Delhi HC decision on Directos Appointment / Removal by IFCI on the board of TFCI Ltd.

Brief facts of the present case are that the appellant company (hereinafter referred to as ‘IFCI’) owns 37.85% of shares of respondent-company (hereinafter referred to as ‘TFCI’). On 26th November, 2010 IFCI sent a requisition to TFCI for convening an Extra-Ordinary General Meeting (for short ‘EOGM’) with the objective of appointing four new directors and removal and replacement of one director on the Board of TFCI. However, TFCI vide letter dated 2nd December, 2010 questioned the validity of the requisition on the ground that though it was signed by the Company Secretary of IFCI, but specific authorisation/board resolution to file such requisition had not been annexed and it requested IFCI to send the said board resolution within a period of one week. Subsequently, on not getting the said information, TFCI through its board meeting held on 14th December, 2010 decided not to convene EOGM of TFCI. On receiving this information, IFCI on 15th December, 2010 initiated the process under Section 169(6) of the Act for convening an EOGM on 17th January, 2011. IFCI then filed the present Company Petition No. 124(ND) of 2010 under Sections 398 and 402 of the Act on the same day.

IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBJECT : COMPANIES ACT, 1956
CO.A(SB) 13/2011 & CO. APPLS. 538/2011, 564/2011, 764/2011
Reserved on : 6th May, 2011
Date of Decision: 16th May, 2011

IFCI LTD.                                                             Appellant
Through Mr. Ashwini Mata, Senior Advocate with Mr. Suresh Dobhal, Mr. Dinkar Singh and Mr. Rahul Tyagi, Advocates

versus

TFCI LTD.                                                                       Respondent
Through Mr. U.K. Chaudhary and

Mr. Abhinav Vashist, Senior Advocates with Mr. Rajnish Sinha, Ms. Hina Sharif, Ms. Manisha Chaudhary and Ms. Avanti Tewari, Advocates

CORAM:

HONORABLE MR. JUSTICE MANMOHAN

J U D G M E N T MANMOHAN, J :

1.  The present appeal has been preferred against the order dated 22nd March, 2011 passed by the Company Law Board (for short ‘CLB’) whereby Company Petition No. 124(ND) of 2010 filed by appellant company under Sections 398 and 402 of the Companies Act, 1956 (for short ‘Act’) was dismissed.

2. Brief facts of the present case are that the appellant company (hereinafter referred to as ‘IFCI’) owns 37.85% of shares of respondent-company (hereinafter referred to as ‘TFCI’). On 26th November, 2010 IFCI sent a requisition to TFCI for convening an Extra-Ordinary General Meeting (for short ‘EOGM’) with the objective of appointing four new directors and removal and replacement of one director on the Board of TFCI. However, TFCI vide letter dated 2nd December, 2010 questioned the validity of the requisition on the ground that though it was signed by the Company Secretary of IFCI, but specific authorization/board resolution to file such requisition had not been annexed and it requested IFCI to send the said board resolution within a period of one week. Subsequently, on not getting the said information, TFCI through its board meeting held on 14th December, 2010 decided not to convene EOGM of TFCI. On receiving this information, IFCI on 15th December, 2010 initiated the process under Section 169(6) of the Act for convening an EOGM on 17th January, 2011. IFCI then filed the present Company Petition No. 124(ND) of 2010 under Sections 398 and 402 of the Act on the same day.