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Shabbir Ahmed v/s Safedabad Cold Storage & Allied Industries (P.) Ltd.

    C.P. No. 38 of 2016 (I.A No. 20 of 2016)

    Decided On, 01 March 2017

    At, National Company Law Tribunal, Kolkata

    By, THE HONOURABLE MS. MANORAMA KUMARI
    By, JUDICIAL MEMBER

   



Judgment Text

Arising out of Company Petition No. 38/2016 filed by the petitioners, namely, Shabbir Ahmad & Ors. on 12-4-2016 under Sections 235, 397, 398, 402, 403 and 406 of the Companies Act, 1956, the present Company Application No. 20/2016 filed by the Respondent Nos. 1, 2 and 3 with regard to maintainability of the Company Petition, in respect of territorial jurisdiction.

Heard both side at length in IA No. 20/2016.

The controversy that needs to be addressed in the present Company Application is whether this Bench has the territorial jurisdiction to adjudicate the matter.

1.1 The IA is filed by the Respondent Nos. 1, 2 and 3 with prayers

(a) to dismiss the Company Petition No. 38 of 2016 for want of jurisdiction;

(b) to vacate the order dated 27-4-2016 passed by then CLB, Kolkata; and

(c) pass such other and/or further order(s) as may deem fit and proper in the facts and circumstances of the present case along with documents such as, notice issued to the respondents by the petitioner in CP No. 38/2016 and the order dated 19-04-2016 and order dated 274-4-2016 of then CLB and the order dated 11-02-2016 passed by Shri Narendra Kumar Bhola, Regional Director, Ministry of Corporate Affairs, Kolkata, whereby the application of the respondents for transfer of the Registered Office of the Respondent No. 1, Company/confirming the alteration in the situation clause in Memorandum of Association as to the change of place of the Registered Office of the Applicant/Respondent No. 1, Company from the State of West Bengal to the State of Uttar Pradesh, was allowed.

2. On perusal of the record, as well as of the order dated 11-2-2016, passed by Shri Narendra Kumar Bhola, Regional Director, Ministry of Corporate Affairs, it reflects that the petitioners/applicants (Respondent Nos. 1,2 and 3) have filed one application under Section13(4) of the Companies Act, 2013 for confirmation of the alteration of Clause II of the Memorandum of Association of the applicant/Respondent No. 1, Company for shifting its registered Office from the State of West Bengal to the State of Uttar Pradesh as approved by the members by special resolution passed in accordance with Section114of the Companies Act, 2013 at its Extraordinary general meeting held on 17-02-2015.

3. Admittedly, applicants (Respondent Nos. 1, 2 and 3)convened an Extraordinary General Meeting of the Company on 17-02-2015 and in the said meeting, a special resolution was passed approved by the members, whereas the petitioner/non-applicant in the CP, holding 21.76% of the shares of the Company, has challenged the holding of the said meeting dated 17-02-2015 in his petition as due process was not followed while convening the meeting and the petitioners/non-applicants are not served with any notice and have no knowledge with regard to convening of any Extraordinary General Meeting held on 17-02-2015.

4. It is pertinent to discuss/notice various provisions of the Act essentially required to be followed for shifting of the registered office from one place to other place, locally or from one State to other State, as provided in Section13of the Companies Act, 2013.

Companies (Incorporation) Rules, 2014 viz., shifting of Registered Office from one State or Union Territory to another State:

As per the Companies Incorporation Rules, 2014 viz. Application in regard to shifting of the Registered Office from one State or Union Territory to another State (1) any application under sub-section (4) of Section 13 for the purpose of seeking approval for alteration of Memorandum with regard to change of place of the registered Office from one State Government or Union Territory to another, shall be filed with the Central Government in Form No. INC 23 with fee and shall be accompanied by the following documents, namely,

(a) the copy of the Memorandum and Articles of Association;

(b) copy of notices convening the general meeting along with relevant Explanations/Statements;

(c) copy of the special resolution sanctioning the alteration by the members of the Company;

(d) copy of the minutes of the general meeting at which the resolution authorising such alteration was passed, giving details of number of votes cast in favour or against the resolution;

(e) an affidavit verifying the application;

(f) list of creditors and debenture holders entitled to object to the application;

(g) an affidavit verifying the list of creditors;

(h) the documents relating to payment of application fee;

(i) a copy of Board resolution or Power of Attorney or the executed Vakalatnama, as the case may be.

