| Judgement :
1. In this order, I am considering CP No.992/2011 filed by Shri Deba Kumar Hazarika and others against M/s Assam Chemical & Pharmaceutical Private Limited and other respondents under Section 397/393 of the Companies Act, 1956 (the Act). Briefly stated the facts, as highlighted in the petition, are as under:
| (i) | | M/s. Assam Chemical & Pharmaceutical Private Limited (the company) was incorporated under the erstwhile Companies Act, 1913 which was subsequently covered under the Companies Act, 1956 (the Act). |
| (ii) | | The initial authorized capital of the company was Rs. 3,00,000 of 300 equity shares of Rs. 1,000/- each and after enhancement of the said authorized capital from time to time, the present authorized capital of the company, as on 14.11.2009, is 5,000 equity shares of Rs. 100/- each. The paid up share capital of the company is 3,072 equity shares of Rs. 100/- each as per the last annual accounts of the company as at 31.03.2009, out of which 788 equity shares are held by the petitioners group, 600 equity shares are held by Government of Assam and the remaining shares are held by others and employees of the company. |
| (iii) | | The registered office of the company initially was at A.K. Azad Road Gopinath Nagar, Guwahati 781 016. Because of ongoing disputes between the shareholders of the company and the Managing Director (MD) Shri Deep Narayan Singh (respondent No 5) the registered office of the company was shifted to the present location at Shantipur Main Road, House No.l6, Near Prag Jyotish College, Guwahati 781009. |
| (iv) | | As per the Newspaper publication, it came to the notice of the shareholders that the activities of the company were bang managed in a very objectional manner by the then MD beyond his authority causing serious prejudice to the interest of the company. Further, a newspaper by the name of "The Asomiya Khabar" has published on 22.07.2009, a news article reporting evasion of payment of Entry Tax and Assam VAT to the tune Rs. 12,00,000, and Rs. 1,00,000/- respectively, for which the Tax Authorities imposed penalties and the total amount of tax and penalty payable to government came to about Rs. 20,00,000/- due to irresponsible act and conduct of the respondents. In addition a couple of other newspapers also published news articles on 30.07.2009 alleging mismanagement and misappropriation company's fund by respondent during his tenure as MD of company. |
| (v) | | Based on the aforesaid news articles mentioning about the mismanagement of the company and misappropriation of funds of the company under the control of the then MD being respondent No. 5, the petitioners being the shareholders decided to remove respondent No.5 from the post of MD by calling an Extra Ordinary General Meeting (EOGM) on requisition under Section 169 of the Act. |
| (vi) | | Respondent No.5 was removed as MD of the company in the EOGM held on 14.11.2009 under Section 284 of the Act and Shri Deba Kumar Hazarika, petitioner No.1, was appointed as the Director who was liable to retire by rotation. The said meeting was said to have been convened in presence of 49 shareholders holding 2,291 equity shares of the company which aggregated to approximately 74% of the total paid up share capital of the company comprising of 3,072 shares. It has been further contended that 1,506 votes were received from the members in favour of both the aforesaid resolutions. Thereafter, requisite Form 32 for removal of respondent No.5 and appointment of petitioner No.1 as Director was filed. In a Board Meeting held on 25,11,2009, the petitioner No.1 was unanimously elected and appointed as new MD of the company. |
| (vii) | | Because of the obstacle created in smooth functioning of the day to day affairs of the company and keeping in view the unlawful activities and attitudes of respondent No.5, the shareholders of the company convened another EOGM in presence of Executive Magistrate deputed by the District Administration, on 05.01.2010 and as per resolution taken in such EOGM, removal of respondent No.5 as MD was confirmed Further, it was resolved by majority votes that all the activities conducted by respondent No.5 on behalf of the company after 14.11.2009, shall not be binding on the company and respondent No.5 shall be personally liable for the losses caused out of his unauthorized activities. |
| (viii) | | Since the Board of Directors could not carry out the day to day business affairs of the company efficiently and peacefully, it was unanimously resolved by a resolution of Board Meeting dated 05.01.2010 authorizing temporary shifting of the registered office of the company from its existing office at A K Azad Road, Gopinath Nagar, Guwahati to Shantipur Main Road, House No.16, Near PragJyotish College, Guwahati. |
| (ix) | | It has been alleged by the petitioners that on 20.02.2010, respondent No.5 illegally allotted 1,455 equity shares to himself and his associates aggregating to about 20 shareholders out of which 6 were outsiders. It has been submitted that such allotment is in complete violation of Article 23 of the Articles of Association (AoA) of the company, which prohibit allotment of shares to outsider. |
