Case: Collyer Logistics International Ltd. Vs Collyer India Freight Forwarding P. Ltd. and Ors.. Company Law Board
| Judges | Vimla Yadav, Member |
| Issue | Company Law |
| Citation | [2010] 154 CompCas 161 (CLB) |
| Judgement Date | August 03, 2009 |
| Court | Company Law Board |
Order:
Vimla Yadav, Member
1. In this order I am considering Company Petition No. 149 of 2007 filed by M/s. Collyer Logistics International Ltd. ("the petitioner") under Sections 397, 398 and 402 of the Companies Act, 1956, against M/s. Collyer India Freight Forwarding P. Ltd. and others ("the respondents") alleging oppression and mismanagement.
2. M/s. Collyer India Freight Forwarding P. Ltd. (respondent No. 1 company) was incorporated on May 2, 2006, having its registered office at B-505, Ansal Chambers-I, Bhikaji Cama Place, New Delhi-66, with the authorised capital of Rs. 10,00,000 divided into 1,00,000 equity shares of Rs. 10 each. The issued, subscribed and paid-up capital of the company was Rs. 10,00,000 divided into 1,00,000 equity shares of Rs. 10 each. The main objects of the company are to carry on the business of cargo agents, cargo movers, freight forwarding of cargo and goods and to act as custom clearing, mercantile agents, consulting, freight contractors, liaising agents on all matters relating to shipping liners, air freight, warehousing, etc. The petitioner (namely, M/s. Collyer Logistics International Ltd., a foreign company, which is a member in respondent No. 1 company) has sought a declaration that the purported meeting held on May 2, 2006 and the resolution passed therein regarding purported appointment of respondent No. 3 and respondent No. 4 to act as directors of the company is bad, illegal, null and void and not binding upon the company and the petitioner; declaration that the resolution passed in the extraordinary general meeting of the company held on July 27, 2006, to be held illegal, null and void; respondents Nos. 2 to 4 and their group be directed to sell their entire shareholding in the company to the petitioner or their nominee(s) on such terms and conditions as the Company Law Board may deem fit and proper; perpetual injunction be given restraining the respondents and any of them whether by themselves or by their servants, agents and/or assigns or otherwise howsoever from allegedly giving effect to the purported resolution purportedly adopted in the purported board meeting alleged to have been held on March 29, 2007, in any manner whatsoever; liberty be given to the petitioner to constitute the board of directors of the company with the nominees of the petitioner; injunction restraining the respondents from convening or conducting or holding any board meeting or general meeting of the company; injunction restraining the respondents from dealing with the immovable property of the company in any manner whatsoever; injunction restraining respondents Nos. 2 to 4 from exercising any rights, or receiving any benefits in respect of their shareholding in the company; injunction restraining respondents Nos. 2 to 4 from transferring their shareholding in the company to any other persons in any manner whatsoever; restraining respondents Nos. 2 to 4, their agents, assignees, nominees from diverting business of respondent No. 1 company to CIFF Logistics P. Ltd., and restrain them from operating business of CIFF Logistics P. Ltd., from premises of respondent No. 1 company; restraining respondents Nos. 2 to 4 from drawing salary and expenses from respondent No. 1 company; restraining respondents Nos. 2 to 4 and their agents, assignees, nominees to use the trade mark in the name "Collyer" and the logo assigned by CLI to respondent No. 1 company.
3. Vide the Company Law Board's order dated November 10, 2008, respondents Nos. 6 to 8 were impleaded in this company petition as under:
C.A. No. 459 of 2008 heard. Considering the nexus between the parties and keeping in view the fact that respondents Nos. 1, 2 and 3 have not complied with the orders of the Company Law Board dated October 29, 2007, whereby they were stopped from doing business in the names of respondents Nos. 6, 7 and 8 which allegedly is nothing but a benamidar/alter ego/association of respondent No. 1, in view of the facts and circumstances of this case, I hereby allow the petitioner's C. A. No. 459 of 2008 impleading respondents Nos. 6 to 8 as necessary and proper parties. Respondents Nos. 6 to 8 are hereby allowed to file reply to the company petition within two weeks, the petitioner is allowed to file rejoinder within two weeks thereafter. Adjourned to December 12, 2008, at 2.30 p.m.
