U.V Hari Prasada Raju & Ors vs Achala Gold Agritech Investment Ltd & ...

Mr. Om Prakash Avulla ...Appellants

Vs.

M/s Achala Gold Agritech Investment Limited & Ors ...Respondents

Present: For Appellant : Mr. Ankit Roopanwal and Ms. Sudakshina Rathor, Adcocates For Respondents : Mr. P.Nagesh and Mr. Shri Dhruv Gupta, Advocates

With

Company Appeal (AT) No. 273 of 2018

U.V. Hari Prasada Raju & Ors. ...Appellants

Vs.

Achala Gold Agritech Investment Ltd. & Ors. ...Respondents

JUDGMENT

(3rd March, 2020)

Dr. Ashok Kumar Mishra, Technical Member

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1. The Present set of two appeals have been preferred under section 421 of

the Company's Act, 2013, against the common order dated 13.07.2018

passed by the National Company Law Tribunal, Hyderabad Bench

("NCLT"). Appellants and his associates (Appellants In Company Appeal

(AT) No. 311 of 2018 and Respondents in Company Appeal (AT) No. 273 of

2018) hereinafter referred to as Appellant are the founder, core- promoter

and together have a shareholding of 38.46 % number of equity shares

and controlling stake in the Respondent Company and Respondents

(Respondent In Company Appeal (AT) No. 311 of 2018 and Appellants in

Company Appeal (AT) No. 273 of 2018) hereinafter referred to as

Respondent who collectively own 61.54% share in the company. They

both have preferred the above-mentioned Appeals against each other.

Accordingly, we are disposing of both the appeals as above through a

common order.

2. The Appellants had filed the Company Petition bearing number C.P. No.

82 of 2015 before the NCLT U/s 397, 398 read with 402 and section 59 of

the Companies Act, 2013 challenging the validity of the resolution passed

in the purported Board Meeting dated 06.06.2014, the Extra-Ordinary-

General Meeting on 30.06.2014 and the Annual General Meeting dated

08.08.2015 whereby the Board declared the allotment of 2000 shares of

2nd Respondent to Respondent 6 to 15 by splitting the shares belonging to

Respondent no.2 and authorized Respondent No. 2 to sell the property of

2 1st Respondent Company and appointed Respondents 6 & 7 as directors

of the company. The purpose of these actions is to increase shareholders

on the side and support of Respondent no. 2 so that they could have

majority on the Board as well as the number of shareholders to enable

them to keep the Quorum to pass resolutions without informing the

Appellants regarding the purported acts in relation to the company. It is

further submitted that on 22.07.2014 Respondent no.2 filed purported

MGT 14 along with an alleged extract of the said EGM and the said notice

dated 06.06.2014 calling for EGM without actually convening the Extra

Ordinary General meeting.

3. The Appellants moved before NCLT against the acts of Oppression and

Mismanagement by the Respondent praying to declare the quoted above

Meetings as invalid and to restrain them from convening any board

meetings without proper representation of the Appellants and to stop

them from selling the properties of the Respondent Company or create any

encumbrances upon the property of the Respondent company. The NCLT

vide its order dated 13.07.2018 approved the validity of the resolution

passed in the purported Board Meeting dated 06.06.2014, the Extra-

Ordinary-General Meeting dated 30.06.2014 and the Annual General

Meeting dated 08.08.2015.

4. The Appellants submits that the respondent in blatant violation of section

162 of the 2013, Act appointed Directors in the purported Board Meeting

without complying with the mandatory requirement of serving the notice

3 on the Appellants. The Appellants submits that the entire minutes of the

meeting are forged by the respondents. It is submitted that only the

transfer of 2000 shares of Respondent no.2 in favor of Respondent No.6-

15 has enabled the quorum to conduct the meeting on 12.11.2015. It is

submitted that filings made with the Registrar of Companies since August

2014 have been made by Respondent No.2 without any authorization from

Board or shareholders of the company and that respondents are forging

documents with a view to grab and usurp the properties of the company

for his personal gain. Appellant submits that they had filed a complaint

before ROC against Respondent No.2 and ROC marked complaint as

management dispute.