5.Calling of Extraordinary general meeting-

Every Company, other than the general meeting in each year, can also hold any other meeting which can be called to transact urgent business of the Company. One of such kind of meeting is called the extraordinary general meeting. The EOGM can be called by the Board of Directors and the members by requisition.

6.Meeting by Board and Members:

The Board may call an extraordinary general meeting of the company. However, the board can also call an EGM at the demand of members as mentioned below:

(a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one tenth of such of the paid up share capital of the company as on that date carries the right of voting;

(b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote, call an extraordinary general meeting of the company within the period specified in sub-section.

7. The prerequisite of holding the EOGM by Board of Directors viz. -

I. Giving at least 21 clear days' notice in writing. The said notice shall contain the place, date, day and hour of the meeting and shall contain a statement of business to be transacted at such meeting. The Notice of meeting shall be given to

(a) every member of the Company/legal representative of any deceased member or the Assignee of an insolvent member;

(b) Auditor or the Auditors of the Company;

(c) every Director of the Company ;

II. The minutes of each meeting shall contain fair and correct summary of the proceeding and all appointments made at any of the meetings, shall be included in the minutes of the meeting.

Section114of the Companies Act, 2013 says - Ordinary Resolution and Special Resolution :

Section: 114:

(1) A. The resolution shall be an ordinary resolution if the notice required under this Act, has been duly given and it is required to be passed by the votes cast, whether on show of hands or electronically or on a poll as the case may be in favour of the resolution including the casting of vote, if any, of the Chairman, by members, who, being entitled so to do, vote in person or where proxis are allowed, by proxy or by postal.

(2) ballot, exceeding the vote, if any, cast against the resolution by members so entitled and voting.

(2) A. The resolution shall be special resolution when -

(a) the intention to pass the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution ;

(b) notice required under such Act has been duly given ; and

(c) votes cast in favour of the resolution, whether on show of hands, or electronically or on poll as the case may be, by members, who have entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of votes, if any, cast against the resole ion by members so entitled f or voting.

8. The perusal of the aforesaid provisions make it patent that before changing and/or shifting the registered Office, the above said requirements are mandatory.

Admittedly, the applicants/Respondent Nos. 1, 2 and 3 stated that there was an Extraordinary General Meeting held on 17-2-2015, though in the pleadings, the applicants/respondents stated that notice has duly been served upon the petitioners/non-applicants, apart from other members/shareholders. But on perusal of the record, it is found that not a single proof of service of the notice upon the petitioner(s)/non-applicant is annexed with regard to convening the meeting on 17-2-2015.

9. On perusal of the main CP, the petitioner/non-applicant has challenged the alleged change of the registered Office of the Company from 55, Bhupendra Bose Avenue, Kolkata to 65, Dilkhusa Street, Kolkata with effect from 21-1-2015 and thereafter by alleged resolution dated 17-2-2015 from 65, Dilkhusa Street, Kolkata, State of West Bengal to the State of Uttar Pradesh as reflected in Para VI-Page 36 of the Company Petition with heading "Alleged change in registered Office of the Company with effect from 21st January, 2015, and thereafter alleged resolution dated February 17, 2015".

10. As per document annexed by the petitioner as Annexure P1 - page 71, the Memorandum and the Articles of Association, the registered Office of the Company is/was shown as 55, Bhupendra Bose Avenue, Kolkata at all material time. But subsequently, as alleged by the petitioner, the same was/is changed to/shifted to 65, Dilkhusha Street, Kolkata with effect from 21-1-2015, which fact is also admitted by the applicants/respondents.

11. It is also alleged by the petitioner(s)/non-applicants that he was/were not aware of any resolution or purported resolution taken/approved at any point of lime by the Company for shifting of the registered office from the State of West Bengal to the State of Uttar Pradesh since no notice of any such shareholders' meeting or EOGM or AGM was ever received by the petitioner/non-applicant and if at all there was any resolution for shifting of the registered office from the State of West Bengal to the State of Uttar Pradesh was/is passed, that was illegal and null and void and the petitioner/non-applicant has filed the Company Petition for mismanagement and oppression under Sections 235, 397, 398, 402, 403 and 406 of the Companies Act, 1956, apart from other prayers made therein, challenging the shifting of registered office.

