Delhi District Court
Mr. Rajeshwar Singh Bal vs Steven Judge Alias Gurdip S. Jhaj on 4 May, 2018
Page no. 1 of 33
IN THE COURT OF SH. SUSHIL ANUJ TYAGI, JUDGE SMALL
CAUSE COURTCUMADDITIONAL SENIOR CIVIL JUDGECUM
GUARDIAN JUDGE, SOUTHEAST DISTRICT, SAKET COURT
COMPLEX, NEW DELHI
CS No: 51228/16
IN THE MATTER OF :
1. MR. RAJESHWAR SINGH BAL
39 A SILVER OAK FARMS
MG ROAD, GHITORNI, NEW DELHI110030
2. MRS. DEEEPINDER BAL
39 A SILVER OAK FARMS
MG ROAD, GHITORNI, NEW DELHI110030
.....PLAINTIFFS
VERSUS
1. STEVEN JUDGE ALIAS GURDIP S. JHAJ
GESCO CORPORATE CENTRE
70 NEHRU PLACE
NEW DELHI110019
ALSO AT
95 SOUTH VIEW DRIVE,
CONCORD, ONTARIO,
CANADA L4 K 2 K8
2. PETER S. HARVEY
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 2 of 33
GESCO COPORATE CENTRE
70 NEHRU PLACE
NEW DELHI110019
ALSO AT
2272 MEADOWVALE RD, SCARBOROUGH,
ONTARIO, MIN, ST
3. INTERNATIONAL BREWERIES PVT. Ltd.
GESCO COPORATE CENTRE
70 NEHRU PLACE
NEW DELHI110019
.....DEFENDANTS
Date of institution : 04.02.2009
Reserved for Judgment : 18.04.2018
Date of decision : 04.05.2018
JUDGMENT
1. Vide this judgment, I shall dispose off the present suit for
declaration, mandatory and permanent injunction filed by plaintiffs
Mr. Rajeswar Singh Bal and Mrs. Deepinder Bal (hereinafter called
plaintiffs) against Steven Judge, Peter S. Harvey and International
Breweries Pvt Ltd (herein after called defendants) seeking the
following reliefs:
a) Pass a decree for declaration to the effect that the
Board Resolution dated 03.09.2007 & 10.09.2007 are
wrong, illegal, inoperative, non existing, null and void and
does not affect the rights of the plaintiffs to act as
directors of M/s International Breweries Pvt. Ltd.
b) Pass a decree for permanent injunction restraining
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 3 of 33
the defendants from interfering into the affairs of the
plaintiffs in acting as in the capacity as directors of the
company or otherwise obstructing the plaintiffs in
discharge of their official duties.
c) Pass a decree for mandatory injunction restraining
the defendant Directors from given effect to and/ or acting
in pursuance of the alleged Board Resolution date
September 3, 2007; and to undo the alleged act of
removal of the plaintiffs from holding the post as directors
of the company.
d) Pass such other or further orders as this Hon'ble
Court may deem fit and proper in the facts and
circumstances of the case and in the interest of justice,
equity and good conscience.
2. During the course of final arguments, the Ld.
Counsel for the plaintiffs submitted that relief no. B & C are not
been pressed for by the plaintiffs as the company has ceased
to operate its business and such reliefs are virtually
infructuous. Only relief no. 'A' is pressed for.
PLAINT
3. It is averred by the plaintiffs that plaintiff no. 1 & plaintiff
no. 2 are the Directors of defendant no. 3 company and plaintiffs
were the authorized signatories of the company and amongst other,
were the only directors authorized to operate all accounts of the
company. It is alleged that defendant no. 1 & 2 are also the directors
of the company and both the defendants are foreign nationals
permanently based in Canada and have no permanent residence in
India. That sometime in the year 2007, serious disputes and
differences arose between the plaintiffs and defendants for the
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 4 of 33
reason that defendants committed various acts of misrepresentation,
misappropriation, fraud, cheating, forgery and manipulation of
documents filed abroad through electronic communication with
various parties including the plaintiffs and bankers of the company. It
is alleged that defendants fled the country and continued to evade
various parties from whom the defendants had availed funds
purporting to act for and on behalf of the company. Misdemeanor
and misconduct of the defendant were detected by various parties
including the plaintiffs but the defendants alleged that plaintiffs were
responsible for the same. It is alleged that defendants addressed
letters dated 31.08.2007 to the managers of HDFC Bank and Bank
of India among other banks issuing unlawful and invalid directions to
the said banks for stopping the operations of the accounts. It is
alleged that the said acts and conduct of the defendants not only
caused grave prejudice to the plaintiff but also occasioned loss of
reputation and credibility of the company which resulted in
jeopardizing the business of the company in India and abroad.
4. It is alleged that the plaintiffs attempted to establish
communication with the defendants with a view to discuss various
serious and pressing issues regarding the affairs of the company
and the plaintiffs not only addressed numerous mails to the
defendants but vide communication dated 01.09.2007 called for
board meeting and for that purpose, intimated the defendants the
agenda for the board meeting. Despite repeated communication and
notice of board meeting, the defendants remained incommunicado
and refused to discuss the urgent issues. To the great shock and
dismay of the plaintiffs, the defendants addressed an email dated
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 5 of 33
03.09.2007. It is alleged that by means of the allegations referred in
the email dated 03.09.2007, the defendants attempted to evade
responsibility for the consequences of their own illegal and
fraudulent responsibility and also to unlawfully gain complete control
of the affairs of the company by threatening the company with legal
action in the event of noncompliance.
