National Company Law Appellate Tribunal
Sri Dhanada Laboratories Private ... vs Namireddy Raghu Ram Reddy & Ors on 6 December, 2022
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
COMPANY APPEAL (AT) NO. 154 of 2020
(Arising out of the Order dated 18th August, 2020 passed by National Company
Law Tribunal, Hyderabad Bench, in C.P. No. - 93/2013 in TP. No.
106/241/HDB/2016
IN THE MATTER OF:
1. Sri Dhanada Laboratories Private Limited
Flat No. 104, Plot No. 441 & 442,
Royal Cedar, HIG, Phase - VI,
Kukatpally, Hyderabad,
Telangana - 500072. ...Appellant No. 1
2. Dr. Namallapudi Kasthur Reddy
Residing at: 705, Emerald Block,
Myhome Jewels, Madinaguda,
Hyderabad, Telangana - 500049. ...Appellant No. 2
3. Smt. N. Rama Devi
Residing at: 705, Emerald Block,
Myhome Jewels, Madinaguda,
Hyderabad, Telangana - 500049. ...Appellant No. 3
4. Ms. N. Poorwa Reddy
D/o N. Kashur Reddy,
Residing at: 705, Emerald Block,
Myhome Jewels, Madinaguda,
Hyderabad, Telangana - 500049. ...Appellant No. 4
5. Master N. Suhruth Reddy,
Represented by his father and Natural Guardian N.
Kasthur Reddy,
Residing at: 705, Emerald Block,
Myhome Jewels, Madinaguda,
Hyderabad, Telangana - 500049. ...Appellant No. 5
Versus
1. Namireddy Raghu Ram Reddy,
S/o Sri N. Seetharama Reddy
R/o Flat No. 502, Prakjyothi High Lands,
Diary Farm Cross Roads, ...Respondent No. 1
Rajendra Nagar, Hyderabad - 500048, -2- Comp. App. (AT) No. 154 of 2020 Telangana.
2. Mr. Namireddy Raja Ram Reddy, S/o Sri N. Seetharam Reddy, Residing at: 18-111, Kamlanagar, Dilsukhnagar, Hyderabad, Telangana - 500060. ...Respondent No. 2
3. Mr. Srinivas Rao Marikanti, Plot No. 90, Flat No. 401, Sri Mahalakshmi Residency, Jayanagar, Kutatpally, Hyderabad, Telangana - 500072. ...Respondent No. 3
4. Mr. Vinit Reddy Kolanu, H. No. 2-21146/7/9/A New Nallankunta, Hyderabad, Telangana - 500044. ...Respondent No. 4 Present For Appellant: Mr. Dhruba Mukherjee, Sr. Advocate with Mr. Kumar Anurag Singh, Ms. Ekta Bharati, Mr. Zain A. Khan, Mr. S. Udaya Kumar Sagar, Dr. K. Lakshmi Narasimha, Ms. Bina Madhavan & Mr. Lakshay Saini, Advocates.
For Respondent No. 1 Mr. S. Ravi, Sr. Advocate with Mr. L. & 2: Venkateshwar Rao, Advocates for R-1 & R-2.
(JUDGEMENT)
1. Challenge in this Appeal under Section 421 of the Companies Act, 2013, (hereinafter referred to as 'The Act'), is against the Impugned Order dated 18.08.2020 passed by the National Company Law Tribunal, Hyderabad Bench in C.P. No. - 93/2013 in T.P. No. 106/241/HDB/2016, by which Order, NCLT has allowed the Company Petition observing that the Board Meeting held on 01.10.2012 is invalid in the eyes of law and therefore the appointment of Respondents 2 to 5 is Additional Directors is also invalid; that the allotment of -3- Comp. App. (AT) No. 154 of 2020 shares made on 04.03.2013, 22.04.2013 to the second, third, sixth & seventh Respondents is also illegal and directed the Company to cancel the said allotment and rectify the register of Members in order to restore the original Shareholding pattern; and lastly that the removal of the Petitioners from the directorship of the Company under Section 284 of the Companies Act 1956 in the AGM held on 07.09.2013, is illegal and therefore null and void.
