Bhagyanagar Boards & Chemicals Private ... vs Vijay Kumar Goyal

In the matter of: 1. M/s. Bhagyanagar Boards & Chemicals P. Ltd. Registered Office at: 1-74, Guchi Bowli Village, Madhapur, Hyderabad - 500 032. ..... Appellant No. 1

2. Smt. Sheela Gupta 12-2-713, Nanal Nagar Hyderabad .....Appellant No. 2

3. Mr. Girish Gupta 12-2-713, Nanal Nagar Hyderabad - 500 028 ..... Appellant No. 3

4. Smt. Sushma Gupta 12-2-713, Nanal Nagar Hyderabad - 500 028 ..... Appellant No. 4

5. Mr. Mitesh Gupta 12-2-713, Nanal Nagar Hyderabad - 500 028 ..... Appellant No. 5 v.

1. Mr. Vijay Kumar Goyal Old No. 30, Rajasekharan Street, Mylapore, Chennai - 600004 ..... Respondent No. 1

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 1 of 22 2. Mr. Bhushan Goyal Old No. 30, Rajasekharan Street, Mylapore, Chennai - 600004 ..... Respondent No. 2

3. Mr. Vishal Goyal Old No. 30, Rajasekharan Street, Mylapore, Chennai - 600004 ..... Respondent No. 3 Present: For Appellant : Mr. Y Suryanarayana, Advocate. For Respondent : Mr. P.H. Arvindh Pandian, Senior Advocate Nos. 1 to 3 : For Mr. R. Parthasarathy, Advocate

ORDER

(Virtual Mode) [Per; Ms. Shreesha Merla, Member (Technical)]:

1. I.A. 1102/2022 in Comp. App. (AT) (CH) No. 128/2022 is filed by

M/s. Bhagyanagar Boards & Chemicals Pvt. Ltd.', seeking stay of the

operation of the Impugned Order dated 19.10.2022 passed by the NCLT,

Hyderabad Bench in T.P. No. 06/HDB/2016 (C.P. No.26/2005), whereby

the Company Petition was allowed with the following directions:

• It is hereby ordered that the Register of Members of the 1 st

Respondent/company be rectified by registering the names of the

Petitioners, after setting aside transfer of 760 shares of the 1 st

respondent dated 07.03.2005 in favour of the 6th respondent.

• The relief as to damages against the 3rd and 6th respondents is

hereby rejected.

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 2 of 22 • We hereby set aside appointments of 4th respondent/Nirmal Kumar

Gupta and 5th respondent/ Girish Gupta as Directors of the 1 st

respondent/company, consequently we direct the reconstitution of

the Board of the 1st respondent/company.

• We hereby declare that the Extraordinary General Meeting dated

20.04.2005 as illegal and invalid. Consequently, it is held that the

Resolutions passed and decisions taken, if any, including the

decision to remove the 2nd respondent as Director is hereby set

aside.

• Under the circumstances, we direct both the parties to bear the

costs.

2. I.A. Nos. 1101 & 1103/2022 in Comp. App. (AT) (CH) No.

128/2022 are filed seeking urgent hearing of the Appeal and stay of the

EGM conducted on 28.12.2022. All the IAs are being disposed of by this

Common Order.

3. Learned Counsel Mr. Y. Suryanarayana appearing for the

Applicant submitted that consequent to the passing of the 'Impugned

Order' dated 19.11.2022, the first Appellant Company received emails

from M/s. Kotak Bank, M/s. HDFC Bank and M/s. Citi Union Bank on

05.11.2022, 07.11.2022 and 09.11.2022 that the accounts maintained by

them in the 'respective Banks' are 'frozen' consequent to the 'Impugned

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 3 of 22 Order'. This is affecting the day to day operations of the Company and

therefore it is imperative that the 'Operation' of the 'Impugned Order' is

stayed.

