C2R PROJECTS LLP Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) The present petition is filed by the petitioners under Articles 14, 19(1)(g), 226 and 227 of the Constitution of India as well as under the provisions of Limited Liability Partnerships Act, 2008 and the Rules framed thereunder for the prayers as prayed for in the petition inter alia that appropriate writ, order or direction may be issued quashing and setting aside the communication dated 3.3.2017 received from the Ministry of Corporate Affairs and also appropriate direction may be issued to the Respondents to give effect to e-Form No. 4 filed on 28.10.2016 by Limited Liability Partnership by taking the same on record and other consequential reliefs on the grounds stated in the memo of petition. The facts of the case briefly summarized are as follows.

(2.) The Petitioner No.1 herein is a Limited Liability Partnership (hereinafter referred to as "the LLP") under the Limited Liability Partnership Act 2008 (hereafter referred to as "the LLP Act 2008"), which is engaged in the business of providing Techno Marketing Financial Consulting for the clients. The Petitioner No.2, a nonresident, having served in the Indian Armed Forces, a designated partner of LLP, had contributed Rs. 45 Crores out of the total contribution of LLP being 45.05 Crores. Originally, the LLP was between one Niraj Kumarpal Shah - Respondent No.2, Shri Kamal Sewaram Jadhwani - Respondent No.3 and one Mr. Dinesh Shivanna with the capital of Rs.5 lacs. Thereafter, as stated in detail in the petition, Petitioner No.2 - Manbhupinder Singh Atwal was inducted with 20% as partner in the LLP. The addendum executed on 27.2.2015 produced at Annexure-A refers to the various terms and the understanding with regard to the ratio of profit as well as share and investment or the capital. It also has a reference to the mutual obligation of the partners. Clause 22 (E) of the LLP agreement provides for mechanism for expulsion of partner. This clause is the bone of contention as it is contended that after execution of addendum, the Petitioner No.2 discovered that the representation made by the other person particularly Neeraj Kumarpal Shah was false and that induced the Petitioner No.2 for making investment in the LLP which was a shell entity, and therefore, on examination, the Petitioner No.2 came to know about as to the manner in which the investment was made for the LLP in other firms or the Company where Neeraj Kumarpal Shah was having the substantial holding. Further, there were further investments, which are made in the name of LLP by Neeraj Kumarpal Shah including the fact that the land for LLP was purchased in Dholera, Gujarat. However, the Memo of Understanding and other papers signed, suggested that the transaction made with the parties were related to Shri Neeraj Kumarpal Shah. During this period, the Petitioner No.2 had made his investment in the LLP and as it has offered the bank statement and other documents, it revealed about the fraud perpetrated upon the Petitioner No.2 by Neeraj Kumarpal Shah by diverting the funds of the LLP or misappropriation and embezzlement of huge some of money including misappropriation as a cash from LLP's bank account. Therefore, as stated in detail, the relation between the partners were not cordial and the complexion of the firm was changed by addition of two new partners as stated at the instance of Petitioner No.2 and expulsion of Shri Neeraj Kumarpal Shah. This lead to the further proceedings including CMA No. 111/2016 before the Commercial Court at Ahmedabad invoking arbitration against Neeraj Kumarpal Shah. This lead to the necessary procedure for modification in the record with the Respondent. However, as it is contended, the Respondent has failed and neglected to make necessary entries regarding the LLP i.e. in relation to e-Form 4 filed by the LLP. The provisions of the LLP Act read with the LLP Rules provide for the procedure including Rule 36(10) of the Rules, which refer to the filing of necessary information. Thus, it is contended that as the Respondent has failed to carry out the duty or the obligation, the present petition has been filed. It is contended that in spite of the order of the Commercial Court in CMA No. 111/2016 dated 29.12.2016 the effect has not been given to e-Form No.3 and 4 filed by LLP which may have an effect causing prejudice to the petitioner firm and the Petitioner who are the partners of the LLP firm.

(3.) The affidavit-in-reply has been filed by Respondent Nos.2 and 3 who have made the Civil Application for being impleaded as party Respondent and Kamal S. Jadhvani has filed the affidavit-in-reply being a designated partner of the Petitioner No.1 raising objection to the petition. Reference is made to Rule 36(10) of the LLP Rules and it is contended that the Respondent may declare it invalid as it has been furnished partially with defects or incompleteness. The Respondent - Registrar of Companies, Gujarat State has filed the affidavit-in-reply contending inter alia that the petitioner had filed e-Form No.3 i.e. 'the information with regard to the LLP' and also e-Form No.4 i.e. the 'Notice of appointment', cessation or the change in the designation of the designated partners. It is contended that the cessation of one partner namely Neeraj Kumarpal Shah w.e.f. 26.10.2016 and appointment of two new partners Rajankumar Singh and Angad Singh Atwal w.e.f. 26.10.2016 were sought to be made. The said forms were filled in as per the requirement of Sec. 25 of the LLP Act read with Rule 21, Rule 8, Rule 10(8) and Rules 22 (2) and 22 (3) of the LLP Rules, 2009. However, it is contended that Neeraj Kumarpal Shah, a partner had intimated about the dispute and the matter is under dispute at City Civil Court [Case No. CMA No. 111/2016]. It is in these circumstances, it is contended that the correspondence took place and in response to letter dated 11.11.2016 by the Respondent No.1, the Petitioner No.1 had furnished a reply dated 20.10.2016 intimating that Niraj Kumarpal Shah has filed a petition under Sec. 9 of the Arbitration and Conciliation Act before the learned City Civil and Sessions Court being CMA No. 111/2016. Therefore, the Respondent had marked the e-Form No.3 "Re-Submission". Similarly, it is contended that in the meanwhile Respondent No.1 had received a letter dated 23.11.2016 from Kamal Jadhwani about certain Resolutions which were passed by the three original partners contending that it was signed by him through bonafide misunderstanding and misconception. Therefore, it was stated that Shri Neeraj Kumarpal Shah acted within four corners of the LLP agreement executed between the partners and various resolutions were passed with the knowledge and consent of all the partners, and Neeraj Kumarpal Shah has not committed any breach of LLP agreement. This was the subject matter of the proceedings before the court, and therefore, as stated and explained in detail, Respondent No.1 asked for further clarification. Therefore, it is contended that the forms which were filled in, have been marked as;