TP Nos. 26/397-398/NCLT/AHM/2016 and CP Nos. 46/397-398/CLB/MB/2012. Case: Radhakishan B. Ruchanadani Vs Beecceelene Textile Mills Pvt. Ltd. and Ors.. Company Law Board

Case Number:TP Nos. 26/397-398/NCLT/AHM/2016 and CP Nos. 46/397-398/CLB/MB/2012
Party Name:Radhakishan B. Ruchanadani Vs Beecceelene Textile Mills Pvt. Ltd. and Ors.
Counsel:For Appellant: Dhiren Dave, Learned PCS and For Respondents: Suriyanarayanan, Learned Advocate and Manoj Hurkat, Learned PCS
Judges:Bikki Raveendra Babu, Member (J)
Issue:Company Law
Judgement Date:April 13, 2017
Court:Company Law Board
 
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Order:

Bikki Raveendra Babu, Member (J), (Ahmedabad Bench)

  1. Beeceelene Textile Mills P. Ltd. is a company registered under the Companies Act, 1956 having its registered office at Surat, Gujarat State.

  2. Authorised share capital of the company is Rs. 15,00,000/- divided into 15000 shares of Rs. 100/- each. Paid up capital of the company is also the same.

  3. Petitioner is holding 2125 equity shares of Rs. 100/- each in the paid up share capital of the first respondent company which comes to 14.17% of the total capital of the company. According to the petitioner - Deepak Radhakishan Ruchandani, Haresh Radhakishan Ruchandani, Radhakishan B. Ruchandani - HUF and Vandana Radhakishan Ruchandani are holding 500, 500, 500 and 1000 shares respectively which constitute 16.66% of the paid up share capital of the first respondent company also gave consent to the petitioner to file this petition.

  4. Respondents 2 to 8 are holding 2125, 500, 500, 500, 2125, 1000 and 500 equity shares each of the first respondent company. Total shareholding of respondents 2 to 8 is 7250 shares.

  5. Petitioner along with respondents 2 and 6 jointly incorporated the first respondent company as a family business company.

  6. Shri Bhagwandas Ruchandani, father of petitioners 2 and 6 died in the year 2000. After the death of Bhagwandas Ruchandani, difference of opinion arose among the directors and shareholders of the first respondent company. Initially, management of first respondent company was in the hands of petitioner. Thereafter, from the year 2006, petitioner has been thrown out of the first respondent company and denied all benefits as shareholder and even as director. After continuous efforts made by the petitioner for a settlement, in the year 2010, there was an understanding among the petitioner and respondent 2 and 6 but the said understanding was not implemented. Said understanding became infructuous by lack of time and change in the circumstances. In fact, the respondents having signed the understanding, refused to implement the same and adopted delaying tactics. Inspite of repeated requests by the petitioner, respondents neither implemented the memorandum of understanding nor allowed the petitioner to take part in the company affairs.

  7. Ultimately, petitioner on 09.12.2011 called a Board Meeting which was attended by respondents 2 and 6 and there was a big dispute among Board of Directors.

  8. Petitioner wrote a letter to Oriental Bank of Commerce, Surat to freeze account of the first respondent company with effect from 09.12.2011, vide annexure "C".

  9. Respondents submitted false resolution dated 13.12.2011 of shareholders to the Oriental Bank of Commerce, Surat stating that majority of members attended the General Meeting.

  10. Petitioner was not served with any notice of meeting dated 13.12.2011 and therefore the said meeting shall be considered as null and void.

  11. According to the petitioner, there are three groups in the shareholders. The petitioner and his supporters are holding 30.83% of the paid up equity capital. 24.17% belongs to the persons who are no more. 45% of shareholding belongs to respondents 2 to 8. Arujn P. Ruchandani, Jaiwanti P. Ruchandani and Arjun Ruchandani (HUF) all expired and they are holding 2125, 1000 and 500 shares respectively in the first respondent company which comes to 24.17% of the total paid up share capital of the first respondent company.

  12. Petitioner wrote letter dated 09.02.2012 to other directors and demanded for statutory records of the first respondent company. Petitioner filed form DIN-2 along with that letter vide annexure "E". Respondents did not give any reply to the letter dated 09.12.2012. Therefore, petitioner again wrote reminder letter dated 19.04.2012 reminding them to take appropriate action regarding form DIN-2 and DIN-3 and to provide statutory record as a matter of right to the shareholder. Petitioner convened a Board Meeting on 28.04.2012. Respondents gave reply dated 23.04.2012 to petitioner's letter dated 09.12.2012. According to the petitioner, the act of denying to provide statutory records to the petitioner who is a shareholder, not giving notice of Board of Directors Meeting, not implementing memorandum of understanding of the family settlement and shifting the registered office of the first respondent company without following the procedures are acts of oppression and mismanagement.

