Neeta Shrinivas Zanvar Vs Nagarjuna Agro Chemicals Private Limited (NCLAT Chennai)
National Company Law Appellate Tribunal (NCLAT), Chennai Bench, has partly allowed an appeal filed by Neeta Shrinivas Zanvar against Nagarjuna Agro Chemicals Private Limited. The NCLAT’s order, dated January 5, 2021, modified an earlier directive by the National Company Law Tribunal (NCLT), Hyderabad, regarding the operation of bank accounts and the investigation into the company’s affairs. The case involves a closely held family company with allegations of oppression and mismanagement from both sides.
The dispute arose from an application (IA No. 989 of 2020) filed by the Respondent group (Respondent No. 2 to 4) before the NCLT. This application challenged a Board Resolution of Nagarjuna Agro Chemicals Private Limited (Respondent No. 1 Company) dated November 19, 2019, which changed the signatories for the company’s bank accounts. The NCLT’s impugned order directed that the bank accounts of the company be jointly operated by a representative from the Appellant group and a representative from the Respondent group. Crucially, it also directed the Registrar of Companies (ROC) to investigate the company’s affairs.
Allegations and Counter-Allegations:
The Appellant group contended that Respondent No. 2, a director who was previously the sole authorized signatory for bank accounts where over 95% of the company’s receivables were deposited, had allegedly siphoned off ₹ 55,99,68,131/- to himself and related parties. They claimed Respondent No. 2 failed to make royalty and statutory payments. The Board Resolution of November 19, 2019, was passed to require two directors (including Respondent No. 2) to jointly operate bank accounts, aiming to prevent further diversion of funds. The Appellant argued that the NCLT’s order superseded this valid Board Resolution without any finding of mismanagement or even a prima facie opinion on the siphoning allegations.