4. The Learned Counsel explained the background of the filing of the

Company Petition as follows:

• The 1st Respondent herein viz., Mr. Vijay Kumar and Shri Nirmal

Kumar Gupta are brothers and sons of Shri Gajanandji Gupta

• Sri Sat Narain Bansal is the brother in law (sister's husband) of the

1st Respondent herein and Shri Nirmal Kumar Gupta.

• The 2nd and the 3rd Respondents herein are sons of the 1st

Respondent herein.

• The 2nd Appellant is wife of Shri Nirmal Kumar Gupta.

• The 3rd and the 5th Appellants are the sons of the 2nd Appellant and

Shri Nirmal Kumar Gupta

• The 4th Appellant is wife of the 3rd Appellant.

5. He drew our attention to the chronology which has led to the

institution of the 'Company Petition' before the NCLT:

24.08.1976 Pursuant to Agreement of Sale between the Andhra

Pradesh State Financial Corporation (APSFC) and

Shamla paper Board Industries, the land in question

was sold to Shamala Paper Board Industries.

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 4 of 22 03.07.1979 A sum of Rs. 1,61,783.92 owed by Shamala paper

board Industries to APSFC has been paid.

10.09.1979 The remaining amount has been transferred in the

name of Respondent No.1/Company, on its

incorporation.

06.07.1979 Shamala Paper Board Industries had become a

defaulter and the unit was taken over by APSFC.

14.04.1980 Respondent No.1 requested APSFC to execute all the

documents in favour of Respondent No.1/Company.

However, the same could not be done as loan could

not be cleared.

30.03.1991 Entire loan was cleared by Respondent No.1 and loan

account with APSFC has been settled by respondent

No.1.

19.11.1991 No Due Certificate has been issued by APSFC.

17.08.1993 APSFC has returned all the documents to Respondent

No.1

26.03.2004 After various communications exchanged between

APSFC and Respondent No.1, sale deed was executed

in favour of Respondent No.1/Company.

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 5 of 22

6. Mr. Vijay Goyal, Mr. Bhushan Goyal & Mr. Vishal Goyal, the

Respondents No.1, 2 &3 herein together hold 76 % of the paid up capital

and the Respondents No. 4 & 5 who had died, held 24% of the paid up

capital.

7. Mr. Y.Suryanarayana, Learned Counsel for the Applicant

submitted that the Ice Cream business being run under the name of

'Chanda Softy Ice Creams' (Milky Way) (which was established in the

year 1994), was doing extremely well and the Respondents were

suppressing the cash income generated from out of this business and there

were 'simmering differences' between the Appellants and the

Respondents herein. It is submitted, that in order to resolve the

differences there was a 'Family Understanding' whereby it was agreed by

the Respondents that instead of holding 50% partnership, located in

Chennai, it would be taken over by the Respondents Group based in

Chennai and 100% of the shares of the 1st Appellant Company,

Hyderabad, would be owned by the Appellants Group based in

Hyderabad. The first portion of the 'Understanding' was implemented by

way of a 'Deed of Dissolution' executed between 3rd Appellant and 2nd

Respondent on 31.10.2002, the second portion of the understanding was

implemented on 31.12.2002 after the wedding of the 3rd & 4th Appellants

which took place in Hyderabad on 12.12.2002. The Respondents group

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 6 of 22 handed over the share certificates along with duly executed transfer forms

to the 4th Appellant who controlled the 1st Appellant Company.

8. It is submitted that the Respondents in their 'Petition' wrongly

stated that they have never executed any 'Transfer Deeds' but in the

'Rejoinder' admitted to have executed these 'Transfer Deeds' in the

month of February, 2002 to an alleged buyer in Hyderabad. The witness

to the 'Transfer Deed' is an attesting witness, namely, Shri Shashi Bansal,

who had sworn in an 'Affidavit' dated 17.05.2005 that the 'Transfer

Deed' duly executed by Mr. Vijay Kumar Goyal and the other two

Respondents in favour of the new Bride Ms. Shushma Gupta, as a 'Gift'

were handed over in his presence to Mr. Vinod Lath, the father of the

bride. The above witness was Suo Moto summoned by NCLT on

20.01.2017 where the witness has confirmed the contents of his

'Affidavit' dated 17.05.2005. It is submitted that the 'Witness' was also

cross-examined by the Respondents and the same was also recorded by

the 'NCLT' in their order dated 20.01.2017.