12. The Respondent No. 4/non-applicant, who appeared in the case, has also filed an affidavit and alleged that the applicants/Respondent Nos. 1, 2 and 3 has shifted their registered office from the State of West Bengal to the State of Uttar Pradesh without issuing any notice to him, being shareholder of 15.26% of the total paid up and issued share capital. Hence, such shifting of the registered office from the State of West Bengal to the State of Uttar Pradesh, is illegal.

The respondent No. 4 also alleged that there was no special resolution passed at any purported extraordinary general meeting alleged to have been held on February 17, 2015. Not only this, the shifting of the registered Office from one local place i.e. from 55, Bhupen Bose Avenue, Kolkata to 65, Dilkhusa Street. Kolkata itself is illegal and no notice even has been served upon the petitioner/non-applicant.

Had there been any resolution, he being the shareholder of 15.26% share of the total issued and paid up share capital of the applicant/Respondent No. 1, Company, is entitled to receive notice before holding of any meeting or Board meeting or any extraordinary general meeting in respect of change of the situation of the registered office.

The Respondent No. 4 also disputed that the order of the Regional Director, Ministry of Corporate Affairs, Government of India, Kolkata confirming the application for the alleged alteration in the situation clause of the Memorandum of the Respondent No. 1, Company to change the place of registered office from one State to another.

The respondent No. 4 also disputed the factum validity, contents, legality of the documents dated 11-2-2016 issued by the Regional Director, West Bengal.

The respondent No. 4 further stated in his reply that he had not received any notice even after the purported change of the registered office of the applicant/Respondent No. 1, Company. The said act of applicants/respondent Nos. 1, 2 and 3 is in violation of the relevant provisions of the law.

13. In order to controvert the contention of the petitioner/non-applicant as well as of the respondent No. 4 with regard to the service of notice and/or issuance of notice, the applicants/respondent Nos. 1, 2 and 3 have not produced a single document so as to show that, it is in the knowledge of the petitioner(s) and the respondent No. 4 with regard to the convening of the EOGM on 17-2-2015 as reflected in the order dated 11-2-2016 of the Regional Director, Ministry of Corporate Affairs, West Bengal, Kolkata and taking of a special resolution as approved by the members.

14. The applicants/respondent Nos. 1, 2 and 3 also have failed to produce the paper/documents as reflected in paragraph 3 of Annexure 'C' i.e. order dated 11-2-2016 of the Regional Director, West Bengal wherein it was clearly observed that in compliance of Rule 30 of the Companies Incorporation Rules, 2014, the applicants respondents 1, 2 and 3 produced

(i) affidavit verifying the application ;

(ii) affidavit in terms of the rules;

(iii) affidavit regarding employees;

(iv) affidavit verifying list of creditors; and

(v) affidavit proving the service of notice together with the newspaper publication, etc., etc.

15. Had there been any proof of notice or the list of creditors or newspaper publication, the applicants/respondents would have annexed at least the copy of same while taking the issue of territorial jurisdiction by way of filing the instant application. Instead, they have relied only upon the order passed by the Regional Director, Ministry of Corporate Affairs, Government of India, West Bengal dated 11-2-2016, approving/confirming the application of the respondents for alteration in the situation clause in Memorandum of Association as to change of place of the registered Office of the applicant/respondent Company from the State of West Bengal to the State of Uttar Pradesh.

16. It is pertinent to note that on perusal of the application/record/documents, no proof is filed with regard to resolution taken by the Board calling Extraordinary General Meeting of the Company on 17-2-2015 for transacting specific urgent business of the Company; before issuance of the notice of the extraordinary general meeting to the members, shareholders, Directors, Auditors, creditors etc.

17. Further, no document has also been annexed so as to show the attendance of the members, shareholders, Directors, Auditors, creditors etc. in the extraordinary general meeting of the applicant/respondent Company, purportedly held on 17-2-2015.

18. On perusal of the record, it is also found that the registered Office of the applicant/respondent Company since its incorporation, was at 55, Bhupendra Bose Avenue, Kolkata and is admittedly shifted to 65, Dilkhusa Street, Kolkata with effect from January 21, 2015 as reflected in the Master data obtained from the MCA portal also annexed therein.

