Ajay Kumar Kedia & Ors vs Anita Kedia & Ors

[Arising out of Order dated 09.11.2017 passed by National Company Law Tribunal, Hyderabad Bench, Hyderabad in CP No.69 of 2009 (TP No.43/HDB/2016)]

IN THE MATTER OF: Before NCLT Before NCLAT

1. Mr. Ajay Kumar Kedia Original Respondent No.4 Appellant No.1 Kedia Overseas Ltd. 19-2-226, Mir Alam Tank Road, Bahadurpura Hyderabad 500064 Telangana

2. Mr. Mahesh Kumar Original Respondent No.2 Appellant No.2 Kedia Flat No.304, Studio Sycamore Apts, Rd No.4, Banjara Hills, Hyderabad 500029 Telangana

3. Mr. Umesh Kedia Original Respondent No.3 Appellant No.3 5-9-30/1/4/3, Road No.5 Basheerbagh, Hyderabad 500029 Telangana

4. Smt. Anitha Kedia Original Respondent No.6 Appellant No.4 Flat No.304, Studio Sycamore Apts, Rd No.4, Banjara Hills, Hyderabad 500029 Telangana

5. Smt. Komal Kedia Original Respondent No.7 Appellant No.5 Flat No.304, Studio Sycamore 2

Apts, Rd No.4, Banjara Hills, Hyderabad 500029 Telangana

Versus

1. Smt. Anita Kedia Original Petitioner Respondent No.1 5-9-30/1/4/3, Rd. No.5 Basheerbagh, Hyderabad 500029 Telangana

2. M/s. Shruthi Agro Original Respondent No.1 Respondent No.2 Farms Ltd. 19-2-226, Mir Alam Tank Road, Bahadurpura, Hyderabad - 64

3. Pankaj Kedia Original Respondent No.8 Respondent No.3 5-9-30/1/4/3, Road No.5, Basheerbagh, Hyderabad - 500029

4. Smt. Aruna Kedia Original Respondent No.10 Respondent No.4 5-9-30/1/4/3, Rd. No.5, Basheerbagh, Hyderabad - 500029

5. Sri Vijender Kedia Original Respondent No.11 Respondent No.5 5-9-30/1/4/3, Rd. No.5, Basheerbagh, Hyderabad - 500029

For Appellants: Shri Vivek Sibal and Shri Yash Patel, Advocates Shri Arun Kumar Malavi, FCA

For Respondents: Shri Hari Krishna, Shri Milind G. Gokhale, Shri Ashok Kumar Juneja and Ms. Renu Tyagi, Advocate (Respondent No.1)

Company Appeal (AT) No.43 of 2018 3

Shri Virender Ganda, Senior Advocate with Ms. Shelly Khanna and Shri Rahul Bhardwaj, Advocates

Dr. S.V. Rama Krishna, Advocate (Respondent No.2)

JUDGEMENT

(2nd September, 2019) A.I.S. Cheema, J. :

1. This Appeal has been filed by the Appellants who were original

Respondents 4, 2, 3, 6 and 7 respectively, being aggrieved by the Impugned

Judgement and Order dated 9th November, 2017 passed by the National

Company Law Tribunal, Hyderabad Bench, Hyderabad (NCLT - in short)

in CP No.69 of 2009 (TP No.43/HDB/2016). There were 11 Respondents

in the Company Petition which was filed by Respondent No.1 - Anita Kedia,

wife of Jitender Kedia (the Appellant No.4 - Anitha Kedia, wife of Appellant

No.2 - Mahesh Kedia has similar name. Whenever we refer to Anita Kedia,

unless the context shows otherwise, the reference would be to original

Petitioner - Anita Kedia, wife of Jitender Kedia). The Respondents in Appeal

are original Petitioner, R1, R8, R10 and R11 respectively. It is clear that

the Appeal Memo has not followed any system or logic while arraying the

parties in Appeal. As such we will be referring to the parties, in the manner

in which they were arrayed in the Company Petition which can be seen

from the Impugned Order. Original Respondent No.5 - Gulzarilal Kedia

was not arrayed as party in the Appeal. It appears that he has now expired.

The original Respondent No.9 - Registrar of Companies is also not party to

the Appeal.