2. Submissions of the Learned Sr. Counsel appearing on behalf of the Appellant:
• It is submitted by the Learned Counsel for the Appellant that on 23.11.2013, the first and the second Respondent filed an Application under Sections 397 & 398 of the Companies Act, 1956 (now Sections 241 & 242 of the Act) and under Section 59 of the Act before the NCLT against the Company seeking the Board Resolution dated 01.10.2012 as invalid and declare the allotment of shares in favour of the Appellants nos. 2, 3, 4 & 5 as null and void. It is submitted that there is no clear averment in the Company Petition alleging Oppression and Mismanagement which is the condition precedent for entertaining any such Company Petition. NCLT did not formulate any issues relating to oppressive acts against the Respondents or if the Company Affairs have been conducted in a manner prejudicial or oppressive to any Members or in any public interest. It is further submitted that as on the date of the filing of the Company Petition i.e., 23.11.2013, the term of the Appellants as Additional Directors came to an end and hence the entire case is infructuous. -4- Comp. App. (AT) No. 154 of 2020
• Learned Counsel strenuously argued that the Tribunal cannot go into the aspect of forgery and disputed questions of facts and law. It is argued that as far as the alleged forgery is concerned, the matter is pending before the Competent Tribunal Court and therefore this Tribunal cannot rely upon the same as all the material papers filed by the Respondents by way of a Rejoinder before the NCLT was not part of the documents filed before the CLB. The alleged report of M/s. Truth Labs dated 06.05.2014 is subsequent to the filing of the Company Petition 93/2013 and should not be given any value as it is created by way of private arrangement by Respondents 1 & 2. This was filed as CA 01/2014 before the Company Law Board by the Respondents and the Appellants have also filed another Report from the same Truth Labs declined to take a specific stand in the matter, based upon which CA 01/2014 was disposed of. NCLT Hyderabad had ignored this objection raised by the Appellants. • It is vehemently contended by the Learned Counsel for the Appellant that the second Respondent is possessing Digital Signature Certificates ('DSC') since 2013; that while alleging that the second Appellant misused its DSC, the second Respondent made no specific allegation about misuse of any particular DSC. As per the documents uploaded on the MCA portal both the Respondents attended the Board Meeting dated 01.10.2012 and intentionally omitted to disclose as to who was marshalling the day to day affairs of the Company during the period 2010 to 2013. Unless and until -5- Comp. App. (AT) No. 154 of 2020 the said Criminal Court gives a finding that these are forged, the presumption of law is always in favour of the Appellants, these Minutes were filed by the Respondents themselves before the CLB and never challenged any of the proceedings in their Company Petition by the time the Respondents have filed their original Company Petition it had become infructuous as the term of the Appellant as Additional Directors ended on 30.09.2019.
• It is contended that the NCLT had decided the case based on assumptions ignoring the fact that all the Directors were present in the Meeting which is clearly evidenced by the Minutes of the Meeting prepared by the second Respondent which is uploaded on the MCA portal that two Directors were present and even assuming that only one Director was present, it means that their attendance was 50%. It is the case of the Appellants that as per Section 287(2) of the Act, which describes the quorum for Meetings, the quorum for the Meetings of the Board of Directors shall be 1/3rd of its total strength or two Directors whichever is higher. In terms of Section 287(2) the quorum is complete as in the present case, the total Directors are only two and even if one Director is present it comes to 50%. The question of interplay of sub-Section (2) does not arise when the total number of Directors is only two in number.
-6-Comp. App. (AT) No. 154 of 2020
3. Submissions of the Learned Sr. Counsel appearing on behalf of the Respondents:
• It is submitted that the authorized capital of the Company is Rs. 5Crs./ divided into 50,00,000 Equity Shares of Rs.10 each and that Respondents 1 & 2 are the only subscribers to the entire issued and paid up capital of Rs.1Lakh divided into 10,000 Equity Shares of Rs.10 each fully paid up.
The Respondents constituting the Board of Directors had indicated the second Appellant as an Additional Director on 02.09.2011 in accordance with the Article 135 of the Articles of Association read with Section 260 of the Companies Act, 1956 when he seems to be a Director by virtue of oppression of law on 29.09.2011, on which date, the AGM of the Meeting was held. As serious disputes had arisen between them, the Board did not reappoint the second Appellant as an Additional Director. Cases were filed by the Appellants against the Respondents invoking the Arbitration Clause in the Partnership Deed.
