Mohd. Sharief Tariq, Member - (1.) The Petition under adjudication has been filed during the year 2012 before the Company Law Board and numbered as CP No. 17 of 2012. After constitution of NCLT, the same has been transferred to this Bench and renumbered as TCP No. 86 of 2016. The Petitioner arrayed seven Respondents in the Petition. Respondent No. 5 is M/s. Small Industries Development Corporation (SIDCO), Respondent No.6 is Indian Bank and Respondent No.7 is a firm viz., M/s. Excel Auto Components wherein R2 and R3 are partners. The Petition has been filed under Sections 397, 398, 402, 403 and 406 r/w Schedule 11 of the Companies Act, 1956. The main grievances of the Petitioner are that the land allotted by SIDCO in the name of Respondent No.7 viz., M/s. Excel Auto Components has been agreed to be contributed as share capital on behalf of the Respondents 2 and 3 as consideration for allotment of 2500 shares of Rs. 10/- each to them in the 1st Respondent company. The 1st Respondent company was incorporated on 09.03.2007 as a private limited company. The authorised capital is Rs. 15,00,000/- having 1,50,000 equity shares of Rs. 10/- each. The second claim of the Petitioner is that he has paid to 1st Respondent company a total sum of Rs.38,81,000/- up to 31.03.2010 in order to keep the factory (1st Respondent company) running even at times of distress on the assurance of Respondent Nos.2 and 3. The Petitioner further states in the Petition that Respondents 2 and 3 had unilaterally and surreptitiously without the consent of the Petitioner assumed upon themselves the cheque-signing power and started dealing with the bank accounts of the company, but failed to, convene any board meeting, annual general meeting, place and finalise the accounts of the company in accordance with law, thereby caused loss to the company. Therefore, the loss caused to the 1st Respondent company by Respondent Nos.2 and 3 be assessed and they be directed to make good the loss to 1st Respondent company. In view of this the Petitioner sought the reliefs as follows :- a) direct the Respondents 2, 3, 5 and 7 to formally transfer the land at AC-30/5, SIDCO Industrial Estate, Thirumudivakkam, Chennai-600044 in the name of the 1st Respondent company; b) direct the Respondents 2 to 4 to hand over the management of the company to the petitioner; c) direct the Respondents 1 to 4 to jointly and severally repay the petitioner the sum of Rs.38,81,000/- together with interest thereon at 24% p.a. till the date of repayment in full; d) to assess the damages caused to the 1st Respondent company and direct the 2nd and 3rd respondents to pay the damages to the 1st Respondent company. It may be noted that at the time of arguments, relief (b) has not been pressed by the Petitioner for the reason that Respondent No.4, with the support of the Petitioner, has taken over the management of the 1st Respondent company.
(2.) The counter has been filed by Respondent Nos. 2, 3, 4 and 7. The gist of the reply is that the claim and contentions made by the Petitioner have been denied by the Respondents stating therein that there was never any agreement, oral or written, to transfer the land allotted to R7 as part of the contribution of share capital by Respondent No. 2 and Respondent No. 3 to the 1st Respondent company and stated that it was explicitly agreed in writing that Respondent No.l company should get lease hold rights from Respondent No.7 (a firm) of which R2 and R3 are partners. The Respondents 2 and 3 denied that they have not invested any money into the company, more so towards the share capital agreed to be taken by them at the time of incorporation of the company as stated in para 4 of the Petition. However, under para 2.4 of the counter, it has been mentioned by the Respondents that the capital contribution were either paid by the respective persons of the company or adjusted against the incurrence of pre-corporation/preliminary expenses incurred by them for and on behalf of the company. It has also been placed on record by the Respondents in the counter that looking to the books, the monies presumed to have been brought in by the Petitioner were done so through cash means. Whereas taxation laws stipulate that any money received by any person/company had to be received through banking channels. There are no entries in the books of the company stating the monies claimed to have been brought in by the Petitioner. It has further been averred by the Respondents in the counter that the 1st Respondent company was given possession of the land on 20.03.2007 that stands allotted in favour of the Respondent No.7 by Respondent No.5 i.e. SIDCO, the monthly rent and the rental advance was to be retained by the 1st Respondent company as contribution of Respondent Nos.2 and 3 towards the plant and machinery that were proposed to be purchased for the 1st Respondent company.
(3.) The Petitioner and Respondent Nos.2, 3 and 7 filed written arguments which are in support of their respective stands taken in the pleadings. Under para 1.16 of the, written arguments submitted by the Respondents 1, 2, 3 and 7, it has been stated that there really existed no agreement for transfer of land to the 1st Respondent company as part of share capital contribution on behalf of the Respondent Nos.2 and 3. However, it has been stated that 'the Petitioner was in control of the 1st Respondent company for a quite long time and during those periods he never made efforts to transfer in the land allotted to Respondent No. 7 by Respondent No. 5 to the account of the company for the purpose of which all that required was merely writing a letter to Respondent No. 5 (SIDCO) for changing the ownership from Respondent No. 7 to 1st Respondent company. But the Petitioner has never done so'. In other words the Respondents would have no objection, if the Petitioner could have taken the steps to get the land in question transferred in favour of 1st Respondent company by writing a letter to R5 (SIDCO), for changing the ownership from Respondent No. 7 to 1st Respondent company.;