Judgment:
1. In this order, I am considering CA 203 of 2009 filed by the petitioner and CA 214 of 2009 filed by the respondents both in CP 10(KOL.) of 2009.
2. The facts of the case are that when the petition was mentioned on 9-4-2009, I passed certain ex parte interim orders in favour of the petitioner. Thereafter, the respondents filed CA 39 of 2009 seeking for dismissal of the petition or in the alternative for vacating the ex parte interim order dated 9-4-2009 on the ground that the petitioners had suppressed an order passed by Calcutta High Court on 7-4-2009. After hearing the counsel on this application and after having convinced myself that the ex parte interim order dated 9-4-2009 was obtained by suppression/non-disclosure of a material and vital fact, I vacated the said order by an order dated 27-4-2009. The petitioners thereafter filed CA 203 of 2009 seeking for the same interim reliefs that were granted in the order dated 9-4-2009. The reliefs granted therein and sought for now are: (a) that there shall be no board or general meeting of the company without the leave of CLB; (b) that there shall be joint operation of bank account with one representative of the petitioners and one of the respondents; (c) that there should be a status quo as of date with regard to shares/shareholding of the company; (d) that Shri Tapal Roy Choudhary, Advocate, be appointed as Commissioner to authenticate statutory records of the company.
3. When this application was mentioned on 30-4-2009, the Advocate for the respondents sought for deferring the hearing of the application to 5-5-2009 on account of his inability to appear due to short notice. I adjourned the hearing of the application to 5-5-2009. I also passed an order that since the matter was being adjourned at the request of the respondents, the EGM convened on 4-5-2009 should not be held till the disposal of the application. In CA 214 of 2009, the respondents have sought for vacation of the order dated 30-4-2009.
4. Both the applications were heard on 5-5-2009. Shri Bakhru, Advocate appearing for the petitioners submitted: The ex parte interim order dated 9-4-2009 was passed taking into consideration that the company is a family company with three brothers and their group and each group having representation on the board. Therefore, considering the fact that the powers of the bank operation of the petitioners, who was one of the promoters of the company had been suddenly withdrawn and that some director had been inducted into the board without the knowledge and consent of the petitioner and that certain shares have been transferred by which the shareholding pattern in the company had changed, with a view to protect the interest of the petitioners, reliefs similar to what has been sought now were granted. In other words, this Board was fully convinced, for the reasons stated in the order itself that the petitioners deserved protection. However, this order was vacated only on the ground of suppression of a material fact and not on merits. The grounds on which this Board passed the ex parte order still continue to hold good and as such there can be no impediment to pass similar orders. Now the respondents have proposed to remove the 1st and 3rd petitioners from the board of the company and accordingly they have proposed to convene an EGM on 4-5-2009. In a family company, removal of a family member from the board that too during the pendency of the petition, is highly oppressive. It is to be noted that in the suit before Calcutta High Court the respondents had sought for appointment of an independent Chairman to hold and conduct the EGM and the said prayer has not been granted by the High Court. Further, even though the High Court has directed the petitioners not to act in any manner inter-meddling with the affairs of the company, by a clarificatory order, the High Court has clarified that the order restraining the petitioners from inter-meddling with the affairs of the company shall not be construed to deprive the petitioners from exercising their rights as directors. This being the position, the respondents cannot hold the EGM to remove the 1st and 3rd petitioners as directors. Since the petitioners have vital interests, as substantial shareholders in the company, to protect their interests, the interim reliefs sought should be granted.
5. Shri Chatterjee, Sr. Advocate appearing for the respondents submitted: The application of the petitioners is an abuse of process of law. It is on record that by an order dated 27-4-2009, this Board has vacated the interim order dated 9-4-2009 on the ground of suppression of a material fact. In its order dated 27-4-2009, after noting the decisions of the Supreme Court and High Courts to the effect that suppression of a material fact would deserve dismissal of the petition itself, this Board did not do so on the ground that non-disclosure was not by the petitioners but by an advocate and as such the petitioners should not suffer. Thus, having retained the petition, this Board has consciously not given any liberty to the petitioners to seek for similar reliefs as granted by the order dated 9-4-2009. Since no liberty had been given, the petitioners cannot seek similar reliefs. It is on record that before the filing of the instant petition, the respondents had filed a suit in Calcutta High Court seeking various reliefs. Some of the reliefs sought now are directly in conflict with the reliefs sought by the respondents in the said suit. For instance, the respondents have sought for a declaration as to the composition of the shareholders as given in the plaint, that they have sought for perpetual injunction restraining the petitioners from in any manner interfering with the functioning of the directors; for a perpetual injunction restraining the petitioners from interfering or obstructing the convening of an EGM etc. Any order passed by this Board granting any of the reliefs now sought for, would be therefore be in contradiction to the reliefs sought for by the respondents in the suit and as such CA 203 should be dismissed and the order dated 30-4-2009 should be vacated.
