Jojo Joseph vs Vajra Creations Private Limited

IA No. 411/2023 in Company Appeal (AT) (CH) No. 40/2023 (Filed under Rule 31 of the NCLAT Rules, 2016) In the matter of: Jojo Joseph ....Appellant V Vajra Creations Pvt. Ltd. & 8 Ors ...Respondents

Present : For Appellant : Ms. Telma Raju, Advocate

ORDER

Virtual Mode) 28/04/2023:

'Heard' the Learned Counsel for the 'Petitioner'/ 'Appellant', in

IA No. 411/2023 ('Delay' in Refiling the 'Appeal Papers'), in Company

Appeal (AT) (CH) No. 40/2023.

2. According to the 'Petitioner'/ 'Appellant', in the instant 'Appeal', the

requisite 'Appeal Papers', were 'Re-presented'/ 'Refiled', before the 'Office

of the Registry', with a 'Delay of 173 days', in filing the 'Appeal'.

3. The 'Petitioner'/ 'Appellant', in Paragraph 2 of the IA No. 411/2023,

has come out with reasons among other things that the 'Appeal Papers',

which were refiled, were returned by the 'Office of the Registry', on

12/10/2022 and that the defects were to be cleared, within '7 days', because

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 1 of 13 of certain 'communication delay', the 'Petitioner'/ 'Appellant', was not in a

position to represent the 'Appeal Papers'/ 'Typed set of Papers' , 'in time'

and infact, the same were refiled, after curing the defects, on 10/10/2022 and

subsequently, on 13/02/2023, 'Notice' was received by the 'Petitioner'/

'Appellant', through post, stating that the 'Appeal Papers', were returned on

12/10/2022 and 'Defects' were to be cured within the time prescribed

therein.

4. As such, it is submitted that in this process, there has occasioned a

'Delay', owing to the fact that it took some time for the 'Petitioner'/

'Appellant', to make some arrangements, to cure the 'Defects', in the

'Appeal Papers', and after complying with the same, pointed out by the

'Office of the Registry', the 'Appeal Papers', were filed, before the

'Registry'. Hence, there has occasioned a 'Delay' of '173 days', in

representing the 'Appeal Papers', which is neither 'wilful' nor 'wanton', but

due to the aforesaid reasons.

5. It is to be pointed out that the 'Delay in Representation', is a matter

between the 'Petitioner'/ 'Appellant', and the concerned 'Court'/ 'Tribunal'/

'Appellate Tribunal', as the case may be. Indeed, the 'Respondent', has no

say in the matter, in the considered opinion of this 'Tribunal'.

This 'Tribunal', on being subjectively satisfied as to the reasons

ascribed, on behalf of the 'Petitioner'/ 'Appellant', in Paragraph 2 of the

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 2 of 13 IA No. 411/2023, in Comp App (AT) (CH) No. 40/2023, by adopting a

lenient approach, 'Condones the Delay' of '173 days', and 'allows' the

IA No. 411/2023 in Comp App (AT) (CH) No. 40/2023. 'No Costs'.

IA No. 412/2023

in Company Appeal (AT) (CH) No. 40/2023 (Filed under Rule 31 of the NCLAT Rules, 2016)

In the matter of:

Jojo Joseph ....Appellant V Vajra Creations Pvt. Ltd. & 8 Ors ...Respondents

Present : For Appellant : Ms. Telma Raju, Advocate

ORDER (Virtual Mode) 28/04/2023:

'Heard' the Learned Counsel for the 'Petitioner'/ 'Appellant', in

IA No. 412/2023, in Company Appeal (AT) (CH) No. 40 of 2023.

2. According to the 'Petitioner'/ 'Appellant', the 'Free copy' of the

'Impugned Order' in CP/92/KOB/2019, dated 30/06/2022, was made filed

on 05/07/2022 and in fact, the 'Appeal', ought to have been filed, within

'45 days', from the said date, in conformity with Section 421(3) of the

Companies Act, 2013.

3. It is represented, on behalf of the 'Petitioner'/ 'Appellant', the

'Appeal', was prepared electronically and filed on 03/09/2022 and in fact,

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 3 of 13 the 'Physical copy' of the 'Appeal Memorandum', was entrusted with the

'Petitioner'/ 'Appellant', for onward filing at Chennai and the

'Representative', took some time in filing the same and that too, only on

19/09/2022 and in this process, there has occasioned a 'Delay' of '30 days',

which is neither 'intentional' nor 'deliberate', but due to the aforesaid reason.