9. The Respondents, in their cross-examination, questioned Shri

Shashi Bansal as to why he was selected as a 'Witness' out of all the

people present and the 'Witness' had answered that it was because, both

the brothers 'had huge faith in him'.

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 7 of 22

10. Learned Counsel for the Applicant further relied on the letter dated

07.04.2005 of Shri Gajanandji Gupta, who is the father of the 1st

Respondent, in which letter Shri Gajanandji Gupta referred to the 'Family

Understanding' and stated that Milkyway at Chennai was entirely taken

over by the family and BBC was entirely given to Nirmal's family. The

1st Respondent in the letter dated 03.06.2005 admits that he had received

the afore noted letter dated 07.04.2005 signed by Shri Gajanandji Gupta

but NCLT has not given any finding regarding this letter. It is also the

case of the Appellant that 130 Shares were allotted to the 3rd Appellant on

08.12.2002 and no shares were allotted to the 'Respondent Group' as

there was a 'family understanding'. The Respondents have failed to give

any reason for dissolving the 'Partnership' of the 'Ice Cream Business',

saying the same was not due to any 'Family Understanding'. The

'Possession' of 'Share Certificate' is a 'prima facie' evidence of

shareholding and there is no reason given by the Respondents as to how

the 'Share Certificates' related to the 760 shares are not in their

possession. Admittedly, the 'Land' of the 1st Appellant Company is the

only major 'Asset' of the Company and the Company did not have a

registered 'Title' over the said 'Land' at the time of 'family

understanding' in the year 2002. It is submitted that if the Respondents

had not transferred their entire shareholding pursuant to the 'family

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 8 of 22 understanding' in the year 2002, their representatives, Shri Sat Narain

Bansal, ought to have represented the 1st Appellant Company in the 'Sale

Deed' dated 26.03.2004 and not the 2nd Appellant, as was done in this

case.

11. The fact is that the total control over the Company was with the

Appellant and not the Respondents, evidences that the Respondents had

already transferred their shares in the Company pursuant to the 'family

understanding'. It has submitted that it is an 'afterthought' by the

Respondents regarding issues of division of the property, winding up of

the Company, development of the property and further the exploitation of

the property of the Company.

12. It is the case of the Applicant/Appellant that no details, whatsoever,

was provided by the Respondents regarding the alleged buyer, the name

or identity, the price or even if there was any agreement entered into or

any advance offered with respect to the alleged purchase of the property.

If the 'Transfer Deeds' were executed for a third party, the witness

column should have been filled in by a person, witnessing the signatures

of the Respondents and further the witness proves the execution of

'Transfer Deeds' and the time period of such execution. The Respondents

never had a consistent stand on how the 'Transfer Deeds' came into the

possession of the Appellant group.

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 9 of 22

13. Learned Counsel drew our attention to page 1086 of the 'Appeal

Paper Book' which states that one brother/4th Respondent gets possession

of certain blank signed transfer forms and also at para 6 in which it is

stated that the "share transfer forms and certificates, which the

Respondents had entrusted to Respondent No.3 to 5 (the 2nd Appellant &

3 Appellant)..." shows that Shri Nirmal Kumar Gupta approached them

and obtained the 'Transfer Deeds' from them. It is also argued that the

Respondents have severely failed to explain why only the executed

'Transfer Deeds' were handed over (as stated by the Respondents in the

'Rejoinder') and not the 'Share Certificates', when there were intended

for an alleged buyer in Hyderabad.

