MILIND DAYARAM KAPSE & ORS Vs. DEN NASIK CITY CABLE NETWORK PVT LTD & ORS
LAWS(NCLT)-2016-9-36
NATIONAL COMPANY LAW TRIBUNAL
Decided on September 27,2016

MILIND DAYARAM KAPSE AND ORS Appellant
VERSUS
DEN NASIK CITY CABLE NETWORK PVT LTD AND ORS Respondents




JUDGEMENT

- (1.)The present company petition has been filed under Section 397, 398, 399 and 402 of the Companies Act, 1956 by ten shareholders of M/s Den Nasik City Cables Network Private Limited, Respondent No. 1 Company. The Petitioners have sought the following relieves as per the amended petition:
(1) Copies of Notice, Agenda and Minutes (including all corresponding agenda papers, related documents, drafts, statements, annexures, enclosures, notes and attachments) of all meetings of the Board of Directors of the company convened on and after June 26, 2008 as the aforesaid petitioner No. 1 and Petitioner No.2 have not received the same from the company till date and hence not been able to attend any Board meeting.

(2) A copy of every balance sheet of the company placed before the Board of the Company for approval before signing and submission of the same to the auditors for their report thereon as the aforesaid Petitioner No.l and Petitioner No.2 have not received the same from the company till date.

(3) Details of all payments made (including any remuneration, fees, benefits and perquisites) to any of the directors on the Board of the Company by the Company till date be made available to Petitioner No. 1 and Petitioner No. 2.

(4) Details of all payments made by the company as or by way of managerial remuneration including fees, benefits and perquisites till date be made available to Petitioner No. 1 and Petitioner No.2.

(5) Details of all payments made to any of the Directors on the Board of the company till date by any other company, body corporate, firm or person in accordance with the companies Act, 1956 be made available to Petitioner No. 1 and Petitioner No.2.

(6) Copies of all agreements, contracts and other similar arrangements entered into or proposed to be entered into by the company and placed before the Board or liable to be placed before the Board at any meeting or the Board of Directors or the company or generally for discussion or approval be made available to Petitioner No. 1 and Petitioner No. 2.

(7) Copies along with complete details of all agreements, contracts or other similar arrangements (including drafts thereof and other related documents and writings that are placed or liable to be placed before the Board for consideration or approval) entered into or proposed to be entered into by the Company with (a) any related party or (b) relative under Companies Act 1956 or (c) any other company in which any of the Directors on the Board of the Company or any shareholder of the Company or any of their respective relatives under Companies Act, 1956 is or has been or proposes to become a Director be made available to Petitioner No. 1 and Petitioner No. 2.

(8) Copies along with complete details of all agreements, contracts or other similar arrangements (including drafts thereof and other related documents and writings that are placed or liable to be placed before the Board for consideration or approval) entered into or proposed to be entered into by the Company with (a) its holding company or (b) its affiliate or (c) any affiliate of its holding company, be made available to Petitioner No.l and Petitioner No.2.

(9). All the books of account and other books and papers of the company be made available for inspection to Petitioner No. 1 in accordance with the Articles of Association of the Company.

(10) All the books of account and other books and papers of the company pertaining to the term and tenure of aforesaid Petitioner No.2 as a Director on the Board of the company be made available for inspection to the aforesaid Petitioner No.2 in accordance with the Articles of Association of the company.

(11) Copies of Notice, Agenda and Minutes (including all corresponding agenda papers, related documents, annexures, enclosures, drafts, statements, notes and attachments), in respect of all Annual General Meetings the company convened on and after June 26, 2008 be provided to each Petitioner in accordance with the provisions of the Companies Act, 1956. Be provided to each Petitioner in accordance with the provisions of the companies Act, 1956.

(12) A copy of every annual report of the company (including complete balance sheet, profit and loss account, all schedules thereto, the auditors' report, Directors' report and every other document required by law to be annexed or attached, as the case may be, to the balance sheet) be provided to each Petitioner in accordance with the provisions of the Companies Act, 1956.

(13) Copies of Notice, Agenda and Minutes (including all corresponding agenda papers, related documents, annexures, enclosures, drafts, statements, notes and attachments) in respect of all Extraordinary General Meetings the company convened on and after June 26, 2008 be provided to each Petitioner in accordance with the provisions of the Companies Act 1956.

(14) Details of all quotations, price lists and bids or tenders received by the company from all suppliers/vendors of services or products and the basis on which decision for procuring the same from such suppliers was taken by Respondent Nos. 2 to 7 be provided to Petitioner No. 1.

(15) Petitioner No.l be allowed to enter the office premises and given full access to the statutory records, registers and financial records of the respondent No. 1 Company and also provided copies of such records and documents.