4. Considering the fact that the 'Delay' of '30 days', in instant Company

'Appeal', is within the 'Condonable Limit of '45 days', as envisaged, under

Section 421(3) of the Companies Act, 2013, this 'Tribunal', on being

subjectively satisfied as to the reasons ascribed, on behalf of the 'Petitioner'/

'Appellant', 'Condones' the delay of '30 days', to secure the ends of

'Justice', but without 'Costs'. Consequently, IA No. 412/2023 in

Comp App (AT) (CH) No. 40 of 2023, is 'allowed'.

Company Appeal (AT) (CH) No. 40/2023 (Filed under Section 421 of the Companies Act, 2013) (Arising out of the Order dated 30/06/2022 in C.P./92/KOB/2019, passed by the National Company Law Tribunal, Kochi Bench, Kerala) In the matter of:

Jojo Joseph S/o Joseph, aged 48 years, Residing at Njaloor House, Muthalakodam P.O., Thodapuzha, Idukki District, Kerala ....Appellant

V

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 4 of 13 Vajra Creations Pvt. Ltd.

Having its Registered Office at 16/501 Mr. M. Montana Estate Paingottupuram, Peringolam P.O., Calicut - 673571, Kerala, India, Represented by its Director Gerarde Manual having DIN 05315011 and Residing at Onatt House P.O. Pullambara, Kozhikode- 673016, Kerala ...Respondent No.1 Mr. Gerarde Manual Director of Respondent No.1, having DIN 05315011 And residing at Onatt House P.O., Pullambara, Kozhikode - 673 016, Kerala.

....Respondent No.2 Mr. Ahammed Basheer, Director at Respondent No.1 having DIN 00016774 and residing at Parakambath, Kattukulangara, Nellikode Post, Kozhikode, 673016, Kerala. ...Respondent No.3

Mr. Jabbar Vannapuzhanjalil Shamon Director at Respondent No.1, having DIN 05315011 and residing at Vannapuzhanjalil, Thodupuzha, Idukki - 685584, Kerala ...Respondent No.4

Mr. Ashar O., Group Executive Director, Malabar Gold and Diamonds, Having DIN 00016721 ....Respondent No.5

Mr. Jaleel R, Regional Head, Malabar Group ...Respondent No.6

Mr. Mujeeb Rahman, Director, Malabar Gold Ornaments Makers Private Ltd., having DIN 00225671 ....Respondent No.7

Mr. N. Chandran, General Manager Malabar Group ....Respondent No.8

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 5 of 13 The Registrar of Companies Kerala, Company Law Bhavan, BMC Road, Thikkakara, Ernakulam-682021 Kerala State ...Respondent No.9

Present :

For Appellant : Ms. Telma Raju, Advocate

JUDGMENT (Virtual Mode) 28/04/2023:

The 'Petitioner'/ 'Appellant', has preferred the instant Company

Appeal (AT) (CH) No. 40/2023, before this 'Tribunal', on being aggrieved

against the 'Impugned Order', dated 30/06/2022, in CP/92/KOB/2019,

passed by the National Company Law Tribunal', Kochi Bench, Kochi.

2. The National Company Law Tribunal, Kochi Bench, Kochi, while

passing 'Impugned Order', in CP/92/KOB/2019 (Filed by the 'Petitioner'/

'Appellant', under Section 59(1) of the Companies Act, 2013), at Paragraph

Nos. 26-29, had observed the following:

Para 26: "We have heard the learned counsel for the Petitioners Shri. Anil D Nair and the learned counsel for Respondent Nos. 1 to 8- Shri Paulose C Abraham through Video Conference and have gone through all the documents produced by both sides. It is true that the petitioner and his wife had subscribed to the Securities of the Respondent Company and invested certain amounts in the Company and that the petitioner was appointed as one of the Directors of the Company. The petitioner's wife's holdings were transferred to M/s Malabar Gold Holdings Pvt.

