Mohd. Sharief Tariq, Members - (1.) The company petition No. 23 of 2013 was filed under Sections 397, 398, 402, 403 and other applicable provisions of the Companies Act, 1956 against the 1st Respondent company viz. M/s. P.T. Mathai Construction Company Private Limited and 5 others before the CLB, that stood transfer to NCLT and renumbered as TCP 113 of 2016. The petitioner and Respondent-3 are brothers and Respondent-2 is their father. The company is a closely held, which came to be incorporated on 15.12.2003 having its registered Office at KV-29, Parambalinagar, Ernakulam, Cochin. The authorised capital of the company is Rs. 5 crores divided into 50,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid up share capital of the company is Rs. 2,50,00,000/- divided into 25,00,000 equity shares of Rs. 10/- each. The petitioner holds 11,62,500 equity share out of 25,00,000 shares of Rs. 10/- each, constituting 47.5% of the paid up share capital of the company.
(2.) The petitioner is the promoter and Director of 1st Respondent company. The object of the company is to construct and carry out contract works of construction and the matters related thereto. The petitioner, R2, R3 and the mother of the petitioner are shown as the promoters of the company in the Memorandum and Articles of Association and have been named as first Directors of the company to hold office for life. It has been stated by the petitioner that his mother being housewife is not taking any active part in the management of the affairs of the company and she is not made a party to the proceedings. The petitioner and 3rd Respondent each hold 47.5% shares and the 2nd Respondent with his wife (mother of petitioner) holds the balance 5% shares in the company. The petitioner claims that when the company was promoted, it was envisaged that each Director (Petitioner, R2 and R3) and projects under them should, for all purposes, be managed and administered as separate cost/profit centres. So, the operations in the company were divided among three functioning Directors, viz. the petitioner, R2 and R3 based on the work each one contracted on behalf of the company. In other words, each Director was to look after his projects independently and was to be completely accountable for the work contracted by him on behalf of the company including in respect of execution and closure in all aspects of such projects. If two Directors have contracted any project, then for such projects there remained a cost centre administered by the said two Directors and to facilitate the implementation of this arrangements. The monies of the company which came into the Master Account of the company was transferred from time to time to three individual current accounts again in the name of the company but operated only by three respective Directors through sub-accounts. The money required for carrying out individual work falling within the scope of individual Director was transferred from the master account to the sub account from where individual Director will administer the sub-account vis--vis. projects falling within his scope. The Director within whose scope the project fallen used to prepare various reports including the work-in-progress, financial statements, etc. and consolidate for circulation to the company record. In other words, each Director has been functioning as individual cost and profit centres and individual cost/profit centre would be must to arrive at the consolidated figures of the company.
(3.) It is also averred in the company petition that by successful execution of the Government projects, the company earned a very good reputation in the market and becoming a force to reckon with and was amazed by any other company in terms of its track record in the State of Kerala. So, in the normal course of business, the company had a Overdraft facility from South Indian Bank Limited (Respondent-4) and the same was renewed from time to time and in relation to monies drawn from the Overdraft A/c also, the monies were transferred from time to time to the sub-accounts and realisation transferred back to the Master Account to repay the Overdraft amounts for which the petitioner, R2 and R3 along with other members of the family have created charge on their properties with South Indian Bank Limited (R4) as stated under Para 5 of the company petition.;