M/S. Rubicon Real Enterprises Pvt. Ltd vs Premium Acres Infratech Pvt. Ltd

IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Company Appeal (AT) No. 122 of 2017 [arising out of Order dated 9th January, 2017 by NCLT, New Delhi, in C.P. No. 43(ND)2015]

IN THE MATTER OF :

1. M/s. Rubicon Real Enterprises Pvt. Ltd. Corporate Office at 66, Indl. Area, Phase-I, Chandigarh, Through its Director, Mr. Sanjay Jain, R/o Panchvati Farms, Hallomajra, Chandigarh

2. Mr. Sanjay Jain, R/o # 3022, Sector - 28 D, Chandigarh.

3. Mrs. Shamita Jain, R/o # 3022, Sector - 28 D, Chandigarh. ...Appellants

Versus

1. Premium Acres Infratech Pvt. Ltd. Having its Registered office, 17/6, Anand Parbat, Industrial Area Near Gali No. 10, New Rohtak Road, New Delhi - 110 005.

2. Shri Parminder Singh Sehgal, R/o House No. 61-62, Sector 70, SAS Nagar, Mohali (Punjab)

3. Mrs. Parminder Kaur Sehgal, House No. 61-62, Sector 70, SAS Nagar, Mohali (Punjab) ...Respondents

Company Appeal (AT) No. 122 of 2017 1 Present: For Appellant : Shri Alok Dhir, Shri K.P.S. Kohli and Shri Milan Singh Negi, Advocates

For Respondent : Shri Sachit Kumar Sahijpal, Shri Prateek Gautam, Shri Suraj Narain Shukla, Advocates Shri Sehgal, Respondent in person

JUDGMENT

SUDHANSU JYOTI MUKHOPADHAYA, J.

The appellants, who were petitioners, preferred an application under

Section 397, 398, 402 and 403 of the Companies Act, 1956 r/w Section 59 of

the Companies Act, 2013 before the National Company Law Tribunal

('Tribunal' for short), New Delhi alleging 'oppression and mismanagement' at

the hands of 2nd and 3rd respondents and for direction on respondents to

rectify of the register of the shareholders so as to include the name of 1st

petitioner (1st appellant herein) as its shareholder, or being a transferee of the

shares held by the respondent. The petition having been dismissed by the

Tribunal by the impugned judgment dated 9th January, 2017, the present

appeal have been preferred.

2. For proper appreciation of the case, it is desirable to refer the

'appellants' as 'petitioners' and the 'respondents' as the 'respondents' as was

their position before the Tribunal.

3. The case of the petitioners before the Tribunal is as follows.

Company Appeal (AT) No. 122 of 2017 2

2nd Petitioner was engaged in selling properties and in the course of his

business came in contact with 2nd Respondent, who at the relevant time was

working with a real estate company viz. EMAAR MGF. 2nd Respondent who

was contemplating leaving his assignment to pursue his business

independently, got together with 2nd petitioner to develop a project at Mohali.

A contact was entered into with another Real Estate Company viz. 'M/s. TDI'

by the 1st Respondent Company for development of 150 plots on which villas

and flats were to be constructed. The said agreement was signed between

'M/s. TDI' and '2nd Petitioner' as Director of the 1st Respondent Company.

4. The 1st Respondent Company was incorporated in the year 2010 with

an authorised and fully paid up share capital of Rs. 1,00,000/- being 10,000

shares of face value of Rs.10/- each. The 2nd Respondent and his wife - 3rd

Respondent, being the promoters, subscribed to 5000 shares each. They were

the only shareholders, as per the Memorandum & Articles of Association of

the Company. Being unable to come to the forefront on account of his job

commitments, the 2nd Respondent appointed the 2nd Petitioner and his wife

3rd Petitioner as Directors to manage the affairs of the 1st Respondent

Company.

5. As per the petitioners, there was an understanding that shareholding

of the 1st respondent Company would be held by two corporate bodies, viz.

