GANESH COMMERCIAL COMPANY LIMITED Vs. ARUN KUMAR MOHATA

JUDGEMENT

(1.) In this appeal the appellant has challenged the order dated 30th March, 2006 whereby the application filed under Sections 397 and 398 of the Companies Act, 1956 by the respondent, Arun Kumar Mohata (AKM) was allowed and proceedings of the Annual General Meeting held on 20th August, 2004 was declared null and void. The allotment of additional shares was also set aside and AKM and his son were allowed to continue as directors. Shri Basant Kumar Daga was removed from the Board of the company and the appellants directed to deposit Rs. 12 lakhs received from sale of plant and machinery of the appellant company, Rs.20.53 lakhs for funds misappropriated by them and Rs. 20.71 lakhs on account of liabilities created in respect of the appellant company.

(2.) According to counsel for the appellants the case of the respondent AKM before the Company Law Board (CLB) was that:-

(3.) The said allegations are baseless. AKM and his son had absented themselves from 3 consecutive meetings of the Board and therefore under Section 283 of the 1956 Act called for their removal. Notices of the meeting was sent to the respondent No. 1 and his son at the last known address mentioned in the share-holder's register maintained with the company by hand which was the practice of the company even during the life time of Sriratan Mohta. It was also sent to New Friends Colony, New Delhi the present address of AKM and his son. Publication was also made on 12th August, 2004 in the Financial Express Calcutta. Therefore all steps were taken by the company and it cannot be said by the respondent AKM that no notice was served on him or he was not aware of the meeting held on 20.8.2004. The notices were sent under certificate of posting and although the appellants wanted to bring the record of service of notice of meeting by a sur-rejoinder before delivery of judgment but the same was not allowed although the CLB has made a discussion on the mode of service but without taking the sur-rejoinder on record. All that the company is to do under Section 286 of the 1956 Act is to give notice of the meeting at the usual address and Section 53 of the 1956 Act contemplates the same as deemed service. In view of the documents annexed to the sur-rejoinder service was evident and the burden to rebut the statutory presumption was cast on AKM. The CLB by not allowing the sur-rejoinder to be taken on record has acted with perversity.