4. It was argued by counsel for the petitioner-company that respondent No. 3 (Smt. Sapna Dhaul wife of respondent No. 2) and respondent No. 4 (Shri Ashok Kumar Gupta) were appointed as directors on May 2, 2006, without giving any notice to respondent No. 5 who was the nominee director of the petitioner-company; respondent No. 4 was shown to be the alternate director of petitioner No. 5 even though no consent had been given; the purported declaration of respondent No. 5 is forged and fabricated. Counsel for the petitioner contended that the board meeting held on May 2, 2006, at 3.00 p.m. without notice to respondent No. 5 who was the representative of the petitioner-company, appointing respondent No. 5 and respondent No. 2 as directors need not have been held since they had been appointed by the articles of association. Respondent No. 4 was appointed as alternate director without consent of petitioner or respondent No. 5. There was no necessity to call for another board meeting on the same day, i.e., May 2, 2006, at 4.00 p.m., for appointment of respondent No. 3, Sapna Dhaul. The minutes were fabricated. It was contended that an adverse inference be drawn. Further, in the pre-incorporation negotiations it was decided that only four directors should be appointed, namely, respondent No. 2, respondent No. 5, Andrew Russell and Friedrich D. Hess, there was no mention of appointment of Sapna Dhaul.
5. Counsel for the petitioner pointed out that respondent No. 2 incorporated a new company, namely, CIFF Logistics P. Ltd., and diverted business of respondent No. 1 company to the said company. My attention was drawn to invoice issued in the name of CIFF Logistics using the address of respondent No. 1 company; respondent No. 2 opened a new bank account in the name of CIFF Logistics. It was argued that the respondents had diverted the business of respondent No. 1 company (CIFFPL) through respondent No. 6 (CIFFLPL) by using the infrastructure of respondent No. 1, thereby eroding the petitioner's 70 per cent. investment in respondent No. 1 company. It was pointed out that respondent No. 2 started another business entity in the name and style of CIFF Logistics P. Ltd. (respondent No. 6); respondent No. 2 changed his e-mail id from Mohit.Dhaul@Delhi.CollyerLogistics.co.in to mdhaul@CIFFLogistics.com, which is a CIFF Logistics id; resources and assets of the respondent-company were diverted to and are being used by this new business entity; the new business entity was carrying on a competing business; respondent No. 2 was diverting business and assets of the respondent-company into this new business entity "CIFF Logistics"; it was being clandestinely represented that CIFF Logistics was the successor of respondent No. 1 company. Even the memorandum of association and objects of CIFF Logistics P. Ltd., is identical to that of respondent No. 1 company. It was contended that the CIFF Logistics is nothing but an alter ego of respondent No. 2 and is clearly an entity under the ownership and control because firstly, CIFF is an acronym of the respondent-company (Collyer India Freight Forwarding P. Ltd.). It was pointed out that this is how the company has been referred to and described at all relevant times; the existence of such a business entity first came to the notice of the petitioner some time in July, 2007, when the petitioner was forwarded a copy of an e-mail sent by respondent No. 2 to a customer of the respondent-company disclosing the existence of a new business entity in the name and style of "CIFF Logistics", it was noted that the address and telephone number of this business entity, namely, "CIFF Logistics India" was the same as that of the respondent-company and the mobile number given was that of respondent No. 2. A perusal of the documents relating to this communication dated July 21, 2007, evidenced that bill of lading of respondent No. 1 company were being diverted to this new concern seeking to raise invoices in its own name for business and transaction of respondent No. 1 company. Further, the entire infrastructure and employees of respondent No. 1 company were simply taken over by this new business entity. For the first time in their reply to C. A. No. 401 of 2007 in C. P. No. 122 of 2007, respondents Nos. 2 to 4 contended that the shareholders of CIFF Logistics P. Ltd., were different and that ex-employees of respondent No. 1 company were involved with CIFF Logistics. It was pointed out that the registration of two employees Robert William and Nagalakshmi dated July 31, 2007, which are identical, were procured subsequently after the filing of the contempt application and after the issuance of the mail dated September 13, 2007. It was further concealed that respondent No. 2 clandestinely started representing to agents and customer, etc., that respondent No. 1 company was now known as "CIFF Logistics". The e-mail dated July 21, 2007, regarding deposit of money to CIFF Logistics P. Ltd., showing the business to be same as respondent No. 1; memorandum of association and articles of association of CIFF Logistics P. Ltd., showed the business to be the same as of respondent No. 1; respondent No. 2 continues to run the business in the name of CIFF Logistics P. Ltd., in spite of the restraint order passed by the Company Law Board on October 29, 2007. The representative of the petitioner-company did not attend any extraordinary general meeting shown to have been held on October 26,
2006. There was no signature of the proxy of respondent No. 5. There was a board meeting shown to have been held on October 27, 2006, attended by respondents...
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