CP No. 15/ND/2010 & C.A. No. 168 of 2010. Case: Archana Gupta Vs Suntech Infratech (P.) Ltd. and Others. Company Law Board

Case Number:CP No. 15/ND/2010 & C.A. No. 168 of 2010
Party Name:Archana Gupta Vs Suntech Infratech (P.) Ltd. and Others
Judges:Vimla Yadav, Member
Issue:Companies Act, 1956 - Sections 186, 397, 398, 399, 399(1), 402, 408, 81; Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(4)
Citation:2012 (106) CLA 283
Judgement Date:September 13, 2011
Court:Company Law Board


Vimla Yadav, Member, (Principal Bench, New Delhi)

  1. In this order I am considering CP No. 15/ND/2010 filed by the petitioner, a promoter director of Suntech Infratech (P.) Ltd., against the respondents alleging oppression and mismanagement under section 397/398 of the Companies Act, 1956 ('the Act') seeking annulment of all actions taken by the respondent No. 1 on behalf of the respondent No. 5-company, being decisions that were taken without any authority or right, in circumvention of law and procedure by playing a fraud upon this Board and petitioner and by indulging in fraudulent activities of fabricating and forging documents; annulling the increase of share capital from Rupees one lakh to Rupees ten lakh and annul the allotment of 90,000 shares made in the name of respondent Nos. 3 and 4 as the same have been allotted by the respondent No. 1 in back date after the order of this Bench dated 5th November/2009 and declare his aforementioned attempt as void ab initio and non est; annulling the appointment of respondent Nos. 2 and 3 as additional directors as the same have been appointed by the respondent No. 1 in back date after the order of the Company Law Board ('CLB') dated 5th November, 2009 by manipulating, forging and fabricating documents without any authority; directions allowing the petitioner, to takeover the ownership, control and management of the respondent No. 5-company; orders annulling all decisions that respondent No. 1 by misrepresenting to the Registrar of Companies ('RoC') may have taken on behalf of respondent No. 5. The R-5-company was incorporated on 9th August, 2007 and is having its registered office at D-63 Ground floor, Naraina Vihar, New Delhi-110028. The authorised share capital of the company as per the balance sheet as at 31st March, 2008 is Rs. 1,00,000 divided into 10,000 equity shares of Rs. 10 each. The issued, subscribed and paid-up capital of the company is Rs. 1,00,000 divided into 10,000 equity shares of Rs. 10 each. The company was incorporated to carry on the business of purchasing, selling and developing and type of land and plot that may belong to the company or to any other person of whatever nature and to deal in land and immovable property of any description; to construct houses, building or civil and constructional works of every description of any lands or immovable property; to purchase land for the construction of the multi-storeyed building and licence the flats therein on suitable terms and conditions and to do consultancy business in the real estate developers.

  2. The petitioner's case in this petition is that the petitioner is a promoter director and holds 50 per cent shares of the said company, since its very inception, i.e., from 9th August, 2007. The petitioner, who was a widow and R-1, met through a marriage portal www.jeevansathi.com and were married on the 16th January, 2007 on the false inducement of R-1. The petitioner, to her credit is astute businesswoman and has sound financial and managerial credentials. Immediately, after their marriage the R-1 persuaded the petitioner to invest with him. On 9th August, 2007, company was incorporated. Subsequently, however, the parties relationship have soured and no longer subsists. Petitioner has discovered that R-1 is a serial womaniser who misrepresented that he was divorced from his second wife and single, when he met and got married to petitioner, and thereafter apart, from cheating, duping, stealing and defrauding the petitioner, has also relentlessly tortured her by afflicting physical violence and cruelty. My attention was drawn to the first information reports ('FIR') dated 6th April, 2009 against R-1 and 4 and charge sheet filed including the MLC. The conduct of the R-1, which all along has only been to dupe and defraud the petitioner.