6. I have considered both the applications. In the normal circumstances, I would have agreed with Shri Chatterjee that in the absence of any liberty granted to the petitioners to seek similar reliefs as in the order dated 9-4-2009, CA 203 of 2009 could be dismissed, yet, I am not doing so as it is not the petitioners who had suppressed the material facts on 9-4-2009. In other words, I am considering this application on merit. It is to be noted that the order dated 9-4-2009 was an ex parte order based on the facts alleged in the petition. However, further facts have emerged through both the applications and therefore these facts have to be taken into consideration in deciding CA 203.
7. Before this petition was filed, the respondents had filed a suit, wherein, they have sought for various reliefs/ declarations. One of the declarations sought relate to shareholders. The list of shareholders is at Annexure-F to the Plaint. In the present application, the petitioners have sought for a status quo order in regard to shares/ shareholding. Since in the suit, the respondents have sought for a declaration regarding the shareholders, the question of alteration in the shareholding till the suit is decided does not arise. Therefore, grating of the prayer relating to status quo in regard to the shares/shareholding is infructuous. Insofar as the restraint relating to Board meetings is concerned, I find that in the suit the respondents have prayed that the petitioners should not obstruct with the functioning of the directors. Therefore, granting the prayer of the petitioners would be in contradiction to the prayers sought for by the respondents in the suit and as such cannot be granted. Further the High Court has also held that the petitioners can exercise their rights as directors. Therefore, I direct that for all Board meetings, 5 days notice by Regd. Post should be given to the 1st and 3rd petitioners. Insofar as joint signatory is concerned, I find that in a Board meeting held on 30-5-2007, the third petitioner was authorized as an additional signatory to operate the bank account. It is also seen that the first and third petitioners and second and sixth respondents had been severally authorized to operate the bank accounts. In other words, there does not seem to have been a practice of joint signatories in respect of bank operation. Further, when the relationship between the parties has strained so much, granting of the prayer of joint operation, which does not appear to be a practice earlier, would only create hurdles in the smooth operation of bank accounts and thus, would prejudicially affect the interests of the company. To take care of the interests of the petitioners, by an order dated 17-4-2009, the High Court has directed the respondents to furnish statements of the Company’s Account on a month to month basis. By this statement, the petitioners would be in a position to know the financial affairs of the company. Thus, taking into consideration the interests of the company, I decline to grant the prayer relating to joint operations of bank account. Insofar as authentication of statutory records of the company is concerned, admittedly the first and third petitioners are not only shareholders, but are also directors. Therefore, they are entitled to inspect the statutory records of the company in both the capacities. Accordingly, I authorize one of the petitioners to inspect the statutory records of the company along with either an advocate or a chartered accountant, with liberty to take copies. The company shall produce the statutory records as sought for by the petitioner in writing and allow inspection without any hindrance. This should be done within a week of receipt of request from the petitioners.
8. Insofar as the EGM is concerned, the same is in pursuance of a requisition given by shareholders and the company was to hold the said meeting on 27-4-2009 and the resolutions proposed are to remove the 1st and 3rd petitioners as directors. In view of the earlier restraint order, this meeting was not held and now after the restraint order was vacated it had been proposed to be held on 4-5-2009. In a family company, removal of a family member as a director has always been considered to be an act of oppression. However, in cases of mis-deeds by a director in relation to the affairs of the company, any other family member can seek his removal. In the suit the respondents have made various allegations against the petitioners and the court had restrained them from inter-meddling with the affairs of the company. In its order dated 17-4-2009, the High Court has clarified that inter-meddling with the affairs of the company be not construed to deprive the petitioners from exercising their rights as directors. This clarification has been given notwithstanding the fact that the plaint discloses the proposal to remove the 1st and 3rd petitioners as directors and also there is a prayer for appointment of an independent chairman to chair the EGM. This being the position, I am of the view that the petitioners should approach the High Court for any relief in relation to the EGM. To enable the petitioners to approach the High Court, which will be on vacation from 25-5-2009 to 6-6-2009, I direct the company not to hold EGM till 15-6-2009.
9. Both the applications are disposed of in the above terms.