| (x) | | It has also been alleged that on 02.03.2010, respondent Nos. 5 and 15 other shareholders held an EOGM and removed Shri Bhupen Chandra Kalita and Shri Deba Kumar Hazarika from the post of Director and MD of the company respectively. The petitioners alleged that the said EOGM was illegal in as much as no notice of EOGM was given to the said directors and/or shareholders. The said EOGM was held by only 15 shareholders having 745 shares which constituted 24.25% of the total paid up share capital only. |
| (xi) | | On 16.03.2010, respondent No.5 filed a Form 32 showing himself as MD with date of appointment as 14.11.2009 which was the date of his removal by majority shareholders. Thereafter, again on 05.05.2010, in an AGM presided over by respondent No.5, Shri Madhab Das and Shri Bimal Sharma were appointed as Directors of the company. No notices of the said meeting were received by the majority shareholders, viz., the petitioners group herein. |
| (xii) | | It has been also contended by the petitioners that on 06,09.2010, the authorized share capital of the company was increased from Rs. 5 lakhs to Rs. 10 lakhs through a purported EOGM held in presence of 18 shareholders. Notices of the said EOGM were not served on the petitioners. Finally, on 15.09.2010, 5,620 equity shares of the company were purportedly allotted to 19 shareholders including 7 outsiders who were not eligible for allotment in terms of Clause 28 of AoA of the company Further, such allotment was done without the consent of existing shareholders who were not given notice of the said EOGM |
| (xiii) | | It has been submitted that respondent No. 5, in order to deceive other shareholders, resigned from the post of MD as reflected from RoC' record w.e.f. 15.02.2011 and a stranger by the name of Shri Madhab Das has been appointed as MD of the company by a Board Meeting dated 16.02.2011. Presently, Shri Madhab Das has been misusing company's properties and funds by illegal means for which he holds no right in the company. He is also trying to harass the present Board of Directors so that they should not be in a position to manage the affairs of the company and also filing malicious petitions against the new Board of Directors causing huge problem to the new directors to manage the affairs of the company smoothly. |
2. Based on the above, the petitioners hove sought the following main reliefs, viz.,
| (a) | | to direct the company and RoC not to give effect in the records of the issue of 6,715 equity shares of the company alleged to be fraudulently issued. |
| (b) | | to declare all resolutions, fraudulently passed by the respondents without approval of existing shareholders as null and void. |
| (c) | | to issue necessary directions for regulation of the conduct of the company's affairs in future along with consequential reliefs. |
3. As against the above facts and other pleadings made in respect of the petition, the respondents have contended as under:
| (i) | | It has been submitted that the petitioners have arrayed M/s. Assam Chemical & Pharmaceutical Private Limited as Respondent No. 1 and Respondent No.3 having 2 different addresses and have further arrayed Managing Director of M/s. Assam Chemical & Pharmaceutical Private Limited as Respondent No.2 and Respondent No.4 again carrying 2 different addresses of the company. The registered office of Respondent No.1 and Respondent No.3 have been shown at 2 different places, thereby giving an impression that these are 2 different companies under the name and style of M/s. Assam Chemical & Pharmaceutical Private Limited having 2 different Managing Directors. The petitioners have appointed Advocates for respondent No.1 and respondent No.2 and incidentally, respondent No.2 is petitioner No. 1 herein, viz., Shri Deba Kumar Hazarika, When respondent No 3 and respondent No.4 objected to the same, the petitioners being unable to explain the aforesaid fact admitted in the rejoinder that respondent No.1 and respondent No.2 have been added erroneously. However, the petitioners have failed to explain as to why respondent No.1 and respondent No.2 were represented by advocate when the said company i.e., respondent No.1 did not exist. |
| (ii) | | The respondents have also submitted that the petitioners have sought for setting aside of issue and allotment of 6,715 shares by M/s. Assam Chemical & Pharmaceutical Private Limited on 20.02.2010 and 15.09.2010, but they have not impleaded the allottees of those shares as parties in the instant proceeding and hence, the instant petition is liable to be rejected for non-joinder of necessary parties. |
| (iii) | | The respondents have further submitted that the instant petition is not maintainable for lack of particulars in as much as the petitioners have sought for declaration of some resolutions as void, but have failed to identify such resolutions and hence, the instant petition is vague and no orders can be passed thereon. |
| (iv) | | The respondents have further submitted that as per Regulation 8 of Company Law Board Regulations, 1991, the CLB should accept either English or Hindi translation of the documents. It has been contended that from the English translation of the newspaper reports relied upon by the petitioners, it has been revealed that the said reports were not independent reporting. In fact, the newspaper reported the facts from information derived by them from petitioner No.1. Thus, such newspaper reports are biased and no reliance can be placed thereon. |