5. Upon nonreceipt of any response from the defendants
to the urgent request for a board meeting, the plaintiffs were
constrained to address another notice vide email dated 04.09.2007
once again calling upon them to make themselves available for
discussion and settlement of all pressing issues but the defendants
neglected and failed to respond. The plaintiffs addressed another
email dated 06.09.2007 and 08.09.2007 to the defendants. The
plaintiffs further addressed another letter dated 08.09.2007 to the
defendants stating that defendants should not evade any genuine
inquiry or investigation if they did not commit any fraud or illegality. It
was also communicated that the defendants should not falsely
defame or seek to implicate the plaintiff without any proof of wrong
doing. It was further stated that the defendants directors deliberately
continued to evade all legitimate queries and demands of the officers
of the company including the plaintiffs and various creditors. To
complicate the matter further, the defendants Directors issued
directions to the various bankers of the company and the plaintiffs
could not use the funds to pay the aggrieved creditors and for that
reasons the plaintiffs directors were perceived to be completely
responsible for the operation and conduct of the business of the
company media. The defendants chose to address a letter dated
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 6 of 33
08.09.2007 whereby the defendants tried to obscure their own
culpability and also the consequences occasioned by the
misconduct and misdemeanor of the defendants by making baseless
and malicious allegations against the plaintiffs with a view to falsely
implicate them. When the addressee (CAs of the company) of the
email dated 08.09.2007 of the defendants, did not follow the unlawful
and coercive demands of the defendants, the defendants purported
to dismiss the said employee in their email dated 11.09.2007.
Thereafter, the plaintiffs were constrained to communicate the
serious irregularities of the defendants to the bankers of the
company through their advocates vide letter dated 10.09.2007 with a
view to forewarn them. Some time in September 2007, the plaintiffs
were shocked to learn that the defendants had addressed letters to
various parties purported to communicate that the plaintiff directors
had been removed from the board of directors of the company. It is
alleged that the alleged board resolution was never passed and the
alleged board resolution dated 10.09.2007 is absolutely invalid and
unlawful as the same is in violation of the statutory provisions
applicable to the companies for holding board meeting. It is alleged
that no notice was served with respect to the board resolution nor
were the plaintiffs afforded any opportunity to make representation
regarding the false and baseless allegations sought to be leveled
against the plaintiffs by the defendants directors. It is alleged that
some time in May 2008, the defendants acting in conspiracy with
each other forged and fabricated a false documents purporting to be
the minutes of meeting of board of directors of the company
allegedly held on 19.05.2008 purporting to authorize defendant no. 2
for doing acts and things for the proper conduct of the company. It is
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 7 of 33
alleged that the impugned meeting dated 19.05.2008 was never held
nor any notice thereof was ever circulated to the board of directors
including the plaintiffs and it was the part of modus operandi of the
defendants to defraud the company and its creditors. It is alleged
that based on the alleged invalid and unlawful authorization, the
defendants directors purported to misrepresent to various third party
including the creditors and bankers, that the defendants were fully
authorized the conduct the affairs of the company in India. It is
further alleged that all the statutory records of the company are with
the auditors. The minute book of the company has not been
maintained as per the requirements under the company acts and the
defendant directors are running the company against the provisions
of companies act. It is alleged that the resolution dated 10.09.2007 is
illegal void and of no effect whatsoever and the plaintiffs continue to
be the directors of the company and are entitled to act as directors of
the company. Hence the present suit.
WRITTEN STATEMENT
6. It is submitted in the written statement that FIR no.
632/2007 at PS Hauz Khas against the plaintiffs has been registered
for fraud, forgery, breach of trust and cheating by the defendants
Directors of the Company and a charge sheet has been filed in the
said FIR by the Delhi Police. That this Hon'ble court has no
jurisdiction to entertain the present suit as there is an Arbitration
clause in the Memorandum of Articles of Association of the company
which clearly provides that if any dispute in pursuance to any affairs
of the company exists, such dispute shall be referred to sole
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 8 of 33
Arbitration by the Chairman. That the suit is not maintainable as at
the time of filing, the plaintiff no.1 was behind bars in FIR No.632/07
registered at Hauz Khas, Police Station, New Delhi U/s 420, 406,
467, 468, 471 and 120B of IPC. The petition filed before this Hon'ble
court has not been duly counter signed by any Jail authorities or the
Hon'ble court, which clearly shows that the signatures of plaintiff
no.1 are forged in a conspiracy to subvert justice and criminally
harass the defendants by an abuse of the process of law.
7. That the plaintiffs have no locusstandi to file the
present suit and pray for relief of permanent injunction.
8. It is submitted that defendant no.3 is a company
incorporated on 10.02.1995 on the instructions of Mr. Steven G.S.
Judge with the objective of bringing international quality brands of
beer to India. After receiving the necessary permissions by the
governmental authorities, the company ("IBPL") was to carry out its
objectives entirely with Foreign Direct Investment to be made by M/s
India Breweries Inc., Canada on behalf of M/s International
Breweries Holding Inc. (two companies promoted by Mr. Peter Scott
Harvey and Mr. Steven G.S. Judge). It is submitted that plaintiff no.1,
Mr. Rajeshwar Singh Bal was engaged as the company's Sales
Manager and later to meet operational requirements in India, he and
his wife Mrs. Deepinder Bal, (the plaintiff no.2) were inducted as
Additional Directors of International Breweries Private Limited on
05.09.2000 to handle the day to day affairs of the company in India.
The business accounts at the company's banks were also operated
by these two directors as signatories. It is submitted that in
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 9 of 33
September 2007, it came to the knowledge of the petitioners that Mr.
