C.P. No. 11(ND)/111/2011. Case: Arvind Mohan Johari and Ors. Vs Carlton Hotels Pvt. Ltd. and Ors.. Company Law Board
| Case Number | C.P. No. 11(ND)/111/2011 |
| Counsel | For Appellant: Party-in-Person and For Respondents: Virender Ganda, Sr. Advocate, Rakesh Kumar and Santosh Kumar Giri, Advocates |
| Judges | B.S.V. Prakash Kumar, Member (J) |
| Issue | Code of Criminal Procedure, 1973 (CrPC) - Section 482; Companies Act, 1956 - Sections 111, 397, 398; Indian Penal Code 1860, (IPC) - Sections 120-B, 420, 467, 468, 471, 477 |
| Judgement Date | May 13, 2015 |
| Court | Company Law Board |
Order:
B.S.V. Prakash Kumar, Member (J), (New Delhi Bench)
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Basing on the order dated 29.4.2011 passed by this Bench in CP 76/2002, the petitioners filed this CP 11/2011 seeking rectification of the register of members of R1 company u/s. 111 of Companies Act 1956 (hereafter referred as "the Act") for having Respondents 2&3 omitted the names of the petitioners and their group company M/s. Cyberspace Ltd. (hereafter called Cyberspace) from the share register without sufficient cause. The petitioners acquired 100 shares each on 3.3.1997, thereafter the petitioner group company Cyberspace acquired 22,670 shares on 28.4.1997, and finally the petitioners and their father Late Gyanendra Nath Johari acquired 25,000 shares (8,500 each to the petitioners and 8,000 shares to their father) on 31.3.2000. Thereafter R2 & 3, on fraudulently showing 200 shares held by the petitioners transferred to R2 and forfeiting the remaining shares held by the petitioners and their company Cyberspace, these Respondents, finally, to clean out the petitioners from the company, allotted to themselves 1,05,000 shares at par on Rs. 6.50/- paid up without any notice to the petitioners, which led the petitioners holding more than 50% to nil. Therefore for having these Respondents omitted the petitioners shareholding from the Share Register without sufficient cause and for these Respondents allotted 1,05,000 shares to themselves without sufficient cause, the petitioners, on the liberty given to the petitioners to file this petition under section 111 of the Art 1956, filed this company petition.
The averments of the petitioners in brief:
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The petitioners submit that they initially placed their grievance in CP 76/2002 u/s. 397, 398 of the Act, on which, when the Respondents filed CA 98/2003 challenging maintainability of that CP, this Bench passed an order dated 24.9.2011, giving liberty to the petitioners to prove that they have shareholding in R1 Company as pleaded in CP 76/2002 by filing company petition u/s. 111 of the Act, within a period of 4 weeks of receipt of the order dated 24-9-2011.
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The Petitioners 1 & 2 are real brothers; third petitioner late Gyanendra Nath Johari in CP 76/2002 is father of them. Since their father passed away on 23-2-2010, they moved this CP seeking prayer for rectification of the register to the shares held by their father as well. These petitioners submit that Cyberspace is one of the group companies owned by the petitioners. Since Cyberspace has gone into liquidation, though they have not shown it as petitioner along with them. However, they have espoused the cause of Cyberspace, because R1 Company has shown as Cyberspace forfeited 22,670 shares held by the petitioners through Cyberspace. Of course, a counsel, namely Mr. Nagesh, appeared on behalf of Cyberspace on the authorisation given by the Official Liquidator.
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The petitioners submit that the dispute being in relation to the shares of a company called Carlton Hotels Pvt. Ltd., the petitioners made it as R1. For having its directors (R2 & 3) alleged to have indulged, in causing tampering of the records of the company and the records R1 filed before RoC, Kanpur; in altering the share register without sufficient cause; they made them as R2 & 3. For R2 & 3 having allotted shares to the wife of R3, they made her as R4, Since Cyberspace, being in liquidation, it's directors cannot initiate proceedings on it's behalf, therefore, the petitioners made it proforma Respondent/intervener in pursuance of the directions in the order dated 29-4-2011.
