Bikki Raveendra Babu, Member - (1.) Learned Advocate Mr. Ayaan Patel i/b Learned Advocate Mr. Apurva Vakil present for petitioner. Learned Advocate Ms. Vaibhavi Parikh present for Respondent No. 2. Order pronounced in open Court. Vide separate sheet. Petitioner, claiming to be shareholder holding 96.55% shares in the 1st Respondent Company, filed this Petition praying for a direction to conduct General Meeting of the 1st Respondent Company for the purpose of appointing the Petitioner as Director of the Company, and with a further direction that one Member shall constitute Quorum.
(2.) The facts in brief, that are necessary for the purpose of disposal of this Petition, are as follows; 2.1 M/s. Kruppa Paints Private Limited [hereinafter called as "1st Respondent Company"] was incorporated on 08.8.2006. The Authorised Share Capital of the Company is Rs. 32,00,000 divided into 3,20,000 equity shares of Rs. 10 each. 2.2 Petitioner is daughter of Ms. Shakuntala who is the divorced wife of Indravadan Shah. Second Respondent is the second wife of Indravadan Shah. 2.3 Late Indravadan Shah, 2nd Respondent and one Mr. Bharat Patel were the initial subscribers to the Memorandum of Association and first Directors of the 1st Respondent Company holding 5000, 4000 and 1000 shares respectively. 2.4 Mr. Bharat Patel resigned as Director of the Company on 06.9.2014. 2.5 The Paid-up Share Capital of the Company is 1,45,000 equity shares of Rs. 10/- each, i.e. 14,50,000. Late Indravadan Shah was holding 1,40,000 equity shares and Respondent No. 2 is holding 5000 equity shares. Late Indravadan Shah by his letter dated 19.10.2015 informed the Board of Directors of the 1st Respondent Company expressing his wish to gift his shareholding of 140000 shares to the Petitioner. Petitioner by his letter dated 20.10.2015 conveyed her no objection to the said transfer. In the Board Meeting of the 1st Respondent Company held on 23.10.2015 it was resolved that 140000 equity shares of late Indravadan Shah are transferred to the petitioner. The original Share Certificates are with the Petitioner. Accordingly, the Petitioner is holding 96.55% share of the Paid-up Share Capital. 2.6 After the resignation of Mr. Bharat Patel, one Mr. Gaurang Kapadia was appointed as 'Additional Director' on 06.9.2014 and his appointment was regularised in the Annual General Meeting ["AGM"] held on 30.9.2014. The said Mr. Gaurang Kapadia resigned as Director with effect from 07.11.2015. There are only two Directors in the 1st Respondent Company, i.e., late Indravadan Shah and Respondent No. 2. Indravadan Shah died on 28.02.2016 after prolonged treatment due to a prolonged illness in SAL Hospital after admission on 21.01.2016. 2.7 Shri Rajiv Yajnik, husband of the Petitioner was appointed as 'Additional Director' on 27.11.2015. The Annual General Meeting of the 1st Respondent Company could not be held on or before 30.9.2016 and as a result appointment of Mr. Rajiv Yajnik could not be regularised. Petitioner convened the requisitioned Extra-ordinary General Meeting {"EOGM"] of the 1st Respondent Company on 04.01.2017 wherein Petitioner was appointed as 'Director' of the Company. Petitioner was under bona fide belief that the appointment of her husband as 'Director' was valid and therefore the Board of Directors of the 1st Respondent Company consist of Respondent No. 2; Petitioner and her husband Rajiv Yajnik. Petitioner admitted that the Resolution passed in EOGM held on 4.1.2017 is not a valid Resolution since there was no Board of the 1st Respondent Company to consider the requisition under Section 100 of the Companies Act. Husband of the Petitioner managed affairs of the 1st Respondent Company with a belief that he is a Director of the Company. In such situation, on 5.1.2017 in the Board Meeting various Resolutions were passed changing the Authorised Signatory of the Company and appointing the Petitioner and her husband severally to operate the Company's Bank Accounts with State Bank of India, Oriental Bank of Commerce etc. 2.8 The 2nd Respondent filed an Affidavit-cum-Declaration before the Ministry of Corporate Affairs on 25.01.2017 stating that Rajiv Yajnik ceased to be Additional Director of the Company with effect from 30.9.2016 