• It is submitted that the second Appellant in connivance with an agent 'R3 e-consulting', for issuance of Digital Signature Certificate ('DSC'), forged the signature of the second Respondent and obtained the DSC in the name as second Respondent on 05.03.2013. The Minutes of the Meeting showing that the Board Meeting took place on 01.10.2012, is also fabricated. Respondents 3 & 4 were inducted as Additional Directors by using the DSC uploaded Form 32 with the Ministry of Corporate Affairs -7- Comp. App. (AT) No. 154 of 2020 ('MCA') on 05.03.2013. The second Appellant allotted shares to the Company himself and Appellants 3 to 5 in two tranches of different dates and appointed himself as a Managing Director and his Wife who is the third Appellant as the Executive Director and further shifted to the Registered Office and removed the first and second Respondents from the Directorship, which amounts to Oppression and Mismanagement. • It is submitted that the Board Resolution dated 01.10.2012 and the uploading of the fabricated Form 32 can also be seen from the fact that Respondent 4 who was said to be present at the Board Meeting on 01.10.2012 was actually not even present in India and R-3 had recorded under Section 164 of the Criminal Procedure Code before the IXth Metropolitan Magistrate that he had never attended any Board Meeting on 01.10.2012, nor did he given any consent to be the Director to the Company.
• It is argued that the consent letters of Appellant 3 and Respondent 4 accepting their appointment as Directors, are both dated 01.10.2012 reflecting their respective DIN numbers but they were allotted the said DIN numbers by MCA only on 26.12.2012 and 21.12.2012 respectively, which goes to show that these consent letters were backdated. • Learned Counsel drew our attention to the Complaint made to the Assistant Commissioner of Police ('ACP') with respect to the details of the DSC serial nos. of Sri Dhanada Laboratories Private Limited. It is submitted that -8- Comp. App. (AT) No. 154 of 2020 'Fraud vitiates everything' and the same was laid down by the Hon'ble Supreme Court in a catena of Judgements. A few of them are detailed as hereunder:
o 'Smt. Srisht Dhawan' Vs. 'M/s. Shaw Brothers'1. o 'Madhukar Sadbha Shivarkar' Vs. 'State of Maharashra'2. o 'Meghmala & Ors.' Vs. 'G. Narasimha Reddy & Ors.'3. o 'S.P. Chengalvaraya Naidu (Dead) by L.Rs.' Vs. 'Jagannath (Dead) by L.Rs. and Ors.'4.
• It is contended that a person who basis his case on falsehood has no right to approach any Court. It is submitted that NCLT has given a right finding that there was no quorum as required under Section 287(2) of the Companies Act, 1956 for the alleged Board Meeting to have been held on 01.10.2012.
Assessment:
4. The issues framed by NCLT in para 10 of the Order are as follows:
"(1) Whether the board meeting held on 01.10.2012 and the appointment of R2 to R5 therein is valid or not;
(2) Whether the allotment of shares made on 04.03.2013 and 22.04.2013 to R2, R3, R6 and R7 is legal or illegal;
and (3) Whether the removal of the petitioners from the directorship of the company under section 284 of the Act, 1956 is legal or illegal."
1 (1992) 1 SCC 534 2 (2015) 6 SCC 557 3 (2010) 8 SCC 383 4 (1994) 1 SCC 1 -9- Comp. App. (AT) No. 154 of 2020
5. It is argued by the Learned Counsel for the Appellant that these issues have nothing to do with the case of Oppression and Mismanagement and that the main reliefs sought for in the Company Petition filed under Sections 397 and 398 read with Section 402 of the Act are as follows:
"7.1 To declare that the appointment of Second to Fifth Respondents at the alleged meeting of the Board of Directors dated 01.10.2012 as additional directors of the Company as invalid and non-est in law;
7.2 To declare the Board meeting dated 01.10.2012 where the Second, Third, Fourth and Fifth Respondents got inducted as additional directors of the First Respondent Company as null and void;
7.3 To declare that the alleged allotments purported to have been made on 04.03.2013 in favour of the Second, Third, Sixth and Seventh Respondent and the Second Petitioner as reflected in the Para 6.9 of the Petition and the form no. 2 filed on behalf of the First Respondent Company as totally invalid and without basis and consequently declare that the Second, Third, Sixth and Seventh Respondents are not shareholders of the First Respondent Company;
7.4 To declare that the alleged allotments purported to have been made on 22.04.2013 in favour of the Second and Third Respondents as reflected in Para 6.10 of the Petitioner and the form no. 2 filed on behalf of the First Respondent Company as totally invalid and without basis and consequently declare that the Second and Third Respondents are not shareholders of the First Respondent Company;
7.5 To grant such other reliefs as this Hon'ble Bench may fell just and proper in the facts and circumstances of the case;
7.6 To award costs relating to the present proceedings." -10- Comp. App. (AT) No. 154 of 2020
6. Learned Counsel for the Appellant contended that there was no pleading regarding Oppression and Mismanagement, and that a bare perusal of the reliefs show that they are basically with respect to 'Allotment of Shares'.
