CP No. 77 of 284(4) of 2012. Case: BSE Ltd. Vs Sureshchandra V. Parekh and Another. Company Law Board

Case Number:CP No. 77 of 284(4) of 2012
Party Name:BSE Ltd. Vs Sureshchandra V. Parekh and Another
Counsel:For Appellant: Hemant Vijay Pandya
Judges:Vimla Yadav, Member
Issue:Code of Criminal Procedure, 1973 (CrPC) - Section 195; Companies Act, 1956 - Sections 10F, 165, 166, 167, 168, 169, 170, 171, 172, 173, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 169, 170, 171, 172, 173, 188, 188(1), 188(2), 190, 284, 284(4)
Citation:2013 (113) CLA 509 (CLB), 2013 (118) SCL 203 (CLB)
Judgement Date:June 08, 2012
Court:Company Law Board
 
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Order:

Vimla Yadav, Member, (Mumbai Bench)

1. In this order I am considering CP No. 77/284(4)/2012 filed by BSE Ltd. against the respondents praying that the petitioner-company be exempted from the publication, circulation or reading out at the forthcoming general meeting, the said Notice issued by the respondents, as the same seeks to abuse the process of law to secure needless publicity for defamatory matter and that direction be passed permanently restraining the respondents from sending notices under section 284 of the Act to the petitioner-company raising the same issues. The petitioner's case is that the respondents, Mr. Sureshchandra V. Parekh and MS. Nilaben S. Parekh, jointly hold 5 equity shares of Re. 1 each of the petitioner-company, under DP ID IN 300450 and Client ID 10497810 from 26th August, 2011. The equity shareholding of the respondents represents 0.000005 per cent of the total issued and paid-up share capital of the petitioner-company. The respondents have sent a notice, a special notice within the meaning of section 190 of the Act to move, at the extraordinary general meeting ('EGM') or the next annual general meeting ('AGM') 2012/13, resolution for removal of Mr. Keki M Mistry, a shareholder-director of the petitioner-company, under the provisions of section 284 of the Act on the ground that the petitioner-company had not helped the respondents in resolving their grievances with Housing Development Finance Corporation Ltd. ('HDFC') in the last 14/18 years. It was pointed out that their shareholding is "insignificant holding" and is pertinently below the statutory and numerical requirements of section 188 of the Act for any shareholder to move any resolution at any general meeting. Mr. Keki M Mistry is holding the position as shareholder-director in the petitioner-company since 22nd June, 2010, as on date of this petition, Mr. Mistry is also the managing director of HDFC Ltd. It was pointed out that the respondents have become the shareholders only on 26th August, 2011 and within a short span of just 5 months, the respondents have moved the said notice to remove Mr. Mistry. It was contended that it indirectly justifies that the intention of the respondents to acquire the shares of the petitioner-company was only to remove Mr. Mistry, notice served is not just and in good faith but merely an abuse of the privilege given by the Act to the shareholders. The notice moved by the respondents evidently brings their grievances against HDFC Ltd. and highlights no ground or issues with respect to Mr. Mistry as a Director in the petitioner-company. It was contended that the respondents' grievances against HDFC Ltd. should not be the ground for removal of Mr. Mistry as director in the petitioner-company. The main plea for taking action against HDFC Ltd. is void of any merits to move any notice for removal of director. The respondents seek the publication of defamatory material against the petitioner-company, its directors and HDFC Ltd. by serving notice under section 284 of the Act for removal of Mr. Keki M Mistry, managing director of the HDFC Ltd., without any merits and without any additional point of complaint.

2. Further, it was contended that in HDFC v. Sureshchandra V. Parekh (2002) 51 CLA 320 (CLB): (2002) 40 SCL 309 (CLB), the Company Law Board had directed the company...

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