  13. Respondents on 23.04.2012 gave reply to letter dated 19.04.2012 written by the petitioner. It is pleaded by the petitioner that, nowhere in the family understanding it was decided that the petitioner has to resign or go out of the company but the respondents are advising petitioner to resign from the company as per family understanding. Further, respondents falsely stated that records prior to 01.04.2009 are with the petitioner.

  14. On 03.04.2012, when petitioner visited the company for verification of records, respondents forcibly threw out the petitioner. According to petitioner, the respondents were not even ready to convene Board Meeting.

  15. In reply to letter of the petitioner dated 25.04.2012, respondents wrote letter dated 27.04.2012 stating that DIN-2 filed by the petitioner is not proper. Respondents did not chose to send a single document as requested by the petitioner.

  16. On 28.04.2012, at 12.00 noon, Board Meeting of the first respondent company was convened at the changed registered office of the company. Respondent 3 who is not even a director in the company remained present in the meeting but not allowed sons of the petitioner to enter into the office claiming that it being a Board meeting only Directors can be allowed. Smt. Radhaben, w/o late Shri Bharat Ruchandani who came there to inquire about the shares of her late husband was also not allowed to enter the office premises. Respondent 3 took video of the entire meeting. Respondent 3 claimed that they are majority shareholders and no one can prevent them doing anything in the company. Petitioner was appointed as Chairman of the meeting. When petitioner asked minutes book and other statutory books, respondent 2 did not give any reply but respondent 3 stated that they do not have any minutes book and other statutory records as they are with the lawyers. Meeting concluded without any decision. But respondents filed forged form 32 for appointment of respondents 3 and 4 as additional directors and showing respondent 2 as Chairman of the meeting, vide annexure "L".

  17. Petitioner on verification of Registrar of Companies' records came to know that the respondents have filed records of all five years from 2006 to 2011 together some time in 2011 and obtained compliance certificate. According to the petitioner, when the respondents were not having records prior to 01.04.2009 how they were able to file returns from 2006 onwards. Petitioner also requested the company's statutory auditor to calculate fair market value of the shares of the company as per Articles of Association of the company so that shares can be offered at that value to other shareholders and if they are not ready, shares can be sold to others. But auditors failed to do the same being under the influence of the respondents.

  18. Respondents are collecting Rs. 15,000/- per month towards rent for Shop No. 102, Gopi Market, Ring Road, Surat but they are showing only Rs. 5,000/- in the company's book and thereby enriching themselves at the cost of the first respondent company. No legal and valid Board Meeting took place and only one director is running the company.

  19. Petitioner has prayed to fix fair market value of the shares by independent valuer or Chartered Accountant and once such fair market value or at a higher price is fixed, either the petitioner or the respondents who ever offer more price shall be allowed to purchase other's shares.

  20. Declare appointment of Respondents 3 and 4 as directors is invalid.

  21. Respondent 2 filed reply affidavit on behalf of respondents 1 and 2. It is the case of the respondents that, as per the family arrangement, petitioner group is bound to deposit and transfer their shares held by them in the first respondent company but petitioner has neither resigned from the directorship nor has he transferred shareholding to respondent 2 and thereby committed breach of condition of family arrangement. In terms of family arrangements, respondent 6 transferred 2000 equity shares of Rs. 100/- each of the first respondent company to respondent No. 4, 125 equity shares in favour of respondent 2 for total consideration of Rs. 02,12,500/- on 9th February, 2012 and the same has been registered in the records of the company on 15th March, 2012, vide annexure R-1 to the reply.

  22. As per the family arrangement, Mrs. Monika A. Ruchandani, wife of deceased Arjun B. Ruchandani who is a promoter director of first respondent company and, brother of petitioner and respondent 2 vide letter dated 01.06.2012 gave her written consent to transfer all 3625 equity shares of Rs. 100/- each held by family members of late Arjun B. Ruchandani, vide annexure R-2 to the reply.

  23. Since 2009-10, petitioner has been doing dress material business of his own concern after stopping doing such business for the first respondent company. Petitioner also withdrew huge funds from the first respondent company during 2005-06 to 2008-09. As per records of the first respondent company, petitioner group has 4625 equity shares but they have no financial interest in the company. In view of the fact that they have withdrawn huge amount from the business of the company and as they were in obligation to transfer their shares as per the family arrangement, respondents asked petitioner to produce copies of original share certificates so that it would be known whether they have created any third party interest in respect of their shares.

  24. Petitioner denied the reply letter dated 10.05.2012 written by the first respondent. Letter dated 10.05.2012 is at Ex. R-3 to the reply.

  25. Petitioner also...

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