7. It is the case of the Appellant that NCLT did not formulate any issues relating to Oppression and Mismanagement, and that there were no averments in the Petition regarding Oppression and Mismanagement and that this is a condition precedent for entertaining a Company Petition under Sections 241 and 242 of the Companies Act 2013. At this juncture, we find it relevant to reproduce Sections 241 & 242 of the Companies Act, 2013, (Sections 397 & 398 of the Companies Act, 1956) for ready reference:
"241. (1) Any member of a company who complains 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 -11- Comp. App. (AT) No. 154 of 2020 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. (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 to 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 sub-section (1), an order under that sub-section 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 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;
-12-Comp. App. (AT) No. 154 of 2020
(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 case;
(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 utilisation 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 -13- Comp. App. (AT) No. 154 of 2020 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.
(3) A certified copy of the order of the Tribunal under sub-section (1) shall be filed by the company with the Registrar within thirty days of the order of the Tribunal. (4) The Tribunal may, on the application of any party to the proceeding, make any interim order which it thinks fit for regulating the conduct of the company's affairs upon such terms and conditions as appear to it to be just and equitable.
(5) Where an order of the Tribunal under sub-section (1) makes any alteration in the memorandum or articles of a company, then, notwithstanding any other provision of this Act, the company shall not have power, except to the extent, if any, permitted in the order, to make, without the leave of the Tribunal, any alteration whatsoever which is inconsistent with the order, either in the memorandum or in the articles.
(6) Subject to the provisions of sub-section (1), the alterations made by the order in the memorandum or articles of a company shall, in all respects, have the same effect as if they had been duly made by the company in accordance with the provisions of this Act and the said provisions shall apply accordingly to the memorandum or articles so altered.
(7) A certified copy of every order altering, or giving leave to alter, a company's memorandum or articles, shall within thirty days after the making thereof, be filed by the company with the Registrar who shall register the same.
(8) If a company contravenes the provisions of sub-
section (5), the company shall be punishable with fine -14- Comp. App. (AT) No. 154 of 2020 which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty- five thousand rupees but which may extend to one lakh rupees, or with both."
(Emphasis Supplied)
8. Learned Counsel placed reliance on the ratio of the Hon'ble Apex Court in 'Needle Industries (India) Ltd. & Ors.' Vs. 'Needle Industries Newey (India) Holding Ltd. & Ors.'5 and in 'V.S. Krishnan & Ors.' Vs. 'Westfort Hi-tech Hospital Ltd. & Ors.'6, in support of his submissions that no relief was claimed with regard to Oppression and Mismanagement which is required under Sections 397 & 398 of the Companies Act 1956.
9. The Learned Counsel for the Respondent relied on the ratio of the Hon'ble Supreme Court in 'Shashi Prakash Khemka (Dead) Through Legal Representatives & Anr.' Vs. 'NEPC MICON (Now NEPC India Limited) & Ors.'7, wherein the Hon'ble Apex Court has laid down as follows:
"6. It is not in dispute that were a dispute to arise today, the civil suit remedy would be completely barred and the powers would be vested with the National Company Law Tribunal (NCLT) under Section 59 of the said Act. We are conscious of the fact that in the present case, the cause of action has arisen at a stage prior to this enactment. However, we are of the view that relegating the parties to civil suit now would not be the appropriate remedy, especially considering the manner in which Section 430 of the Act is widely worded."