Bal along with his wife had defrauded and embezzled the company
and manipulated the accounting records and had also siphoned off
huge amounts of money. That the defendants objected to these
activities and warned the plaintiffs about initiating legal action. The
plaintiffs engaged in continuous, repeated and deliberate criminal
acts to slander, libel, harass and further defraud the company by
conspiring to file various false cases either through third parties or
directly against the defendants such as the present case before this
Hon'ble Court. It is submitted that the plaintiffs absconded with many
trucks loaded with the entire property of the company, including all
accounting files, records and documents and continuously
threatened the defendants to file numerous false cases to harass
them and get them arrested if they tried to enter India. They further
threatened to kidnap them and created many legal problems through
fake arbitrations and fake court cases to prevent the company's
owner's / directors from continuing their business and to drive them
out of India, with the objective of wrongfully gaining the entire
money, property & business of the company. On September 10th,
2007 and ExtraOrdinary General Meeting (EGM) of the
shareholders was held which legally removed the plaintiffs from the
position of Directors and terminated their employment and
involvement with the company in all capacities. On 15th & 16th
October, 2007 the company published various Public Notices,
notifying the general public that the plaintiffs were no more
associated with the company in any capacity. It is submitted that
based on the complaint made by the defendants (FIR No.632/07),
plaintiff no.1 was arrested by the Economic Offences Wing of Delhi
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 10 of 33
Police and was sent into custody. It is pertinent to mention that on
February 26, 2009, Mr. Rajeshwar Bal (Plaintiff no.1) was granted
interim bail by the order of this Hon'ble Court after remaining in
custody for almost 5 months.
9. It is further submitted that plaintiffs are not the directors
of the company and they were removed from the directorship by the
EGM of the shareholders on 10.09.2007. The plaintiffs were
previous signatories of the bank accounts and by misusing their
power, the siphoned off huge amounts of money from the company
accounts and also opened forged accounts in the name of the
company and transferred the said amounts in their own accounts. It
is alleged that in the month of September 2007, the company
detected the same and was forced to freeze all the bank accounts
and an FIR bearing no.632/2007 was lodged against the plaintiffs at
PS Vasant Kunj. It is further alleged that plaintiffs were requested
continuously by the defendants to help them investigation and to
produce all the company accounting records, files and documents in
their possession but instead of helping, the plaintiffs created more
problems by filing false cases against the defendants. The plaintiffs
issued forged cheques to many persons in order to harass the
defendants. Plaintiffs also sent emails to the defendants not to
discuss company issues but instead to threat them therefore the
Canadian High Commission advised them not to attend any bogus
meeting hold by the plaintiffs because of security threats. It is further
submitted that plaintiffs in connivance with one exemployee namely
Karumesh Verma cheated and defrauded the company which
resulted in huge financial losses and the shareholders were left the
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 11 of 33
no other option but to remove the plaintiffs as well as the said ex
employee.
REPLICATION TO THE WS
10. Replication was filed by the plaintiff wherein he re
iterated and reaffirmed the contents of the plaint.
ISSUES
11. On the basis of pleadings of parties, following issues
were framed by the Ld. Predecessor of this Court, vide order dated
06.12.2010.
Sl. Issues Onus
No. to
prove
1 Whether this court has no jurisdiction to entertain OPD
the present suit there being an Arbitration Clause in
the Articles of Association of the defendant no.3
company?
2 Whether the suit is not maintainable for want of the OPD
same having been duly signed and verified?
3 Whether the suit is not maintainable for want of OPD
proper valuation for the purposes of jurisdiction and
Court fee?
4 Whether the plaintiff is entitled to a decree for OPP
declaration as prayed for?
5 Whether the plaintiff is entitled to a decree for OPP
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 12 of 33
permanent injunction as prayed for?
6 Whether the plaintiff is entitled to a decree for OPP
mandatory injunction as prayed for?
7. Relief
12. Matter was then listed for Plaintiff Evidence.
PLAINTIFF EVIDENCE
13. Sh. Rajeshwar Singh Bal, Plaintiff himself appeared as
PW1, who had filed his evidence by way of Affidavit Ex. PW1/A
and relied upon following documents:
i Ex.PW1/1 Certificate of incorporation
ii Ex.PW1/2 Memorandum of Association of the company
iii Ex.PW1/3 and Letter dated 31.08.2017 was sent to the
Ex.PW1/4 HDFC Bank and another to Bank of India
respectively
iv Ex.PW1/5 Plaintiff sent emails dated 02.09.2007
v Ex.PW1/6 Email dated 01.09.2007
vi Ex.PW1/7 Defendants sent email dated 03.09.2007 to
the plaintiff
vii Ex.PW1/8 The plaintiff then sent another email dated
04.09.2007
viii Ex.PW1/9 The plaintiff then sent another emails dated
06.09.2017
ix Ex.PW1/I0 Email dated 08.09.2007 to the defendants
x Ex.PW1/11 Email dated 08.09.2007 for meeting
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 13 of 33
xi Ex.PW1/12 Plaintiff had also sent another email
xii Ex.PW1/13 Defendants sent false and defamatory email
dated 11.09.2007
xiii Ex.PW1/14 The alleged board resolution dated
10.09.2017
xiv Ex.PW1/15 Plaintiffs had also sent 2 email dated
and 13.12.2007 to the defendants
Ex.PW1/16
xv Ex.PW1/17 Plaintiff sent notice dated 23.09.2008
xvi Ex.PW1/18 Plaintiff also sent letters to the HDFC Bank
through their advocate that the bank should
not allow the transfer or withdrawal of the
amount by the defendant no.1 and 2
xvii Ex.PW1/19 Another notice was sent to Scotia Bank
xviii Ex.PW1/20 Another notice was sent by the plaintiff to the
HDFC Bank that the freezing of the account
by the bank is wrong and illegal
xix Ex.PW1/21 Notice was also sent to Assistant
Commissioner of Police EOW, New Delhi
Xx Ex.PW1/22 Certificate U/s 65B Indian Evidence Act
14. Sh. R.K. Saini, Senior Technical Asst., Office of
Registrar of Companies, 4th floor, IFCI Tower, 61, Nehru Place,
New Delhi appeared in the witness box as PW2 and produced the
summoned record i.e.
i Ex.PW2/1 Copy of certificate of incorporation
ii Ex.PW2/2 Memorandum of Association and Article of
Association
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 14 of 33
iii Ex.PW2/3 Form 32 of J.S. Toor and H.S. Toor dated
10.02.1995
iv Ex.PW2/4 Form no.32 of Ms. Deepindir Bal and Sh.
