Nita Dube & Anr vs Tej Kumar Book Depot Pvt. Ltd. & Ors

[Arising out of order dated 18th September, 2018 passed by National Company Law Tribunal, Allahabad Bench in C.A. No. 203/2017 Company Petition no.14/ALD/2015]

IN THE MATTER OF:

1. Nita Dube 29 Newal Kishore Road Hazratganj, Lucknow Uttar Pradesh - 226001.

2. Mr. Avnindra Dutt Dube 115, Machharhatta Jaunpur. Uttar Pradesh - 222002. ...Appellants

Vs

1. Tej Kumar Book Depot Pvt. Ltd. 1, Triloki Nath Road, Lucknow Uttar Pradesh.

2. Mrs. Smita Patwardhan Smit Pratik, CTS No. 1995, S. No. 103, Plot No. 129 E Nagpur Road, TCS Office Lane Opposite Konark Rivera Society Yerwada Pune Maharashtra - 411006.

3. Mr. Pratik Parshuram Patwardhan Smit Pratik, CTS No. 1995, S. No. 103, Plot No. 129 E Nagpur Road, TCS Office Lane Opposite Konark Rivera Society Yerwada Pune Maharashtra - 411006. ....Respondents

Present: For Appellants: Mr. Zeyaul Haque, Advocate. -2-

BANSI LAL BHAT, J.

Appellant's application filed under Section 424 of the Companies Act,

2013 for granting certain reliefs incorporated therein with the primary relief

of impleading one 'Mr. Pranav Patwardhan', Director of Respondent No. 1 as

party respondent in Company Petition no.14/ND/2015 came to be rejected

by National Company Law Tribunal, Allahabad Bench in terms of impugned

order dated 18th September, 2018. Aggrieved thereof the Appellants have

filed the instant appeal assailing the impugned order on the grounds

enumerated in the memo of appeal.

2. Heard learned counsel for the Appellants and perused the record on

the file. It emerges from record that the Appellants had filed the Company

Petition no.14(ND)2015 before the erstwhile Company Law Board, New Delhi

Bench under Section 397 and 398 of the Companies Act, 1956 alleging

oppression and mismanagement by the Respondent Directors and siphoning

of huge funds by selling off fixed assets of the Company. Notices are said to

have been issued in the Petition and status quo directed to be maintained in

regard to shareholding. With the enactment of Companies Act, 2013, the

matter landed in the National Company Law Tribunal, Allahabad Bench.

The Appellants moved C.A. No. 203/2017 for impleadment of Mr. Pranav

Company Appeal (AT) No. 386 of 2018 -3-

Patwardhan as party respondent alleging that he had been illegally

appointed as Director in the Respondent Company which came to be

dismissed in terms of the impugned order. Learned counsel for the

Appellants submits that Mr. Pranav Patwardhan had been illegally

appointed as Director in the Respondent Company fraudulently by forging

statutory documents in collusion with the Directors and the Auditor. It is

contended that in terms of its resolution dated 15th March, 2016, the Board

of Directors appointed Mr. Pranav Patwardhan initially as Additional

Director and documents were forged for statutory filings. It is further

contended that the resignation submitted by Mr. Pranav Patwardhan after

filing of the application before the Tribunal and its hasty acceptance by the

Board in terms of resolution dated 1st February, 2018 did not absolve him of

his liabilities even after his resignation. It is contended that the whole

episode was an instance of corporate fraud which should have been

investigated by the Tribunal exercising inherent powers vested in it. The

impugned order dismissing the Appellants application seeking impleadment

of Mr. Pranav Patwardhan as party respondent on the ground of his

resignation from the post of Additional Director on 16th January, 2018

coupled with the fact that no harm has been caused to the Appellants or the

Company is assailed as being unsustainable and liable to be set aside.

3. After hearing learned counsel for the Appellants for a while and

wading through the record on the file, I am not inclined to entertain this

appeal which is lacking in merit. Though, learned counsel for Appellants

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insisted that impleadment of Mr. Pranav Patwardhan as party respondent

was not the only relief claimed in the application, he failed to demonstrate

as to how the other reliefs flowing from and incidental to arraignment of Mr.

Pranav Patwardhan as party respondent could be considered without

impleading him as a party respondent. What comes to fore from record is

that the Appellants primarily sought impleadment of Mr. Pranav

Patwardhan as party respondent on the score that such appointment was

illegal and documents were fabricated to file statutory compliances while

other reliefs claimed were consequential. This factual position stares in the

face of Appellants who cannot wriggle out of the same. Even the Memo of

Appeal incorporates this factual position. The impleadment was sought on

the ground that such appointment was violative of Section 161 of the

Companies Act, 2013. The Tribunal took cognizance of the fact that

Mr. Pranav Patwardhan had already resigned from the post of Additional

Director on 16th January, 2018. The factum and validity of such resignation

has not been questioned by the Appellants. The Tribunal's finding that in

view of this development coupled with the fact that the Appellants had failed

to demonstrate that any harm was caused to them or to the Company due to

such appointment cannot be termed as erroneous muchless perverse. In

absence of proof of any prejudice caused to the interests of the Appellants or

the Company during the tenure of Mr. Pranav Patwardhan as Additional

Director, such impleadment would not be warranted merely on the ground

that the Respondents made such appointment in contravention of Articles of

Association of the Company thereby infringing statutory provisions.

Company Appeal (AT) No. 386 of 2018 -5-

Infraction of the Articles of Association of the Company or provisions of

Companies Act in this regard cannot be attributed to Mr. Pranav

Patwardhan who is neither a necessary party nor a proper party for being

impleaded as party respondent, moreso as he has admittedly tendered

resignation on 16th January, 2018 and ceased to be a member of the Board

of Directors.

4. There being no legal infirmity in the impugned order, the appeal

merits dismissal. The appeal is accordingly dismissed. However, there shall

be no order as to costs.

[Justice Bansi Lal Bhat] Member (Judicial)

NEW DELHI 19th November, 2018

AM

Company Appeal (AT) No. 386 of 2018