Company Appeal (AT) No.43 of 2018 4

2. The Company Petition was filed before the Company Law Board at

Chennai. Copy of the Company Petition as was basically filed has been

filed along with the Replies by the Appellants with Diary No.6357. It

appears that the Company Petition filed on 21st August, 2009 was

dismissed in default on 5th June, 2014 and later on was restored. At

subsequent point of time, the Company Petition was amended, copy of

which is at Annexure A-2 filed by the Appellants. The amendment appears

to have been contested by the parties but was allowed and the amended

Company Petition was taken on record. The amended Company Petition

separately shows the portions which were added. The Appellants at the

time of Appeal have tried to claim prejudice on the basis that after the

amended Company Petition was filed, they did not get opportunity to file

Reply to the amended Company Petition. At this stage itself, we record

that when the parties have throughout the litigation aggressively pursued

the litigation, and discreetly keep quiet so that they can later claim

prejudice, on technicalities we would not interfere, especially, when all the

necessary facts and documents were before the Tribunal and the learned

NCLT took a considered view which is based on documents. The parties

were and have been given sufficient opportunities to put on record

whatever case they wanted to.

Case of Original Petitioner

3. In a nutshell, the case put up by the original Petitioner in the

Company Petition as was filed, was that the original Respondents 2 to 5

Company Appeal (AT) No.43 of 2018 5

should be restrained from acting as Directors of the original Respondent

No.1 Company - Shruthi Agro Farms Ltd. (Company - in short). That,

Respondents 2 and 4 had resigned on 7th April, 2004 and Respondent No.3

resigned on 8th April, 2004 which resignations were accepted and they had

also disinvested all their holdings. Original Respondent No.5 - Gulzarilal

Kedia, who was inducted as Additional Director on 9th April, 2004, had

also resigned on 18th December, 2004. The original Petitioner prayed that

the Registrar of Companies (Original Respondent No.9) should be asked

not to take cognizance of Form 32 which was filed on 9th February, 2005

purporting to be under signature of original Respondent No.5 - Gulzarilal

Kedia who had resigned earlier on 18th December, 2004. Company Petition

referred to various documents of transfer like sale deeds, gift deeds, etc.

giving particulars and claiming that the property of the Company was

simply sold off or transferred mainly by original Respondent No.2 - Mahesh

Kedia to their relatives. Original Petitioner claimed that she came to know

about the transactions when Company Secretary - CS Vasanth Bajaj

verified ROC records and when Application was filed for certified copy of

the Form 32 said to have been submitted by original Respondent No.5 -

Gulzarilal Kedia, it was found missing from ROC record leading the

Petitioner to file complaint dated 14.11.2006 (R-VOL.2 - Page No.268).

Then the original Petitioner sought setting aside of the documents of

transfer as detailed by her in the Company Petition.

Company Appeal (AT) No.43 of 2018 6

4. Record shows that the original Respondents contested the Company

Petition and the NCLT after considering the pleadings and arguments put

forth before it, framed following issues:-

"17. After considering various contentions raised by all the parties as briefly stated supra, the following main issues, apart from other issues, arise for consideration in the case:

1. Whether the Company Petition is maintainable under Section 397/398 of the Companies Act, 1956 in the light of allegation that the petitioner is not holding minimum 10% shareholding of the Company, as prescribed under Company law;

2. Whether Respondent No.2 to 4 have resigned as Directors of the Company and again re-appointed as additional Director as contended by them;

3. Whether the respondent No.5 has resigned as contended by the petitioner and the Company;

4. If the resignations are validly made and accepted by the Company, what is validity of impugned transactions made by them;

5. Whether the Form 32 filed by Respondent No.5 on 09.02.2005 is valid or not, in the light of his resignation as Director/ Chairman made as early as on 18.12.2004;

6. If so, what is the relief, the petitioner is entitled for."

Company Appeal (AT) No.43 of 2018 7

The issues were answered in favour of the original Petitioner for

which NCLT recorded detailed reasons and passed the following operative

directions/Orders:-

"1) Hereby declared that the respondent Nos 2 to 4 herein ceased to be Directors of the Company with effect from 9.04.2004, and they have also ceased to be members of the Company;

2) Hereby declared that the Respondent No.5 is also ceased to be a Director of the Company with effect from 18.12.2004;

3) Hereby set aside the impugned registered document Nos.3440 of 2006, 6722 and 6723 of 2006 and unregistered sale deed vide file No.791/AR/08 dated 07-01-2008, Registered document No.3640 of 2008 and 143 of 2008 dated 10.01.2008 and another document Nos.6720/2006 and 6721 of 2006 by declaring them as illegal and void abinito having been executed without any authority;

4) It is hereby directed the Registrar of Companies, (Respondent No.9) to effect necessary changes with respect to the Board of Directors of the Company and not take cognizance of form No.32 filed on 09.02.2005 and communicate the action taken to the petitioner and the Company within a period of three weeks from the date of receipt copy of order.

