details of rent paid along with the period of such payments to secure the tenancy as alleged in the application. (vi) Guru Forging and Agrico (P.) Ltd. is competent to take possession of its own property in the circumstances of default of payment of rent by the tenant for consecutive periods. (vii) The petitioners have paid due consideration for the transfer of the shares and the decision of purported transfer of shares is well within the jurisdiction of the hon'ble CLB. (vii) To sum up, it has been emphasised that the application is baseless, frivolous and made with mala fide intention and ultimately any order passed in terms of the application would cause irreparable loss and prejudice to the petitioners and, therefore, such application should be rejected in limine with exemplary costs.;