| (v) | | It has been further submitted that the entire dispute is nothing, but as a result of personal rivalry between petitioner No.1 and respondent No.5 and the petitioner No.1 is trying to convert the said rivalry into that of mismanagement and oppression by respondent No.5. In fact, respondent No.5 as MD had removed petitioner No.1 on 05.10.2008 as an employee of the company. Being unhappy with such removal, petitioner No.1 and Shri Bijay Kumar Deka made baseless allegations against respondent No.5 in print media. |
| (vi) | | The respondents have further stated that the removal of respondent No.5 as MD on 14.11.2009 was in violation of order dated 13.11.2009 passed by Ld. Additional District Judge, Kamrup, Guwahati and as such, the said removal is void ab initio. |
| (vii) | | Respondent No.3 and respondent No.4 submitted under affidavit a copy of the order of the Civil Judge, Kamrup, dated 11.11.2011 in Misc.(J) case No. 10/2011 the matter of Shri Deba Kumar Hazarika v. Shri Bimal Sharma, wherein Ld. Civil Judge, Kamrup, inter alia, decided that Shri Deba Kumar Hazarika, having been already removed from the Managing Director of the company, cannot seek protection against such removal of Managing Director of the company. |
| (viii) | | Respondent No.3 and respondent No.4 vide another affidavit dated 18.12.2013 brought to the notice of this Bench that the petitioners were sending a copy of the petition to several members of the company as per direction by the Bench, whereas, in fact, there was no such direction by the Bench. |
| (ix) | | The appointment of petitioner No.1 as Director of the company on 14.11.2009 is bad in law as no special notice was given to the shareholders under Section 284(5) of the Act. It has been further submitted that there has been non-compliance of the provisions of Section 284(5) and Section 190 of the Act towards appointment of petitioner No.1 as Director of the company. Since the said sections are mandatory in nature, the appointment of petitioner No.1, in violation of the said sections, is void and deserves to be cancelled. |
4. During the course of hearing, the main pleading of Shri A K Shrivastava, Ld. Pr. C.S, appearing for the petitioners was that Shri D N Singh, respondent No.5, tried to illegally control the company and resorted to malpractices which Shri Deba Kumar Hazarika, petitioner No.1 and other shareholders of the company came to know through newspaper reports and they removed Shri D N Singh as MD of the company and appointed Shri Deba Kumar Hazarika as the new MD of the company.
5. As against the above, Shri Anjan Kr. Roy, Ld. Pr. C.S. appearing for respondent No.3 and respondent No.4, has submitted that Shri Deba Kumar Hazarika was appointed as an employee of the company by Shri D N Singh earlier and after a long period he was sacked by the management of the company vide letter dated 15.10,2003, for which documentary evidence has been placed. As regards the newspaper report against Shri D N Singh, it has been submitted that after being sacked as an employee of the company, Shri Deba Kumar Hazarika wanted to seek revenge and for that, he supplied false allegations against Shri D N Singh before the publishing authority of newspaper in connivance with some shareholders and accordingly, such false allegations have been reported against Shri D N Singh in order to implicate him. Shri Roy also emphasized that there was an injunction order against passing of any resolution for removal of Shri D N Singh in the meeting held on 14.11.2009, issued by Court of Ld. Additional Judge, Kamrup, Guwahati, in Case No.571/2009 dated 13.11.2009, but a section of the members of the company led by Shri Deba Kumar Hazarika, in violation of the said order of injunction, went ahead and passed the resolution. Shri Roy had further emphasized the fact that it was a private grievance of Shri Deba Kumar Hazarika against Shri D N Singh which the former had tried to bring under the purview of CLB and in the process, had prejudiced the interest of the company as well Shri Roy also pointed out that even in the instant order of Ld. Civil Judge, Kamrup, Guwahati, being Mise.(J) Case No.10/2011 dated 11.11.2013, the Court had observed that there was no case of restoration of directorship of Shri Deba Kumar Hazarika since he was removed as a director by the members of the company.
6. As regards the allegations that the petitioners have arrayed M/s. Assam Chemical and Pharmaceutical Private Limited as Respondent No.1 and respondent No.3 and have further arrayed the MD of the said company as respondent no,2 and respondent No.4, Ld. Pr. CS. appearing for the petitioners has admitted that it was an error to mention respondent No.1 and respondent No.2 in the petition and alleged that the Bench should have taken notice of the same at the initial stage. On the other hand, Shri Roy appearing on behalf of respondent No.3 and respondent No.4 has raised the following baste questions:
| "(i) | | Even if it is accepted as a drafting error, how petitioner No.1 had appointed advocates to represent respondent No.1 and respondent No.2 on numbers of occasions? |
| (ii) | | If the petitioners had arrayed respondent No.1 and respondent No.3 as respondent company, against which respondent the petitioners have claimed relief? |
| (iii) | | Where was the evidence of existence of two companies with the same name "Assam Chemical and Pharmaceutical Private Limited". |
Shri AK Shrivastava could not offer any convincing reply supported by evidence against such challenges made by Shri Roy appearing on behalf of the respondents.
