C.P. No. 103 (ND) 2013. Case: Gopal Krishan Dua Vs Shiv Machine Tools Pvt. Ltd. and Ors.. Company Law Board

Case Number:C.P. No. 103 (ND) 2013
Party Name:Gopal Krishan Dua Vs Shiv Machine Tools Pvt. Ltd. and Ors.
Counsel:For Appellant: Saurabh Kalia and Harshit and For Respondents: Rajeev K. Goel and Ajay Garg
Judges:Dhan Raj, Member
Issue:Companies Act, 1956 - Sections 111, 111A(3), 209, 252(2), 397, 398, 399, 402, 403, 406, 53(1), 531(1); Land Acquisition Act, 1894 - Sections 4, 6; Securities And Exchange Board Of India Act, 1992 - Section 30; Uttar Pradesh Imposition Of Ceiling On Land Holdings Act, 1960 - Section 9(2)
Judgement Date:March 19, 2015
Court:Company Law Board
 
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Order:

Dhan Raj, Member, (New Delhi Bench)

  1. In this case, the Petition has been filed by the Petitioner under Sections 111, 397, 398, 402, 403 and 406 of the Companies Act, 1956 on account of the alleged acts of oppression and mismanagement on the part of the Respondents and the same is under consideration for adjudication. Precisely speaking, the Respondent No. 1 Company was incorporated on 25-2-1987 and Mr. Gopal Krishan (Petitioner) and Mr. Krishan Kumar (Respondent No. 2) were the promoters and first Directors of the Respondent No. 1 Company. At present, the Respondent No. 1 Company is not carrying out any business activities except holding some properties in its name and the immovable properties viz. Land situated at Chak No. 30, Village Namoli Block Dankur, Tehsil - Sikandrabad, District Bulandshehar and Chak No. 31 Village Namoli, Block Dankur, Tehsil - Sikandrabad, District Bulandshehar are registered in the name of the Respondent No. 1 Company Further, it has been averred that the Respondents induced the Petitioner to enter in a family settlement and hence, an understanding was formulated between the Petitioner and the Respondents on 19-2-1998. As per the agreement Mr. Bhushan Kumar (R - 4) was to transfer the properties in the name of Mr. Gopal Krishan (Petitioner) and Rs. 2.5 crore cash as against the transfer of shares held by Mr. Gopal Krishan in all family companies to Mr. Krishan Kumar (R - 2). Subsequently, the parties also entered into another family segment dated 21-2-1998 and all other disputes/controversies were also settled by the parties vide the said family settlement. Besides, transfer-cum-gift deeds in respect of eight properties were executed by the Respondents in favour of the Petitioner on 26-2-1999 in terms of the family settlement dated 19-2-1998 and 21-2-1998.

    1.1 The Petitioner Advocate has further submitted that pursuant to the family settlement, the shares of Tony Electronics were transferred to the Petitioner on 27-2-1999 and the transfer-cum-gift-deeds in respect of four properties out of total eight properties have not been registered in favour of the petitioner till date though the possession of the said Properties is with the petitioner.

    1.2 It has been pointed out in the Petition that a notice was received by the petitioner Collectorate Office, Suraj Pur, Greater Noida on or around 22-4-2013 about the land being acquired by Indian Railways therefore the Petitioner examined the record of his land at Tehsil Sadar and came to know that the land acquired by Greater Noida Authority in 2008 after publishing notice in the newspaper under Sec. 4 and 6 of the Act and the Petitioner had no information about it. Thereafter, the Petitioner checked the list of land acquired by the Greater Noida Authority and came to know that land of whole group was being acquired by Greater Noida Authority in 2008 including the land belonging to Respondent No. 1 Company. However, none of the family members informed the Petitioner about the acquisition of land. Apart from this, the Petitioner also visited the Office of Additional District Magistrate, Land Acquisition wherein he learnt that the notice issued by the Government Authorities for acquisition of land has been stayed by the Hon'ble Allahabad High Court and the case is still pending adjudication.

    1.3 It has also been alleged that the Respondents in collusion and connivance with each other have fraudulently forfeited 6000 equity shares of Rs. 100/- each, (partly paid up) sometime in the year 2001 of the Petitioner in an unlawful and arbitrary manner and without following the due process of law. Not only this, no notice had ever been given to the Petitioner nor any Board meeting or shareholders meeting had ever been held in this regard Consequently, the aforesaid forfeiture of 6000 equity shares is illegal, mala fide and has been done without the knowledge, consent and concurrence of the Petitioner. As a matter of fact, no call notice on these 6000 shares was ever received by the Petitioner and hence, there is no question of any call notice remaining pending and call money being due on the paid up shares and thereby, the forfeiture is completely fraudulent. In this context, it has also been submitted that the question of forfeiture does not arise even if any amount whatsoever was due to the Respondent No. 1 Company as the Petitioner had advanced a loan of Rs. 5,39,340/- to the Respondent No. 1 Company from the year 1989. Therefore, under any circumstances whatsoever, the question of forfeiture of the shares of the Petitioners does not arise at all in view of the money of the Petitioner already kept with the Respondent No. 1 Company and the forfeiture had been done by the Respondents in the most arbitrary manner and without any sufficient cause or justification. In fact, due to the illegal and unlawful forfeiture or 6000 shares held by the Petitioner, the shareholding of the Petitioner has been reduced from 31.68% of the total shareholding of the Respondent No. 1 Company as on 18-6-1987 to 1.08% at present. Over and above, it has also been alleged that the forfeiture of 6000 shares held by the Petitioner was done without convening a proper and valid shareholders meeting and Board meeting and without following the due process of law.