  3. It was pointed out that the R-5-company holds only one asset being immovable property of description bearing Plot No. C-45, Gagan Enclave, dundaheda, Ghaziabad, Ghaziabad measuring 169,77 sq. yards and construction made thereon in addition to construction material and equipment lying on site. The R-5, had undertaken the project and business of construction of Residential Flats on Plot No. C-45, Gagan Enclave, Dundaheda, Ghaziabad measuring 169.77 sq. yards since inception. For that purpose loan of Rs. 30 lakh from PNB Housing and Finance Ltd. was taken against the company's immovable property at C-45, Gagan Enclave, Dundaheda, Ghaziabad. Unsecured loan of Rs. 30 lakh was advanced by the petitioner by way of cheque and cash receipts, in addition, to the aforesaid amount the petitioner also gave to the R-1 and amount of Rs. 2 lakh, which was reinvested from the profits derived from another project. It was pointed out that initially for reason of the representations made, had implicit faith and no reason to distrust or suspect the respondent No. 1. She believed that her interest and investment were secure and allowed the respondent No. 1 the larger responsibility of managing the affairs of the respondent No. 5-company. But subsequent events have ubiquitously proved and unequivocally established that the intention of the respondent No. 1 all along was to dupe, defraud and cheat the petitioner who was forced to register a criminal complaint/FIR dated 6th April, 2009, against the respondent Nos. 1 and 4. Subsequent to the initiation of the criminal proceedings more particularly the registration of the FIR and charge sheet the respondent No. 1 has conducted himself in manner completely unbecoming of a director and utilised his fiduciary powers contrary to all accepted standards of fair dealing. Pursuant to gaining knowledge about the mala fide of respondent No. 1 the petitioner started looking into the affairs of the company. In order to better deal with the situation at hand and to further protect, preserve and stave off consequence which possibly could further jeopardise and threaten the continuity and existence of the respondent No. 5-company, the petitioner called upon the respondent No. 1 for an extraordinary general meeting ('EGM') on 5th June, 2009, vide notice dated 28th May, 2009, to discuss and approve annual accounts, i.e., balance sheet 31st March, 2009, and profit and loss account; the current status of overdue liabilities of the company remaining unpaid; the plan to pay overdue liabilities including interest on loan from the bank PNB Housing Ltd.; status of filling of income-tax return of assessment year 2007-08; an update of business operation from the 1st March, 2008 till date and any other item with the permission of the chair. The notice was duly served on the registered office of the company as well at the residence of the respondent No. 1, he deliberately chose not to attend. My attention was drawn to the notice dated 28th May, 2009. In the interest of all, the meeting was adjourned to 13th June, 2009. Respondent No. 1, was once again intimated and same was brought to his knowledge through another notice dated 6th June, 2009. Once again the respondent failed to appear, though respondent No. 1 was time and again appraised about the urgency in convening the Board meeting.

  4. My attention was drawn to a demand notice dated 19th August, 2009 for an amount of Rs. 24,68,037 payable within 60 days from the receipt of the same failing which the PNB Housing Finance Ltd. which was in exercise of any or all powers as conferred in section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('Securitisation Act, 2002'), In order to secure and safeguard the interest of respondent No. 5-company, the petitioner submitted a reply dated 11th September, 2009. The petitioner, once again called upon the respondent No. 1 a third time, vide its notice dated 14th September, 2009 vide which the meeting was rescheduled for 22nd September, 2009. Once again, in complete dereliction of duty the respondent No. 1 despite service failed to present himself for the said meeting.

  5. Further, the counsel for the petitioner pointed out that in terms of the constitution of the respondent No. 5-company, the petitioner and respondent No. 1, were jointly entitled to sign cheques and operate the bank account. Without and in absence of the respondent No. 1 and for want of quorum no decision for running the respondent No. 5-company could be taken. Respondent No. 1, despite knowing about the said restrictions, had deliberately failed to cooperate, and mala fidely kept himself from attending the said meetings and made it impossible for the petitioner or...

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