(OSR) Rajeshwar Bal (appointed as Addl.
Director w.e.f 05.09.2000)
v Ex.PW2/5 Form no.32 of Sh. Peter Scott Harvey and Sh.
(OSR) Gurdeep Singh Jhaj (appointed as Addl. Director
w.e.f 16.04.2001)
vi Ex.PW2/6 Form no.32 of Sh. Gurdeep Singh Jhaj
(OSR) (resignation w.e.f 18.04.2005)
vii Ex.PW2/7 Form no.32 of Sh. Steven Judge (date of
(OSR) appointment w.e.f 02.06.2005)
viii Ex.PW2/8 Annual return of the defendant no.1 company for
(OSR) the period 25.09.2005
ix Ex.PW2/9 Certified copy of Form DIN3 of Sh. Deepinder
Bal and Rajesh Singh Bal
x Ex.PW2/10 Certified copy of Form DIN3 of Sh. Peter Scott
Harvey
xi Ex.PW2/11 Certified copy of Form DIN3 of Sh. Steven
Gurdip Singh Judge
xii Ex.PW2/12 Certified copy of Form 32 of Sh. Rajeshwar
Singh Bal and Sh. Deepinder Bal dated
10.09.2007
xiii Ex.PW2/13 Certified copy of Form 18 of defendant no.1
company
15. PW1 & PW2 were cross examined by the counsel for
the defendants and thereafter the Plaintiff Evidence was closed vide
Order dated 06.08.2015. Matter was then listed for Defendant
Evidence.
DEFENDANT EVIDENCE
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 15 of 33
16. Sh. Steven G.S. Judge, defendant himself appeared as
DW1, who had filed his evidence by way of Affidavit Ex. DW1/1
and relied upon following documents:
i Ex.DW1/A FIR No.632/2007 P.S. Hauz Khas
ii Ex.DW1/B Chargesheet
iii Ex.DW1/C Public Notice
iv Ex.DW1/E RTI Application dated 27.08.2015. (Now
marked as Mark D being the photocopy)
v Ex.DW1/F Reply dated 28.09.2015 to the RTI
application
vi Ex.DW1/G Reply dated 26.09.2015 to the RTI
application
vii Ex.DW1/H Office copy of RTI Application. (Now marked
as Mark E being the office copy)
viii Ex.DW1/I Reply dated 14.12.2015 to the RTI
application.
17. Defendant Evidence was closed vide Order dated
18.02.2017. Matter was then listed for arguments.
FINDINGS
18. My issuewise findings are as follows:
Issue No. 1: Whether this court has no jurisdiction to
entertain the present suit there being an
Arbitration Clause in the Articles of
Association of the defendant no.3 company?
OPD
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 16 of 33
19. The onus to prove this issue lies upon the defendants.
Vide order dated 29.03.2011 of the Ld. Predecessor of this court this
issue was treated as preliminary issue. Vide order dated 20.05.2014
of the Ld. Predecessor of this court, the present issue no. 1 was
decided in favour of the plaintiffs against the defendants.
Issue no. 2: Whether the suit is not maintainable for want
of the same having been duly signed and
verified? OPD
20. The onus to prove this issue also lies upon the
defendants. It is alleged on behalf of defendants that when the
present suit was filed, the plaintiff no. 1 was in judicial custody and
he could not have signed the plaint and verification without following
the established procedure. It is alleged that the present plaint has
not been supported by the affidavit of plaintiff no. 1 and only the
affidavit of plaintiff no. 2 has been filed along with the plaint. It is
argued that the suit is not maintainable as the signature of plaintiff
no. 1 on the plaint and verification have not been counter signed by
the jail authorities and hence they cannot be read. The same
allegations were raised by the defendants in their application under
Order 7 Rule 11 CPC and the objections were set aside vide order
dated 20.05.2014 of the Ld. Predecessor of this court by observing
that the objections are irrelevant as no affidavit was signed by
plaintiff no. 1 while in jail which is a matter of record.
21. The defendants have relied upon the RTI application
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 17 of 33
mark B & Mark E and also replies of the jail authorities Ex.DW1/F,
Ex.DW1/G and Ex.DW1/I.
22. It is not in dispute that at the time of filing of the plaint,
the plaintiff no. 1 was in custody. It is also apparent that as per the
established procedure, the signatures of the person in custody are
countersigned by the jail authorities which is not done in the present
case but the counsel for defendants have failed to show that the suit
becomes nonmaintainable for not following the said procedure. The
counsel for defendants has failed to show any law or rules or
regulations that in default in following the aforesaid procedure, the
suit is liable to be rejected. To my mind, purpose of countersigning
the signatures of the person in custody is to establish that the
signatures are done by the person in custody and attested by the jail
authorities. The nonfollowing of the aforesaid procedure does not
make the suit nonmaintainable nor could it be said that the
signatures on plaint and verification do not belong to plaintiff no. 1.
The plaintiff no. 1 himself admits his signatures on the plaint and
verification. Further, no forensic evidence has been led by the
defendants to prove the allegation that the signatures on the plaint
and verification of plaintiff no. 1 do not match with his admitted
signatures. Nothing has been brought on record by the defendants
to show that the plaint cannot be filed by the affidavit of one of the
plaintiff or that affidavits of all the plaintiffs is required for filing of the
plaint.
23. In the light of above, this court is of the view that the suit
has been signed and properly verified by both the plaintiffs. This
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 18 of 33
issue is decided against the defendants.
Issue no. 3: Whether the suit is not maintainable for want
of proper valuation for the purposes of
jurisdiction and Court fee? OPD
24. The burden to prove this issue lie upon the defendants.
It is alleged that suit has not been properly valued for the purpose of
jurisdiction and court fee. The present suit is for declaration and
injunction. The plaintiffs have valued the suit at the rate of Rs. 200/
for declaration, Rs. 130/ for permanent injunction and Rs. 130/ for
mandatory injunction and appropriate court fee has been paid. The
defendant has not led any evidence to suggest what could have
been the proper valuation for the purpose of jurisdiction and court
fee. It is well settled law that where the relief could not be
specifically ascertain in terms of money, the plaintiff in his discretion
can put a reasonable valuation to his reliefs which is done in the
present case. The suit has been properly valued for the purpose of
court fee and jurisdiction. This issue is decided against the
defendants.