However, no document has also been produced to show that due procedures were complied, in regard to the shifting of the registered office of the applicant/respondent Company from 55, Bhupendra Bose Avenue, Kolkata to 65, Dilkhusa Street, Kolkata with effect from 21-01-2015.

On thoughtful consideration and on perusal of the documents, records submitted by the applicants/respondents and the reply filed by the petitioner as also the reply filed by Respondent No. 4 on subject of territorial jurisdiction, it is held that because of such acts of the applicant/Respondent No. 1, Company and applicants/respondent Nos. 2 and 3, the Company Petition No. 38/2016 is filed by the petitioner wherein he has challenged the Extraordinary General Meeting and shifting of the registered office from 55, Bhupendra Bose Avenue, Kolkata to 65, Dilkhusa Street, Kolkata with effect from 21-01-2015 and further from 65, Dilkhusa Street, Kolkata, State of West Bengal to the State of Uttar Pradesh with effect from 17-2-2016.

The purported Extraordinary General Meeting showing to be held on 17-02-2015 and the resolution, if any, passed therein, was not as per the provisions of law.

The applicants/respondents 1, 2 and 3 submitted that notice of Extraordinary General Meeting has been duly served to the petitioner and respondent No. 4 but they failed to show or prove the service of notice upon the petitioner and/or upon the respondent No. 4 and/or upon any other members/shareholders as required under rule 30 of the Companies (Incorporation) Rules, 2014. Further, the Memorandum and the Articles of Association (Annexure P1 of the Company Petition) shows the Registered Office at 55, Bhupendra Bose Avenue, Kolkata, but in the order dated 11th February, 2015 passed by the Regional Director reflect the address as 65, Dilkhusa Street, Kolkata.

How and when it is shifted from 55, Bhupendra Bose Avenue, Kolkata to 65, Dilkhusa Street, Kolkata is also not explained. More so, when the Memorandum and the Articles of Association show the address of the Company as 55, Bhupendra Bose Avenue, Kolkata.

Then, question arises as to how the Regional Director allowed/approved the application of the applicants/Respondents 1, 2 and 3 showing the address as 65, Dilkhusa Street, Kolkata, without alteration of the Memorandum and Articles of Association as required under Sections 12(4) & 13 of the Companies Act, 2013.

Therefore, unless action speaks for themselves, no presumption can be drawn.

In support of the argument, the petitioner submitted paragraph 30 ofKamal Kumar Dutta v. Ruby General Hospital Ltd. [2006] 7 SCC 613.

The

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sub-para of paragraph 30 may usefully be quoted as under: "or pass any order as it think fit. Likewise, in Section 398, if the management wants to bring any material change in t he management, and control of the Company prejudicial to the interest of Company, then, in that case, appropriate order can be passed by the tribunal. The act which would amount to oppression to the members or mismanagement or material alteration in the control of the case or prejudice to the interest of the company would depend upon the facts of each case...." It is a settled principle of law that the conduct of the parties is a very relevant factor to be considered in the equitable proceeding. The person/party seeking equitable relief, must come with clean hand and good conduct failing which it constitutes a gross abuse of the process of law and equally, he who seeks equity, must do equity and he who does equity, must come with clean hand. As discussed above, as per provisions of law, I find that the equity is in favour of the petitioner. Rather, it is the conduct of the applicant/respondent 1, Company and the applicants/respondents 2 and 3, as detailed above, which has been prejudicial to the interest of the petitioners/non-applicants and it would be highly unjust to allow the prayers sought by the applicants/respondents 1, 2 and 3 to transfer the Company petition to Safedabad (UP). The relief as prayed by the applicants/respondents 1, 2 and 3, if granted, would be highly oppressive to the petitioner/non-applicant as the applicants/respondents 1, 2 and 3 have acted in the manner not only prejudicial to the interest of the petitioner/non-applicant but also acted in violation of the established principles/procedures of law while shifting the registered office of the respondent No. 1, Company from the local jurisdiction to other and thereafter, from State of West Bengal to the State of Uttar Pradesh. In view of the above discussion and observations, the IA No. 20/2016 stands rejected.
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