Case: Ashok Kumar and Ors. Vs Shree Janki Cold Storage P. Ltd. and Ors.. Company Law Board
| Judges | S. Balasubramanian, Chairman |
| Issue | Company Law |
| Citation | [2010] 153 CompCas 222 (CLB) |
| Judgement Date | July 24, 2009 |
| Court | Company Law Board |
Order:
S. Balasubramanian, Chairman
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One late Janki Sao, among others, along with the fourth petitioner and respondents Nos. 4 and 5, being his sons, incorporated Shree Janki Cold Storage P. Ltd., in the year 1974. The fourth petitioner is the son of the first wife of Janki Sao and respondents Nos. 4 and 5 are the sons of his second wife. As per the admitted balance-sheet as on September 30, 2004, the board of the company consisted of petitioners Nos. 1 to 4 and respondents Nos. 2 to 6. The shareholding as on that date was that the petitioners group held 28.12 per cent, shares, the respondents group 17.57 per cent, shares, the balance by others. According to the petitioners, they had acquired 3,000 shares from other shareholders subsequent to September 30, 2004 and thus, they came to hold 53.22 per cent, shares in the company. Some time in 2006, the petitioners filed an application before the Company Law Board under Section 186 of the Companies Act, 1956, alleging that the annual general meeting for 2004-05 had not been convened. On that application, this Board passed an order on December 18, 2006, appointing one Shri Rajeev Ranjan Prasad, advocate, to convene the annual general meeting for the year 2004-05 within 45 days. This annual general meeting was held, even though belatedly due to certain reasons, on April 21, 2007. In that annual general meeting petitioners Nos. 1 to 5 and respondents Nos. 2 and 3 were appointed as directors and respondents Nos. 4, 5 and 6 who came up for re-election were not re-elected.
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In this back ground, the petitioners have filed this petition dated April 7, 2008, making various allegations that respondents Nos. 2 to 6 had illegally issued 3,000 shares of Rs. 100 each at a premium of Rs. 400 per share to respondents Nos. 9 to 13 and in an allegedly held board meeting on February 5, 2007, they had allegedly appointed the fourth respondent as the managing director and in an allegedly held annual general meeting for the year ended March 31, 2006, on September 21, 2007, respondents Nos. 6 to 8 were allegedly appointed as directors. On the basis of these allegations, the petitioners have sought for a declaration that the allotment of 3,000 shares in illegal and void: for a declaration that the appointment of the fourth respondent as the managing director and that of respondents Nos. 5 to 8 as directors as null and void, etc.
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Shri Bose, advocate, appearing for the petitioners submitted: The petitioners collectively held 28.12 per cent, shares as in September, 2004. Thereafter, they acquired 3,000 shares from other shareholders consequent to which they became the majority with 53.22 per cent, shares. So far, none of the transferors has challenged the transfer. Coming to know that the petitioners had become the majority, the respondents attempted to remove the first and second petitioners as directors. Since no annual general meeting was held for the year 2004-05, the petitioners filed an application under Section 186 of the Act and the special officer appointed by this Board, held the annual general meeting on April 21, 2007. In that meeting petitioners Nos. 1 to 5 were appointed as directors along with respondents Nos. 2 and 3. Thus, after April 21, 2007, the petitioners have been in the majority on the board also. In March, 2008, the petitioners carried out inspection of the records in the office of the Registrar of Companies from which they came to know that on March 30, 2007, respondents Nos. 2 to 6 had allegedly allotted 3,000 shares to respondents Nos. 9 to 13 at a premium of Rs. 400 per share, and the relevant Form No. 2 had been filed on May 31, 2007. Further, in an allegedly held board meeting on February 5, 2007, the fourth respondent was allegedly appointed as the managing director, and relevant Form No. 32 was filed on October 25, 2007. It also transpires that the respondents had also convened and held annual general meetings for the years 2005-06 and 2006-07 and relevant returns were filed on November 6, 2007 and December 5, 2007. There are no details as to when the annual general meeting for 2005-06 was held even though annual general meeting for 2006-07 was purportedly held on September 21, 2007. The annual general meeting for 2005-06 could not have been held before April 21, 2007, as on that day only the annual general meeting for 2004-05 was held where after it is the board that was elected on April 21, 2007, had the power and authority to convene further annual general meetings. It also appears that respondents Nos. 5, 6, 7 and 8 were allegedly appointed as directors on September 21, 2007.
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Learned Counsel further submitted: In so far as alleged allotment of impugned shares is concerned, the said allotment has been made only for the purpose of reducing the petitioners from a majority into a minority. Even though, during the hearing, the...
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