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 6 of 13 Ltd as on 31.03.2018. According to the respondents, there was embezzlement in the Company by the petitioner along with one Mr. Nowfal Sheriff and when this embezzlement was brought out, in order to clear his dues, he has entered into a transfer deed for transferring his shares, which was registered and reported to the Registrar of Companies removing his name from the Register of Members. It is also stated that in connection with the embezzlement, criminal cases are pending before the Civil Court and the Police Crime Branch, Kottayam. The petitioner's contention is that the transfer documents and deeds were got signed by the Respondents taking him to a closed room and forcibly obtaining his signature.

Para 27: The Criminal Cases taken against the petitioner is presumed to be still pending and no final outcome has come in the cases, as both sides have not stated whether any decision was taken in the Criminal Cases pending.

Para 28: According to the Registrar of Companies, the petitioner as per their record is not a member and shareholder of the Company as per the latest MGT-7 filed by the Company, as he was removed from the Directorship of the Company.

Para 29: For the reasons stated above, we do not want to enter into a final decision in the matter and grant the relief sought for in this Company Petition. It is for the petitioner to prove before the appropriate forum/Court that the documents have been forged and his signatures were taken forcibly to transfer his shares. When a decision in the matter to acquit the petitioner from the charges is taken by the appropriate court, he is at

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 7 of 13 liberty to approach before this Tribunal under Section 59 of the Companies Act, 2013.

and dismissed the main 'Petition', but 'without costs'.

3. Assailing the 'Correctness', 'Validity', 'Propriety' and 'Legality' of

the 'Impugned Order', dated 30/06/2023, in C.P.(IB)384/7/HDB/2018,

passed by the National Company Law Tribunal, Kochi Bench, Kerala, the

Learned Counsel for the 'Petitioner'/ 'Appellant', submits that the

'Impugned Order' suffers from 'legal infirmity', because of the fact that it

had not taken into account, the relevant material facts, coupled with the

another fact that the original 'Share Certificates', are still in the 'Custody' of

'Petitioner'/ 'Appellant', and added further, the 'Appellant', was not

approached with an offer, towards the 'Transfer of Securities', nor was

'Valuation of Securities', carried out for the purpose of fixing consideration.

4. At this juncture, the Learned Counsel for the 'Appellant'/ 'Petitioner',

points out that the 'Appellant'/ 'Petitioner', was perforced under threat to

sign the 'Blank' 'Transfer Deed Forms' and it is a settled position of 'Law'

that when the nature of the 'Impugned Transfer', was not that of 'Gift',

consideration towards the same is necessary.

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 8 of 13

5. In this connection, the Learned Counsel for the 'Appellant' adverts to

the decision in Vinayak Vasudeo Sahasrabudhe v. Pentagon Drugs (P.) Ltd.,

wherein it is observed as under:

"Now that I have held that the factum of gift has not been

established, the shares could not have been transferred

without consideration even assuming that handing over of

blank transfer forms indicated the intention of the petitioner

to transfer the shares. Transfer of shares without

consideration is null and void and, therefore, the prayer of

the petitioner for rectification of the register of members

deserves to be granted."

6. The other Contention advanced on behalf of the 'Appellant', is that

the 'Transfer of Securities', held by the 'Appellant', was done so, without

Valuation of the Securities, carried out and also that 'Fair Value of the

Securities', was to be determined, before the same is transferred and in this

regard, reliance was placed in regard to Article 22 of the Respondent's

Company, which points out that prior to the transferring of Shares, 'Fair

Value' was to be ascertained and there has been a non compliance with the

true condition for transfer, will render the transfer void, because of the fact

that the same is in negation of the 'Articles of Association', of the

'Respondent'/ 'Bank'.

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 9 of 13

7. It is brought to the 'Notice' of this 'Tribunal', on behalf of the

'Appellant', that in March 2016, he was required to be present, at the

Corporate Office at Kozhikode, Kerala, to meet the 'Respondents No.

3,5,&7'. Also that, according to the 'Appellant', he was not lawfully

detained in a room for well over 5 hours, without an access to his Mobile

phone, nor is friend who had accompanied him, etc. As s matter of fact, the

'Appellant', was fastened with the 'Liability' of repaying the due sum,

despite demonstrating his innocence in the matter. But under 'Coercion', he

was forced to right down as was directed to him on a Rs. 100 Stamp paper

and further he was forced to affix his 'Signature' on 'Transfer Deed Forms'.