14. Learned Counsel drew our attention to the 'Comparative Table' of

the evidence with respect to the 'Execution of Transfer Deeds' and

handing over of the 'Share Certificates'. It is also the case of the

Appellants that the Notice dated 05.03.2005 for the 'Board Meeting' to be

held on 07.03.2005 was sent by a 'Telegram' and the certified copy of the

Telegram was filed along with the 'Counter' and the notice was signed by

a 'Director' of the 1st Appellant Company. The notice dated 05.03.2005

for the 'Board Meeting' clearly stated that the 'Agenda' will be served in

the meeting and the same is evident from the 'Minutes of the Meeting',

which clearly shows that there were six 'Agenda items' with respect to

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 10 of 22 appointment of Mr.Girish Gupta as 'Additional Director', approval of

Share transfers, shifting of the 'Registered Office of the Company' and

confirmation of the 'Minutes' of the previous 'Board Meeting'. Though

Shri Sat Narain Bansal was sent the notice through telegram, he did not

attend the meeting and it was only attended by the 2nd Appellant and Shri

Nirmal Kumar Gupta. The transfer of shares was transacted in the 'Board

Meeting' after being mentioned as an 'Item' in the agenda. The

Respondents have given a 'concocted story' that the records of the

Company were maintained under the charge of Mr. Ghanshyam Bhati,

however, subject to the overall control of Shri Sat Narain Bansal and that

the 3rd Appellant had taken away the records from Mr. Ghanshyam Bhati

on the false promise of reference and informed that he would return the

same soon. It is submitted that this statement has been made without any

evidence as the Respondents in Company Application No. 54 of 2017

stated that they themselves entrusted the share certificates to the 2nd

Appellant. Mr. Ghanshyam Bhati addressed letters dated 18.12.2004 &

08.02.2005 to the 3rd Appellant seeking return of the file containing

documents related to 'Registrar of Companies', 'share transfers form' and

'statutory registers'. The Respondents had colluded with Shri Sat Narian

Bansal and preferred the petition with an 'ulterior motive'. It is submitted

that this is clear from the fact that the remuneration to the Advocate of

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 11 of 22 Shri Sat Narain Bansal, was paid by the 1st Respondent and Shri Sat

Narian Bansal was a 'nominee' on behalf of the Respondents. In their

letter dated 13.04.2005 issued to the ROC, it was stated that the Board

comprises of only two persons while Mr. Sat Narian Bansal represents the

interest of our group viz. VKG group and Smt. Sheela Gupta represents

NKG Group. Certified copies were obtained by Sri Sat Narian Bansal and

given to Respondents. Shri Sat Narian Bansal was a paid employee of

'M/s. Tirupati Roller Flour Mills Pvt. Ltd' which 'managed' and

'controlled' by the Respondents. The 3rd Appellant filed IA No. 51 of

2021 before the NCLT highlighting this collusion between the

Respondents and Sri Sat Narian Bansal and when the said IA came up for

hearing on 12.07.2022, the NCLT stated that "in the light of the prayers

sought for, this CA cannot be disposed of independently, especially when

the Company Petition which is more than 17-year old, is ripe for final

hearing. Hence, this IA will be heard along with the Company Petition".

15. Learned Counsel concluded that the NCLT had erred in not

considering the letter dated 09.04.2005 of Shri Nirmal Kumar Gupta and

erred in also overlooking the contents of the reply dated 05.03.2005 of the

3rd Appellant wherein it was clearly stated that Mr. Ghanshyam Bhati, the

sender of the letters, was repeatedly informed that the file contained only

the papers related to M/s. Tiruptai Roller Flour Mills Pvt. Ltd.

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 12 of 22

16. It is submitted that the Respondents Company being the

'Transferors' of all their shares cannot be an aggrieved party as is held in

Prafulla Kumar Rout. Vs. Orient Engineering Works Pvt. Ltd. and Ors.1

The shares were registered with due compliance of 'Article of

Association'. It is also submitted that the 'registration of shares' is a

matter acted upon by the 'Directors' in a 'Board Meeting' and a

shareholder not being a 'Director' cannot be question the proceedings of

the 'Board Meeting'. The Respondents are only shareholders and not

Directors of the 1st Appellant Company. Since there were only two

partners in the firm 'Chanda Softy Ice Creams (Milky Way)', only these

two partners executed the 'Deed of Dissolution' to fulfil the legal

formalities and it was not necessary for all the members of the family to

sign the same.

17. By the 'family understanding', the differences were resolved and as

a consequence all the events took place in a short span of within 45 days

i.e. the 'Partnership Firm' was dissolved on 31.10.2002; 130 shares of the

1st Appellant Company were allotted on 08.12.2002 to the 3 rd Appellant;

760 shares of 1st Appellant Company were transferred on 13.12.2002 by

the Respondents. It has also submitted that the NCLT had erred in

observing that the value of the property holding of the Respondents of the

1 (1986) 060 C-C0065 ORI-

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 13 of 22 1st Appellant Company at the time of 'Dissolution of the firm' was about

Rs.2 crores. The Respondents miserably failed to prove their case and

there were continuous contrary claims by both Sri Sat Narain Bansal and

the Respondents herein. The Respondents, not being the Directors of the

1st Appellant Company, cannot dispute any 'Board Meeting' as per

Section 195 of the Companies Act, 1956.

18. Learned Counsel lastly submitted that the 'Impugned Order' does

not mention an 'Affidavit' dated 17.05.2005 of the 'Witness to Transfer

Deeds'; or the 'Deposition of the Witness' before the NCLT on

20.01.2017; Cross Examination of the Witness; or the Letter dated

24.05.2005 of M/s. Tirupati Roller Flour Mills Pvt. Ltd and also not given

'any finding' with respect to CA 51of 2021 or Letter dated 13.09.2010 of

Sri Sat Narain bansal to his Advocate and also letters dated 16.09.1020 &

25.03.2011 of Sri Sat Narain bansal to the erstwhile 'Company Law

Board'. It is vehemently contended that the NCLT has not given any

observation with regarding to the allotment of 130 shares of the 1st

Appellant Company only to the 3rd Appellant; the 'Dissolution of the

Partnership firms'; Full control of the Appellant on the first Appellant

Company; the collusion of the Respondents with Sri Sat Narain Bansal

and also the evidence regarding the AGM notice. In view of all these

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 14 of 22 submissions made, Learned Counsel vehemently argued that the

'Operation' of the 'Impugned Order' dated 19.10.2022, be stayed.

19. It is vehemently argued by the Learned Counsel for the Applicant

that NCLT has not dealt with or considered the main evidences in favor of

these Applicant/Appellants and has also misunderstood the facts of the

case. After reconstitution of the Board in terms of the NCLT Order dated

19.10.2022, the composition of the Board is as under:

(a) Smt. Shila Gupta DIN00045796

(b) Sh. Mitesh Gupta DIN00348848

20. It is submitted that the Respondents have purportedly called an

EGM without fallowing due process of law and without giving any

requisition to call the EGM to the Board of Directors of the Company. As

per Section 100 of the Companies Act, 2013, (hereinafter referred to as

'The Act'), it is necessary to give requisition to the Board of Directors of

the Company for calling EGM. Further, as per Section 100(4) of the Act

if the Board does not within 21 days from the date of receipt of a valid

requisition in regard to any matter, proceed to call a Meeting for the

consideration of that matter on a day not later on 45 days from the date of

receipt of such requisition, the Meeting may be called and held by the

requisitions themselves within a period of three months from the date of

requisition. In violation of these provisions the Respondents called an

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 15 of 22 EGM without giving any requisition to the Board of Directors of the

Company and have directly called for the purported EGM themselves.

Hence in the interest of justice, the Applicant in I.A.1102/2022 seeks stay

of the 'Operation' of the 'Impugned Order' dated 19.10.2022.

21. Learned Counsel for the Applicant sought for Status Quo 'ante-

restoring'/maintaining the composition of Board of Directors as it existed

on 18.02.2022, prior to the passing of the 'Impugned Order' and pass an

'Order' not to implement the Resolutions passed in the EGM dated

28.12.2022 till the disposal of the main Company Petition and pass an

Order to freeze the 'Fixed Deposits' of the first Applicant/Appellant

Company allowing with various Banks till the disposal of the main

Appeal.

