SUSHEEL KUMAR SHARMA AND ANOTHER Vs. M/S DEES CHEMICALS PRIVATE LIMITED AND OTHERS

JUDGEMENT

(1.) The instant one is essentially an appeal under Section 10 -F of the Companies Act, 1956 ['the Act of 1956'] against the order dated 13.09.2011 as passed by the Company Law Board (Kolkata Bench) in a petition under Sections 397/398 of the Act of 1956 as filed by the appellants -petitioners, being C.P. No.18 (Kol)/2008.

(2.) This appeal has been registered in this Court as Company Petition No.5 of 2013 for having been titled as a 'Company Petition', though it should have been titled and registered as a 'Company Appeal'. Be that as it may, this petition has been dealt with as an appeal and has been finally heard as such with reference to Section 10 -F of the Act of 1956 and Section 434(1)(b) of the Companies Act, 2013, which has come into force w.e.f. 01.06.2016. Put in brief, the relevant background aspects of the matter are that the respondent No.1 Dees Chemicals Private Limited (hereinafter referred to as 'the company'/the respondent company') is a company incorporated under the Act of 1956 having its registered office at Them Marwet, Khanapara, Meghalaya that came into existence on 24.11.1999 for carrying waxes business with the authorized share capital of Rs.50 lakhs divided into Rs.5 lakhs equity shares of Rs.10/ - each. It has been the case of the appellants -petitioners that the appellant -petitioner No.1 was holding 1 lakh shares and the appellant -petitioner No.2 was holding 39,900 shares, which together amounted to 28% of the total paid up capital of the respondent company; and they were the Directors of the company whereas the respondent No.2 Shri Kamesh Kumar Himatsingka was the Managing Director. The appellants -petitioners pointed out that the respondent Nos.2 to 5 were together holding 3,60,100 shares, amounting to 72% of the paid up capital of the company. The respondent No.5 Andhra Bank, Guwahati is said to be maintaining the account of the company whereas, the respondent 7 State Bank of India, Burnihat Branch, Meghalaya is said to be the creditor bank of the company.

(3.) It has been pointed out that in the process of establishing its business and working capital requirements, the respondent company procured two loans in the sum of Rs.34,00,000/ - (thirty four lakhs) and Rs.41,00,000/ - (forty one lakhs) respectively from the respondent No.7, with the appellants -petitioners as also the respondent Nos.2 to 4 standing as guarantors therefor. According to the appellants -petitioners, for the company's inability to pay its dues after suffering huge losses, it had been seeking assistance from the State Government for revival. It has been the case of the appellants -petitioners that since beginning, the respondent No.2 had been maintaining the overall management and affairs of the company to the exclusion of the others; that the respondent No.2 neglected to take any step to repay the loan amount to the creditors including the State Bank of India; and that the appellants -petitioners were not given any notice of Annual General Meeting nor any account was shown to them. The appellants -petitioners preferred a petition under Section 397/398 of the Act of 1956 before the Company Law Board, Kolkata Branch with the submissions that they had received a copy of the notice dated 08.02.2008 from the State Bank of India under Section 13 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ['SARFAESI Act'] making demand to the tune of Rs.73,18,764.57/ - and threatening to take steps for enforcement of securities in case of failure of payment. According to the appellants - petitioners, they made enquiries whereupon the respondent No.2 admitted that such a notice was served on the company as well. Apart from the aforesaid submissions, the appellants -petitioners alleged that the respondent No.2 had siphoned out a sum of Rs. 88,26,870/ - from the bank account of the company maintained with the Andhra Bank, Guwahati Branch. With these averments, the appellants -petitioners sought the reliefs, inter alia, that the Annual General Meeting or the Meeting of the Board of Directors of the respondent company be declared null and void; and the respondent No.2 be directed to restore the aforesaid amount of Rs. 88,26,870/ -. The appellants -petitioners further prayed that the respondent No.2 be directed to take steps to negotiate with the creditor -bank and to liquidate its dues; and the respondent No.2 be prohibited from dealing with the assets and properties of the company including the bank account. The learned Member of the Company Law Board dealing with the aforesaid petition found shortcomings too many in the petition so filed by the appellants -petitioners and proceeded to dismiss the petition by the impugned order dated 13.09.2011, inter -alia, with the observations and considerations as follows: -