8. Besides the above, the stand of the 'Appellant', is that his 'Signatures'

were obtained on a 'self-undertaking', by which he was forcefully required

to under take that he would pay a sum of Rs.3.65 Crores, within a month etc.

9. According to the 'Appellant', he lodged a Complaint with Kasba

Police', Kozhikode, through 'Registered Post', narrating the illegal

detention, faced by him, the threat that was exerted upon him and the

'Signatures', obtained through 'Coercion'. That apart, the 'Appellant', was

not paid any consideration for the 'Transfer of Securities', nor was intimated

about the same through any medium.

10. The clear cut stance of the 'Appellant', is that the consent of the

'Appellant', was not obtained, which is a Contention precedent for

'Transfer'. Added durther, the 'Tribunal', had not borne in mind, the

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 10 of 13 Ingredients of Section 59 of the Companies Act, 2013, because the same

were not fulfilled and that 'Transfer', is a 'Element of Fraud'.

11. This 'Tribunal' has heard the Learned Counsel for the 'Appellant'/

'Petitioner', in the instant Company Appeal (AT) (CH) No. 40 of 2023, at

the 'Admission' stage, itself and disposes of the same, without issuing

'Notice' to the Respondent's side.

12. At the outset, this 'Tribunal' points out that a cursory perusal of the

'Impugned Order', dated 30/06/2022, in C.P./92/KOB/2019, passed by the

'Tribunal', indicates that the 'Petitioner'/ 'Appellant', had subscribed to the

'Securities' of the 'Respondent'/ 'Bank' and invested particular/certain

amounts in the Company and the 'Appellant'/ 'Petitioner', was appointed as

one of the 'Directors of the Company'.

13. There is no second opinion of the fact that the Appellant's/ Petitioner's

wife's holds were transferred to Mrs. Malabar Gold Holding Private Limited

as early as on, 31/03/2018.

14. It comes to light that the 'Respondents', before the 'National

Company Law Tribunal, Kochi Bench' had come out with a plea that there

was 'Misappropriation'/ 'Embezzlement in the Company, by the

'Appellant', along with Mr. Nowfal Sheriff, and when this was brought out

with a view to clear his dues, he had entered into 'Transfer Deed'. For

transferring his shares, which was registered and reported to the 'Registrar

of Companies' and his name was removed from 'Register of Members'.

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 11 of 13

15. There is no query as to the candid fact, that the Criminal Cases pending

before the 'Competent Court' and the Crime Bench, Kottayam, in connection

with the embezzlement of the amounts, as on date is pending and it is

admitted by the Learned Counsel for the 'Appellant'/ 'Petitioner', that as on

date, they are pending on the file of the respective Fora. Before the

'Tribunal', it was brought to the fore that according to the 'Registrar of

Companies', the 'Appellant'/ 'Petitioner', is not a Member, as per record,

and a Shareholder of the Company, recent Latest MGT-7 filed by the

Company, seeks he was removed from the 'Position of Director' of the

Company.

16. Be that as it may, in the teeth of plea, being taken by the 'Petitioner'/

Appellant', that the signatures were taken with 'coercion'/ 'force', to transfer

his shares and the averment of 'Forgery', was also put forward, before the

'Tribunal' and also that when a 'Liberty' is granted to the 'Petitioner'/

'Appellant', to approach the National Company Law Tribunal, Kochi Bench,

Kochi, (in terms of the Ingredients of the Section 59 of the Companies Act,

2013), (Rectification of 'Register of Members), when once he is concluded

by the Criminal Court in respect of the Charges levelled against him, then

the view arrived at, by the National Company Law Tribunal, Kochi Bench,

in C.P./92/KOB/2019, in dismissing the main Company Petition, is free from

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 12 of 13 any legal flaws. Viewed in that perspective, the instant 'Company Appeal

(AT) (CH) No. 40/2023', fails.

In fine, the instant Company Appeal (AT) (CH) No. 40/2023, is

dismissed by this 'Tribunal' for the reasons ascribed in this 'Appeal'.

'No costs.'

[Justice M. Venugopal] Member (Judicial)

[Shreesha Merla] Member (Technical) SPR/TM

IA Nos. 411, 412/2023 in Comp App (AT) (CH) No. 40/2023 Page 13 of 13