Company Law Board
Dabur India Ltd. vs Anil Kumar Poddar on 12 September, 2001
Equivalent citations: [2002]108COMPCAS293(CLB)
ORDER
S. Balasubramantan, Vice-Chairman
1. In this petition filed under section 284(4) of the Companies Act, 1956 ('the Act'), the petitioner-company has sought for a direction that the resolution proposed by the first respondent for removal of Shri Ninu Khanna as a Director of the company need not be notified to the members and even if notified, need not be placed before the members in the AGM of the company convened on 18-9-2001. When this petition was mentioned on 11-9-2001 and directions were sought, with the view to hear the first respondent, the matter was adjourned to 12-9-2001 and the petitioner was directed to inform the first respondent about the hearing so that he could enter appearance. When the petition was taken up for hearing today, the petitioner produced evidence of having sent the notice of hearing by fax as well as by speed post to the first respondent but none appeared for him. Even though this matter is one to be considered by a single-member Bench and since this Bench is not sitting, we are disposing of this matter ex parts in view of the urgency.
2. The learned counsel appearing for the petitioner submitted that the first respondent having only one share in the company has issued the notice under section 284 for removal of the second respondent as a director with mala fide intention and with the view to harass the company. He also pointed out that the notice is a printed notice with gaps for filling up of the name of the company, the name of the director proposed to be removed and the date of the AGM and similar such notices have been reportedly sent to many other companies. He produced a copy of the notice received by Goetze (India) Ltd. wherein also the first respondent had sent a similar notice by filling up the gaps in the printed letter for its AGM on 22-9-2001. He further pointed out that the first respondent had sought for various informations from the company earlier and in view of non-furnishing of the same, he has sent the notice under section 284. He also pointed out that the second respondent is the CEO of the company and to place any notice before the General Body to remove him would be prejudicial to the interest of the company.
3. We have considered the matter. By virtue of section 284(4) of the Act, the CLB has the powers to direct a company not to circulate the notice for removal of a director if it is convinced that the provisions of this section are being abused. In the present case, it is quite obvious, from the printed notice with the gaps to be filled in as indicated by the learned counsel for the petitioner, that the removal of the director sought in the said notice is not a bona fide in exercise of the rights of a shareholder but for an ulterior motive and as such is an abuse of the provisions of section 284. Therefore, we consider it a fit case to exercise the powers under section 284(4) and, accordingly, direct that the company need not place the proposal to remove Shri Ninu Khanna as a director as contained in the notice of the first respondent before the General Body Meeting. Since the company has already published the notice in Newspapers, we are not giving any directions in regard to non-circulation of the notice to the members.
4. The petition is, accordingly, disposed of.