5) CA No.94 of 2017 is hereby dismissed as having no merits.

6) No order as to cost."

5. Being aggrieved, the present Appeal has been filed by the

Respondents 2 to 4, 6 and 7. We will refer to the Appellants as the

contesting Respondents.

Company Appeal (AT) No.43 of 2018 8

Case put up by Appellants/Contesting Respondents

6. The Appeal claims, and it has been argued for the Appellants that

the Company Petition filed by the original Petitioner claiming to be

shareholder of the Company, was a collusive Petition as the Company is

managed by her husband - Jitender Kedia (Managing Director) who in his

Replies filed, admitted the factual assertions made by the original

Petitioner and the same were relied on by NCLT to pass the Impugned

Order. The Appellants claim that the Form 32 filed on 8th February, 2005

under the signature of original Respondent No.5 - Gulzarilal Kedia was

questioned in the Company Petition filed in August, 2009 and thus, it was

time barred claim. According to the Appellants, it was not a case of

oppression and mismanagement. The original Petitioner did not hold more

than 10% shareholding in the Company when the Petition was filed. The

shareholding of the Company till 31.03.2004 was 16,54,020 shares with

24 shareholders. Originally no shares had been allotted to Anita Kedia -

wife of Jitender Kedia till 21.02.2004. The paid up capital, in Annual

Return filed by Jitender Kedia (counter signed by original Petitioner) for

Financial Year 2004 - 2005 for AGM held on 30.09.2005, suddenly

increased to 21,24,000 shares and the number of shareholders was shown

only as 8 for the period 2004 - 2005, which was reduced from 24

shareholders. Although Annual Return mentioned list of shareholders but

the same was not enclosed with Annual Return filed with ROC. It is also

mentioned that if new shares were allotted, procedure required by Section

Company Appeal (AT) No.43 of 2018 9

81 was not followed. The claim of the original Petitioner that these

Respondents had transferred their shares is denied by the

Appellants/Respondents claiming that original Petitioner with her

husband - Jitender Kedia conspired against the shareholders to execute

fraudulent Share Transfer Forms to register share transfers in her name

by misusing blank signed Share Transfer Forms which were available with

Jitender Kedia, Managing Director for the purpose of offering security for

obtaining loans from the banks and outside agencies. They also claimed

that there was no payment of consideration against said transfers. It was

closely held Company. Appellants claim that Share Transfer Forms were

fraudulent and somewhere consideration was shown as Rs.5/- per share

and somewhere it was shown as Rs.10/- per share. The book value of

shares was about Rs.800 per share. The Appellants also claim that the

original Petitioner and her husband - Jitender Kedia had acted against the

interest of the Company as there was illegal execution of sale deed

No.10670/2006, transferring the property of Company in favour of

Jitender Kedia through another Director Mr. Rajesh Agarwal (claimed by

the original Petitioner as appointed Additional Director on 11th December,

2004). Appellants claim that the original Respondent No.2 - Mahesh Kedia

filed OS 2196 of 2007 in this regard and Judgement was passed in favour

of Respondent No.2 - Mahesh Kedia which dispute is now pending in

Appeal. The Appellants have tried to defend the unregistered sale deed

dated 07.10.2003 which has been questioned by the original Petitioner

claiming that admittedly on that date Respondent No.2 - Mahesh Kedia

Company Appeal (AT) No.43 of 2018 10

was Director of the Company. The Appellants claim that proceedings on

the revenue side regarding that sale deed and gift settlement deed

document No.143 of 2008 were pending. Appellants admit that Appellants

1 to 3 (original Respondents 2 to 4) did resign in April, 2004 but claim that

original Respondent No.2 - Mahesh Kedia was re-inducted as Additional

Director on 8th December, 2005 in which original Respondent No.5 -

Gulzarilal Kedia submitted Form 32 on 8th February, 2005. According to

the Appellants (contesting Respondents), Gulzarilal Kedia never resigned

as claimed by the original Petitioner. They claim that Gulzarilal Kedia had

filed counter Affidavit in 2009 and also submitted newspaper

advertisement dated 22.07.2009 mentioning that Jitender Kedia had