and therefore there is only one Director in the Company, i.e., herself (Respondent No. 2). Respondent No. 2 proposed to appoint another Director under Section 174(2) of the Companies Act. Respondent No. 2 also filed Form No. DIR-12 in respect of cessation of Rajiv Yajnik as Director of the Company w.e.f. 30.9.2016. Respondent No. 2 also filed a complaint dated 30th January, 2017 with the Registrar of Companies making allegations against the Petitioner and her husband Rajiv Yajnik. In February 2017 Petitioner and her husband were prevented from entering into factory premises of the 1st Respondent Company and participating in any manner in the affairs of the Company, and denied access to the records of the Company. 2nd Respondent also addressed a letter dated 22nd February, 2017 to State Bank of India stating that she is the Director and shareholder and she has been authorised by the Board of Directors to operate Company's Current account with State Bank of India and that some other authorised persons were trying to take control of the Company. Petitioner addressed letters dated 2.3.2017 and 7.3.2017 to Respondent No. 2. Petitioner also got issued a legal notice dated 30.3.2017 to Respondent No. 2. Petitioner stated that even the salary of some of the members of the staff of the 1st Respondent Company has not been paid since Respondent No. 2 is not signing the cheques. 2.9 Further it is stated in the Petition that Section 98 enables this Tribunal to order to conduct Meeting of the Company and to give ancillary directions. It is further stated that Petitioner being the shareholder of 96.55% shares is denied of any role in the management of the Company. It is stated that the Board of Directors of the Company consists of only Respondent No. 2 as Director and therefore it is not competent under Section 100(4) of the Companies Act to call a meeting of the Company upon the requisition given by the Petitioner under Section 100(2) within 21 days from the date of receipt thereof. It is further stated that in the absence of competent Board which is unable to comply with the first part of Section 100(4) of the Companies Act Petitioner cannot act under second part of Section 100(4) and hold meeting of the Company within a period of three months. It is further stated that even if a meeting is held Respondent No. 2 may not attend and thereby there will not be any quorum. According to the Petitioner it is impracticable to conduct General Meeting or to call Extra-ordinary General Meeting of the Company and therefore in these circumstances in order to safeguard the interest of majority shareholders, this Tribunal can give directions to conduct meeting under Section 98 of the Companies Act.
(3.) Respondent No. 2 is contesting this Petition on the following grounds; (i) Rajiv Yajnik is ceased to be Additional Director with effect from 30.9.2016; (ii) No EOGM was held on 4.1.2017 and the so-called Resolutions passed in the purported EOGM on 4.1.2017 were invalid including the appointment of Petitioner as Director of the 1st Respondent Company. (iii) Petitioner and her husband committed several illegal acts in the affairs of the Company. After 2nd Respondent filed Complaint dated 30th January, 2017 Petitioner and her husband having no other recourse to take control of the 1st Respondent Company, filed this frivolous Company Petition. (iv) Respondent No. 2 pleaded that she has filed Civil Suit No. 764 of 2017 in City Civil Court, Ahmedabad against the Petitioner and her husband and others challenging the validity of the transfer of shares of late Indravadan Shah in the name of Petitioner and therefore Respondent denied that the Petitioner is the shareholder of 1st Respondent Company. (v) Petitioner without making a valid requisition under Section 100 of the Act to the Board of Directors for calling a meeting, based upon the presumptions, Petitioner came to the conclusion that calling of Annual General Meeting is impracticable. Respondent No. 2 further pleaded that since the death of Indravadan Shah Mr. Rajiv Yajnik had taken the entire control of the 1st Respondent Company illegally and was operating the Company illegally and therefore Respondent No. 2 never got a chance to call for a meeting.;