SANJAY SURYAPRAKASH MEHTA Vs. SKG CONSULTANTS AND ENGG. P. LTD.

JUDGEMENT

(1.) THE present application is filed by the petitioner praying this Bench to restrain the respondents from contending that the applicant ceased to have been a director of the company under section 283(g) of the Companies Act, 1956, the advocate for the petitioner submitted that the respondents claimed to have convened the meeting of the board of directors on June 9, 2011 and September 29, 2011, though no notice of meeting of June 9, 2011, was ever given to the applicant. The alleged notice dated September 26, 2011, stated to have been sent to the applicant by courier is delivered in the afternoon of September 29, 2011. The applicant was aghast to receive a letter dated October 3, 2011, purportedly signed by respondent No. 2 as a managing director of the company, inter alia, recording that :

(2.) THE respondents filed the reply and submitted that there is evidence that the board of directors of the company did really hold its meetings on June 9, 2011 and September 29, 2011, respectively for both of which the petitioner has been informed well in advance. Equally it is only with intention of misleading the Company Law Board that the applicant is asserting that no notice of meeting scheduled to be held on June 9, 2011, was ever given to him. Actually notice of this board of directors' meeting has been delivered to him on June 7, 2011, against which his letter dated June 7, 2011, has been received by the company on June 7, 2011, itself. Similarly the notice dated September 26, 2011, for the board of directors' meeting scheduled to be held on September 29, 2011, was actually delivered to the applicant on September 27, 2011 and not on September 29, 2011, as falsely claimed by the applicant. This fact must be underlined that the respondents have been strictly maintaining the status quo as required by the hon'ble Company Law Board with regards to the shareholding pattern and the board of directors as on April 21, 2011. The hon'ble Bombay High Court also, on December 16, 2011, while hearing the appeal of the petitioner challenging the rejection order of his petition for modification of the interim order of status quo as on April 21, 2011, has held that "at this tentative and prima facie stage, the Company Law Board has also directed the parties that they should after the board meeting, not take any decision which would alter the shareholding pattern or the composition of the directors. That is not being done and that is not even the grievance of the appellant". Except maintaining the share pattern and board of directors as on April 21, 2011, the said status quo order of the hon'ble Company Law Board has stayed no part of the minutes of board of directors' meeting held on March 31, 2011. Naturally the validity of remaining part of it is not questionable till the final order is passed by the Company Law Board. By passing the status quo order on April 21, 2011, the hon'ble Company Law Board has not bestowed on the petitioner immunity from the provisions of the Companies Act, 1956, the articles of association of the company and other relevant provisions of the Act, related to his fiduciary duties and liabilities as he presumes to have been and neither the Company Law Board has empowered him to act in defiance of the resolutions passed by the board of directors and in denial of supervision/superintendence, control and direction of it. There are two sections in the Companies Act, 1956, which are relevant to exclusion of a director of a company from the management of any company :

(3.) HEARD counsel appearing for the parties. The stand of the respondents is that the petitioner was continuously absenting himself for three board meetings consecutively, i.e., on March 31, 2011, June 9, 2011 and December 29, 2011, without any application/intimation for leave of absence in spite of the fact that the petitioner was well informed about the meetings with proper notices. In view of the absence the petitioner deemed to be vacated the office of the director of the company under section 283(1)(g) of the Companies Act with effect from September 29, 2011. It is -important to see that whether the petitioner absented himself for the three board meetings consecutively. The petitioner contended that for the board meeting dated March 31, 2011, he received the notice but he requested the company to postpone the meeting vide his letter dated March 25, 2011, in view of the reason that he has to attend the court with regard to a case instituted by the company against Mission Construction Co. P. Ltd. In this regard the provision of law is relevant to be looked into. The vacation of office by the director falls under section 283(1) (g) of the Act which says that: