Mr Sachin Kumar & Anr vs Altron Cast Private Limited & Ors

1

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI COMPANY APPEAL (AT) NO.309-311 OF 2024 (Arising out of Order dated 30.08.2024 passed by National Company Law Tribunal, Chandigarh in CP(CA) No.21/CHD/Hry/2024 and IA No.17/2024 and IA No.14/2024) In the matter of: 1. Mr. Sachin Kumar, House No.1/269, New Mansa Chowk UIT Sector 1, Bhiwadi, Harchandpur, Bhiwadi, Alwar, Rajasthan 301019

2. Ms Divya D/o Mr. Devendra Singh Bhaduria House No.1/269, Near Mansa Chowk UIT Sector 1, Bhiwadi Harchandpur Bhiwadi, Alwar Rajasthan 301019 Appellant

Vs

1. Altron Cast Pvt Ltd, Plot 84, Sector 5, Manesar, Gurugram Haryana 122051

2. Mr Jitendra Kumar S/o Shri Deonath Prasad D-14/23, 2nd Floor, Ardee City, Sector 52, Gurugram, Haryana 122001 2

3. Ms Anjana Rani D/o shri Ramdeo Mehta D-14/23, 2nd Floor, Ardee City Sector 52, Gurugram, Haryana 122001

4. Mr Daljit Singh Company Secretary, E-193, Phase 8B, Industrial Area, Sector 74, Sahibzada Ajit Singh Nagar, Punjab 160055

5. Mr. Ritesh Agrawal, Chartered Accountant 202-203, Deep Plaza Near Civil Court, Gurugram Haryana 122001

6. Mr Ravi Kumar Police Station Industrial Sector 7, IMT, Manesar,

Section Sector 7, IMT Manesar Gurgram Haryana 122052 7. Registrar of Companies, Delhi and Haryana 4th Floor, IFCI Tower, 61, Nehru Place New Delhi 110019 Respondents For appellant: Mr Ashkrit Tiwari, Advocate. For Respondent:Mr Anup Kumar, Ms Neha Jaiswal, Ms Shruti Singh, Ms Pragya Choudhary, Mr Shivam Kumar, Advocates. ORDER

HYBRID MODE 27.09.2024: These appeals are filed under Section 421 of the Companies Act,

2013 against the order dated 30th August, 2024 passed by National Company 3

Law Tribunal, Chandigarh in CP(CA) No.21/Chd/Hry/2024 and IA

No.17/2024 and IA No.14/2024 filed under Section 241-242 of the

Companies Act, 2013.

2. The facts of the case are the appellants held 3,50,000 equity shares of

Rs.10 each which amounted to 35% of the total shareholding in Respondent

No.1 company and constitute more than 1/10th of the total members of the

Respondent No.1 company. It is alleged the Respondent No.1 company was

initially incorporated with an authorised share capital of Rs.1,00,000/- and

at the time of its incorporation Ms Anjana Rani and Ms Divya were holding

50% shareholding in the company. Later in the year 2020 two more

shareholders were brought in, viz the respective husbands of Ms Anjana Rani

and Ms Divya and shareholding pattern changed. More investments were

made by Ms Anjana Rani and Mr Jitender Kumar and thus they held 65%

shares of the company whereas and Ms Divya and Mr Sachin Kumar were

holding 35% of the shares.

3. It is alleged on 30.09.2020, Mr Jitendra Kumar and Mr. Sachin Kumar

were also appointed as Additional Directors in Respondent No.1 company vide

Board Resolution signed by Respondent No3, Ms Anjana Rani. Later on

12.10.2020 Mr Jitender Kumar was unilaterally appointed as the Managing

Director of the Respondent No.1 company, vide Board Resolution dated

10.10.2020. On 01.12.2020 a notice for convening an Extraordinary General

Meeting of members of the Respondent No.1, to be held on 09.01.2020, was

issued for the purpose of increasing the authorised share capital and altering

of the capital clause in the Memorandum of Association of the company, and 4

the Memorandum of Association was altered and filed with ROC without

intimation to the appellants herein.

4. It is alleged objections were raised by the appellants against

reduction/non-allotment of shares proportionate to their capital investment

in the Respondent No.1 company and Mr. Jitender Kumar promised to allot

10% of the authorised shares in the next financial year. Various emails were

allegedly exchanged.

5. It is alleged on 27.11.2023 the appellants were barred from entering

into the office premises and appellant No.2 was constrained to call local police

and only then they could enter its premises. In the presence of police a

meeting for discussion of an exit plan was fixed for 30.11.2023 and later on

an Exit Agreement dated 12.12.2023 was executed between the parties

wherein the total consideration of Rs.1,83,00,000/- was to be paid to the

appellant herein by 28.02.2024 and it was only then they were to exit by

transferring of their share certificates, resignation of directorship etc.

6. It is the submission for the appellants the Respondents only paid an

amount of Rs.91,50,000/- as on 28.02.2024 and thus the Exit Agreement

had become voidable at the option of the appellant w.e.f. 01.03.2024 and

hence the appellants still are the shareholders to an extent of 35% of the total

shareholding of the Respondent No.1 company and be allowed to act

accordingly.

7. Considering the fact that the shareholding ratio had changed in the

year 2020 and thereafter an Exit Agreement was entered into, would not now

give a right to the appellants namely Sachin Kumar and Divya to challenge 5

such reduction to 35%. Further qua the issue if the exit agreement has

become void, the Ld. NCLT had held as under:-

12. We have heard the Ld. Counsels for both parties and pursued the records carefully. The whole controversy revolves around acting upon the Share Purchase Agreement cum Memorandum of Understanding. The total consideration amount was stated to be Rs. 1.85 crores, out of which Rs. 91.50 lakhs have already been paid and this fact is admitted by the Petitioners. It is pertinent to note that the Respondents, namely, the company, Jitendra Kumar, Anjana Rani, Daljit Singh, and Ritesh Agrawal, are ready to pay the remaining 50% of the consideration amount and also produced the Demand Drafts bearing Nos. 206935, 206936, 206937, 206938, 0206939, and 206940, which were offered to the Ld. Counsel for the Petitioners but were refused by the Petitioners. It was also mentioned by Respondent No. 2, Mr. Jitendra Singh, that he is ready to pay interest at the rate of 24% p.a. W.e.f. 28.02.2024. The same is recorded in the orders dated 07.06.2024 and 12.06.2024.

13. It may be noted that no such grievous act of oppression and mismanagement is neither alleged nor proved against the Respondents, which may be detrimental to the interests of the Petitioners or the Company. The whole discussion in the case in hand revolves around the execution of the Share Purchase Agreement cum Memorandum of Understanding, whereby the Petitioners agreed to transfer their 35% shareholding in the Respondent No. 1 Company to Respondent Nos. 2 and 3 for a consideration amount of Rs. 1.85 crores and Respondent Nos. 2 and 3 paid only Rs. 91.50 lacs to the Petitioners. Thus, the conflict involved is execution of the said agreement, which is more of a civil in nature rather than of oppression and mismanagement as alleged by the Petitioners.

14. It is pertinent to note that the Petitioner is Director of the Respondent No. 1 Company till 05.09.2023. Thus, he being the key person at helms of affairs of the company, cannot pursue allegations of Oppression and Mismanagement for being in charge of the day-to-day activities of the Company.

15. Taking into consideration the above-mentioned facts and circumstances, the Petitioners have failed to show any valid grounds to constitute Oppression and Mismanagement u/s 241 of the Act. There is nothing contained in the Petition u/s 241 and 242 to suggest allegations/complaints are in violation of the rights of the Petitioner as member/shareholder and acts of the Contesting Respondents/Directors are prejudicial to the rights of the Petitioner or public at large.

6 16. Therefore, the petition u/s 241 and 242 is filed by the Petitioners to grind their own axe. The non-compliance of the Share Purchase Agreement cum Memorandum of Understanding is neither prejudicial to the interest of the Petitioners nor to the affairs of the Respondent No. 1-Company.

The present application u/s 241 and 242 of the Act is not maintainable. However, the parties are at liberty to approach civil court and forum for the appropriate remedies.

8. IAs No.14 and 17/2024 were also filed for the same purpose of declaring

the notices dated 16.06.2024 and 18.06.2024 sent by Respondent No.2 for

convening the Meeting of Board of Directors and EOGM and to stay of EOGM

scheduled to be held on 10.07.2024; further to direct the Respondent not to

alter or modify the admitted shareholding position of the applicants and to

restrain the company from issuing or allotting new securities which would

result in further dilution of shareholdings of the applicants in the company

and to restrain Respondents No.2 and 3 from unilaterally transferring any

funds from the bank accounts of the company and manage the affairs of the

company; was rather dismissed by the Ld. NCLT, hence these appeals.

9. We have gone through the Exit Agreement viz Share Purchase

Agreement cum Memorandum of Understanding of 12th December, 2023.

The relevant clauses are as under:-

3. That the transfer of the shares is subject to the following conditions on or before the transfer date:

i. On the payment of entire amount referred to Annexure I. ii. The second party would have to affix the applicable stamp duty on the duly filled up, executed and revalidated share transfer form i.e. Form SH-4. That on the fulfilment of the conditions set out hereinabove, the Parties shall proceed to transact the following business:

i. First Party shall handover to the Second Party, the original share certificate(s) evidencing the shares and the original and revalidated share transfer forms, if any, duly signed sealed and validly executed by the First 7

Party for the purpose of transfer of the Shares by the First Party to the The Second Party.

ii. The second party shall lodge the said documents with the Company for giving effect to the Share Transfers and the The Second Party shall obtain a confirmation from the Company to this effect alongwith a certified copy of the resolution of the Company's Board recording the transfer of the Shares in favour of the second Party and the share certificates evidencing the endorsement in favour of the Second Party.

iii. The Second Party shall deliver to the First Party a copy of the resolution of the Company's Board recording the transfer of the Shares in favour of the The Second Party. iv. The First Party shall file Resignation with the Company on 28.02.2024 or before, subject to realization of the Amount set out in the Annexure I. v. The Company shall file the Resignation alongwith the required Documents with ROC within 2 days of settlement as stated in Sub-Clause iv.

vi. The Bank Account shall be unfreezed on request of the First Party with immediate effect after receiving 1st tranche of amount i.e. Rs. 50,00,000/- to be paid on 12.12.2023.

vii. Amount shall be disbursed by the Second Party as per the applicable laws and TDS wherever applicable. viii. Till 28.02.2024 no Interest shall be charged, however, after 28.02.2024 the Interest shall be paid on pending amount @ 24% P.A. ix. After the execution of the payments mentioned in Annexure I, the First Party to this Agreement shall issue a No Dues Certificate, duly Notarized in favour of Second Party and the Second Party shall issue respective Letters to the First Party stating that the Payments transferred in the Bank Accounts mentioned in Annexure I, shall not be reclaimed in future.

x. The First Party shall not use the name of the Company i.e. 'Altron' in set-up new business in any Form/Constitution.

xi. xi. The Second Party shalt be liable to release Property Papers on or before 28.02.2024, in the name of Mrs. Manju Rathore, held by the Banker as collateral Security against the CC Limit availed by the Company.

10. Admittedly an amount of Rs.91,50,000/- was paid as on 28.02.2024.

Admittedly the date was extended to 5th March, 2024. As per the Respondents

they were inclined to make balance payments but the appellants created 8

obstacles. The learned counsel for the Respondent rather referred to an order

dated 12.6.2024 of the Ld. NCLT wherein it notes:-

"As per last order dated 07.06.2024, it is stated by Ld. Counsel for respondent Nos. 1 to 5 that as per directions given by this Bench, he is ready to pay the remaining amount with interest @ 24% p.a. w.e.f. 28.02.2024 till today. The Bank drafts of the said amount of interest are as follows:-

S.No. Name DD No Amount Date

1 Sachin Kumar 206935 67,50,000/- 20.05.2024

2 Divya 206936 250000/- 20.05.2024

3 Diksha 206937 4,40,000/- 20.05.2024

4 Beena Bhadouria 206938 715000/- 20.05.2024

5 Satish Singh Rathore 206939 2,95,000/- 20.05.2024

6 Satish Singh Rathore 206940 7,00,000/- 20.05.2024

7. Sachin Kumar 206959 4,66,027.40 10.06.2024

8 Divya 206958 17,260.27 10.06.2024

9 Diksha 206956 30,378.08 10.06.2024

10. Beena Bhadouria 206955 49,364.38 10.06.2024

11 Satish Singh Rathore 206957 68,695.89 10.06.2024

Ld counsel for the petitioner alongwith the petitioner in person

-Sachin Kumar, who is present today, refused to accept the same and wants to argue on the point of maintainability. A date is requested by Ld. Counsel for petitioner to file the rejoinder, however, instead of filing the rejoinder, he is directed to file the short note not more than three pages about the maintainability of the present petition with the relevant law, if any, with a copy in advance to the counsel opposite. Response to the said note by the other side not more than three pages with relevant law thereto, if any, be filed within one week thereafter with a copy in advance to the counsel opposite."

11. Considering the facts viz as per the MOU, if there was a delay in making

payment for balance amount the appellants were only entitled to interest @ 9

24% p.a. and such amount with an uptodate interest was offered by way of

Pay Orders as numbered in the order dated 12.06.2024 but despite the

appellants did not come forward to accept such balance payments and now

are trying to enter into the company after enjoying half of the consideration of

sale of their shares. Admittedly there was a deadlock in the company and

considering this fact an amount with uptodate interest, per MOU, was offered

to the appellants by the Respondents but was deliberately refused hence the

Ld. NCLT passed the impugned order. We are in agreement with the order of

the Ld. NCLT and we dispose of this appeal by directing the Respondents to

deposit the fresh/revalidated drafts of such balance amount as is mentioned

in order dated 12.06.2024 with the Ld. Registrar, Ld.NCLT, Chandigarh. The

said amount be deposited within four weeks from today by the Respondents

and the appellants shall be at liberty to withdraw it from Ld. NCLT by moving

an appropriate application.

11. There is otherwise no force in these appeals and are accordingly

dismissed.

12. Pending applications, if any, are closed.

(Justice Yogesh Khanna) Member (Judicial)

( Mr. Ajai Das Mehrotra) Member (Technical)

BM