RAJENDRA SINGH AND ORS Vs. R R SHEETGRAH PRIVATE LIMITED AND ORS
NATIONAL COMPANY LAW TRIBUNAL
Rajendra Singh And Ors
R R SHEETGRAH PRIVATE LIMITED AND ORS
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V.S.R. Avadhani, Member -
(1.)Besides the Company Petition, several Company Applications are also pending for a long time. With the consent of both sides we heard the Company Petition along with the applications and this Order will dispose of all the applications. Oral arguments are submitted and written arguments are also filed in the Company Petition. In the above circumstances, the Company Petition was taken for final disposal.
The Company Petition is filed under Sections 397, 398, 402, 403 and 237 of the Companies Act, 1956 for the following key reliefs:
1) Declare Form 5 dated 10.2.2003 increasing the Authorized Capital of the Company from 30 lacks to 35 lacks as null and void and to cancel the same;
2) Declare Form 2 dated 18.2.2013 for the allotment of shares to Respondent No. 3 as null and void and cancel the allotment of 2.00 lacks shares to the Respondent No. 3;
3) Declare removal of the Petitioner No. 1 as director of the Company and to further declare Form No. 32 as null and void and to reinstate Petitioner No. 1 on the Board of Directors;
4) To direct investigation into the affairs of the Company
5) Direct to initiate criminal proceedings against the Respondent for the acts of fraud committed by them; (other reliefs are not extracted to maintain brevity)
(i) Petitioners' case: The Company was promoted by Petitioner No. 1 and Ranveer Singh. For the purpose of construction and operation of the cold storage and warehouse, the company had obtained credit facilities from Syndicate Bank to an extent of 1.80 Crores on hypothecation of the fixed assets of the Company besides collateral security provided by Ranveer Singh and his family members. The Bank, however declared the debt as 'non performing asset' (NPA) and that forced the Petitioners to approach the Respondents 2 and 3 for infusing funds on the understanding that they will be made directors and shares of some of the members will be transferred to them. Accordingly, a cluster of 49,4co shares belonging to Petitioners' group was transferred to Respondents 2 to 4 in February 2011. Up to this extent, facts are not in dispute.
(2.)It is contended by the Petitioners that an agreement was signed between the parties where under the control of the company was given to the Respondents. (Vide para 7.6) However, it is alleged, subsequently the Respondents in order to gain absolute control over the affairs of the Company have fabricated 'resignation letter' of the Petitioner No. 1 by means of forgery' and removed him from the Board of Directors on 18.2.2013. It is the case of the Petitioner No. 1 that notice of that meeting was not served on them and that no such meeting was in fact, convened. It is further alleged that the Respondents have also increased the authorised capital of the Company from 30 lacks to 35 lacks on 19.2.2013 without sending any notice for the purported EOGM and increased the paid up capital from 13,25,000 to Rs. 33,25,000 on 18.2.2013 without sending notice of Board Meeting to the Petitioners an the Petitioners came to know of these transactions from the web site of Ministry of Corporate Affairs with which the Respondents have uploaded he statutory Forms.
(3.)According to the Petitioners this was done to water down the share holding of the Petitioners and reduce them to minority. To censure the validity of the allotment of 20 lack new shares to the Respondent No. 3, it is canvassed by the Petitioners, that there was no proper valuation of the share value and without collecting any premium the shares are allotted to the prejudice of the Company. On these grounds among others which will be referred at relevant discussion the Petitioners have raised the issues of oppression and mismanagement on the following broader aspects:
1. by illegally removing the Petitioner No. 1 from the Board of Directors;
2. by illegally increasing the authorised capital of the Company;
3. By illegally allotting shares to Respondent No. 3; and
4. By non-com plying with the provisions of the Companies Act, 1956 particularly by not sending he notice of meetings, nonetheless the Petitioners are majority share holders by 18.2.2013.
(ii) Respondents' case: They contend in the Reply that none of the acts alleged in the petition would a amount to oppression and mismanagement prejudicial to the interest of the members of the company. They admit that the banking operations of the company were taken over by the Respondents 2 and 3 in February 2011. While referring to the circumstances that drawn the parties to an understanding it is stated that when the Company was in deep financial troubles the Petitioners approached the Respondents 2 to 4 with a proposal to take over the company by making substantial payment to the Bank and this was agreed by the Respondents. Yet, the petitioner No. 1 requested the Respondents to continue him as Director and also agreed to continue his personal guarantee to the bank for some time. The value of the Company's assets was arrived at 2.65 lacks (Annexure 1 to Reply paper book) It was further agreed that 100% shareholding of the Company will be transferred to Respondents 2 to 4 and their other family members. With that understanding, the Respondents agreed to take over the reins of the company with a liability of 257.29 lacks due to the Bank and by investing a further amount of Rs. 7.71 lacks
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