5
(1981) 3 SCC 333 6 (2008) 3 SCC 363 7 (2019) 18 SCC 569 -15- Comp. App. (AT) No. 154 of 2020
10. This Tribunal having gone through the issues framed by the NCLT are of the view that they relate to the acts of 'Oppression and Mismanagement' affecting the functioning of the Company and therefore have the jurisdiction to entertain and adjudicate these acts of 'Oppression and Mismanagement' alleged to have been committed by the Appellants under Sections 397 & 398 of the Companies Act, 1956, (Sections 241 & 242 of the Companies Act, 2013). The issues raised by the Respondents are reflected in para 7 of the Company Petition 93/2019 and therefore it cannot be said that these issues were never pleaded or that these issues do not form part of the 'acts' falling within the ambit of the definition of 'Oppression and Mismanagement' as defined under Sections 241 & 242 of the Companies Act 2013. Keeping in view that Sections 241 & 242 of the Companies Act 2013, deals with all 'acts' of 'Oppression and Mismanagement' and the issues arising out of any such 'Allotment of Shares' and 'Removal of Directors' would fall within the ambit of the 'Oppression and Mismanagement', we do not find any substance in the contention of the Learned Counsel for the Appellants that this was never pleaded or that there was no finding with respect to Oppression and Mismanagement per se by the NCLT.
11. Now we address ourselves to the issue whether the Meeting actually took place on 01.10.2012. It is not in dispute that the second Appellant had ceased the to be the Director by virtue of operation of law on 29.09.2012 on which date the AGM was held. This is relevant from the Form No. 3 filed on 25.11.2012, along with the Annual Returns of the Company for the year ending 31.03.2012, which clearly shows that the second Appellant ceased to be a Director of the Company. -16- Comp. App. (AT) No. 154 of 2020 It is the case of the Respondents that the documents of the Company were uploaded to the RoC using the DSC of the first Respondent as the Appellant did not have access to the DSC of R-1, without which they could not have uploaded the fabricated documents and that the Appellants had made an Application on 05.03.2013, in the name of the second Respondent by forging his signature for obtaining the DSC. Using the said DSC, the second Appellant had uploaded Form 32 on the same day i.e., on 05.03.2013, showing that Appellants 2 & 3 along with Respondents 3 & 4 were inducted as an Additional Directors in the Board Meeting alleged to have been held on 01.10.2012. It is the case of the Appellants that the Tribunal cannot go into the aspect of forgery and disputed questions of fact and also that NCLT had wrongly relied on the statement recorded under Section 164 which is not admissible and that the matter is still pending before the Criminal Court. It is also contended by the Learned Counsel for the Appellants that these Witness Statements filed before the Criminal Court, were filed by Respondents 1 & 2 by way of Rejoinder before NCLT, but not when the Company Petition was filed before the CLB. This argument that the material papers were filed before NCLT and not before the CLB has no legs to stand as a Witness Statement itself is not denied and moreover when the matter is transferred from CLB to NCLT, the proceedings continued before NCLT, which has been laid down by the Hon'ble Supreme Court, in a catena of Judgements. At this juncture, we find it relevant to reproduce the Report of Truth Labs relied upon by NCLT in giving a finding that the Meeting dated 01.10.2012 never took place and that -17- Comp. App. (AT) No. 154 of 2020 the documents were fabricated. The final opinion of the copy of the Report dated 06.05.2014, submitted by Truth Labs (Annexure R-9) is reproduced as under: -18- Comp. App. (AT) No. 154 of 2020
12. The aforenoted Truth Labs gave an opinion that the signatures do not match and have also given cogent reasons for the same. Apart from this Report, NCLT has also placed reliance on a copy of the Report dated 19.02.2015, 10.04.2015, 29.07.2015, and 01.10.2015 from Andhra Pradesh Forensic Science Laboratories pertaining to documents in Cr. No. 199/2014 and observed that signatures were forged as per the reports given. FIR 199/2014 was lodged based on the complaint given and a detailed investigation was conducted in respect of the generation of the DSC of the second Respondent and chargesheet was filed after receiving a Report from the Andhra Pradesh Forensic Science Laboratory.