obtained some signatures on blank papers from him. Appellants

(contesting Respondents) claim that Form 32 appointing original

Respondent No.2 - Mahesh Kedia and Umesh Kedia was valid. They claim

that the resignation of Gulzarilal Kedia was fabricated by the original

Petitioner. According to the Appellants, the original Petitioner did not hold

10% shareholding. They also want to claim that one Kailash Narayan

Bhangadia had filed another CP 43/2009 claiming that he had been

illegally divested of his shares by the original Petitioner and Jitender Kedia

but the said Petition was stayed in Writ Petition by the High Court. With

regard to Sale Deed dated 21.2.2006, questioned by Petitioner, Original

Respondents claim that it was executed to raise finds of Company.

Company Appeal (AT) No.43 of 2018 11

7. The Respondent No.1 - Anita Kedia - original Petitioner and the

Counsel for Respondent No.2 Company have also been heard. These

parties have supported the Impugned Order raising various arguments as

have been noted by the NCLT also.

The Respondent No.1 - Petitioner has filed documents from the

Company Petition. For the sake of convenience, the different volumes were

directed to be properly numbered and they have been numbered as R-

VOL.1 to R-VOL.5. These are filed with Diary No.4051.

Can it be claimed that Original Respondents 2 and 4 were duly re-inducted back as Directors

8. Having gone through the matter, there is no dispute regarding the

fact that original Respondents 2 to 4, who were earlier Directors, had

submitted resignation letters in April, 2004. Copies of those documents

are at R.VOL.1 Pages - 93 to 97, which show their resignations and the

appointment of original Respondent No.5 - Gulzarilal Kedia as Additional

Director w.e.f. 09.04.2004. Then there is resignation of original

Respondent No.5 - Gulzarilal Kedia at Page - 98 of the R-Vol.1 resigning

from the post of Chairman-cum-Director (which of course Appellants are

questioning). R-Vol.1 at Page - 74 has Annual Return of the Company filed

after AGM of 29.09.2006 showing one Shri Rajesh Aggarwal inducted as

Director w.e.f. 11th December, 2004.

9. In the light of the above documents and admitted facts, if the

Appellants want to claim that they were re-inducted as Directors, it would

Company Appeal (AT) No.43 of 2018 12

be burden on them to show as to how and that legally they got re-inducted.

Apparently, if Respondent No.5 - Gulzarilal Kedia had resigned on 18th

December, 2004, he could not have submitted Form 32 on 8th February,

2005, copy of which is at Page - 112 and 113 of R-VOL.3. This Form

claimed that original Respondent No.2 - Mahesh Kedia and original

Respondent No.3 - Umesh Kedia had been reappointed as Additional

Directors on 7th February, 2005.

It appears that original Respondent No.5 - Gulzarilal Kedia recorded

and notarized Affidavit dated 8th August, 2013 (Volume R3 - Page 59)

claiming that original Respondents - Mahesh Kedia and Umesh Kedia had

resigned from the Board of Directors on 09.04.2004; he claimed that he

had himself resigned on 18th December, 2004 and the changes had been

informed to ROC. This Respondent No.5 - Gulzarilal Kedia appears to have

been the father of Mahesh Kedia, Umesh Kedia and Jitender Kedia. He

executed the Affidavit claiming that in the course of litigation between the

brothers, he has come to know that a fresh From 32 was filed on

05.02.2005 stating that original Respondents - Mahesh Kedia and Umesh

Kedia had been re-nominated as Directors and the Form 32 bore his

signature. He claimed that he has sent a letter dated 18.12.2013 to the

Registrar of Companies that he had ceased to be Director from 18th

December, 2004 and that he had not appointed Mahesh Kedia and Umesh

Kedia as Directors. No doubt the Appellants have claimed that in 2009

Gulzarilal Kedia had executed another Affidavit and given in newspaper

Company Appeal (AT) No.43 of 2018 13

that Jitender Kedia had taken some signatures on blank papers from him

but such notarized Affidavit of 2013 is also on record. Unfortunately,

Gulzarilal Kedia is said to have expired on 12th September, 2018. The point

remains that it is burden on the original Respondents 2 and 3 to show that

they were duly re-inducted. Merely referring to Form 32 signed by late

Gulzarilal Kedia would not be sufficient. There is no material to show that

there was any Board Resolution re-inducting these parties as Directors.

