AUROBINDO PHARMA LTD. Vs. ANIL KUMAR PODDAR

JUDGEMENT

(1.) IN this company petition filed under Section 284 of the Companies Act, 1956 ("the Act"), M/s. Aurobindo Pharma Ltd. ("the petitioner -company") is seeking (i) to exempt the petitioner -company from circulating, publishing or reading out at its annual general meeting proposed to be held during September 2009, the notice of the respondent issued under Section 284 and the explanatory statement dated March 2, 2009; and (ii) to restrain the respondent from misusing and abusing the powers conferred under Section 284 from issuing any further notice for removal of Mr.Penaka Venkata Ram Prasad Reddy or any other director of the petitioner -company, for the following among other reasons:

(2.) THE respondent in his written submissions, submitted:

(3.) A careful perusal of the records produced before me would reveal that the respondent who became a member of the company on November 7, 2008, requested the company in writing on the very same day demanding copies of (i) the minutes of the last annual general meeting, (ii) list of top ten shareholders, (iii) list of individual directors, (iv) copy of register of investment, (v) copy of register of contract, (vi) latest five year annual reports, and (vii) memorandum of association and articles of association. This request was followed by several reminders sent during the periods between November 19, 2008 and February 17, 2009, which came to be responded in terms of communication dated March 3, 2009, of the company, thereby substantially meeting the requirements of the respondent. The respondent in his yet another communication dated March 5, 2009, called for from the company, copies of (a) register of investment; (b) register of contract for the periods from January 1, 2008 to March 4, 2009; (c) annual report of all subsidiary companies and particulars of employees, upon which the company had furnished to the respondent copies of the annual return, annual report of subsidiary companies and particulars of employees, as borne out by its communication dated March 9, 2009. However, the respondent issued a special notice dated March 2, 2009, under Section 284 of the Act, for removal of Penaka Venkata Ram Prasad Reddy, from directorship, for the reasons enumerated in the explanatory statement enclosed thereto. The respondent even after serving the special notice under Section 284, requested the company on March 16,2009, for a copy of the register of investment from April 1, 2008 to March 4, 2009, which was met by the company, in terms of his communication dated March 18, 2009. The sequence of events would show that all the requirements of the respondent were duly satisfied by the petitioner -company as on the date of the company petition. It may be observed that the petitioner -company offered inspection of the statutory records and documents to the respondent as permitted by law, in terms of its letters dated March 3, 2009 and March 9, 2009, at free of cost, showing the bona fide attitude, in the matter of maintaining transparency in the affairs of the company. The petitioner -company did not hesitate to furnish to the respondent the requisite documents on March 9, 2009, even after receipt of the special notice on March 2, 2009, under Section 284 of the Act. In this context, the statements contained in the explanatory statement dated March 2, 2009, enclosed to the aforesaid special notice to the effect that (a) Penaka Venkata Ram Prasad Reddy, director is running the company in an un -transparent manner; (b) many things are going on in the company which are against the interest of the shareholders; and (c) the company is being run with malpractices, malfunctioning, mismanagement and manipulation by the directors with the consent of Penaka Venkata Ram Prasad Reddy, would lead to the irresistible conclusion that the respondent abused the powers conferred under Section 284 of the Act and failed to act in the paramount interest of the company. None of the requirements of the respondent remained outstanding on the date of the company petition and, therefore, the plea of the respondent that Penaka Venkata Ram Prasad Reddy is unable to reply the letters of the shareholders and further that he has no control on the working of secretarial function by the company secretary, does not merit any consideration.