CA No. 192 of 2012 in CP No. 15 of 2008. Case: Wynn's Belgium N.V. Vs Mekuba Petroleum India (P.) Ltd. and Others. Company Law Board

Case NumberCA No. 192 of 2012 in CP No. 15 of 2008
CounselFor Appellant: T.K. Bhaskar and For Respondents: A.K. Mylsamy
JudgesKanthi Narahari, Member (J)
IssueCompanies Act, 1956 - Sections 166, 169, 257, 264(2), 266(1)(a), 434
Citation2013 (116) CLA 169 (CLB)
Judgement DateMay 29, 2013
CourtCompany Law Board

Order:

Kanthi Narahari, Member (J), (Chennai Bench)

  1. The present company application has been filed under regulation 44 of the Company Law Board Regulations, 1991 by the 2nd respondent in the main company petition praying this Bench, inter alia, to pass an order directing the company, to call a general meeting for the current year and comply with the provisions of section 257 of the Companies Act, 1956 ('the Act') and put to vote at the general meeting, the proposal of the applicant to appoint Mr. Jozef Louis Van den dossche and Ms. Pinkey Hooda as directors of the company. A narration of the brief facts of the case is that on 6th September, 2012, the applicant issued a notice to the company proposing the appointment of Mr. Jozef Louis Van den dossche and Ms. Pinkey Hooda as directors of the company pursuant to provisions of section 257 of the Act. The necessary documents were forwarded to the company along with the requisite deposit of money. The said notice was received by the company fourteen days before the proposed annual general meeting ('AGM') dated 27th September, 2012. In response to the above notice, the company by e-mail dated 18th September, 2012 wrongfully claimed that the company is a private limited company and the provisions of section 257 of the Act are not applicable to it. The applicant issued a notice dated 19th September, 2012 pointing out, inter cilia, that the company was indeed a subsidiary of a public limited company and is bound to comply with the provisions of section 257 of the Act and stood by its proposal for appointment of the above two persons as directors. In response to the applicant's letter, the managing director of the company Mr. S. Balakrishnan by an e-mail dated 21st September, 2012 stated as follows: "Thank you for your mail dated 19th September, 2012. Since the settlement proposal is on and the same is being processed by taking into account the intent of all parties, it may not be advisable at this stage to precipitate the issue by appointing any of your nominees on the Board". It is submitted that on 27th September, 2012, the date of AGM, the above two persons were present. Mr. S. Balakrishnan, the managing director of the company chaired the AGM. Mr. Jozef Louis Van den dossche, acting on behalf of the applicant, signed the attendance register. The representative of the applicant insisted on the chairman to put to vote the proposal of the applicant to appoint the above two persons on the Board. The chairman refused to take up the proposal on the ground that if the persons proposed are appointed as directors there would never be an amicable solution to the shareholders' dispute. The action of the chairman was illegal. Since the parties could not agree on an amicable solution, the chairman unilaterally adjourned the meeting sine die even though requisite quorum was present. The adjournment of the AGM was objected to by the applicant vide letter dated 27th September, 2012 and called upon the company to hold the AGM at the earliest. The company is deliberately not complying with the provisions of sections 257 and 166 of the Act at the instance of the managing director. The company is a private limited company which is a subsidiary of a public limited company but is not complying with the requirements to be met by the private companies which are subsidiaries of public limited company. The applicant, as a 51 per cent shareholder can have a say in the management to protect their investment in the company. In support of his case, the counsel appearing for the applicant relied upon the following judgments:

    (i) In the matter of Smt. Namita Gupta v. Cachar Native Joint Stock Company ltd. (CLB)

    (ii) In the matter of Companies Act, 1956 v. in the matter of Motion Pictures Association. In re. [1974] 44 Comp Cas 298 (Del.).

  2. The respondents filed a detailed counter and took the following preliminary objections:

    (a) The company application has been filed by the applicant represented by Mr. Bomi Daruwala based on the power of attorney dated 22nd October, 2012, executed by one Ms. Mary Ann Spiegel as director of the applicant in his favour, appointing him as lawful attorney to institute and defend proceedings before various forums in India on behalf of the applicant. It is pertinent to note that there is no statement in the power of attorney that the Board authorised Ms. Mary Ann Spiegel, the director of the applicant, to appoint such power agents nor is there any Board resolution authorising to appoint the power agent to institute and defend proceedings on behalf of the applicant in India. The said power of attorney has been executed without a Board resolution of the applicant-company and no director has authority to execute the power on...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT