C.P. No. 76 (ND) of 2009. Case: Daksha Infra Build P. Ltd. Vs Rochees Resorts (India) P. Ltd. and Others. Company Law Board

Case NumberC.P. No. 76 (ND) of 2009
CounselFor Appellant: Ms. Meenaskhi Arora and Rajiv Adlakha, Practising Company Secretary and For Respondents: Rana Mukherjee, Sparsh Bhargva and Shashi Mathews
JudgesD.R. Deshmukh, J. (Chairman)
IssueCompanies Act, 1956 - Sections 283, 283(1)(g), 397, 398, 399, 402, 409
Citation2013 (113) CLA 657 (CLB), 2013 (177) CompCas 178 (CLB), 2013 (2) CompLJ 571 (CLB)
Judgement DateOctober 03, 2012
CourtCompany Law Board

Order:

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

  1. The petitioner, a real estate company has filed this petition under sections 397 and 398 read with sections 402 and 409 of the Companies Act, 1956 (henceforth "the Act") alleging acts of oppression and mismanagement in respondent No. 1 (henceforth "the company"). Admittedly the petitioner held 24 per cent. shares in the company prior to the board meeting and the extraordinary general meeting held in July, 2009. It is also not in dispute that prior to the alleged cessation under section 283(1)(g) of the Act the petitioner had two directors on the board of the company, i.e., Mr. Yashpal Agnihotri and Mr. Y.C. Kaushik. Undisputedly the petitioner directors did not have notice of the board meeting of the company held on July 10, 2009, which allotted 10 lakhs equity shares to the respondents and their friends. During the course of arguments the respondents produced a letter dated September 5, 2007, written by Mr. Yashpal Agnihotri stating that notice of the board meeting dated September 3, 2007, were actually received by the petitioner director on September 4, 2007 and therefore praying that leave of absence be granted to them.

  2. Mrs. Meenakshi Arora, learned counsel appearing for the petitioner conceded the well established position in law that in the present petition the petitioners cannot seek enforcement of the memorandum of understanding dated May 18, 2007.

  3. The petitioner alleges that its directors had no notice of the board meetings held on September 3, 2007 and December 5, 2007, while admitting notice of the board meeting held on January 25, 2008, which the petitioner directors did attend at Jaipur. It is alleged that the petitioner directors were not allowed to sign the attendance sheet on the ground that all the documents would be got signed by them on complete implementation of the second memorandum of understanding dated May 18, 2007. Form No. 32 intimating the Registrar of Companies, Jaipur about the vacation of office by the petitioner directors, under section 283(1)(g) of the Act for not attending 3 consecutive board meetings on September 3, 2007, December 5, 2007 and January 25, 2008, was filed by the respondents as late as on July 10, 2009. On the same day in a board meeting the respondents allotted 10 lakhs equity shares of Rs. 10 each to the respondents and their friends, relatives and associates pursuant to a resolution passed at an extraordinary general meeting held on July 3, 2009, increasing the authorised share capital from Rs. 50 lakhs to Rs. 1 crore 50 lakhs for which the petitioner directors had no notice. Due to such allotment the shareholding of the petitioner was reduced below 10 per cent. On the above grounds the petitioner has prayed that allotment of 10 lakhs equity shares of Rs. 10 each by the company on July 10, 2009, be declared illegal. A stay of the operation of the board of directors of the company in view of the illegal removal of the nominee directors of the petitioner under section 283(1)(g) of the Act is also prayed, inter alia.

  4. According to the respondents on failure to attend three consecutive board meetings on September 3, 2007, December 5, 2007 and January 21, 2008, despite notice the petitioner directors vacated their office under section 283(1)(g) of the Act. The decision to raise the authorised share capital was taken by the company with a view to raise further capital required by the company on an urgent basis to complete the hotel/resort project at the earliest. Notice of the extraordinary general meeting for the said purpose was received by the petitioner on June 30, 2009. According to the respondents the petitioner directors had ceased to hold office on account of not attending three consecutive board meetings held on September 3, 2007, December 5, 2009 and January 25, 2008. Since Mr. Yashpal Agnihotri and Mr. Y.P. Kaushik were no longer on the board of directors the decision taken by the board of the company on July 10, 2009 to allot 10 lakhs equity shares of Rs. 10 each cannot be...

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