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R1 Company owns a hotel called Carlton Hotel in a building spread in 6.48 lacs Sq. Ft. This hotel is located in 8,89 acres of freehold commercial land situated in the heart of Lucknow City. In mid 1990s, when R1 was in heavy losses for it was being occupied by nearly 70 tenants on nominal rent for decades, R2 & R3, to come out of this tangle, approached P1 & P2 with an offer envisaging substantial investment for settlement of the long term tenants of the hotel because vacating tenants from the premises was necessary for the growth of hotel business. On negotiations, both the parties agreed that the petitioners group would solely hold more than 50% equity and constitute 50% in the Board of the company. On this agreement, P1 & P2 were invited to join the Board taking qualifying shares as stated under Article 76 of AoA of the company to become directors of the company. Accordingly, P1 & P2 acquired 10 shares of R. 100/- each for directorship in a board meeting held on 3.3.1997. In pursuance thereof, P2 was made additional director of R1 Company in the same meeting held on 3-3-1997, accordingly the company filed Form-32. In furtherance of their understanding, the petitioners, in April 1997, purchased 22,267 shares of Rs. 100/- each (Rs. 65 per share paid up) at a premium of Rs. 900/- per share from R2 in the name of Cyberspace (in liquidation), for a price of Rs. 2,27,00,000/-, duly reflected in the Board Resolution dated 28.4.1997. In the same resolution, Board appointed P1 as Additional Director of R1 Company. When R1 Company held AGM on 30-9-1997, the company appointed both the petitioners as regular directors, ever since they continued as directors up to the year 2000. The petitioners submit that the certified copies of Directors Reports for the year 1998 and 1999 and copies of certified copies of Note on Accounts for the years 1999 and 2000 reflect that the petitioner had been continuing as directors of the company.
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The petitioners submit that the Respondents agreed that they would make the petitioners majority in the company, provided the tenants stand vacated. Having the petitioners caused the tenants vacated hotel premises by making payments to them, R1 allotted 25,000 shares to the petitioners and their father on 31.3.2000 at the rate of Rs. 80/- per share (Rs. 10 at face value, Rs. 70/- at premium). In these 25,000 shares, P1 & P2 were allotted 8,500 shares each, whereas their father was allotted 8,000 shares. As to consideration, having the petitioners already made huge payments to the tenants for vacation of them from the premises, 25,000 shares were allotted to them at the rate of Rs. 80/- per share. Out of total consideration, the petitioners paid part consideration of Rs. 10,00,000/- at the rate of Rs. 40/- per share (Rs. 5/- towards face value and Rs. 35/- towards share premium) to the company in March 2000, which was reflected in the audited annual accounts of R1 for the year ended on 31.3.2000. The petitioners paid remaining 10 lacs to the company in August 2000 and these shares by this second payment have become fully paid. The tenants being vacated from the premises of the hotel by the petitioners, the company, for the first time, made profits in the years 1998, 1999 and 2000. When R1 Company was facing liquidity crunch in between 1997 and 2000, Cyberspace had paid Rs. 30,00,000/- to R1 Company as advance for sponsorship vide three Account Payee cheques bearing serial No. 127007, 127008 to 127010 for Rs. 10 lacs each, which R1 reflected in Notes on Accounts annexed to its audited Annual Accounts for the year ending 31.3.1997.
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The petitioners submit R2 & 3 perhaps seeing the company making profits after the petitioners came in, R2 & 3 with the help of CA, V.K. Gupta, to get rid of the petitioners from the company, started doing mischief in the company - deleted the names of the petitioners, their father and Cyberspace as shareholders of the company. To achieve their oblique motive, R2 & 3, without any notice to the petitioners, deleted P1 & P2 holding 200 shares from the register of members without any transfer deeds from the petitioners. The reason given by R3 for removal of their names from register is that the petitioners sold these 200 qualification shares in the year 1999-2000 to R2; another reason they gave is that these 200 shares were transferred back to respondents on the failure of the petitioners to meet their obligations - both are inconsistent to each other.
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The petitioners submit that the Respondents have come up with a story that P2 and R2 & R3 entered into an MOU dated 27.3.2000 stating that the petitioners and their father acquired 25000 shares at the rate of Rs. 1,000/- per share coupled with right of forfeiture. As to this MoU, the petitioners stated that it is a false document forged by R2 & R3 to create non-existent demand against the petitioners. The petitioners submit that this purported MoU is on a plain paper, R1 has not signed as a party to the same, the purported signatures of the petitioners are only on one page. He submits that CBI has found that this MoU is a false document. Apart from this, the respondents filed minutes of Board meeting as if it was held on 31.3.2000 prescribing the entire sum be paid latest by 27.3.2000 even if no calls are made. Contrary to above, it is said that call money shall be paid in 25 equal monthly installments within 15 days from the date of receipt of call notice by the shareholders of these 25,000 shares. Therefore, it is clear that the receipt of call notice was a precondition for call become due. Whereas, Clause (iv) of MoU dated 27.3.2000 says that calls on these shares be made as and when need arose, in the same MoU, clause (vi) says that in any case, the entire call money should be paid within two years from the date of allotment. That various statements in the document itself are not in sync with each other, in fact, conflicting one clause against another within the document.
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The petitioners submit that R2 & R3 annexed the minutes of Board meeting on which 25,000 shares held by the petitioner were allegedly forfeited. In CP 76/2002, the respondents claim that the shares were forfeited in a Board meeting held on 12.6.2001, whereas in a Revision u/s. 482 Cr.P.C. before Hon'ble High Court of Allahabad, the same respondents stated that the very same shares were forfeited in a Board meeting held on 30.3.2001...
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