SMT. SHAILA CHEHBI GOVIND Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) These petitions are heard and disposed of by this common order, as the same are inter related.

(2.) The facts as stated are that one Smt Shaila Chebbi Govind and Smt. Mala Madikeri Srinivas Gowda, Petitioner Nos. 1 and 2, respectively, in the petition in WP 19462/2016 are said to have founded the company M/s Alliance Business School Pvt. Ltd., in the year 2005. It is claimed that their younger brother, Sudhir Angur, who had the requisite expertise in running a large educational institution, had assisted them. The said petitioners are said to have held 50% of the shares of the company, each. It is stated that the Alliance Business School which was established by the company, had very soon achieved a high degree of success. It is said to have been granted permission to sponsor and start a private University in Bangalore, in the year 2010. This gave birth to the Alliance University, incorporated under the Alliance University Act, 2010, enacted by the State legislature. The company acquired the status of a charitable company under Section 25 of the Companies Act, 1956 (Corresponding to Section 8 of the Companies Act, 2013)

(3.) Presently, the University sponsored by the company is in the management of a Law School and an Engineering college apart from its Business School. It claims to have a student strength of 6500 with a staff of over 350. The above petitioners credit their brother, Sudhir Angur, for these land mark achievements over the years. It then transpires that Sudhir Angur was embroiled in a bitter matrimonial wrangle with his spouse. He is said to have been a Trustee managing a large educational institution along with his wife and father-in-law. He was said to have been accused oi actively diverting the goodwill and resources of the said Trust in order to build Alliance Business Pvt. Ltd. and had thus deliberately refused any honorary posts in the company and the University. It transpires that the venom with which his wife attacked Sudhir Angur, was even to allege that he had siphoned funds from their Trust to build the Company of the petitioners. The above said petitioners faced with tin crisis of not having the able guidance of their brother, who had withdraw n from his active support to them on ethical grounds and the petitioners were in search for another able person to carry on the management. It is stated that at this stage, the petitioners' elder brother, Madhukar Angur who had settled in the USA, is said to have broached the subject of being given the reins of the company as he had the requisite experience as an educationist. He was then said to be in the employment of the Michigan University, USA. He was said to have been inducted as a Director of the company. The entire share holding of the said petitioners was said to have been transferred in favour of Madhukar Angur, as on 27.11.2008. He was also said to have been nominated the Managing Director. The transfer of shares and his induction into the company, was said to be without any monetary consideration. It is alleged that the said Madhukar Angur soon started displaying his evil side and began blatantly transferring the large funds of the institutions to his private accounts in the US. And he is said to have appointed two of his close confidants, Krishna Mohan Ramineni and Richard Glenn Roakman III, as Directors and engineered the resignation of the above petitioners from their posts as Directors of the company, as on 16.10.2009. In 2010, Madhukar Angur is said to have been asked by the Michigan University to quit, as he had come under a cloud, having been accused of dereliction of duty, conflict of commitment and conflict of interest etc. But his position in the Alliance University assumed greater importance with being named the first Chancellor of the University in the year 2010. At that point he was in absolute control of the finances of the University which were overflowing, especially since the company enjoyed the privilege of exemption from taxes. According to the petitioners, he had by then siphoned off at least a sum of Rs.100 crore to his personal accounts, channelled through bogus bank accounts and other means. Madhukar Angur is said to be a much married man at 60, his fourth wife presently is said to be aged 22. He is known to lead a lavish and extravagant life. And to feed that life style he is said to have liberally helped himself to the funds of the institution. The founders having realised the notoriety of Madhukar Angur, are said to have demanded accounts and sought to examine the books and records, which, it was claimed, were not readily furnished. But with unrelenting pressure from other members of the family, when the accounts were finally accessed it was said to have been found that there was large scale misappropriation by Madhukar Angur. 11 was in this background that it was felt necessary to divest him of the share holding in the company to prevent further damage. It is slated that Madhukar Angur had, as on 6.4.2010, transferred 43% of the share holding of the Alliance Buiness School to the second petitioner (38%) and her husband, Srinivas Govda (5%), as on 7.10.2011. The share certificates were accordingly said to have been issued. The annual returns filed by the company for the years 2011-2012 and 2012-2013 are said to reflect the share holding of the second petitioner and her husband. However, it transpires that inexplicably the share holding of the second petitioner and her husband was shown to have been transferred in favour of Priyanka, the wife of Madhukar Angur in March 2014. This was discovered by the second petitioner only when the annual returns for the year 2013-2014 was filed. The second petitioner had thus been constrained to file a criminal complaint as on 20.3.2015, registered as Crime No. 66/2015 before the Anekal Police Station. In view of these developments, the petitioners herein are said to have confronted Madhukar and Priyanka, who finally pleaded that no action be taken against them and assured all that the entire share holding would be transferred to the petitioners and others and undertook to resign from the company. And at a Board meeting on 4.3.2015 two additional Directors, Abhay Chebbi and Prakash Siddappa were said to have been inducted on the Board, at the behest of the petitioners. And at a Board meeting on 5.3.2015, Madhukar Angur, Sachidanandarao Mechineni and Krishna mohan Ramineni are said to have resigned form Directorship. The shares held by Madhukar Angur and the shares transferred in favour of Priyanka were said to have been transferred in the following manner: <FRM>JUDGEMENT_121_LAWS(KAR)10_2016_1.html</FRM> The above comprised 92% of the share holding. The transfers were said to have been paid a consideration of Rs. 12.25 lakh and Rs. 10.75 lakh, respectively. Madhukar is said to have assured that he would provide the Digital signature necessary for uploading the transactions to the portal of the Registrar of Companies, on the next day. However, he is said to have resiled and is said to have demanded that the transfers were to be nullified and sought for return of all the original documents. He is also said to have tampered with the digital signature of a divorced wife, Vani B. Rao and had named her as an Additional Director of the Company and also his present wife, Priyanka, as an Additional Director, as on 9.4.2015. On 10.4.2015, when the petitioners put Madhukar on notice and strictly warned him that stringent action would be taken against him for his illegal actions, he is said to have relented and at a Board meeting on 11.4.2015, petitioners No. 1 & 2 were said to have been re-inducted as Additional Directors of the company. The company was thus reconstituted with the petitioners No. 1 to 4 in the petition in W.P. 19462/2016, as Directors and such changed status of the company was said to have been uploaded on the portal of the ROC, as on 13.4.2015. But on the same day and also on 15.4.2015, Madhukar along with his wife, Priyanka and Krishna Mohan Rameneni is said to have filed criminal complaints, in Crime No. 97/2015, Crime No. 104/2015 and Crime No. 105/2015, before the Anekal Police Station, against the petitioners and others. It was said to have been alleged that digital signatures had been forged and that the petitioners had uploaded their status as Directors of the company and that he had been illegally removed from the Directorship.