7. Shri Shrivastava appearing on behalf of the petitioners referred to the order of this Bench in CA No.215/2012, wherein the issue of maintainability had already been addressed while disposing of the said application. Shri Roy appearing on behalf of respondent No.3 and respondent No.4 has submitted that CA No,2l5/2012 has raised the issue of res judicata and the maintainability under Section 399 of the Act was not considered in such CA.
8. I have considered the above submissions and pleadings of all the parties as well as arguments placed by the Ld. Pr. Company Secretaries appearing on behalf of the rival parties during the course of hearings of the instant petition being CP No.992/2011. It is observed that the petitioners have shown in their petition, two respondent having the same name, viz., "Assam Chemical and Pharmaceutical Private Limited" being respondent No.1 and respondent No.3, but the petitioners have failed to submit any evidence of existence of 2 companies under the same name and style of "Assam Chemical and Pharmaceutical Private Limited". Similarly, without any satisfactory reason, the petitioners have mentioned two Managing Directors of the said company being respondent No.2 and respondent No.4. The petitioners in their rejoinder dated 28.08.2013 have admitted that it was an error to mention respondent No.l and respondent No.2. However, this Bench has noticed that in written objection to CA No.93/2012, the petitioners in para 3 of page 2 had confirmed that Shri Deba Kumar Hazarika, being petitioner in CP No.992/2011, was respondent No.2 and also represented respondent No.1. Even in reply to CA No.215/2012 and CA No.216/2012, the petitioners had submitted that Shri Deba Kumar Hazarika was respondent No.2 and was representing respondent No.1. The Bench has also noticed that respondent No.1 and respondent No.2 attended the hearings through their advocates on various dates and Shri Deba Kumar Hazarika personally attended the hearing on 22.02.2013 in the capacity of MD representing respondent No.1 as also respondent No.2. The Bench has also noticed that respondent No.1 and respondent No.2 have filed CA No. 132/2013 together with CA No. 133/2013, which were withdrawn by the respective parties on being objected as defective, by respondent No.3, respondent No.4 and respondent No.5. Thus, it is evident that the petitioners tried to mislead the Bench by becoming the petitioner and respondent at the same time and on opposition by respondent No.3 and respondent No.4, tried to put the blame on the Bench for not recording the same. This Bench takes a strong view against such false and misleading submissions by the petitioners on affidavit.
9. It has also been noticed that there was an injunction against passing resolution no. 2 at the EOGM of the company called on 14.11.2009 relating to removal of Shri D N Singh as the MD of the company, vide order of Ld. Additional District Judge, Kamrup, Guwahati, in Case No.571/2009 dated 13.11.2009. In spite of that, a section of members led by Shri Deba Kumar Hazarika, passed the said resolution No.2, despite there being an injunction order of the Court against such resolution. Further, it is observed that in respect of purported appointment of Shri Deba Kumar Hazarika as Director of the company on 14.11.2009, the provisions of Section 284(5) read with Section 190 of the Act were not complied with and the petitioners failed to raise any lawful defense against this issue. In addition, it is found that even though Shri D N Singh resigned as MD of the company on 16.02.2011 and the members of the company appointed Shri Madhab Das, Shri Anup Deka, Shri Bimal Sharma as MD of the company from time to time, but on none of these occasions, the shareholders of the company appointed Shri Deba Kumar Hazarika as MD of the company. Even though allegations have been made against Shri D N Singh about misappropriation of funds of the company, the petitioners had failed to bring on record any evidence of such misappropriation of funds by Shri D N Singh, The petitioners have sought for an order to cancel the allotment of 6,715 equity shares of the company, but have not made the concerned allottees as necessary parties to CP No.992/2011, thereby creating a situation of non-joinder of parties. The adjudication against such allotment is not possible without affording a reasonable opportunity of being heard to the purported allottees otherwise it will thwart the process of natural justice. The petitioners have complained about oppression by Shri D N Singh and his "cohorts" but no specific persons have been identified as such "cohorts" to substantiate the allegation.
10. In view of the above facts and circumstances of the case, it is quite evident that the instant petition suffers from many defects as recorded above which could not be satisfactorily explained either by the pleadings on record or by arguments advanced by the Ld. Pr. C.S. appearing on behalf of the petitioners, it appears that the petition has been lodged to take revenge of removal of petitioner No.1 as employee of the respondent company by respondent No.5 by making false allegations against respondent No.5 and initiating various illegal actions in connivance with some members of the company by convening meetings for removal of respondent No.5 without following the due provisions of law and making appointment of petitioner No.1 as Director of the company against the mandatory provisions of law. As a result, having regard to the detailed reasons mentioned above, the petition is not considered as maintainable and accordingly, the petition being CP No.992/2011 is hereby dismissed.
11. Interim orders, if any stand vacated and all the pending applications, if any, stand closed.
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