Again, even if they were re-inducted as Additional Directors, it is not

claimed by Appellants and there is no material that in following AGM, they

were continued as Directors.

10. Rather, the original Petitioner has pointed out that in 2005 when

these contesting Respondents issued Notice under Section 169 read with

Section 257 of the earlier Companies Act, 1956 the Company had informed

that they had already transferred their shares and also that they were no

more Directors. Copy of the document is at Page - 73 of R-VOL.3. This

document shows that the Company addressed letter to original

Respondent No.2 - Mahesh Kedia on 19th January, 2005 and

communicated as under:-

"As you are aware that you have transferred the shares held by you in the Company and the Company has effected the transfer of 7,00,202 equity shares standing in your name in the board meeting held on 30.01.2004 & 09.04.2004 vide duly filled share transfer forms and certificates lodged with the Company.

Accordingly we regret to inform you that you are no longer a member of the Company. Hence, you do not

Company Appeal (AT) No.43 of 2018 14

have the right to call for an EGM or propose a Director as stated in your letter under Sec.169 read with Sec.257 of the Companies Act."

On the photocopy of the letter filed, there is copy printed of the Postal

Receipt of registration of the letter with the Post Office, and also photocopy

of acknowledgement of Respondent No.2 - Mahesh Kedia is there. It also

bears stamp and signature of the Office of Registrar of Companies along

with date of January, 2005. Similarly, there are other documents at Page

- 85 of R-VOL.3 addressing similar letters to original Respondent No.4 -

Ajay Kedia, at page - 90 of the Volume; letter addressed to Vijendra Kedia,

at Page - 94 of the Volume; and at Page - 300 of R-VOL.4 letter addressed

to Respondent No.3 - Umesh Kedia. These are documents from the

Company informing these persons that they are no more shareholders and

could not convene meeting. These documents show postal receipts as well

as acknowledgements. They also bear Receipt Stamps and signature with

date from office of ROC. There is no reason to doubt the endorsements.

Thus on one side, where the Appellants are trying to claim that on Form

32 submitted under signatures of late Gulzarilal Kedia, the original

Respondents 2 and 3 had been re-inducted, there were letters from the

Company informing these persons as mentioned in the letters that they

had divested their shareholdings and were not even members. Thus,

according to us, the contesting Respondents - Appellants have not been

able to show that once having resigned, how they were re-inducted as

Directors; or that the same was done legally. In fact, the Company

Company Appeal (AT) No.43 of 2018 15

questioned their membership itself and there is no material to show that

when the Company sent such information, these original Respondents

made any efforts by filing any Company Petition to claim that they have

not transferred their shares and original Respondents 2 and 3 were duly

reappointed as Additional Directors and then Directors.

Do Appellants show they still are Shareholders?

11. The Appellants have tried to claim that Jitender Kedia had blank

Share Transfer Forms with him which was given for the purpose of offering

security to obtain loans from banks and outside agencies and that the

same were misused to show transfer of shares in favour of the original

Petitioner. The fact remains that signatures on the Forms are not in

dispute. The Appellants also claim that the original Petitioner did not have

10% shareholding. However, if documents at R-VOL.3 Pages 29 to 57 are

perused, the following picture emerges:-

Transfers Shares Transfer From No. Date

R2 transferred to 2,00,202 034594 30.01.2004 Petitioner 5,00,000 160490 09.04.2004 (Pages 29 and 34)

R3 transferred to 20,000 160489 09.04.2004 Petitioner 3,74,000 160491 09.04.2004 (Pages 42 and 44)

R4 transferred to 13,000 034596 30.01.2004 Petitioner (Page 52)

R8 transferred to 15,600 160488 09.04.2004 Petitioner (Page 54)

Company Appeal (AT) No.43 of 2018 16

R11 transferred to 4,000 160484 09.04.2004 Petitioner (Page 56)

These forms were acted upon and taken on Record by the Company

in 2004 itself. In the face of such documents, we discard the claim of the

Appellants that blank Share Transfer Forms were misused. We have

already referred to the Reply notices sent by the Company to these persons

(copies of which are at Pages - 73, 85, 90 and 94 of R-VOL.3 and Page -

300 of R-VOL.4) in January, 2005, which documents we have already

referred in earlier paragraphs. As mentioned, the Appellants do not appear

to have filed any Company Petition to claim restoration of their names in

the records of the Company in the Register of Members. It is not the case

of the Appellants that in the Annual Returns and the Returns filed by the

Company, they were still shown as shareholders even after 2004-2005.