We do not see any illegality in the findings given by NCLT having relied upon both the Government Forensic Laboratory and also Truth Labs that the signatures of the DSC of the second Respondent was forged and also that the signature of the second Respondent in the Board Minutes dated 01.10.2012 and the abstract of the Resolution dated 04.03.2013 filed with the RoC was also fabricated. The pendency of the Criminal Case has no relevance to the adjudication by the NCLT regarding 'acts' of 'Oppression and Mismanagement'. NCLT has only based its observations that the Meeting had never taken place on the findings given by Truth Labs and the Government Forensic Laboratory, 'apart from other material on record'. It appears from the record that Respondent No. 4 disputes his presence at the Board Meeting dated 01.10.2012. It is significant to mention that the letter dated 11.05.2015 addressed by the Bureau of Immigration, Ministry of Home Affairs, Government of India shows that the fourth Respondent had never attended any Board Meeting on 01.10.2012 as he was travelling abroad as on -19- Comp. App. (AT) No. 154 of 2020 01.10.2012. Learned Counsel for the Respondent drew our attention to the statement made by R3 before the IXth Metropolitan Magistrate that he never attended the meeting on 01.10.2012, nor gave his consent to be a Director of the Company. At this juncture, we find it relevant to reproduce the said letter given by the Ministry of Corporate Affairs to the Assistant Commissioner of Police, Cyber Crime, which reads as follows:
13. It is further seen from the record that the consent letters of the third Appellant and the fourth Respondent accepting their appointments as Directors is dated 01.10.2012, reflecting from respective DIN Nos., whereas they were -20- Comp. App. (AT) No. 154 of 2020 allotted the said DIN Nos. by the Ministry of Corporate Affairs only on 26.12.2012 and on 21.12.2012 respectively, which shows that the consent letters were backdated to establish that the Board Meeting had indeed not taken place on 01.10.2012.
14. We are also conscious of the fact that the Board Meeting supposed to have been held on 01.10.2012 was held immediately on the next working day after the AGM in which the tenure of the second Appellant as Additional Director had come to an end. The issue of quorum and the attendance of the second Respondent is not being gone into, though it is the case of the Appellant that an error had crept into the pleadings that the second Respondent had not attended the Meeting, when he had actually been present and attended the Meeting. R2, has categorically denied having attended any such Meeting. This aspect is not being gone into at this stage as the other documents on record have clearly established that the Meeting on 01.10.2012, never took place whereby and whereunder a Resolution is stated to have been passed in the presence of R3 & R4 who is supposed to have attended as 'special invitees', (R4 was not even present in India, while R3 denies attendance).
15. At the cost of repetition, it is reiterated that the issue of 'Allotment of Shares' and 'Removal of Director', if alleged to be 'illegal' do fall within the ambit of the 'acts' of 'Oppression and Mismanagement' as they affect the overall functioning of the Company. We also observe that the NCLT has not based its opinion about the disputed Meeting on 01/10/2012, solely on the reports of Truth Labs filed before NCLT or that of Government Forensic Laboratory which is part -21- Comp. App. (AT) No. 154 of 2020 of the record at the Criminal Court but rather on the other documents as well, including the relevant dates which substantiate the stand of the Respondents that the disputed Meeting never took place on 01.10.2012. Therefore, the contention of the Learned Counsel for the Appellant that the statements made under Section 164 is inadmissible and that the Criminal Case is still pending, is of no relevance here keeping in view the facts of the attendant case on hand.
16. This Tribunal is of the earnest view that NCLT had rightly referred to the consent letters of the third Appellant and the fourth Respondent both being backdated as the DIN Nos. were allotted by the Ministry of Corporate Affairs only on 26.12.2012 and 21.12.2012 respectively, together with all Reports of Truth Labs and Andhra Pradesh Foresnic Science Laboratories and also the evidence that the fourth Respondent was not even in India as on the date and has passed the Impugned Order, allowing the Company Petition.
17. For all the aforenoted reasons, this Appeal fails and is accordingly dismissed. No order as to costs.
[Justice Anant Bijay Singh] Member (Judicial) [Ms. Shreesha Merla] Member (Technical) Principal Bench, New Delhi 06th December, 2022 himanshu