V.P. Singh JUDGMENT
V.P. Singh, Member (T)
1. This Appeal emanates from the Order dated January 05, 2021, passed by the National Company Law Tribunal, Hyderabad Bench, Hyderabad in IA No. 989 of 2020 in Company Petition No. 203/241/HDB/2021, whereby the NCLT directed that the Bank Account of the Respondent No. 1 Company be operated jointly by one representative of Appellants and one representative of Respondent No. 2 to 4 and directed the Registrar of Companies to investigate into the affairs of the Respondent No. 1 Company. The original parties status in the Company Petition represents them in this Appeal for the sake of convenience.
Appellant's Contention
2. Respondent No. 2 to 4 herein applied the NCLT, vide IA No. 989 of 2020, challenging the Board Resolution of the Respondent No. 1 Company, which among other things, provided for the bank accounts of the Respondent No. 1 Company to be jointly operated with the 2nd Respondent as a necessary signatory and anyone of the other three Directors of the said Company as a Co-signatory. Respondent No. 2 to 4 failed to maintain a challenge against the said Board Resolution in Civil Suit No. 117 of 2020 before the Civil Judge, Wardha, Maharashtra. After that, an unsuccessful attempt was made to get the same relief by filing IA 664 of 2020. However, the Respondent filed IA No. 989 of 2020 before the NCLT, wherein the impugned Order has been passed.
3. The Appellant contends that Respondent No. 2 is one of the Directors of Respondent No. 1 Company, who was the sole Authorised Signatory of the bank accounts maintained with Punjab National Bank, Wardha, in which more than 95% of the receivable of the Respondent No. 1 Company are received, has siphoned an amount of ` 55,99,68,131/- of the Company to himself and his related parties (including Respondent No. 3 and 4.). Respondent No. 2 failed in making the payments to royalty and statutory dues, including GST. Around 95% of the sales proceeds are received into the bank accounts maintained at the Wardha Branch, which was solely operated by Respondent No. 2. Respondent No. 2, instead of making the payments, has diverted funds of the Respondent No. 1 Company to himself and its associates. In the circumstances, the Board of Directors, at its meeting held on November 19, 2019, passed the Resolution authorising any two Directors (including Respondent No. 2) to operate the bank accounts of Respondent No. 1 Company.
4. The Appellant contends that the NCLT by the Impugned Order superseded the said Board Resolution dated November 19, 2019, of the Company and the manner in which the Company had been operating its accounts for more than a year, without any discussion or finding of any mismanagement or forming even a prima facie opinion on the allegations of the Respondent No. 2 to 4, of purported siphoning off funds.
5. The Appellant contends that the Learned NCLT interfered with the Company's internal management through the impugned Order, which Respondent No. 1 Company was exercising by the Board Resolution dated November 19, 2019, impermissible in law. The NCLT further directed the Registrar of Companies to investigate the affairs of the Respondent No. 1 Company.
Respondent's contention
6. Respondent No. 1 Company is a closely held family Company between the Appellant Group and the Respondent Group. The Company has been run like a quasi partnership between the two groups. Respondent No. 2 is a whole-time Director, appointed as a Director on December 11, 2014, and is the single largest shareholder, holding 39.70% of the Company's paid-up share capital. Respondent No. 2 and his Group was inducted into the Company and was allotted shares, among other things, on Respondent No. 2's business experience in the agriculture sector. The Appellants started committing acts of oppression to oust Respondent No. 2 from the Board of Directors of the Respondent No. 1 Company and committed acts of mismanagement and siphoning and diverting the Company's funds to their accounts and related entities. This compelled Respondent No. 2 and his Group to file the pr........