Issue no. 4: Whether the plaintiff is entitled to a decree for
declaration as prayed for? OPP
AND
Issue no. 5: Whether the plaintiff is entitled to a decree for
permanent injunction as prayed for? OPP
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 19 of 33
AND
Issue no. 6: Whether the plaintiff is entitled to a decree for
mandatory injunction as prayed for? OPP
25. The burden to prove these issues lies upon the
plaintiffs. The counsel for plaintiffs during the course of final
arguments submitted that since the business of the defendant no. 3
company has been already closed, the relief of permanent and
mandatory injunction have become infructuous and therefore, no
decision is required on issue no. 5 & 6.
26. As far as issue no. 4 is concerned, the plaintiff has
sought the declaration to the effect that Board Resolution dated
03.09.2007 and 10.09.2007 be declared as wrong as illegal,
inoperative, nonexisting, null and void and does not affect the right
of plaintiff to act as directors of defendant no. 3 company.
27. The defendants have vehemently opposed the present
case on the ground that this court has no jurisdiction to decide the
present case as it is a company matter and the same should have
been filed before the National Company Law Tribunal (NCLT
previously company law board). It is argued that in substance, the
present suit is for setting aside the Board Resolution vide which the
plaintiffs were removed from the company as directors and the same
falls U/s 169 of the Companies Act 2013 ("Act") (Section 284 of the
Companies Act, 1956) and only the NCLT has the power to decide
the dispute. It is further alleged that the jurisdiction of Civil Court is
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
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barred U/s 430 of the Act.
28. At this stage, it is advantageous to reproduce Section
430 of the Act which reads as under:
430. Civil Court not to have jurisdiction No Civil Court
shall have jurisdiction to entertain any suit or proceedings
in respect of any matter which the Tribunal or the
Appellate Tribunal is empowered to determine by or
under this Act or any other law for the time being in force
and no injunction shall be granted by any court or other
authority in respect of any action taken or to be taken in
pursuance of any power conferred by or under this Act or
any other law for the time being in force, by the Tribunal
or the Appellate Tribunal.
29. Parallely, of course Section 9 of the CPC postulates that
the Civil Courts shall have jurisdiction to try all types of suits except
the suits of which the cognizance is either expressly or impliedly
barred.
30. Section 430 reproduced above clearly bars the
jurisdiction of Civil Court from entertaining any suit in respect of any
matter which the NCLT is empowered to determine by or under this
Act or any other law for the time being imposed.
31. At this juncture, it is important to advert to the Section
241 & 242 of the Act (Somewhat paramateria to Section 397 & 398
of the Companies Act, 1956) which is reproduced below for ready
reference:
241. Application to Tribunal for relief in cased of
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
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oppression, etc. (1) Any member of a company who
complaints that
(a) the affairs of the company have been or are
being conducted in a manner prejudicial to public interest
or in a manner prejudicial or oppressive to him or any
other member or members or in a manner prejudicial to
the interests of the company; or
(b) the material change, not being a change
brought about by, or in the interests of, any creditors,
including debenture holders or any class of shareholders
of the company, has taken place in the management or
control of the company, whether by an alteration in the
Board of Directors, or manager, or in the ownership of the
company's shares, or if it has no share capital, in its
membership, or in any other manner whatsoever, and
that by reason of such change, it is likely that the affairs
of the company will be conducted in a manner prejudicial
to its interests or its members or any class of members,
may apply to the Tribunal, provided such member has a
right to apply under Section 244, for an order under this
Chapter.
(2) The Central Government, if it is of the opinion that the
affairs of the company are being conducted in a manner
prejudicial to public interest, it may itself apply to the
Tribunal for an order under this Chapter.
242. Powers of Tribunal (1) If, on any application made
under Section 241, the Tribunal is of the opinion
(a) that the company's affairs have been or are
being conducted in a manner prejudicial or oppressive to
any member or members or prejudicial to public interest
or in a manner prejudicial to the interests of the company;
and
(b) that of wind up the company would unfairly
prejudice such member or members, but that otherwise
the facts would justify the making of a winding up order
on the ground that it was just and equitable that the
company should be wound up,
the Tribunal may, with a view to bringing to an end the
matters complained of, make such order as it thinks fit.
(2) Without prejudice to the generality of the powers
under subsection (1), an order under that subsection
may provide for
(a) the regulation of conduct of affairs of the
company in future;
(b) the purchase of shares or interests of any
members of the company by other members thereof or by
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 22 of 33
the company;
(c) in the case of a purchase of its shares by the
company as aforesaid, the consequent reduction of its
share capital;
(d) restrictions on the transfer or allotment of the
shares of the company;
(e) the termination, setting aside or modification,
of any agreement, howsoever arrived at, between the
company and the managing director, any other director or
manager, upon such terms and conditions as may, in the
opinion of the Tribunal, be just and equitable in the
circumstances of the cases;
(f) the termination, setting aside or modification of
any agreement between the company and any person
other than those referred to in clause (e):
Provided that no such agreement shall be
terminated, set aside or modified except after due notice
and after obtaining the consent of the party concerned;
(g) the setting aside of any transfer, delivery of
goods, payment, execution or other act relating to
property made or done by or against the company within
three months before the date of the application under this
section, which would, if made or done by or against an
individual, be deemed in his insolvency to be a fraudulent
preference;
(h) removal of the managing director, manager or
any of the directors of the company;
(I) recovery of undue gains made by any
managing director, manager or director during the period
of his appointment as such and the manner of utilization
of the recovery including transfer to Investor Education
and Protection Fund or repayment to identifiable victims;
(j) the manner in which the managing director or
manager of the company may be appointed subsequent
to an order removing the existing managing director or
manager of the company made under clause (h);
(k) appointment of such number of persons as
directors, who may be required by the Tribunal to report
to the Tribunal on such matters as the Tribunal may
direct;
(l) imposition of costs as may be deemed fit by the
Tribunal;
(m) any other matter for which, in the opinion of the
Tribunal, it is just and equitable that provision should be
made.