(16) Respondents be directed to pay appropriate moneys as and by way of dividends to the Petitioners as monies have been distributed to the respondents and other members through related party transactions in place and stead of dividend.

(17) Respondent No.8 be directed to submit a revised audit report in respect of financial years 2008-2009 and 2009-2010 incorporating auditors' observations in respect of related party transactions.

(18) Appropriate penalty, fines and other penal consequences be imposed on the Respondents in accordance with the applicable provisions of law.

(19) Such other and further orders as this Hon'ble Board deem fit and proper in the interest of justice to set aside the oppressions and mismanagement may be passed.

(20) A declaration confirming Petitioner No. 1, Milind DayaramKapse as the continuing Managing Director of Respondent No. 1 company.

(21) A declaration that Respondent No.5 be expelled from directorship of Respondent No.l company and as such Respondent No. 5 be restrained by an order of injunction to act as the Director of the respondent No. 1 company.

(22) A declaration that Board Meeting dated 16th March 2013 be declared as invalid and void ab initio.

(23) Grant a permanent order and injunction restraining Respondents 2 to 7 from acting on the resolution dated 16th March 2013.

(24) Grant a permanent order and injunction declaring all acts and actions of Respondent No. 1 company based on Board meeting dated 16th March 2013 be declared as invalid and void ab initio.

(2.)The brief facts relevant to decide the controversy raised in the Company Petition are that M/s. Nasik Cable Networks, a partnership firm was formed on 11th July 2006 by Petitioner No.l & 2 along with two other persons for conducting the business of cable network particularly in Nasik city. The registered address of the partnership firm was First Floor, Mayur Plaza, below Vignhar Hospital, Dwarka, Mumbai-Agra Road, Nasik - 422 001. Subsequently through a Business Transfer Agreement dated 01.04.2008, the assets of the partnership firm were transferred to Nasik City Cable Network Pvt. Ltd., a private company incorporated on 4th June 2007. M/s. Nasik City Cable Network Pvt. Ltd., purchased the office premises, bearing No. 104, 106 and 107 on the first floor of the aforesaid Mayur Plaza building through a Deed of Conveyance dated 29.04.2008. M/s. Nasik City Cable Network Pvt. Ltd. had 47 shareholders including promoters Petitioner No.l & 2. Respondent No.2 company offered a joint business proposal to M/s. Nasik City Cable Network Pvt. Ltd. and proposed to acquire 51% equity share in the paid-up share capital of Nasik City Cable Network Pvt. Ltd. Accordingly Share Subscription, Share Purchase, and Share Holders Agreement (SPA) dated 26th June 2008 was entered in between Nasik City Cable Network Pvt. Ltd. and Respondent No.2 company. As per clause 2.5 of Article 2 of SPA the name of Nasik City Cable Network Pvt. Ltd. was changed to Den Nasik City Cable Network Pvt. Ltd. (Respondent No.1) with 51% share in favour nf Respondent No.2 company and 49% shareholding with earlier 47 shareholders. The total number of shareholders of Den Nasik City Cable Network Pvt. Ltd. became 48. After coming into effect of the same SPA, the shareholding of the 10 petitioners in Respondent No.l company became 14.22%. Petitioner No.l & 2 were directors in Respondent No.l company. Petitioner No.2 resigned as a director of Respondent No.l company with effect from 10th May 2010. Respondent No.3 to 7 are directors of Respondent No.l company and Respondent No.8 is the auditor of the said company. Respondent No.9 is a company named M/s. Den Discovery Digital Networks Pvt. Ltd. incorporated on 15th February 2013. It is pertinent to note that Respondent No.2 acquired 51% shareholding in Respondent No.9 company with effect from 25.06.2013 and has appointed Respondent No.4 as its nominee Director in Respondent No.9 company.
(3.)The Petitioners have filed the present petition alleging various acts of oppression and mismanagement against Respondents purportedly committed by them in the affairs of the respondent No. 1 company. According to the case of the petitioners, the main issues pertaining to the acts of oppression and mismanagement are as follows:
(i) Illegal holding of Extra-Ordinary General Body Meeting dated 16th March 2013 with malafide intention to enable transfer the business of Respondent No. 1 company to Respondent No.9 company in the grab of digitalization. The petitioner has also challenged the EOGM of Respondent No. 1 company held on 15th February 2016.

(ii) Fabrication of documents and Wrongful cessation of Petitioner No.l as Director.

(iii) Non-allotment of dividend/profit to the Petitioners.

(iv) Non-issue of bonus shares to Petitioners.

(v) Siphoning of funds of Respondent No. 1 company through related party transactions and acts of mismanagement.

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