Taking into consideration the shareholding of the Company and the facts

appearing showing original Respondents 2 to 4, 8 and 11 transferring their

shares as above, we are unable to accept the contentions being raised by

these Respondents that they were still members of the Company and that

original Petitioner did not have the necessary shareholding to maintain the

Company Petition. There is substance in the Company Petition filed by the

original Petitioner that in the closely held Company by the family, those

who had resigned and divested their shareholding were continuing to

meddle in the affairs of the Company and thus, affairs of the Company

were getting mismanaged and the Company Court was required to interfere

Company Appeal (AT) No.43 of 2018 17

to save the Company from mismanagement. The original Petitioner also

claimed that such Respondents were holding themselves out as Directors

of the Company and were even executing sale deeds of the properties of

the Company which properties were required to be protected and thus, at

the instance of such erstwhile members and Directors who continue to

purport themselves to be members and Directors, she was suffering

oppression and the interest of the Company required that the Company

Court should protect the Company.

Illegal Transfers

12. Before going to the amended Company Petition, we refer to the

averments made by the original Petitioner in the Company Petition as was

initially filed which made out a case of original Respondent No.2 being

party to various questionable transfers of properties of the Company. The

Appellants have filed the copy of Company Petition with Diary No.6357,

which we have referred. As we have found the original Respondent No.2

had resigned in April, 2004 as Director and there is no evidence to

establish that he was duly re-inducted as Director and there is also

evidence to show that he had divested his shareholding, it becomes

apparent that after April, 2004, Respondent No.2 could not have claimed

to be a Director or member. In this background, now if the Company

Petition is seen, the original Petitioner pointed out the following actions on

the part of the contesting Respondents, which we examine with Documents

on record:-

Company Appeal (AT) No.43 of 2018 18

a) On 21.02.2006, original Respondent No.2 posed himself as Director

to execute registered sale deed document No.3440 of 2006 before the Sub-

Registrar Office, Rajendra Nagar for transferring the agricultural land

Survey No.476 at Manchurevulu Village in favour of his son - original

Respondent No.4 who claim to be Director of M/s. Kedia Overseas Limited.

According to original Petitioner, Respondent No.2 was Managing Director

and shareholder of M/s. Kedia Overseas Limited. She has pointed out

documents in this regard at R-VOL.1 Page 101.

In the Reply, original Respondent No.2 claimed that this document

was executed for raising funds of the Company and that he was authorized.

However, the document does not claim that he was authorized. There is no

Resolution of the Company supporting the transfer nor authority shown.

b) Original Petitioner pointed out in the Petition that on 12.05.2006,

Respondent No.2 - Mahesh Kedia executed two sale deeds before the

Sub-Registrar, Shamshabad by registered document Nos.6722 and 6723

transferring property of the Company to Pankaj Kedia, his relative. Survey

No.191 and 194 to the extent by 3 acres and 4.25 acres situated at

Shamshabad were transferred. She pointed out document at R-VOL.1 Page

121.

c) Original Petitioner referred to Shailesh Agarwal, brother-in-law of

original Respondent No.2 executing gift deed on 18.09.2008 by Document

No.3640 of 2008 in favour of original Respondent No.6, wife of original

Company Appeal (AT) No.43 of 2018 19

Respondent No.2. This document was executed before Sub-Registrar,

Gandipet and agricultural land of 5.25 acres - Survey No.476 of

Manchirevula of RR District, Andhra Pradesh was gifted. In the arguments,

the document is shown at R-VOL.1 - Page 151. The document shows (at

Page - 153) Shailesh Agarwal claimed that he had acquired the property of

the Company in discharge of monetary liability.

d) The original Petitioner pointed out and it is argued that on

07.10.2003, Original Respondent No.2 executed unregistered sale deed.