'M/s. Rubicon Real Enterprises Pvt. Ltd.' of which 2nd & 3rd Petitioners are

shareholders and 'M/s. BHEE Enterprises Pvt. Ltd.', company promoted by

2nd & 3rd Respondents. The 2nd Respondent is stated to be a Chartered

Company Appeal (AT) No. 122 of 2017 3 Accountant and handled all documents while 2nd Petitioner looked after the

business promotion of 1st Respondent such as the project for development of

the 150 plots assigned under the agreement with 'M/s. TDI'. As per

averments made in the petition, in furtherance of the agreement the 2nd

Respondent transferred 5,000 shares in favour of company, while shares held

by 3rd Respondent were transferred to 'M/s. BHEE Enterprises Pvt. Ltd.' To

corroborate this submission the petitioners relied on the photocopies of the

Share Certificate No. 0001, Folio No. 001, distinctive Nos. 1-5000. In respect

of 5,000 shares held by the 2nd Respondent being transferred to the 1st

Petitioner 'M/s. Rubicon real Enterprises Pvt. Ltd.' petitioners alleged that

their signature was taken on blank documents and papers which remained

in custody of the 2nd Respondent. The petitioners further alleged that the

respondents in collusion with the chartered accountant, fraudulently filled

Form 20B and uploaded it on the portal of the RoC along with the Annual

Returns for the year ending 31st March, 2010. The petitioners' case is that

while E-Form 20B correctly reflects the shares of the 1st Respondent company

held by body corporates, the annual return which was forged and is without

signatures, wrongly reflects that the shares are held by 2nd and 3rd

Respondents alone. The petitioners further alleged that the fraud and

fabrication has been done with the complicity and connivance of their

Chartered Accountant viz. 'M/s. B. Aggarwal & Company' to whom 2nd

Petitioner had entrusted his digital signatures for filing requisite documents

with the Income Tax Authority and the Registrar of Companies. It is also

alleged that in furtherance of this fraud, the 2nd and 3rd Respondents

Company Appeal (AT) No. 122 of 2017 4 fabricated the records of 1st Respondent Company wherein the amount

withdrawn by the 2nd Petitioner was reduced from his investment and was not

intentionally reflected in the books of accounts. It is further stated that with

the intention grabbing the company, 2nd and 3rd Respondents made criminal

conspiracy and forged the resignation letter of the 3rd Petitioner and uploaded

the relevant form on the website of Ministry of Corporate Affairs by misusing

his digital signatures. After the alleged resignation of 3rd Petitioner, the 3rd

Respondent was illegally induced as an Additional Director and subsequently,

shareholders' meeting was falsely recorded to have been held on 9th June,

2014, in which the 2nd Petitioner was removed as its Director. It is alleged

that no notice of AGM was served on the petitioners.

6. Apart from the 'oppression and mismanagement' of the affairs of the

company the petitioners made allegations of the siphoning of companies

funds to the tune of several crores. According to the petitioners, 2nd and 3rd

respondents were consistently marginalising and victimising the petitioners.

Not only that they are denying the petitioners 50% shareholding and have

removed them as the Directors of the 1st Respondent Company. The

grievance of the petitioners are that the 2nd petitioner was illegally removed

as the Director of the 1st respondent company, and the resignation to 3rd

Petitioner is forged.

7. The respondents on appearance refuted the claim. The stand of the

respondents are as follows.

Company Appeal (AT) No. 122 of 2017 5

The 2nd Respondent worked as the Chief Executive Officer of 'M/s.

EMAAR Ltd.' at the time of incorporation of the 1st Respondent company. The

2nd Petitioner, a property dealer having expertise in sale of flats, being aware

that the 2nd Respondent was planning to incorporate his own company in the

vicinity of Chandigarh, convinced the respondents about his capabilities of

looking after the development and sale of flats. He undertook overall

supervision and control till the 2nd Respondent was released from service of

'EMAAR MGF Land Ltd.' 1st Respondent Company agreed to pay 7%

commission to the 2nd Petitioner on the basic sale price of each unit sold. As

per the respondents, it was made amply clear that the 2nd and 3rd

Respondents would be the only shareholders, while 2nd and 3rd Petitioners

would act as agents. The 1st Respondent Company was incorporated on 5th

January, 2010, and the 2nd and 3rd Respondents were its sole subscribers.

The 2nd and 3rd Petitioners were however made its Director(s) to act on the

instructions of the 2nd and 3rd Respondents.

