Manorama Kumari, Member - (1.) The instant Company Petition bearing No. 208/KB/2017 has been filed under Sections 58, 59, 210, 241 and 242 and other relevant provisions of the Companies Act, 2013 by the petitioners, namely, Jagat Singh Chopra & Vikram Singh Chopra, with the prayer, inter alia, (i) to reinstate/permit/allow the Petitioner No. 1 and 2 to act as Directors of the Company; (ii) to deliver up and cancellation of the purported return of allotment in form PAS-3 with regard to allotment of 26000 (twenty six thousand) equity shares of the Respondent No. 1, Company. The Ld. Counsel on behalf of the Petitioner(s) submitted the following facts of the case: That M/s. Frey ship Services Private Limited, the Respondent No. 1, Company was incorporated on the 27th February, 2012 under the Companies Act, 1956 as a private company limited by shares. The Company was incorporated by Shri Jagat Sigh Chopra, Petitioner No. 1, Shri Vikram Singh Chopra, petitioner No. 2, Shri Raj Singh Chopra, respondent No. 2 and Shri Narpat Singh Surana, Respondent' No. 3. The petitioner No. 1 is the father of the petitioner No. 2 and the Respondent No. 2 and the Respondent No. 3 is a relative of the petitioners and the Respondent No. 2. The petitioners group was holding 50.51% equity stake of Respondent No. 1 Company but due to illegal allotment of shares by the Respondent No. 2, the petitioner group equity stake reduced to 23.24% from 50.51%. That the Respondent Company was carrying on its business smoothly till December, 2015 and thereafter the family disputes arose. The petitioners and the Respondent No. 2 agreed to refer the disputes for the settlement by meets and bounds in presence of two independent person as consented by both side. Accordingly, a family settlement was entered into between the petitioner(s) and the Respondent No. 2 in the form of partition in respect of business and residential house. However, the said agreed upon partition as alleged (Page 33 is said settlement, annexed with reply). That for expansion of growth of business of Respondent No. 1 Company the petitioners from time to time had provided unsecured loan to the Respondent No. 1 Company as working capital loan. The outstanding loan amount due to the petitioner No. 1 is Rs. 76,00,000/- (Rupees Seventy six lac only) and to the petitioner No. 2 is Rs. 7,50,000/- (rupees seven lac fifty thousand only). Such unsecured loan was given on interest at the rate of 12 % per annum. However, no interest had been paid after 31-12-2015 despite repeated reminders. That on 19th October, 2016, the respondent No. 2 and 3 called and convened a purported Board meeting without giving any notice to the petitioners and in the said meeting both the petitioners were removed illegally from the Directorship of the Company in terms of Section 167(1)(b) of the Companies Act, 2013. It is also alleged that the Respondents made an illegal allotment of 26,000 equity shares on 15th November, 2016 without holding any general meeting, without sending notice of meeting to the petitioners and without following the procedures under the provisions of the Companies Act, 2013. The petitioners have prayed for grant of multiple relief's in the prayer portion of the company petition out of which chief relief's are as follows: (1) Cancellation of purported allotment of 26,000 equity shares on September 15th, 2016 in favor of the respondents on the premises that notices of EOGM and Board Meeting have not been served. (2) Restoration of Petitioner No. 1 and 2 as director of the respondent No. 1 Company who were illegally removed. Purported allotment of 26,000 equity shares dehors the provision of companies Act. 2013 The petitioner contented that the respondent No. 2 and 3 have illegally and fraudulently allotted 26,000 (Twenty six thousand) equity shares of Rs. 10 each on September 15th, 2016 in their favor for their individual benefit or to gain unauthorized control over the affairs of the company without serving notice of EOGM and Board Meeting held on September 7th, 2016 and September 15th, 2016 respectively to the Petitioner No. 1 and 2, who were the directors and shareholders of the company. That apart, such allotment of shares dehors the provision of the companies Act, 2013 and as such the said allotment of shares are invalid as well as null and void and cannot be sustained in any manner whatsoever.
(2.) The petitioners further contended that by increasing the share capital of the company leading to dilution of shareholding of the petitioner group from 50.51 % to 23.24% in clandestine manner which is illegal and void ab initio, The petitioner categorically submitted that to increase the paid up capital of the Respondent No. 1 Company to the tune of 2,60,000 as well as filing Form-PAS 3 and Form MGT-14 on November 16th, 2016 before the ROC. West Bengal is prejudicial to the interest of the petitioners as well as to the company.
(3.) The answering respondents in reply to opposition vehemently opposed and denied the allotment of shares by the respondents are for their individual benefits or to gain unauthorized control over the affairs of the company by diluting the equity shares of the company as alleged in para IV (Page 25-27) of the company petition. It is also denied that such allotment are dehors the provisions of the Act leading to the detrimental to the interest of the petitioners. On perusal of the records it manifests that the purpose of enhancing the capital base of the company by converting the existing loan due to the extent of Rs. 67,60,000/- into equity shares of the company with a view to leverage better balancing the debt-equity ratio of the company. The enhanced 26,000 equity shares of 260 each including premium of Rs. 250/- was subscribed and allotted to the companies owned and controlled by Mr. Raj Singh Chopra i.e. Respondent No. 2 in lieu of their outstanding loan to the company. Resultantly, shareholding pattern between the petitioner's Group and the Respondents Group have been changed leading to dilution of shareholding of petitioner group from 50.51% to 23.24%;