(R-VOL.2 Page 176) on non-judicial stamp. It was relating to Survey

No.504(P) and 503 - 2.35 acres at Manchirevula, RR District transferred

to Anil Kumar Jhunjhunwala. According to Petitioner, this person

was relative of original Respondent No.2. It is the case of original

Petitioners that original Respondents 2 to 4 applied on 7th January, 2008

for validating the proceedings before District Registrar, RR District and in

validation file No.791/AR/08 (R-VOL.2 Page 177), the validation was done

in 2008. The original Petitioner pointed out that this Anil Kumar

Jhunjhunwala executed gift deed within another three days on 10th

January, 2008 in favour of Mrs. Komal Kedia (original Respondent No.7)

who is wife of original Respondent No.4 and daughter-in-law of original

Respondent No.2. Thus, this Komal happens to be daughter of Anil Kumar

Jhunjhunwala. The said gift deed has been pointed out by the original

Petitioner at Page - 183 of R-VOL.2.

Company Appeal (AT) No.43 of 2018 20

13. It is clear from the above that the above transfers were clearly

suspicious acts on the part of the original Respondents concerned. The

transfer Documents were entered into in name of Company without

showing Authority. None of the transfers are supported by any Resolution

of the Company permitting the transfer nor the persons signing as

transferors on behalf of the Company even claiming that they were

authorized. Mearly standing and claiming to be Director would not be

enough. Such transfers in favour of such near relatives without showing

the money flowing to the Company, are clearly unacceptable actions. The

misdeeds get compounded in the contexts of the facts that the contesting

Respondents and, especially, Respondent No.2 - Mahesh Kedia had

already resigned as Director and had divested his shareholdings in 2004.

The situation does not help original Respondent No.2 to claim that on

07.10.2003 when the unregistered sale deed was executed, he was

admittedly a Director because unregistered sale deed would not be

acceptable in law. When the validation proceeding is claimed to have been

conducted in 2008, apparently, original Respondent No.2 had no business

to take part in the validation proceeding.

14. Although learned Counsel for the Appellants expressed so much of

concern that the Appellants were not given opportunity to meet the

amended Company Petition. If we peruse the amended Company Petition,

which is at Annexure -A2 of the Appeal (Page - 122), the new facts

amended petition brought on record are at Page - 133, which were to the

Company Appeal (AT) No.43 of 2018 21

effect that original Respondent Nos.2, 10 and 11 transferred by registered

sale deed No.7620/2006 (see R-VOL.2 Page - 212) land to Aruna Kedia,

original Respondent No.10 and that by document No.6721/2006 (see R-

VOL.2 Page - 241) land in favour of original Respondent No.11 - Vijender

Kedia. In the Appeal, although the Appellants were given all the required

time to argue, nothing is shown as to how these transfers which are evident

from registered documents, which are on record, could be justified. To

repeat, the Appellants have not been able to support their actions from any

Board Resolutions or any authority from Board of Directors of the

Company. We have gone through the Impugned Order and we find that the

learned NCLT has rightly set aside these various transactions.

15. We discard the argument that the Company Petition could not have

been filed against the Appellants, if the original Petitioner claimed that they

had divested their shareholding and were no more members and that the

original Petitioner should have gone to the Civil Court. The Appellants are

not rank outsiders. The Appellants apparently are claiming to be still

shareholders and Directors and purported to act in such capacities. The

transactions show contesting Respondents transferring Company

properties to their immediate family members or near relatives.

Considering the facts and issues involved, such factors cannot be

considered and decided by any Civil Court as it would be a matter for the

Company Court - NCLT to deal with. The actions of the original

Respondents are on the basis of their claims as Directors and members of

Company Appeal (AT) No.43 of 2018 22

the Company and such actions can be dealt with and decided by NCLT

alone and thus, we discard the arguments of the learned Counsel for the

Appellants that the Company was collusive and that Petition was not

maintainable under Section 241 and 242 of the Companies Act, 2013 or

the analogues provisions of the earlier Companies Act.

16. We do not find any substance in this Appeal. The Appeal is dismissed

with costs. Each of the Appellants will pay Rs.1 Lakh as costs of the Appeal

to the original Respondent No.1 Company.

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[Justice A.I.S. Cheema] Member (Judicial)

[Balvinder Singh] Member (Technical) /rs/nn

Company Appeal (AT) No.43 of 2018