8. Learned Counsel for the Respondents submitted that the petitioners,

not being members of the 1st Respondent Company, do not satisfy the

requirement of Section 399 of the Companies Act, 1956 and, therefore, the

petition under Section 397 and 398 is not maintainable. On the contrary, the

2nd and 3rd Petitioners are taking advantage of their position as Directors, and

in fact they have siphoned off the money of the 1st Respondent Company for

their personal benefits and have purchased properties in their personal

names. For such alleged criminal acts a number of criminal cases are pending

Company Appeal (AT) No. 122 of 2017 6 against them and as a counter blast the present petition has been filed by

petitioners to detract the mind from the criminal cases pending in different

courts.

9. The respondents have brought to the notice of the Tribunal that the

annual returns of the 1st Respondent Company for the financial years 2010-

11 and 2011-12 do not show any change in shareholding pattern. These

financial returns which have been filed by the petitioners under their

signatures, reflect the 2nd and 3rd Respondents as the Directors, but have

deliberately been kept out so as to mislead the Tribunal. Further, as per

statutory requirement for effecting a valid transfer, the transfer deed has not

been executed by the respondents in favour of the 1st Petitioner, neither has

there been any signed request made by the 2nd Respondent to the Board of

Directors to showing his intention of divest his shares. There is no record to

show that there is an offer given to the other shareholder, as mandated under

the Articles of Association. The Register of members does not record the

petitioners as its shareholder, neither has any money been paid by the 1st

Petitioner which is alleged to be a shell company. The submission of

contributing Rs.85 Lakhs is repudiated and stated to be the booking amount

received by the 1st Petitioner from investors and customers. Reliance has

been made on the income tax returns of the 1st petitioner company which has

reflected its annual income as Rs.2 Lakhs only.

10. The Tribunal after hearing the learned counsel for the parties and on

verification of record rightly held that the question of mismanagement of

Company Appeal (AT) No. 122 of 2017 7 company can be questioned by the minority shareholders provided the

petition is filed by persons holding at least 10% equity. From the record we

find that the Registrar of Companies do not reflect the name of 1st Petitioner

as shareholder. In view of the fact that the 1st Petition is not shown as the

shareholder of the 1st Respondent Company, we hold that the application

under Section 397 and 398 of the Companies Act, 1956 is not maintainable

at the instance of the petitioners.

11. According to the learned counsel for the petitioners in collusion with

the Chartered Accountant, the respondents have manipulated the records of

the 1st respondent company. The Annual Returns for the year ending 31st

March, 2010 filed by the respondents is different from the one uploaded on

the site of Registrar of Companies in the year 2013. However, from the records

of the Ministry of Corporate Affairs, we find that the record does not suggest

that 1st Petitioner is a shareholder. The petitioners relied upon the Annual

Returns and Form 20B filed by 1st Respondent Company for the financial year

ending 2010, but the record available with the Ministry of Corporate Affairs

do not support it. The respondent's repudiation is based on non-execution of

the transfer deed but we find that no written request was made by him to

divest his shareholding in favour of 1st Petitioner and no financial transaction

took between 1st Petitioner and the 2nd Respondent. This Appellate Tribunal

directed the petitioners to produce the original share certificate along with

Annual Returns but nothing has been brought on record. Learned counsel

appearing on behalf of the petitioners submitted that the respondents with

Company Appeal (AT) No. 122 of 2017 8 mala fide intent are withholding the share certificates and the annual return.

However, it has not been made clearly as to how respondents are holding

shares if the shares have been transferred in the name of the 1st petitioner,

as claimed.

12. Learned counsel for the petitioners referred to Income-tax Returns of

the 1st Respondent company for the year 2012-13 filed on 24th March 2014 to

suggest that the 1st petitioner is 50% shareholder of the 1st Respondent

Company, but mere mentioning the name of the 1st petitioner in the Income-

tax Return cannot be relied upon to pass order under Section 397 and 398 or

Section 59 of the Companies Act, 1956. As the petitioners have failed to show

that they are holding any share of the 1st Respondent Company, we hold that

the petition under Section 397 and 398 is not maintainable at their instance.

13. We find no merit in this appeal, it is accordingly dismissed. However,

in the facts and circumstances of the case, there shall be no order as to costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Balvinder Singh ] Member (Technical)

New Delhi 22nd December, 2017

/ns/

Company Appeal (AT) No. 122 of 2017 9