CP No. 3 of 2009. Case: Harshadbhai B. Patel Vs Bhagirath Construction Co. (P.) Ltd. and Others. Company Law Board
| Case Number | CP No. 3 of 2009 |
| Counsel | For Appellant: Pragnesh M. Joshi and For Respondents: Pavan S. Godiawala |
| Judges | Vimla Yadav, Member |
| Issue | Companies Act, 1956 - Sections 397, 397, 398, 398, 433(f), 434(2); Indian Contract Act, 1872 - Section 55 |
| Judgement Date | June 26, 2013 |
| Court | Company Law Board |
Order:
Vimla Yadav, Member, (Mumbai Bench)
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In this company petition the petitioner has alleged that the respondents have oppressed the petitioner and mismanaged the affairs of the R-1-company by (a) non-filing balance sheet and annual returns since 2004; (b) intentionally not filing Form 32 of appointment of 3 directors of petitioner's group on 1st April, 2008; (c) Making further allotment to dilute the shareholding of petitioner during the pendency of petition; and by (d) stating the wrong address of the registered office of the company and making allotments, appointment of directors, etc., at the address which never was occupied by the R-1-company as registered office of the company. It was pointed out that till petitioner had deposited Rs. 70,00,000 into the accounts of R-1-company plus Rs. 55,16,000 was paid to R-2 and R-3, thus, total amounting of Rs. 1,25,16,000 was infused by the petitioner. Thereafter on 16th September, 2008 R-2 and R-3 gave their resignations as directors of the company. They even handed over the minutes book and attendance register for the period 1st April, 2008 to 9th September, 2008. It was contended that the plea of respondents that they have resigned as chairman and managing director of the company is not tenable. The annual return for the year 2004 last filed with office of Registrar of Companies ('RoC') indicates the designation of R-2 and R-3 as directors only. It was argued that R-2 and R-3 were never appointed as chairman and managing director of the R-1-company. They were only directors of the company. Further, it was pointed out that the records submitted by bank vide letter dated 27th February, 2013 also provide that R-2 (Mr. Atulkumar B. Shah) and R-3 (Mr. Vanrajsinh Zala) had signed all documents as directors and not as managing director or chairman. Further, minutes of all meetings dated 5th March, 2008, 1st April, 2008. 30th April, 2008, 9th September, 2008, 16th September, 2008 clearly show designation of R-3 and R-2 as directors. My attention was drawn to the resignation letters of R-2 and R-3 as directors. It was pointed out that in the letter of resignation Mr. V.J. Zala had modified the spelling of his surname Jala to Zala and made a counter sign on the same. Thus, the contention of the respondent Nos. 2 and 3 is baseless. Further as per the Act once the directors resigned and their resignation is accepted they cannot repudiate that they have never intended to resign. It was argued that R-2 and R-3 cannot repudiate their resignation on the ground of memorandum of understanding ('MoU'). Therefore, it was argued that resignation given by R-2 and R-3 at the Board of directors meeting held on 16th September, 2008 is for their resignation as director and any act, allotments, appointments or, things done by R-2 and R-3 after 16th September, 2008 is null and void and non est and illegal. It was stated that there was no managing director appointed by the company and no chairman of the company was appointed ever since 2004. Further, it was pointed out that in the minutes of Board of directors meeting held on 5th March, 2008 matter about minutes of Board meetings and general meetings was discussed and confirmed that minutes from the incorporation to February 2008 are destroyed. It was argued that respondents being the then directors and directors on portal of MCA-21 took the undue advantage about the system designed by Ministry of Corporate Affairs, which only authorised existing directors to file and upload the necessary forms. This situation put the petitioner in a grave situation till date. The respondents are acting very smartly and preparing minutes and letters in their favour. Taking the property of the company and managing the affairs of the company even after the resignation amounts to mismanagement and oppression to the petitioner. It was pointed out that the loan account of the company became NPA as per bank norms and Reserve Bank of India ('RBI') Guidelines. In order to protect the assets of company from being taken over the possession by bank petitioner had as per the instructions of the bank deposited the amount and R-1-company was saved by the efforts of petitioner only. At that point of time petitioner group was only directors as per the Act as the R-2 and R-3 had already resigned on 16th September, 2008. Further, the petitioner's case is that (i) Form 2 for the allotment dated 2nd December, 2008, (ii) Form 2 for the allotment dated 1st November, 2009, (iii) Form 32 for the appointment of R-4 and R-5 as director dated 2nd November, 2009, and (iv) Form 2 for the allotment of equity shares dated 26th November, 2009 are showing the registered office of the company as "33. Raj Ratna Complex. Nr. Navarangpura Bus Stand, Navarangpura, Ahmedabad-380009", in fact at the said address company never had registered office since 2002 till date. Inspection report of the RoC officer also discovered that R-1-company had never their registered office at the address "33. Raj Ratna Complex, Nr. Navarangpura Bus Stand, Navarangpura, Ahmedabad-380009". All forms were signed by R-2 in which the registered office...
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