C.P. No. 102(ND)/2009. Case: Almonds Capital and Management Services Ltd. Vs Shivas Spas and Hospitality Pvt. Ltd. and Ors.. Company Law Board

Case NumberC.P. No. 102(ND)/2009
CounselFor Appellant: P.K. Mittal and Mehak Gupta, Advocates
JudgesB.S.V. Prakash Kumar, Member (J)
IssueCompany Law
Judgement DateJanuary 12, 2015
CourtCompany Law Board

Order:

B.S.V. Prakash Kumar, Member (J), (New Delhi Bench)

  1. The Petitioner company filed this Company Petition against R1 Company and R2, namely Mr. Dhharam Mehta continuing as Managing Director of company alleging that R2 has been mismanaging the affairs of the company prejudicial to the interest of the petitioner and R1 Company, therefore, the petitioner has sought to remove R2 from the Board of Directors, direct R2 to restore the sum of Rs. 4,25,00,827/- to R1 company, direct R2 to restore any other sum which may be covered after it was ascertained on the trial of the present petition, direct the Central Government or any other competent authority to launch criminal prosecution against R2 for violation of various provisions of the Companies Act, 1956, direct R2 to provide books of accounts, vouchers, bills, invoices, challans, Bank statements, cash book, general ledgers, accounting data and such other order as may deem fit and proper in the facts and circumstances of the case.

  2. The brief facts of the petition is that R1 company was incorporated on 23.10.2008 with an authorised share capital of Rs. 5/- lacs, having paid up capital of Rs. 3/- lacs dividing into 30,000 shares of Rs. 10/- each to run the business of Spa in the city of Mumbai, having its registered office at Delhi. Since R2 claimed himself having expertise in running Spa, the promoter directors, i.e., Shri Navjeet Singh Sobti and Shri G.P. Agrawal, believing the picture given by R2, made him Additional Director of the company on 5.11.2008, thereafter appointed him as Managing Director of R1 company on 9.2.2009 to carry the business of Spa at Mumbai since the promoter directors of this company are based at New Delhi, Since R2 is the only director based at Mumbai came forward to run the business, the promoter directors left everything to the control of R2. Having the promoter directors put trust upon R2, they sanctioned loan of Rs. 3,70,000/- to R1 company, out of which, Rs. 2,54,50,000/- was in fact disbursed to the company to set up the machinery and other infrastructure that was required to run R1 company.

  3. The nature of business of this company is that the customers come and join on monthly basis or on quarterly basis as envisaged by R1 Company and take services of Spa by making monthly or quarterly payment, as the case may be, to the company. Since R2 is the person left with the control of the company, he started collecting the monthly contribution from customers. Accordingly, hardly for three months, the earnings were reflected in the company account until 4.4.2009. The petitioner says the evidence to say the company started doing business is the statement of account of the company reflected customers' payments coming into R1 Company. They are not even aware how much money coming into the company, how much money being deposited into the accounts of the company. Since some money was coming into the company accounts of R1 Company for some time, the promoter directors of the company remained quiet with a belief that R2 was running the company by doing business of Spa.

  4. The petitioner company got suspicious over the functioning of R2 only when R2 did not attend to the Board meetings and even failed to attend to the phone calls given by the members holding Petitioner Company and when they could not get any clue from R2, they made all their efforts to get the details of accounts of the books of R1 Company and for audit of the company. However, they failed in their efforts because R2 failed to attend Board meetings; avoided to see anything come to R1...

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