M. K. Shrawat, Member - (1.) The Petition under consideration was submitted before the then CLB on 1st April, 2016. A) Facts of the Case:-
(2.) In this case the Petitioner is a Company incorporated under Belgium Law, having its office in Kontich, Belgium. The Petitioner is having 80% shareholding by subscribing 8000 Equity Shares of the Respondent Company incorporated under Indian Laws having its Registered office in Nasik, Maharashtra. The Respondent No. 1 Company was incorporated under Companies Act on 11th January, 2011. The Respondent No. 2 namely Mr. Sameer C. Vinchurkar was allotted 20% of the total shareholding of R-1 Company. It is informed that the nature of business was commercialisation of "Respiratory Imaging Technology". The Petitioner was interested to set up an in-house processing unit in India therefore incorporated the Company (R-1) in India. A "Shareholder Agreement" was executed on 4-11-2010 for the purpose of formation of Company R-1, which was executed between the Petitioner Company and Respondent No. 2. As per the said agreement one part, the Belgium Company was founded under Belgium Laws on 27th of October, 2005, having business in Biomedical field and claimed to be specialised in Respiratory medicine and on the other par Mr. Sameer Vinchurkar, being an employee of Fluid DANV prepared to help in establishing a new Company in India. Mr. Vinchurkar was made responsible to train employees of Fluidda, India using his own skill in Bio-medical Image Analysis. 2.1 The brief background, as narrated, was that R-2 was admittedly an employee of the Petitioner Company. As per the Shareholder Agreement considering the background of R-2 it was decided to establish a new company in India. One of the clauses emphatically mentioned during the argument, necessary to mention at this juncture, was that the agreement would be terminated in case of death or in case Mr. Vinchurkar (R-2) is terminated by Fluidda for any reason. One of the clauses i.e. Article 5 provided that as compensation to the services of R-2 an offer of 20% of the shares of the Indian Company was made to Mr. Vinchurkar. It was also agreed upon that for the duration of this agreement R-2 would not offer his services to any competing entity. 2.2 The Constitution of the Indian Company (R-1) was that 8000 shares were held by the Petitioner & 2000 shares were held by R-2. 2.3 The allegations against R-2 as narrated in the impugned Petition can be summarised as follows:- a) A registered office of R-1 was established as per a "Leave and License Agreement" entered into with R-4. The allegation is that the said agreement was never approved in any meeting of the Bard of the Company. The R-2 had not provided a copy of the said "Leave and License Agreement" to the Petitioner. b) In October 2015, R-2 had proposed to purchase a new property instead of having the office in the said rented premises. The Petitioner had stated that during the period of 2011 to 2015 the Respondent No. 2 was an employee of the Petitioner managing the day-to-day affairs of the Indian Company. The Petitioner has nominated a Director, Mr. Jan De Backer on the Board of the Indian Company(R-1). A discussion was held according to which the R-1 was proposed to own 49% in the new property and the remaining 51% to be owned by the R-2. The statement of the Petitioner is that the "Nominee Director" had never consented to the said transaction. The Petition contains series of correspondences exchanged between said Director and R-2 in this regard. The objection of the Petitioner is that the R-2 had not provided the proposed Sale Document for perusal. On 10-11-2015 the said nominee Director informed R-2 to refrain from signing or entering into the said proposed Purchase Agreement. At that time to the surprise the Petitioner it was informed by R-2 that he had already paid an advance equal to 40% of the purchase price to the owner of said new property. It was informed by R-2 that post-dated cheques were issued from the account of the Indian Company (R-1). Due to the said objection, R-2 had at one point of time communicated that he would negotiate with the owner of the new property for return of the cheques and the amount. The allegation is that without proper authority R-2 had illegally signed the agreement, if any, as well as without authority issued post-dated cheques (stated to be for an amount of Rs. 63,70,000/-) on behalf of R-1 company. The objection of the petitioner was that no information was submitted about the negotiation of the said "New Property". As well as even not informed, although on enquiry, the name of the person who had signed those cheques on behalf of the company. According to the Petitioner the answer of all questions raised at that time to R-2 were evasive and misleading. Later on it was informed that sister-in-law of R-2 (Miss. Kirti Vinchurkar R-3 in this case) had been given a Power of Attorney to act on behalf of the company. The Petitioner was informed that the owner of the "New Property" had refused to return the cheques of Rs. 63,70,000/- handed over to him by R-2 and R-3. According to the allegation the Petitioner had suspected that the said transaction was created by R-2 for his own personal benefit. c) The next allegation was that on 15-11-2015, R-2 sought permission from the Petitioner to grant additional holiday to the staff. According to the Petitioner it was planned by the R-2 to vacate the Registered Office Premises in the guise of repairs. Through e-mail R-2 had informed that the roof of the office had been damaged due to an Internet Tower installed at the said premises. Because of the damage, the landlord (R-4) had asked to vacate the office. Although the nominee director had permitted to vacate the office premises only for the purpose to carry out the repair work but it was found to be a false hood of R-2. The instructions given to R-2 was to prepare an inventory of the Company's assets in the office and also to pursue Insurance Claim. However, R-2 vide e-mail dated 15-11-2015 had intimated that there was no Insurance cover for the Registered Office Premises. d) The next allegation is that the R-2, 3, & 4 were acting in collusion to extract money from the Petitioner. The Petitioner was denied access to the Registered office of the Company. The Petitioner was also denied to examine the records of the company. According to one communication the R-4 had demanded compensation to the tune of Rs. 15,00,000/- towards damages. The statement of the Petitioner was that the Leave and License was executed and arranged by R-2 with R-4 and only R-2 had made a proposal to install Internet Tower on the building with an impression that such installation was legal and duly authorised. R-4 had issued a legal notice dated 23rd November, 2015 calling upon the Company (R-2) to vacate the registered office and to pay damages of Rs. 15,00,000/-. But the fact was that as per the communication received from R-2 the office had already been vacated. That information was provided by one Miss Sneha Joshi, Senior Image Analyst, an employee of R-1. According to the petitioner, R-2 had not provided full and accurate details of the financial dealings. According to the allegation it was a gross financial irregularity committed by R-2. e) To safeguard the interest of the company (R-1) the nominee director had issued a letter dated 17-11-2015 to the bank and called upon to stop the operation of the Bank Account. f) As per the Petition vide e-mail dated 22nd Nov., 2015, R-2 had attempted to erase the record of his mismanagement. Through that e-mail R-2 had proposed to amend the Minutes of the Board Meeting held on 19-11-2015. It was also found by the Petitioner that R-2 had published confidential information on his personal social net-working account. The Petitioner terminated the service of R-2 on 18th December, 2015. The Petitioner had offered a severance package of six months' remuneration. g) A Board meeting was held on 10th March, 2016 unanimously passed a resolution to convene EGM on 8th April, 2016. At that meeting R-2 had adopted a threatening stance by informing that neither he nor his family members or any employee would furnish any documents to the company. According to the allegation, R-2 had breached his fiduciary duty towards the company. R-2 had also failed to file the information to the office of RoC required under Companies Act. B) Arguments of Petitioner:-
(3.) From the side of the Petitioner in the light of the above factual back ground, Ld. Advocate Mr. Sameer Pandit pleaded that this is a case of mismanagement of the affairs of the company. The R-2 had also played tricks to extract money from the Petitioner. In the name of purchasing a new property for the office premises he had tried to extract huge amount and thereafter tried to extract another huge amount in the name of the land lord of the registered office. On 19th November, 2015 the Board had therefore appointed the Nominee Director as a sole signatory for all financial transactions including operation of Bank Account. The R-2 was informed to cancel all the cheques issued by R-3 immediately. As a consequence, the services of R-2 have also been terminated vide letter dated 18th December, 2015. However, a generous "severance package" was offered. R-2 was asked to surrender the shares. The misdeed was that the staff of the company was also persuaded to resign en-mass. The R-2 had mismanaged the affairs and deliberately suppressed material information for oblique reasons. As per the "Shareholders Agreement" on termination of employment the said Agreement would also be terminated. The Ld. Counsel has pleaded that a direction should be issued to Respondent No. 2 to transfer 2000 equity shares held by him in favour of the petitioner. He shall also be directed to submit the details of the transactions executed by him without any authority. He should be directed to go out of the company to protect the interest of the company. Reliance was placed on the decision of CLB Principle Bench New Delhi reported as (MANU /CL/0047/2003 : (2004) 121 Comp Cas 712 (CLB), (2004) 53 SCL 22 (CLB)) dated 02-12-2003. Ld. Advocate has also pleaded that it was a case of oppression by R-2 being in control of the affairs of the company for which he should be held responsible. The controlling powers were mis-utilised by R-2. Reliance was placed on the citation SCOTTISH COOPERATIVE WHOLESALE Vs. MEYER (324 House of Lords 1959) authored by Lord Denning. C) Arguments of Respondent:-;