At, Company Law Board Principal Bench New Delhi
By, THE HONOURABLE CHIEF JUSTICE MR. (RETD.) M.M. KUMAR
By, PRESIDENT & THE HONOURABLE MS. DEEPA KRISHNAN
By, MEMBER (T)
For the Petitioner: Kishore M. Gajaria, Advocate. For the Respondents: Anil K. Aggarwal, Md. Inteyay, Advocates.
M.M. Kumar, Chief Justice (Retd.)
1. This petition was mentioned on 30.06.2017 and the matter was posted for hearing on 05.07.2017 when the following order was passed:-
“Learned Counsel for the respondent orally argued that notice of the meeting dated 9th January, 2017 was given to the petitioner without having the original record of sending notices to the petitioner. Let the original record with regard to holding of meeting and sending notices to the respondent be produced.
List the matter on 07.07.2017.”
2. The matter was then taken up for effective hearing on 28.08.2017 and we asked the learned counsel for the respondent to produce the original record concerning convening of Meeting dated
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09.01.2017 as per the order dated 05.07.2017. Even on 28.08.2017 learned counsel for the respondent was insisting on accepting the photocopy of that record. We granted time to the learned counsel to produce the original record today. Along-with the affidavit of one Smt. Pushpa Gupta a letter styled as ‘notice for convening of Board Meeting dated 30.12.2016’ has been filed alongwith notes to agenda for the meeting. The primary dispute is with regard to appointment of one Smt. Jyoti Kumar as an additional Director of the Company in the meeting held on 09.01.2017.
3. For the purpose of interim order, we have heard learned counsel for the parties at a considerable length and have perused the paper book with their able assistance.
4. For convening any Board meeting Section 173(3) of the Companies Act, 2013 provides that a meeting of the Board of Director is to be called by giving not less than seven days’ notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or post or by electronic means. The notice of meeting dated 30.12.2016 is stated to have been delivered to the petitioner through messenger on 01.01.2017 at his home i.e. 126, Engineers Enclave Pitampura, Delhi-110034 and no written acknowledgment concerning the receipt of the notice has been placed on record (Annexure R/1). The respondents have also referred to some practice followed in the past for not sending written notice of the meeting nor obtaining of acknowledgement in receipt of the notice. It. is not disputed that the petitioner is a promoter director alongwith respondent Nos. 2 & 3 who jointly incorporated the respondent No. 1 company in the year 1989. They hold equal shareholding in respondent No. 1 company. The crises appears to have started on account of the efforts made to bring in Smt. Jyoti Kumar W/o Shri Vivek Kumar and respondent No. 4 as additional director. A meeting of the Board of Director alleged to have been convened on 09.01.2017 to appoint her as additional director. The petitioner has prayed for the following interim directions:-
“a) to grant status quo ante, with regards to the composition of Board of Directors and shareholding pattern of respondent no. 1 Company, as on 31.12.2016;
b) to restrain respondent no. 4, from acting as the additional director of the respondent no. 1 Company;
c) to direct respondent no. 1 Company to urgently hold a Board meeting, without considering the participation of illegal and unlawful additional director being, respondent no. 4 under the supervision of this Hon’ble Tribunal, for passing necessary resolutions and to prepare required documents, to be submitted to the Banks and for registration of respondent no. 1 Company under the GST law;
d) to direct respondent no. 2 to 5 to produce all the statutory records, minutes book, book and accounts and all other documents in their possession, relating to the respondent no. 1 Company before the Hon’ble Tribunal;
e) to restrain the respondent no. 2 to 3 from allotting/gifting any shares to anybody in the respondent no. 1 Company;
f) to restrain the respondent no. 1 Company from appointing any further director/additional directors on the Board of the respondent no. 1 Company;
g) to pass an order of injunction against respondent no. 2 to 4 not to alienate, or otherwise dispose of, or create any third party interest on, any of the properties/ assets of the respondent no. 1 Company;
h) to pass ex-parte ad-interim orders in terms of prayer (a) to (g) above;
i) to pass any other order as deemed fit by this Hon’ble Tribunal.”
5. The aforesaid interim directions has been sought on the ground that the provision of Section 173(3) of the Companies Act has not been complied with in as much as no notice for convening the meeting was issued and the notice on which reliance has been placed and which has been produced today is a fabricated piece of evidence.
6. As a matter of fact, the case has been adjourned on various occasions and the notice could be produced only today. The aforesaid notice is stated to have been served upon the petitioner on 01.01.2017 by a special messenger. Ordinarily when a notice is sent through a special messenger acknowledgment in receipt of the notice is always obtained particularly when the parties are at variance. A perusal of the notice shows that there is no endorsement signed by anyone on behalf of the petitioner acknowledging the receipt of the notice and a curious defence has been raised by the respondent No. 1 referring to the past practice that the signatures are never obtained. However, we are unable to accept that notice dated 30.12.2016 could be considered as a notice complying with the provisions of Section 173(3) of the Companies Act, 2013. Moreover, if a notice without acknowledging the receipt is to be accepted as adequate notice then any piece of paper/letter pad of the company can be utilised anytime to argue that there is compliance of the provisions. We do not feel inclined to accept that such a notice can be considered authenticated, It is also pertinent to point out that before approaching this Tribunal the petitioner had sent a detailed letter on 24.03.2017 to respondent No. 2 complaining about the fraudulent appointment of Smt. Jyoti Kumar as additional director. There was no stand taken by sending reply. It was first available opportunity.
7. We find that prima-facie case is made out and the interim direction are required to be issued. Accordingly, respondent No. 4 is restrained from acting as additional director of respondent No. 1 company. It is also directed that respondent No. 1 company would not appoint any further Director/Additional Director without prior permission of the Tribunal. Respondent Nos. 1 to 5 are restrained from alienating or otherwise disposing of or creating any third party interest in respect of any of the properties/assets of the respondent No. 1 company and respondent Nos. 2 & 3 are also restrained from alienating/ gifting any share to anybody in respondent No. 1 company without prior permission of the Tribunal.
8. Respondent No. 1 company however must hold its urgent meeting for passing any resolution and to prepare required documents for registration of the respondent No. 1 company under the GST law and respondent No. 4, as already directed, shall not participate.
Let the respondents file their detailed reply within a period of four weeks with a copy in advance to the learned counsel for the petitioner. Rejoinder, if any, be filed within two weeks thereafter.
List for further consideration on 24.10.2017.