32. The amplitude of Section 241 is undoubtedly wide and
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
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expansive. They cover all cases where there is a complaint that the
affairs of the company are being conducted in a manner prejudicial
to public interest or in a manner prejudicial or oppressive to the
complainant or any other member or company.
33. Section 241 limits its applicability to cases where an
order is sought by the applicant or is capable of being granted by the
Tribunal. The question arises whether the reliefs claimed in the
present suit falls within the Section 241 and 242 of the Act. In the
present case, the plaintiff has mainly sought the relief of declaration
to the fact that board resolution dated 03.09.2007 and 10.09.2007
are wrong illegal, null and void and does not affect the rights of the
plaintiff to act as Directors of defendant company. Thus the answer
to the aforesaid question comes out in the negative.
34. Further the Hon'ble High Court of Delhi in Jai Kumar
Arya Vs. Chhaya Devi 2017 SCC Online Del 11436 observed as
follows:
"118. We are constrained, therefore, to observe that it is
not possible to accept Mr. Chandhiok's submission that
the reliefs claimed by the plaintiffs in CS (OS) 285/2017
fall, statutorily, within the purview of jurisdiction of the
NCLT.
119. There is, in fact, no provision, in the Act, where
under the claim contained in CS (OS) 285/2017, as made
by the plaintiffs - irrespective of the merit or demerit
thereof - could have been preferred before the NCLT. No
case of exclusion of the jurisdiction of the Civil Court,
under Section 430 of the Act or, consequently, under
Section 9 of the CPC can, therefore, be said to have
been made out.
120. As it happens, we are not alone in the view we are
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 24 of 33
taking.
121. K.Shivshankar Bhat, J., as a learned Single Judge of
the Karnataka High Court, was, in Prakash Roadlines
Ltd. V. Vijaya Kumar Narang, (1995) 83 Comp Cas 569,
concerned with a claim, legally similar to that of the
present plaintiffs, to remove certain directors from the
company and appoint a Director in their place. As in the
present case, it was sought to be contended that the
claim was not maintainable before the High Court, as it
lay within the purview of jurisdiction of the Tribunal, under
Section 397 of the Companies Act, 1956 (the
predecessor provision to Section 241 of the present Act,
and in parimateria therewith). Bhat J., Opined thus.
" It is also necessary to note that under
Section 397, it is not only the oppression that
given a cause of action but also the applicant of
the applicants shall have to show that that the
facts would justify the making of a winding up
order on the ground that it is just and equitable
that the company should be wound up. In other
words it is necessary to show that the facts are
such that normally the company could be sought
to be wound up under the " just and equitable"
clause but such winding up would unfairly
prejudice the members. Therefore, I am of the
view that section 397 is not an effective forum to
grant any relief of an individual member under all
circumstances. Similar is the situation under
Section 398 also. Being a constituent of the
company a shareholder has several individual
rights and those rights could be enforced by
invoking the civil jurisdiction of the Courts. Further,
the Act nowhere specifically excludes the
jurisdiction of the civil courts."
122. Panipat Woollened General Mills Co. V. R.L.
Kaushik, 1969 (39) Comp Cas 249 (P & H) is another
case in point. The memorandum and articles of
association of the petitionercompany before the High
Court, in that case, provided for retirement of one third of
the directors of the company every year. The directors so
slated to retire would be those who had held office for the
longest period since the last election. The controversy,
before the High Court, pertained to the annual general
meeting of the company, scheduled to be held on 30th
December 1967. The respondent RL Kaushik contended
that his name was proposed to be included, in the said meeting, as one of the directors scheduled to retire the rotation, even though, in his submission, he was not so CS No. 51228/16 (Sushil Anuj Tyagi) Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge Gurdip S. Jhaj South East, Saket Courts:New Delhi 04.05.2018 Page no. 25 of 33 due for retirement. Mr. Kaushik, therefore, filed a suit in the court of the Subordinate Judge, for a declaration that he was the Director of the company and that the election, held on 30th December 1967 was illegal, ultra vires and void. Consequential relief, by way of permanent injunction restraining the defendants from interfering with the management of the company, or for allowing Mr. Kaushik to act as director, was also sought. An application for interim relief, under Order XXXIX of the CPC, was also filed therewith. The company (who was the revision petitioner before the High Court) raised preliminary objection to the effect that the jurisdiction of the civil court, to adjudicate on the matter, stood ousted by Section 9 of the CPC read with Sections 398 and 402 of the Act. These provisions, it may be noted here, were somewhat parallel to Section 241 and 242 (2) of the present Act. Consequent on a detailed discussion, the learned judge held that the civil court had jurisdiction to try the suit. Significantly, in the course of such discussion, reliance was placed on the following aphorism, from the judgment of a Division Bench of the Calcutta High Court in Sarat Chandra Chakravati V. Tarak Chandra Chatterjee, AIR 1924 Cal 282:
"An injunction may be granted on the application of a director restraining the plaintiffs codirectors from wrongful excluding him from acting as a director; there is nothing excluding the jurisdiction of the court from entertaining such a suit."
123. Notice was also taken of another decision, in Sati Nath Mukherjee V. Suresh Chandra Roy, (1941) 11 Com Cas 203, wherein it was held that a suit for declaration that the plaintiff is a director and for the protection of his rights qua director is competent.
