Rajeswara Rao Vittanala, Member - (1.) The Company petition bearing C.P. No. 21 of 2013 (which is hereinafter referred to as Company Petition) was filed by V. Suresh Babu (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. 29.07.2016; 19.06.2016; 17.09.2016; 06.10.2016; 28.10.2016; 17.11.2016; 09.12.2016; 13.12.2016; 29.12.2016; 19.01.2017; 30.01.2017 and finally on 02.02.2017, the case was reserved for orders.
(2.) The Company petition has been filed under Section 111, 397 and 398 read with Sections 402 and 403 and other applicable provisions of the Companies Act, 1956 by seeking the following reliefs: a. Restraining the respondents herein from conducting and holding the proposed EGM of the First Respondent Company scheduled to be held on 08.04.2013. b. Consequential Restrain the Respondents from altering the capital and subsequently allotting shares. c. Further restrain the respondents from removing the petitioner from the board of the First Respondent Company d. Declaring the EGM notice dated 06.03.2013 convening the EGM on 08.04.2013 as null and void. e. Direct that the petitioner is entitled to representation on the board of the First Respondent Company. f. Director the Respondents to operate the bank account of the first company jointly with the petitioner. g. Restraining the respondents or their men or agents or any one claiming through them from in any manner Transferring/transmitting/alienating/encumbering assets of the 1st of the Respondent Company. h. Restrain the 2nd and 3rd Respondent from exercise the voting rights in 7000 shares pertaining to the petitioner.
(3.) The brief facts, which are relevant for adjudication of the present issue, as set out in the Company petition, are as follows: a) Svakrm Laboratories Private Limited (hereinafter referred to as "the Company") was incorporated on 09.04.2007, having its registered office at Plot No. 293, Vivekananda Nagar Colony, Kukatpally, Hyderabad - 500072. The authorised Share Capital of the Company as on the date of incorporation was Rs. 1,00,000/- (Rupees One Lakh only) consisting of 10,000 equity shares of Rs. 10/- each. Subsequently, the authorised capital of the Company increased from Rs. 1,00,000/- (Rupees One Lakh only) to Rs. 2,00,000/- (Rupees Two Lakh only) by creation of 10,000 equity shares of Rs. 10/- each in the EGM held on 28.02.2008. The main object of the Company is to carry on the business of manufacturers, producers, processors, makers, convectors etc. b) The Petitioner is one among the 1st Directors and signatory to the Memorandum of Association of the Company. He is holding 5000 equity (25%) shares on the date of filing the present petition, which is filed on 25.03.2013. c) Two partnerships were constituted on 05.01.2006 in the name of M/s. VSK Laboratories and M/s. SVAKRM Laboratories. The shareholding of the petitioner and other respondents in both the entities are: petitioner: 40%, 2nd Respondent: 15%, 3rd Respondent: 15%, S. Shahjahan; 15% and G. Ramakrishna: 15%. The shareholding pattern of the Company at the commencement of the business is as follows:- d) The Petitioner along with G. Ramakrishna purchased land to an extent of 14 acres and 2 guntas, Velimenadu, Chityal Mandal, Nalgonda District, Andhra Pradesh (TS now) in the year 2006. Subsequently, the said lands were sold and transferred to both the Companies; comprising 6 acres and 37 guntas, in survey No. 406, were transferred to VSK Laboratories Private Limited and land to an extent of 7 acres and 5 guntas, comprised in survey No. 405, were transferred to SVAKRM Laboratories Private Limited. Thus both the factories of VSK Laboratories Private Limited and SVAKRM Laboratories Private Limited were situated next to each other as an adjacent land. e) The Petitioner along with others including the respondents acquired M/s. Vision Drugs Private Limited. The petitioner along with one Mr. Nageswara Rao held 58%, G. Ramakrishna held 12%, the 2nd and 3rd Respondents held 15% each. Subsequently, dispute arose in between the 2nd Respondent and said Mr. Nageswara Rao. The 2nd and 3rd Respondents hatched a plan to oust the Petitioner, who was holding major shares in both the companies viz. VSK Laboratories Private Limited and SVKRM Laboratories Ltd. (1st Respondent Company.) f) The petitioner alleges that the Respondents No. 2 and 3 illegally altered MOA and increased authorised capital from Rs. 1 Lakhs to Rs. 2 Lakhs basing on the alleged EGM held on 28.02.2008. Accordingly, the increased shares of 10,000 were allotted to V. Nageswara Rao (4000), A. Mohan Krishna (400), G. Venkatewara Rao (2600), G. Ramakrishna (3000). All these things were done without notice to the Petitioner. g) The Petitioner alleges that the 2nd and 3 rd Respondents mismanaged the Bank accounts of the Company, and also allotted the increased shares to themselves, with a mala fide intention to reduce the Petitioners holding to a miniscule fraction in VSK Laboratories Private Limited. h) In order to buy peace and focus on the business, the Petitioner and the 2nd and 3rd Respondents, were entered into two Memorandum of Understanding (MOU) dated 07.06.2011 relating to VSK Laboratories Private Limited and the SVKRM (R1 Company). In pursuant to the said MOU, the 2nd and 3rd Respondents transferred their entire shareholding in VSK laboratories private Limited to the Petitioner and his wife Mrs. B. Padmaja Rani and thus exited from the Company. i) The second MOU relates to the R1 Company was executed among A. Mohan Krishna (R3), Venkateswara Rao (R2), Suresh Babu (Petitioner) and Padmaja Rani. In terms of this MOU, the petitioner has to transfer 7000 equity shares in favour of the 2nd Respondent. It is alleged that the 2nd Respondent failed to pay sale consideration to the Petitioner for the above transfer of shares. j) It is alleged that the Respondents trying to sell the land and buildings to the third parties without informing the Petitioner. k) The 2nd Respondent issued a notice dated 01.02.2013 proposing to convene the Board meeting to be held on 09.02.2013. Again another notice was issued dated 23.02.2013 by proposing to convene a board meeting held on 02.03.2013. The petitioner attended the Board meeting on 02.03.2013. Thereafter, another notice dated 06.03.2013 was issued by the Company calling for EGM on 08.04.2013 (which is the major controversy in the present case) along with a special notice under Section 284(2) of the Companies Act, 1956 proposed by the 3rd Respondent dated 05.03.2013. This EGM was proposed and conducted for increasing authorised capital of the Company from Rs. 2 Lakhs to Rs. 5 Lakhs and for removal of petitioner from office of Board of Directors. The Petitioner alleges that the above action was proposed with mala fide intention in order to dilute the shareholding of the petitioner to a miniscule fraction and to remove him. l) The Petitioner alleges that a complaint by 3 rd Respondent U/s. 284 for his removal is unsustainable. One of the reasons for his removal was that he was holding 100% shares in VSK Laboratories Private Limited, and this is admittedly false as no one can hold in 100% in a Private Limited Company. And the other baseless reason cited for his removal was that he was obstructing road to the Company. m) In the above circumstances, the Petitioner submit that there would be justifying reasons exist to wind up the Company U/s. 433(f) of the Companies Act, 1956, but it would unfairly prejudice the interest of the petitioner, and the Company in general. The petitioner, therefore, sought the intervention of this Tribunal to pass appropriate orders so as to put an end to the acts of oppression and mismanagement on the part of the Respondent Company in order to see ease of business.;