BUHARI ABDUL KHADER KHALID Vs. EMIRATES TRADING LLC

JUDGEMENT

(1.) Under adjudication is Company Application No. 1 of 2016 filed in C.P. No. 84 of 2015. The C.P. has been filed before the CLB which stood transferred to NCLT and renumbered as T.C.P. No. 91 of 2016. The company petition has been filed under Sections 111 A, 237, 397, 398, 402 and 403 of the Companies Act, 1956, by M/s. Emirates Trading Agency LLC, through authorised signatory Mr. Bartholomew Kamya against M/s. ETA Engineering Private Ltd. and 7 others. The petitioner alleged against the respondent that their various acts constitute oppression against petitioner and amount to mismanagement of R1 company and prays, inter alia, to declare that the acts of Respondents 2 to 7 are oppressive against the petitioner and prejudicial to the interest of both the petitioner and R1 company. It has further been prayed to declare that the resolutions passed by the Board of Directors of R1 company during the meetings held on 08.09.2015 and 08.10.2015 pertaining to the impugned issue of shares on rights basis and actions taken pursuant thereto including the letter of offer dated 11.09.2015 are null, invalid, void ab initio, fraudulent, non est and illegal and consequently prayed to set aside all the forms, returns filed pursuant to the said resolution.

(2.) Applicant No. 1/Respondent-2, Applicant No. 2/Respondent-3 and Applicant No. 3/Respondent-4 have filed the company application against Respondent/Petitioner, Respondent-2/Respondent-1, Respondent-3/Respondent-7, Respondent-4/Respondent-8 stating therein that the company petition does not disclose cause of action and the authorisation on the basis of which the company petition has been filed is incorrect and cannot be used to initiate proceedings under Sections 397 and 398 of the Companies Act, 1956. Therefore, the petition deserves to be rejected on this basis alone.

(3.) The Applicants in the company application have submitted that the petition has been signed by Mr. Bartholomew Kamya who is described as senior legal counsel and the letter of authorisation to him which is produced with the petition has been signed by Mr. Showkat Ali Mir, in the capacity of the General Manager of the petitioner company. Mr. Showkat Ali Mir derives his power as the General Manager of the petitioner Company being appointed on the basis of "Appointment of Manager's Resolution" dated 4th June 2014. It has further been averred in the application that the "Appointment of Manager's Resolution" is the resolution of M/s. ETA ASCON Holding LLC (the holding company of the petitioner company) which is based on "Shareholders" Resolution" notarised on 5th November 2013. It has been stated in the application that no Board resolution of the petitioner company appointing Mr. Showkat Ali Mir as the Manager is produced. As per Article 235 of the Dubai's Federal Law No. 8 of 1984 as amended by Federal Law No. (13) of 1988 Commercial Companies, the Manager shall be appointed under the Company Memorandum of Association or a separate contract for a limited period. In the event of failure to appoint the Managers in the above mentioned manner, they shall be appointed by the Partner's General Assembly. The applicants state that as per the procedure, there is no Board resolution of the Petitioner's company wherein Mr. Showkat Ali Mir could be stated to have been validly appointed as Manager even as per Dubai Law. However, under para 8 of the application it has been admitted by the Applicant/Respondents that the powers given to the Manager are for appointing lawyers and legal advisors to protect the company's interest and defending the company in the proceedings instituted against it. The applicants state that the same cannot be construed as the powers to issue or initiate litigation on behalf of the company. Thus, it lacks the specificity required under law for undertaking an act as critical as suing on behalf of the company or person. Based on this, the Applicants/Respondents have prayed that the CP is not maintainable for being filed without proper authorisation and the same may be rejected. To the above said application, the Respondent-1/Petitioner has filed an objection. But on perusal of the objection it appears that the issue which has been raised in the Company Application has not been controverted properly, except the averment that the application cannot be entertained and heard separately unless those issues involved in the company petition are not decided. The Applicants/Respondents has also filed a rejoinder wherein the stand taken in the application has been reiterated and prayer is made to reject the Company Petition in limine.