124. Ravinder Kumar Jain v. Punjab Registered (Iron and Steel) Stockholders Association Ltd., (1978) 48 Com Cas 401 (P & H) was concerned with a situation in which a petition was moved, before the High Court, under Section 166 of the erstwhile Companies Act, 1956, for declaration of a meeting of the company, held on 28th September 1977, to be illegal and void. Following, interalia, the decision in Panipat Wollen and General Mills Co. (supra), it was held that the petition was competent. Similarly, a suit for declaration that the Annual General Meeting of the Company was illegal, was held to be competent, by the Kerala High Court, in R. Prakasam v. Sree Narayana Dharma Paripalana Yogam, (1980) CS No. 51228/16 (Sushil Anuj Tyagi) Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge Gurdip S. Jhaj South East, Saket Courts:New Delhi 04.05.2018 Page no. 26 of 33 50 Comp Cas 611 (Ker), which went to the extent of holding that the Company Court could not grant relief in such matters.
125. The inevitable outcome of the above discussion is that the invocation, by Mr. Chandhiok, of Section 430 the Act, to nonsuit the plaintiffs, is misplaced. Per sequitur, CS (OS) 285/2017 has to be held to be competent."
35. In the light of above observations and discussions, this court is of the view that the jurisdiction of Civil Court is not barred in the present case and the suit is maintainable.
36. Now the main question that arises for the consideration of this court is whether the board resolution dated 03.09.2007 and 10.09.2007 are wrong, illegal, inoperative, nonexisting, null and void and whether they do not affect the rights of plaintiffs to act as Directors of M/s International Breweries Pvt Ltd.
37. Though there is no board resolution dated 03.09.2007 on the judicial record but there is one email Ex.PW1/7 vide which the plaintiffs were purportedly suspended of duties. Perhaps the plaintiffs intend to seek relief qua the aforesaid email dated 03.09.2007.
38. Vide board resolution dated 10.09.2007, both the plaintiffs were resolved to be removed from the directorship of the company.
39. The plaintiffs have alleged that the aforesaid board resolution dated 03.09.2007 & 10.09.2007 are illegal as the resolution has been passed in complete violation of the statutory CS No. 51228/16 (Sushil Anuj Tyagi) Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge Gurdip S. Jhaj South East, Saket Courts:New Delhi 04.05.2018 Page no. 27 of 33 provisions for holding a board meeting. No notice was ever issued or served in respect of the board resolution. The plaintiffs were not afforded any opportunity to make representation regarding the false and baseless allegations leveled against them. At this juncture, it is relevant to quote the Section 115 and 169 of the Act (paramateria to Section 284 of the Companies Act, 1956) which are as follows:
115. Resolutions requiring special notice Where, by any provision contained in this Act or in the articles of a company, special notice is required of any resolution, notice of the intention to move such resolution shall be given to the company by such number of members holding not less than one percent of total voting power or holding shares on which such aggregate sum not exceeding five lake rupees, as may be prescribed, has been paidup and the company shall give its members notice of the resolution in such manner as may be prescribed.
169. Removal of Directors (1) A company may, by ordinary resolution remove a director, not being a director appointed by the Tribunal under Section 242, before the expiry of the period of his office after giving him a reasonable opportunity of being heard:
Provided that nothing contained in this subsection shall apply where the company has availed itself of the option given to it under Section 163 to appoint not less than twothirds of the total number of directors according to the principle of proportional representation.
(2) A special notice shall be required of any resolution, to remove a director under this section, or to appoint somebody in place of a director so removed, at the meeting at which he is removed.
(3) On receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director, whether or not he is a member of the company, shall be entitled to be heard on the resolution at the meeting.
(4) Where notice has been given of a resolution to remove a director under this section and the director CS No. 51228/16 (Sushil Anuj Tyagi) Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge Gurdip S. Jhaj South East, Saket Courts:New Delhi 04.05.2018 Page no. 28 of 33 concerned makes with respect thereto representation in writing to the company and requests its notification to members of the company, the company shall, if the time permits it to do so,
(a) in any notice of the resolution given to members of the company, status the fact of the representation having been made; and
(b) send a copy of the representation to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representation by the company), and if a copy of the representation is not sent as aforesaid due to insufficient time or for the company's default, the director may without prejudice to his right to be heard orally require that the representation shall be read out at the meeting.
Provided that copy of the representation need not be sent out and the representation need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Tribunal is satisfied that the rights conferred by this subsection are being abused to secure needless publicity for defamatory matter; and the Tribunal may order the company's costs on the application to be paid in whole or in part by the director notwithstanding that he is not a party to it.
(5) A vacancy created by the removal of a director under this section may, if he had been appointed by the company in general meeting or by the Board, be filled by the appointment of another director in his place at the meeting at which he is removed, provided special notice of the intended appointment has been given under sub section (2).
(6) A director so appointed shall hold office till the date up to which his predecessor would have held office if he had not been removed.
(7) If the vacancy is not filled under subsection (5), it may be filled as a casual vacancy in accordance with provisions of this Act:
(8) Nothing in this section shall be taken
(a) as depriving a person removed under this section of any compensation or damages payable to him in respect of the termination of his appointment as director as per the terms of contract or terms of his appointment as director, or of any other appointment CS No. 51228/16 (Sushil Anuj Tyagi) Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge Gurdip S. Jhaj South East, Saket Courts:New Delhi 04.05.2018 Page no. 29 of 33 terminating with that as director; or
(b) as derogating from any power to remove a director under other provisions of this Act.
40. The scheme of the statute is clear and unequivocal. Except in exceptional circumstances, a Director may be removed by the company by ordinary resolution U/s 169. The following procedure would apply:
(i) A special notice of the resolution has to be issued to the company, in the manner specify in Section 115.
(ii) on receiving such resolution, the company has to send a copy thereof, to the concerned Director.
(iii) the concerned director shall be entitled to be heard on the resolution at the meeting whereat he is proposed to be removed.
(iv) the concerned Director may also make a written representation and requires its notification to the members of the company.
