Rajeswara Rao Vittanala, Member - (1.) The Company petition bearing C.P. No. 73 of 2015(which is hereinafter referred to as Company Petition) was filed by Mr. N. Kasthur Reddy (hereinafter referred to as Petitioner), before the then Hon'ble Company Law Board, Chennai Bench, Chennai (CLB). On the constitution of NCLT Bench at Hyderabad Bench for the cases pertaining to the States of Andhra Pradesh and Telangana, the case is transferred to Hyderabad Bench. Hence, we have taken the case on records of NCLT, Hyderabad Bench and deciding it. After the case was transferred to this Bench, it was listed on various dates for hearing i.e. on 28.7.2016, 18.8.2016, 6.9.2016, 14.9.2016, 29.9.2016, 20.10.2016, 10.11.2016, 22.11.2016, 24.11.2016, 13.12.2016, 29.12.2016, 05.01.2017 and finally on 06.01.2017 the case was reserved for orders.
(2.) The Company petition has been filed under Section 397.398 and 111A read with Section 402 and 403 of the Companies Act, 1956 and Section 59 of the Companies Act, 2013, by inter-alia seeking following reliefs: a. To set aside transfer of shares dated 22.03.2013 to Respondents No. 4 and 5 and consequently rectify the Register of Members and restore membership of the Petitioner holding 2,00,000 shares of Rs. 10 each in the Company. b. To set aside the resolutions passed in Extra Ordinary General Meeting for increasing authorized share capital of the Company in the meeting held on 18.03.2013 and 18.11.2013. c. To set aside allotment of shares to Respondents made on alleged Board Meeting held on 22.03.2013 and 29.11.2013 to Respondents. d. To set aside sale deeds 1379/2013, 1380/2013, 2242/2013, 2242/2013 and 2273/2013 registered in Sub Registrar office, Rajendranagar, Telangana, etc.
(3.) The brief facts, as set out in the Company petition, are as follows: a) M/s. Prakjyothi Constructions Private Limited (herein after referred to as the Company) was incorporated on 16.07.2007 with the Registrar of Companies, Hyderabad (AP) on 01.06.2015, having its registered office at Rajendra Nagar, Hyderabad. The Authorised share capital of the Company is Rs. 250,00,000/- divided into 25,00,000 equity shares of Rs. 10 each with issued and subscribed capital of the Company being Rs. 250,00,000 divided into Rs. 25,00,000/- equity shares of Rs. 10 each. The main objects of the Company are to lay out, develop, construct, build, erect, demolish, re-elect etc. b) The Petitioner and Respondents No. 2 to 5 are related to each other and the Petitioner is brother-in-law of Respondent Nos. 2 & 3. The Petitioner having vast experience in the field of Drugs and Pharmaceutical founded Sri Dhanada Laboratories (SDL). The Petitioner has inducted the Respondent No. 2 & 3 in the business at the behest of his wife. Accordingly, a partnership firm was constituted with respondent No. 1, 2 & 3 as partners along with Petitioner's wife and mother-in-law and a third party in the year 2000. c) Several issues with regard to SDLPL were contended and also stated that a case was filed by N. Raghu Ram Reddy and Mr. N. Raja Ram Reddy against the SDLPL under Section 397/398 and other provisions of the Companies Act, 1956 before the then CLB bearing CP No. 93 of 2013 and the same is pending. d) The Company had a paid-up capital of Rs. 5 lakhs divided into 50000 equity shares of Rs. 10/- each for the year rendered in 31.3.2010. There was an application pending for allotment of Rs. 25 lakhs for the year ended 31.03.2010. On 22.05.2011, authorized capital of the company was increased from Rs. 50 lakhs to Rs. 1 crore. On 20.10.2011, 9,50,000 shares were allotted to the Petitioner, Respondent No. 2, 3 and 6. The Petitioner was allotted 2 lakhs shares of Rs. 10 each out of those shares allotted and thus, his share contribution constitutes 20% of the paid-up capital. e) In the Annual Returns filed in the year 2011-12, the Petitioner was shown as shareholder of the Company. There are only 4 shareholders viz., the Petitioner, Respondents No. 2, 3 and 6. The Petitioner with the knowledge of Respondents No. 2 and 3 capitalized the company in March, 2013 and the third respondent invested 3 lakhs and approved the resolution of allotment to the petitioner and his family. f) The Petitioner alleges basing on the records retrieved from MCA website, the authorized share capital of the company was increased from Rs. 1 crore to 1.5 crores on 18.03.2013. However, no notice of extra-ordinary General Meeting, purportedly held on 18.03.2013 was ever issued to the Petitioner. The whole idea of the Respondents No. 2 and 3 was to exclude the Petitioner from the affairs of the Company. On 22.3.2013, further allotment of shares of Rs. 50 lakhs representing 5 lakhs shares were allotted to Respondents No. 4 to 6. Out of 5 lakhs shares, Respondents No. 4 and 5 were allotted 2 lakhs shares each and Respondent No. 6 was allotted 1 lakh shares. g) The authorized capital was again increased from Rs. 1.5 crores to Rs. 2.5 crores and fresh capital was once again allotted on 29.11.2013 to the Respondents. h) The Petitioner questions the allotment made on 22.3.2013 and 29.11.2013 on the ground that he was not aware of the proceedings taken for those allotments, and no notice whatsoever was given and he was kept totally in dark. No notice was also given for altering the Memorandum of Association. i) The Respondents are all part of the family, and the Company itself is a family Company. When the petition is pending, the Respondents removed the Petitioner from the Register of members of the Company. Without any transfer deed, the Petitioner's shares were transferred. No notice of AGM/EGM held on 18.3.2013 and 18.11.2013 was given to him. He was totally ousted from the Company in illegal manner by violating all principles of natural justice. j) The 6th Respondent is wife of 7th Respondent, who was the erstwhile Auditor of the Company. The 7th Respondent still manages and maintains the books of accounts and audits of the company. Sh. K. Surendranath, the present Statutory Auditor is the main lender to the real work being carried out by 7th respondent. The 6th respondent is benami of 7th respondent in carrying out transaction for illegal gratification. k) The Company had constructed 40 flats under the name and style of 'Prakjyothi Highlands Apartments' in Upparpalle Hyderabad. Out of 40 flats, 5 flats were conveyed to Respondent Nos. 4, 5 and 7 and these are illegal gratifications. l) The details of apartments is given below: m) The Petitioner submits that it is just and equitable that Company should be wind up, however, such wind up would not serve the interest of the Petitioner and the Company in general and thus, he sought the relief as prayed for.;