    1.4 The Petitioner Advocate has further emphasized that the Respondents have not only illegally forfeited the shares of the Petitioner but have also converted the partly paid up shares held by them into fully paid up shares in an unlawful and arbitrary manner. Consequently, the aforesaid 6000 equity shares of Rs. 100/- each (paid up to the extent of Rs. 50/-) which had been allegedly transferred by the Respondent No. 2 to Respondent No. 4 on 10-10-2000 have been converted into fully paid up shares sometime in the year 2001. In this regard, no Board meeting or shareholders' meeting has ever held. Apart from this, the Petitioner Advocate has levelled the allegation of illegal and unlawful change in the Registered Office of the Respondent No. 1 Company to E-2/16, White House, Ansari Road, Darya Ganj, New Delhi 110-002 on 27-11-2003 without any intimation or notice to the Petitioner. Furthermore, the Petitioner was removed as Director of Respondent No. 1 Company with effect from 28-7-1995 and Form 32 was filed on 5-1-2000. A bare perusal of Form 32 filed by the Respondents show that the Petitioner has allegedly ceased to be Director of Respondent No. 1 Company with effect from 28-7-1995 and no resignation letter has been attached along with the said Form 32. As a matter of fact, there were only two Directors in the Respondent No. 1 Company and therefore, the alleged resignation of the Petitioner could not have been accepted inasmuch as the Board lacked proper quorum.

    1.5 It has also been pointed out in the Petition that the Respondents in order to increase their further control in the Board of the Respondent No. 1 Company appointed the Respondent No. 3 as Additional Director on the Board of Directors of the Respondent No. 1 Company in an alleged Board meeting convened on 28-7-1995. It has also been highlighted that the Petitioner did not receive any notice for any alleged Board meeting wherein the Respondent No. 3 was allegedly appointed on the Board of the Respondent No. 1 Company. Lastly, it has been alleged that the Respondents are indulging in rampant manipulation and fabrication of statutory records with a view to not only defraud the Petitioner but also to cause prejudice to the Respondent No. 1 Company itself.

  2. The Respondents Advocate submitted that the entire petition is misrepresentation and distortion of facts. Moreover, the Petitioner has failed to place any material disclosing oppression and mismanagement from the side of the Respondents causing prejudice to the Petitioner and the Petitioner has not made any prayer for declaring oppression and mismanagement by the Respondents. In fact, the Petitioner is guilty of alleged disclosure of information and/or distortion of material facts. As a matter of fact, the Petitioner resigned from the Directorship of the Respondent No. 1 Company in the year 1995 and he has not adduced any reason as to why he resigned from the Board. Further, forfeiture of 10,050 partly equity shares including 6000 partly shares held by the Petitioner was done way back in the year 2000. Being a closely held company specially when several criminal and civil proceedings were continuing in respect of the family property, it is not convincing that the Petitioner was not aware of the forfeiture of shares made in the year 2000. Therefore, it is crystal clear that there has been undue delay and laches of almost 13 years in filing of the present Petition. It has been alleged that the Petitioner has now approached this Hon'ble Board with an oblique intention to extract money from the Respondents sensing that the Respondent No. 1 Company shall receive hefty amount of compensation for the land being acquired by the Govt., authority. In this process, the Petitioner has alleged to be the Director of Respondent No. 1 Company after almost 18 years of his resignation without any explanation for inordinate delay on the part of the Petitioner to exercise all his rights as a Director/Shareholder of the Respondent No. 1 Company.

    2.1 The Respondents Advocate has highlighted that the Petitioner has been fully aware of his legal rights under the Companies Act, 1956 and the same is evident from a bare perusal of Order dated 17-12-2012 of the Hon'ble Delhi High Court in C.A. No. 730/2002 filed in CP No. 167/1999 by the Petitioner seeking to set aside the scheme of amalgamation sanctioned by the Hon'ble Delhi High Court on 20th December 1999 whereby Tony Electronics Ltd. merged with M/s. Super Cassette Industries Ltd. The aforesaid application filed by the Petitioner was dismissed by the Hon'ble Delhi High Court on the ground that no case of any fraud was made out by the Petitioner and the...

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