22. Mr. P.H. Arvindh, Learned Senior Counsel submitted that the

Applicants have not demonstrated any case to stay the 'Operation' of

'Impugned Order'; there were no disputes in 2002 between the two

groups to necessitate the purported family settlement; FIR No. 659/2006

evidences that the Appellant group and the Respondents did not have any

disputes till march 2005; the 3rd Appellant transferred his 260 shares to 1st

Respondent on 15.10.2002 and the Respondents did not object to fresh

allotment of 150 shares to the 3rd Appellant in December, 2002, which

actions are against the normal course of conduct, if indeed there were

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 16 of 22 disputes between the parties. It is vehemently argued that there was no

evidence at all to prove any 'oral family settlement'.

23. It is also the case of the Respondents that 'Deed of Dissolution'

dated 31.10.2002 is silent on any 'Family Settlement'. Clause 8 of the

'Deed of Dissolution' states that the 'Deed' was in 'full' and 'final'

settlement of claims between the parties, which agreements has not been

dealt with by the Respondents. It is argued by the Learned Senior Counsel

that only 'Annual Returns' filed by Appellant Group as also the IT

Returns filed by the Respondents indicate the shareholding in the name of

the Respondents. The IT Returns of the 4th Appellant (obtained under

RTI) does not include the 760 shares in her name. It is contended that if

there indeed were disputes between the parties, the Appellants would

have ensured that the transfers were registered immediately but only

reason given by the Appellants for the unnatural delay in registration of

transfer of shares from 13.12.2002 to 07.03.2005 is due to 'genuine

oversight', which is also 'flawed' because the 'Annual Returns' for 2002-

03 till 2004-05 signed by the 'Appellant Group' continuously reflect the

Respondents shareholding of 760 shares. Other transfers that were made

in the same period i.e. allotment of 130 shares to 3rd Appellant on

08.12.2002 and transfer of 260 shares from 3 rd Appellant to Respondent

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 17 of 22 No.1 on 15.10.2002 were recorded immediately as can be seen in the

'Annual Returns'.

24. It is the case of the Respondent that it was only to circumvent the

requirements under 'Article 11' of the 'Article of Association' of the

Company, which required the prior permission of 3/4th of the Directors

that the record of AGM dated 30.09.2004 was fabricated. It is contended

by Learned Senior Counsel for the Respondents that Sri Sat Narain

Bansal did not receive notice of Board meeting dated 05.03.2005; No

agenda was served with the so-called notice; that the said board meeting

was convened only to discuss an urgent matter; the alleged Board

Meeting did not have any quorum because it was purportedly attended by

Mr. Nirmal Kumar Gupta and 2nd Appellant only. The Transfer of shares

is procedurally invalid as the forms were not properly revalidated, no

undue hardship has been established to justify such revalidation and

further 'Article 11' 'has not been complied with inasmuch as there was no

permission in writing, there was no application for transfer from the

'Transferor' and no record of the meeting of the 'Directors'.

25. As regarding the affidavit of the witness and his disposition, not

being considered, the witness had admitted that he was a close friend of

Mr. Nirmal Kumar Gupta and, therefore, the evidence does not possess

'high probative value'. The witness deposition is also 'suspect' as he does

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 18 of 22 not remember when the share certificates were handed over and also other

specific details. As regarding the letter dated 07.04.2005 of Sri Gajanandji

Gupta, it is submitted by the Learned Senior Counsel that the alleged

signature of Sri Gajanandji Gupta was 'dramatically' different from his

other purported signature. This letter was never received by the

Respondents as is evident from the letter dated 03.06.2005.

