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Judgment
Petition has been mentioned.
We have heard Ld. Counsel for the parties at some length.
On behalf of the petitioner it has been argued that a notice of meeting was received on 05.07.2019 and the meeting was slated for 11.07.2019. All that was received was an agenda containing three sentences which reads as under: -
"1. To discuss company tax matters,
Discuss and review company expenditure,
Discuss the role of management and directors in business. ... and any other agenda that chair person may deem fit."
On the basis of the aforesaid sketchy agenda the argument raised is that there is flagrant violation of the Secretarial Standard 1 concerning meeting of Board of Directors. In particular emphasis has been laid on item No. 1.3.8 highlighting that each item of business requiring approval at the meeting is to be supported by a note setting out the details of the proposal, relevant material facts that enable the Directors to understand the meaning, scope and implications of the proposal and the nature of concern or interest of any director. It has then been argued that under the garb of 'permission from the chairman' a number of issues have been decided to the prejudice of the petitioner. Our attention has been drawn to the minutes of meeting alleged to be supplied to the petitioner on 26.07.2019 wherein the decision has been taken with regard to reduction of salary of the petitioner to 50%, (Rs. 78,500); putting some bar on the power of the petitioner to access to record and many other things. The primary contention firstly is that the agenda was sketchy and secondly a large number of items were not in the sketchy agenda which were taken up for discussion.
On behalf of respondent company as well as the respondent directors it has been argued that the petitioner has been indulging in activities which are affecting the expenses of the respondent company in as much as the bills of his own business are being debited to the respondent's company account. However, there is no dispute that the business being transacted by the petitioner in his individual capacity by associating with another company is entirely different. Mr. Chaudhary, Ld. Sr. Counsel has argued that it would not be in the interest of the company to permit the petitioner to continue to hold the position of signing cheques and withdraw money. There were many other issues raised but Mr. Chaudhary stated that the discussion may be defer for ten days when he would be able to file the reply with a copy in advance to the counsel opposite.
Having heard the Ld. Counsel for the parties and weighing the equity on both the sides we are of the considered view that the following interim directions are required to be issued:-
a) The perquisites share of the petitioner shall continue to be the same as were being paid before meeting dated 11.07.2019 and to that effect statement has been made by Ld. Counsel for the respondent.
b) The petitioner shall not be barred from inspection of the record in his capacity as shareholder and director; and to that extent the decision taken in the meeting dated 11.07.2019 must give way to this direction.
c) It has also been stated that by the Ld. Counsel for the respondent that if the petitioner signs their cheques and present before any of the two directors the same shall be honoured and if for good reason it is rejected then the matter be brought to the notice of this Tribunal. We order accordingly.
Reply if any be filed on or before 29.08.2019 with a copy in advance to the counsel for the petitioner.
Rejoinder, if any, be filed within two days thereafter with a copy in advance to the counsel opposite.
It is needless to observe that the parties shall be at liberty to negotiate an amicable settlement.
List for arguments on 03.09.2019.