(v) Where such representation is made, the company shall;
a) State the fact of such representation to every member of the company in any notice of resolution given to the members
b) Send a copy of the representation to every member of the company to whom the notice of meeting is sent.
c) If the copy of representation made by the concerned director is not sent as aforementioned, the director may require the representation to be read at the meeting.
41. Section 100 of the Act, governs the calling of extra ordinary general meeting. It reads as under:
100. Calling of extraordinary general meeting (1) The Board may, whenever it deems fit, call an extraordinary general meeting of the company.
(2) The Board shall, at the requisition made by, CS No. 51228/16 (Sushil Anuj Tyagi) Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge Gurdip S. Jhaj South East, Saket Courts:New Delhi 04.05.2018 Page no. 30 of 33
(a) in the case of a company having a share capital, such number of members who hold on the date of the receipt of the requisition, not less than onetenth of such of the paidup share capital of the company as on that date carries the right of voting:
(b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than onetenth of the total voting power of all the members having on the said date a right to vote, call an extraordinary general meeting of the company within the period specified in subsection (4).
(3) The requisition made under subsection (2) shall set out the matter for the consideration of which the meeting is to be called and shall be signed by the requisitionists and sent to the registered office of the company.
(4) If the Board does not, within twentyone days from the date of receipt of a valid requisition in regard to any matter, proceed to call a meeting for the consideration of that matter on a day not later than forty five days from the date of receipt of such requisition, the meeting may be called and held by the [requisitionists] themselves within a period of three months from the date of the requisition.
(5) A meeting under subsection (4) by the requisitionists shall be called and held in the same manner in which the meeting is called and held by the Board.
(6) Any reasonable expenses incurred by the requisitionists in calling a meeting under subsection (4) shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting.
42. Section 100 postulates that the board of directors may call an EGM on its own or on the requisition by the requisite shareholders of the company. Such requisition is required to set out the matters for consideration of which the EGM is to be called and is CS No. 51228/16 (Sushil Anuj Tyagi) Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge Gurdip S. Jhaj South East, Saket Courts:New Delhi 04.05.2018 Page no. 31 of 33 required to be sent to the registered office of the company. In case of default by the board, in calling the EGM within 21 days of the valid requisition, the requisitionists are entitled to call and hold the EGM.
43. In the present case, the plaintiffs have alleged that no such EGM took place on 10.09.2007 and the same is in violation of statutory principles. On the other hand, the defendants have alleged that the EGM of the share holders was held on 10.09.2007 which legally removed the plaintiffs from the position of directors.
44. Apparently the alleged EGM dated 10.09.2007 has not been called by the board of directors and the same has been allegedly called by the shareholders. Section 100 of the Act provides that EGM may be called by the requisition of the requisite shareholders and the requisition must set out the matters for consideration and it is required to be sent to the company. If the board does not call the EGM within 21 days, the requisitionists are entitled to call and hold the EGM. The defendants have not shown any such requisition by the requisite shareholders to the company and it is not shown to the satisfaction of this court as to how they proceeded to call for an EGM without any requisition to the company. Thus, it is apparent that the EGM dated 10.09.2007 called by the shareholders is against the statutory principles laid down in Section 100 of the Act.
45. Further Section 169 r/w Section 115 of the Act demands of a special notice of any resolution to remove a director. The aforesaid provisions also stipulates of giving reasonable opportunity of being heard to the Director who is proposed to be removed. It is CS No. 51228/16 (Sushil Anuj Tyagi) Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge Gurdip S. Jhaj South East, Saket Courts:New Delhi 04.05.2018 Page no. 32 of 33 the case of the defendants that they have issued the notice dated 03.09.2007 to the plaintiffs. During cross examination on 18.02.2017, DW1 stated that the notice for EGM was sent to the plaintiffs to their Chandanholla address, New Delhi by courier. On being asked whether DW1 can produce the copy of courier by which the aforesaid notices were sent, DW1 replied that he could not produce the same as it was 10 years ago. DW1 further replied that he is not aware whether the proof of courier was filed with the ROC or not. On 13.09.2017, the counsel for the defendant filed one photostat copy of the courier receipt. Defendant has failed to file the original courier receipt vide which the notice dated 03.09.2007 was allegedly sent to the plaintiff. Bare perusal of the aforementioned copy of courier receipt reveals that it does not disclose the name of the courier company and it does not show that the courier was received by the recipients. It does not bear the signatures of the recipients. No evidence has been led by the defendants to prove that the notice dated 03.09.2007 was served upon the plaintiffs and company. No reasonable opportunity of being heard was given to the plaintiffs regarding their removal from the directorship of the company. Thus, it is conspicuous that the requirements of section 115 and section 169 of the Act are not complied with by the defendants.
46. In the light of above, it can be safely concluded that notice dated 03.09.2007 was not duly served upon the plaintiffs and reasonable opportunity of being heard was not afforded to them and as such the Board Resolution dated 10.09.2007 is invalid in the eyes of law. Thus, the issue no. 1 is decided in favour of the plaintiffs against the defendants.
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018
Page no. 33 of 33
RELIEF
47. In the light of above conclusions on the issues, the suit filed by the plaintiffs against the defendants is hereby partly decreed. The board resolution dated 10.09.2007 is hereby declared to be invalid and that it does not affect the rights of the plaintiffs to act as directors of M/s International Breweries Pvt Ltd.
48. Decree sheet be prepared accordingly.
49. No order as to costs.
50. File be consigned to Record Room, after due compliance.
Announced in the open (Sushil Anuj Tyagi)
Court today i.e. 04.05.2018 JSCCcumASCJcumGJ
South East, Saket Courts
04.05.2018 (r)
CS No. 51228/16 (Sushil Anuj Tyagi)
Rajeshwar Singh Bal Vs. Steven Judge Alias JSCCcumASCJcumGuardian Judge
Gurdip S. Jhaj South East, Saket Courts:New Delhi
04.05.2018