26. It is also submitted that mere possession of the share certificate is

not indicative of a valid transfer; that there is no question of any full

control by any one group as there were no disputes between the parties till

2005; there is no proof of handing over these transfer form and the reason

for doing the same. The letter dated 13.09.2010 was submitted, after the

matter has heard and reserved for orders, twice and the issue regarding the

collusions of Respondents with Mr. Sat Narain Bansal has been

considered in detail by the `Tribunal'. The `NCLT', appreciates the

'expert evidence' which indicates that the notice submitted by Mr. Sat

Narain Bansal was indeed signed by the 2nd Appellant. While considering

this with other piece of evidence, the `Tribunal' (`NCLT') concluded that

the Appellants have not furnished proper notice. The Appellants have

been inconsistent in their stand, firstly by stating that the transfer of 76%

of the shareholding was part of a non-existent family settlement; secondly

it was consideration for handing over the 3rd Appellant share in Chanda

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 19 of 22 Softy Ice Creams; and thirdly that the same was a Stridhan to 4th

Appellant. The Appellants are themselves confused if the 760 shares is

the family property of Nirmal Kumar Gupta, or a property of the 3rd

Appellant by way of transfer as consideration, or the property of the 4th

Appellant by way of a 'Gift'. Despite the order of NCLT, directing that

the appointment of Mr. Nirmal Kumar Gupta as also the 3rd Appellant is

set aside and the 'Board of Directors' be reconstituted, the Appellants are

attempting to portray themselves as 'Directors' before various banks

where the Company maintains its accounts, with a motive of siphoning

off the funds and given the unlawful conduct of the Appellants, Learned

Senior Counsel vehemently opposed for granting of any interim

directions.

27. As regarding the I.A. seeking stay of the EGM held on 28.12.2022,

admittedly the Meeting has already been convened. Prima facie there is

no evidence on record to establish that the 'Special Notice' and 'EGM

Notice' dated 23.11.2022 were issued against any provisions of the Act.

Consequent to the observations made in the Impugned Order, there is no

valid Board existing and therefore any violation of Sections 100 & 100(4)

of the Act cannot be inferred, at this juncture.

28. It is seen from the record that the 'Impugned Order' is dated

19.10.2022 and subsequent to the directions given by the NCLT, the

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 20 of 22 Respondents has called for an EGM on 28.12.2022 and the Board has

been duly reconstituted. Since, this is an event subsequent to the passing

of the 'Impugned Order', unless the 'Impugned Order' is decided 'on

merits', this `Tribunal', does not see any substantial grounds to Stay the

'Operation' of the 'Impugned Order', passed by the `Tribunal'.

29. As the Learned Counsel for the Applicant/Appellant has raised

grounds regarding evidences not addressed to by the `NCLT', it is

imperative that the main Appeal be heard at length on merits and at this

juncture, any consequent developments, subsequent to the 'Impugned

Order', cannot be stayed, in the light of the fact that no substantial reasons

have been found by this `Tribunal', to order any `Status Quo'.

30. Having regard to the fact that the apprehension of the Learned

Counsel for the Respondents, keeping in view the 'Balance Sheets'

uploaded with the RoC that the Appellants has siphoned off a sum of

Rs.42 Lakhs/- and their strong opposition to granting the stay of the

'Impugned Order', we are of the considered view that the main Company

Petition is to be decided at the outset 'on merits'. It is pertinent to mention

that the Applicants in their 'Rejoinder' in I.A.1102/2022, have stated in

para 15 that they have no objection to freezing of the FDs. As the Bank

Accounts are already frozen, no specific, separate directions with respect

to freezing of FDs be given. Additionally, the Prayer seeking permission

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 21 of 22 to operate the Bank Accounts for executing day to day operation is denied

keeping in view that the findings in the 'Impugned Order' have a bearing

on these consequent developments and unless the main matter is decided

'on merits', and further specifically keeping in view the 'Chequered

History' and 'Factual Matrix' and 'Rival Contentions', this `Tribunal',

does not find any `Justiciable' reason(s), to grant any `Interim Stay', as

prayed for, by the `Petitioner / Appellant'.

31. For the aforesaid reasons and foregoings, the `Interlocutory

Applications', are dismissed. No costs.

[Justice M. Venugopal] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical) 08/02/2023 Himanshu/TM

IA Nos. 1102 & 1103 of 2022 in Comp. App (AT) (CH) No. 128 of 2022 Page 22 of 22