C.A. No. 405 of 2011 in C.P. No. 104 (ND) of 2009. Case: Ashok Agarwal and Others Vs Amar Ujala Publications Ltd. and Others. Company Law Board

Order:

D.R. Deshmukh, J. (Chairman), (New Delhi Bench)

1. This order governs C.A. No. 405 of 2011 filed by the petitioner under regulation 44 of the Company Law Board Regulations, 1991, read with Order 6, rule 17 of the Code of Civil Procedure, 1908 read with section 151 of the Code of Civil Procedure, 1908, for amendment of Company Petition No. 104 (ND) of 2009. In sum and substance the voluminous amendment running into 64 pages introduces the historical background, the shareholding and participation of the petitioners in the company, the position of the petitioners on the board and certain subsequent events. It also gives details of the change in the shareholding pattern in the company. It prays for incorporation of the following interim reliefs in paragraph 22:

   That the following paragraph be inserted after clause (viii) of the interim relief:--

   (ix) Reappointment of petitioner No. 2 as a whole-time director; Restoration of power and functions of petitioner No. 1;

   (x) Pending reappointment of petitioner No. 2 as a director of the company, the subsequent board meetings consequent upon his removal on September 25, 2010, be declared as null and void on the ground of lack of proper quorum.

2. I have considered the written submission filed by the parties and have perused the record. For the reasons given below, I am of the considered opinion that the amendment application deserves to be dismissed:

   (i) By order dated August 24, 2009, it was held that the term of Mr. Ashok Agarwal as a director of the company not having expired the passing of a resolution for his removal as director of respondent No. 1 company would prima facie constitute an oppressive act. Therefore, the respondents were restrained from considering the resolution for the removal of Mr. Ashok Agarwal as a member of the board of the company in the annual general meeting scheduled to be held on September 25, 2010. The term of Mr. Ashok Agarwal as the whole-time director expired on October 17, 2011. By order dated October 13, 2011, I had declined to grant the prayer of the petitioner to maintain status quo on Mr. Ashok Agarwal's position as the whole-time director. I had also held that in a quasi partnership the principles of legitimate expectation cannot be invoked and the contractual appointment of Mr. Ashok Agarwal as the whole-time director must come to an end on October 17, 2011. I had further stated that Mr. Ashok Agarwal shall continue to be a director in respondent No. 1. This finds further...