5. The Appellant submits that further on 21.10.2015 he received notice

calling for an EGM to be held on 12.11.2015. The sole agenda in the

purported meeting was to seek consent of the members for selling the

properties of the company.

6. The grievance of the Respondents in Company Appeal (AT) No. 273 of

2018 is that despite holding that no acts of oppression and management

has been committed by the Respondents herein against the Appellants,

the Tribunal has in Para 47 and 48 asked for EOGM to be held and

directed that one among the two Appellants should be signatory to the

sale agreements, if any and registered sale deed if any, thereby giving veto

power to the Appellants in selling the property.

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7. Respondent No.2 submits that he and his associates invested Rs.

1,12,00,000/- of which an amount of Rs. 52,00,000 was brought towards

allotment of shares and balance amount of Rs. 60,00,000/- for

purchasing the land in the name of the Respondent no.1 Company. Thus

the respondent submits that properties purchased in the name of the

company was from the funds invested by the Respondent no.2 and his

associates.

8. The respondent submits that the share certificates to split and transfer

the shares of the Respondent No.2 were very much in accordance with

section 56 and other provisions of the Companies Act, 2013 and in

accordance with Articles of Association of the Company. The Respondent

further submits that NCLT observed that the splitting of shares of

Respondent No.2 herein is not going to affect the percentage of shares of

the Appellants herein. It is further stated that voting pattern in the

General Meeting of the Company is based upon the shares held by the

members and not by counting the number of members.

9. The Respondent further submits that the notice of the EGM was duly

served upon the Appellants on 29.05.2014, where the Appellant No.1

signed the acknowledgement receipt of the notice on its behalf and on

behalf of the Appellant No.2 who is the wife of the Appellant No.1. and in

spite of the acknowledgment of the notice for the Extra Ordinary General

Meeting dated 30.06.2014, none of the Appellants attended the same and

5 the shareholders present in the said meeting unanimously approved the

sale of the assets of the company for day to day expenses of the company.

10.Respondent no.2 submits that the Appellants filed a complaint against

the Respondent No.2 against the Board meeting dated 06.06.2014 and

EGM dated 30.06.2014 alleging that the Appellants were not served notice

to which the Respondent No.2 filed its detailed reply countering the

Complaint. Thereafter, the ROC was pleased to dispose of the complaint

filed by the Appellants.

11.The Respondents submits that Notice dated 13.07.2015 calling the

Board Meeting for considering the Annual General Meeting dated

08.08.2015 was issued to all Directors of the Company including the

Appellant No.1 and Appellant No.2 by courier but the Appellants refused

to accept and receive the same through courier and courier receipts and

tracking reports have been submitted accordingly.

12. It is observed that the all these suggests that Extra Ordinary General

meeting as ordered by NCLT be convened after convening the Board

Meeting and giving proper notice in accordance with provisions of

Companies Act, 2013. After approval of the Board, the specific agenda

with statement in accordance with section 102 of Companies Act, 2013 to

consider the proposal to sell the property based on Auction through the

newspaper and online modes be placed before Extra Ordinary General

6 Meeting. An Independent Administrator be appointed by the NCLT in

order to have a proper voting by poll and not by show of hands and all

material facts in relation to sale of the property be placed in the Extra

Ordinary General Meeting and all the deliberations are properly recorded.

Based on the decision of Extra Ordinary General meeting the sale of

property of the Company, if approved, be acted upon. The requirement of

the Appellant herein to be the joint signatory to an agreement to sell or to

a sale deed according to the impugned order is therefore removed. The

NCLT is to review Independent Administrator's report for proper disposal

of the cases at hand. We accordingly remand back the matter to NCLT,

Hyderabad.

(Justice Jarat Kumar Jain) Member (Judicial)

(Mr. Balvinder Singh) Member (Technical)

(Dr.Ashok Kumar Mishra) Member (Technical)

NEW DELHI

RK

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