Rathna Textile Mills Private Limited Vs V.R.A.R. Ramakrishnan (NCLAT Chennai)
NCLAT Delhi held that Notices were never served on the Petitioner/Respondent as there are no ‘Proofs of Receipt’, filed by the Appellant.
Facts- A Company Petition was filed by the Petitioner Shri V.R.A.R. Ramakrishnan, against the Respondents under Sections 397 and 398, read with Sections 402 and 406 of the Companies Act, 1956, challenging the transfer of Shares effected; allotment of shares and Appointments made by the Board in the year 1995-96.
It was averred that the Company never commenced its business and that the Registrar of Companies (“ROC”) issued a ‘Show Cause Notice’ in the year 1989, under Section 433(c) read with Section 439(e) of the Companies Act, 1956. It was submitted by the Petitioner that Late Shri. T.S. Rathnasabapathy had sold the machinery of the Company for a less price, on account of which the Petitioner issued a Legal Notice to him on 02/02/1990.
The NCLT has allowed the Company Petition.
Conclusion- In the absence of any proof that the Notices were actually ‘served’ on the Respondents, it is not in dispute that the previous Notices were sent by Late Shri. T.S. Rathnasabapathy by ‘Registered Post Acknowledgement Due’, we are of the considered view that the Notices were never served on the Petitioner/Respondent as there are no ‘Proofs of Receipt’, filed by the Appellant, herein.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
1. Aggrieved by the Impugned Order dated 11/10/2018, in CP No. 08/2008 (TP No. 10/2016) filed under Sections 397 and 398 of Companies Act, 1956, passed by the National Company Law Tribunal, Bengaluru Bench, M/s Rathna Textile Mills Private Limited and 5 Ors, preferred this Appeal under Section 421 of the Companies Act, 2013 (hereinafter referred to as the Act).
2. The facts in brief are that a Company Petition C.P. No. 8/2008 in TP No. 10/2016 was filed by the Petitioner Shri V.R.A.R. Ramakrishnan, against the Respondents under Sections 397 and 398, read with Sections 402 and 406 of the Companies Act, 1956, challenging the transfer of Shares effected; allotment of shares and Appointments made by the Board in the year 1995-96. It was prayed to set aside the allotment of 620 equity shares made in favour of the Appellants No. 2 to 6 as null and void; to remove Appellants No. 2 and 6 from the Directors of the Company and to declare them as unfit to be appointed as Directors in any Company. Mr. V.R.A.R. Ramakrishnan (hereinafter referred to as the Petitioner) and his Late brother were subscribers to the Memorandum of Association of the Company which secured the licence for starting 9.34 1/2 acres of dry land at Palladam, Coimbatore District.
3. It is averred that the Company never commenced its business and that the Registrar of Companies (“ROC”) issued a ‘Show Cause Notice’ in the year 1989, under Section 433(c) read with Section 43 9(e) of the Companies Act, 1956. It is submitted by the Petitioner that Late Shri. T.S. Rathnasabapathy had sold the machinery of the Company for a less price, on account of which the Petitioner issued a Legal Notice to him on 02/02/1990. The Petitioner filed a Company Petition, C.P. No. 117/1995 before the Hon ble High Court of Karnataka, seeking to voluntarily wind up the Company and also filed C.A. 919/2005 seeking Permission to withdraw this Company Petition, on account of Suit O.S. No. 17254/2005, filed before the Additional Civil Judge, at Mayo Hall. Therefore, the Hon ble High Court of Karnataka allowed the said Application, vide Order dated 16/09/2005. After filing of the said winding up Petition, it is submitted that Late Shri. T.S. Rathnasabapathy, had sent a ‘Notice’ to the Petitioner on 17/10/1999, seeking to shift the Registered Office of the Company; co-opting the Additional Directors, who are sons of the Managing Director; ratifying the Share Transfer; to prepare the Report of the Board of Directors and post the Auditor’s Balance Sheets and Financial Statements.
4. It is averred in the Company Petition that Late Shri. T.S. Rathnasabapathy was holding only 400 shares and the other 400 shares were held by the Petitioner. There was no fresh issue of any Shares beyond 800 and the same was recorded in the Balance Sheet prepared on 2 1/03/1994. It is submitted in the Company Petition that as winding up Proceedings were pending, the Petitioner did not attend the Share Holders Meeting, held on 25/10/1995. As per the Balance Sheet of 31/03/1 995, Late Shri. T.S. Rathnasabapathy and his two sons had signed the Balance Sheet, where in it is shown that 400 shares were with the Petitioner and 400 shares with Late Shri. T.S. Rathnasabapathy. It was averred that as the Shares were transferred to his two sons i.e., Shri. Senniappa Sridhar and Shri. R. Vidhyadhar, he himself was left with no Share Holding in the Company and therefore he was ineligible to continue as the Director or as the Managing Director.
5. It was averred that Shri. T.S. Rathnasabapathy continued to exercise his powers illegally and signed the Report of the Board of Directors on 25/10/1996 and convened an Annual General Meeting on 3 1/10/1995, on account of which the Petitioner had got issued a Legal Notice dated 02/11/1995, questioning the conduction of this Annual General Meeting. It was stated that even as on 17/02/1996, Late Shri. T.S. Rathnasabapathy, who had filed the Statement of Objection to the winding up Petition, did not mention the issuance of any fresh Shares or increase in the Share Capital. It was averred that Vasantha Kokilam, Shri. Angappa Murali and Shri. Senniappa Sridhar filed Affidavits in the High Court of Karnataka in C.P. No. 117/1995 reporting that they had inherited 1/4thof the Shares (620) held by their Late father. It was submitted by the Petitioner that Late Shri. T.S. Rathnasabapathy had never held more than 100 shares in the Company. In the Civil Suit O.S. No. 17254/2009, the Petitioner prayed for a declaration that the Appellants herein are holders of only 100 Equity Shares each, in the Company.
6. It is stated that the Petitioner had come to know about the Sale Deed dated 14/11/2005, only in March 2007, when a Suit O.S. No. 285/2007 was filed before the Sub Judge, Tirupur, by the Alleged Purchaser of Property / ‘M/s. TCS Textiles Private Limitedwas dismissed. The Petitioner filed a Suit before the City Civil Court at Mayo Hall to restrain ‘M/s TCS Textiles Private Limited’ from dealing with the said Property and from alienating the same.
7. The NCLT has allowed the Company Petition vide the Impugned Order dated 11/10/2018 with the following directions:
a. We hereby set aside the proceedings of the Board of Directors held on 18.03.1996 and the subsequent declarations in Form No. 32 filed by the respondents on 1st December, 2005;
b. Set aside the impugned allotment of 620 shares made in favour of Respondent Nos. 2 to 6 as null and void, by consequently declaring that the petitioner is holding 400 shares and remaining 400 shares can be apportioned among the family members of Late Shri T.S. Rathnasabhapathy as per their agreement;
c. The Respondent Nos. 2 to 6 can elect any one of them as Directors of the Company and convene a Board Meeting accordingly with the Petitioner and the Director elected by the Respondents within a period of three months from the date of receipt of copy of the Order;
d. Hereby declared Forms Listed in Annexure 1 enclosed to the petition filed with Registrar of Companies as null and void;
8. Submissions of the Learned Counsel appearing for the Appellants:
