Delhi High Court
Arun Kumar Saraf And Ors. vs Union Of India And Ors on 18 April, 2018
$~40
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment pronounced on: 18 April, 2018
+ W.P.(C) 3811/2018
ARUN KUMAR SARAF AND ORS. ..... Petitioners
Through Mr. Anish Dayal, Ms. Rupam
Sharma and Mr. Arjit Pratap
Singh, Advs.
versus
UNION OF INDIA AND ORS ..... Respondents
Through Mr. Vinod Diwakar, CGSC for
R-1 & 2
CORAM:-
HON'BLE MR. JUSTICE RAJIV SHAKDHER
RAJIV SHAKDHER, J. (ORAL)
1. Issue notice. Mr. Diwakar accepts notice on behalf of official
respondents.
2. Learned counsel for the respondents says that he does not wish
to file a counter affidavit in the matter and that he will argue the
matter based on the record presently available with the Court.
3. Briefly, the averments made by the petitioners are as follows:
3.1 The respondent no.3 is a joint venture company which has been
incorporated by a set of persons originating from India and Russia
(hereafter referred as Indian and Russian partners respectively).
3.2 The respondent no.3 company, as per the record, presently,
placed before the Court appears to have been incorporated on
27.3.2008.
3.3 Evidently, disputes erupted between the Indian and the Russian
partners, in and about April and June, 2009.
3.4 Consequent thereto, litigation got triggered before various foras,
which includes a title suit no.4197/2009, instituted before a Civil
Court in Kolkata and before an arbitral tribunal, which was constituted
pursuant to the order of the Supreme Court dated 18.2.2011.
3.5 There is also, I am told, litigation pending in the High Court of
Calcutta. These proceedings are numbered as AP no. 497/2011. I am
further informed that proceedings are also pending before the High
Court of Orissa. These proceedings are numbered as COA no.
02/2016. These proceedings I am told arise out of the Company Law
Board (Kolkata Bench, as constituted at the relevant time) proceedings
registered as CP 183/2014.
4. The net effect of the disputes obtaining between the Indian and
the Russian partners was that the financial statements and statutory
returns pertaining to respondent no.3 company could not be filed.
Given the fact that, the Articles of Association of respondent no.3
company require the participation of Russian partners, no board of
directors meeting, I am told, has been held since 2009.
4.1. In support of this submission, the petitioners seek to place
reliance on Articles 104 and 113 of the Articles of Association. For
the sake of convenience, the said articles are extracted hereafter:
"104. The Board of Directors of the Company
shall be elected by the General meeting of
shareholders for three years and shall consist of 7
(seven) members in accordance with the procedure
stipulated by these Articles of Association and the
laws of the Republic of India. The Board of
Directors shall be composed of four (4) nominees
of the Russian party and three (3) nominees of the
Indian party. Every Party shall be entitled to
recall its representative in the Board of Directors
suggesting a new nominee within the period not
less than 30 calendar days from the date of recall,
with it being further approved by the General
meeting of shareholders. The First Directors of
the Company shall be the persons whose names
are mentioned in the form 32 filed at the time
incorporation.
113. The meeting of the Board of Directors shall
be deemed to be qualified if not less than five (5)
members of the Board of Directors among which
not less than three (3) members of the Board of
Directors representing the Russian party are
present at the meeting. In case there is no quorum
at the meeting of the Board of Directors of the
Company such meeting shall be adjourned, with
the members of the Board of Directors being
notified of the new date and place of holding the
meeting."
(emphasis is mine)
5. It appears that on account of a logjam in the management of
respondent no. 3 company, as indicated above, the requisite financial
statements and statutory returns could not be filed; resultantly, the
official respondents struck off the name of respondent no.3 company
from the register of companies. Consequently, as alluded to above,
the petitioners' names were put in the list of disqualified directors.
5.1 The petitioners being aggrieved have approached this Court by
way of the instant petition.
6. I am informed that petitioners are directors on the Boards of
several other companies apart from the Board of respondent no.3
company.
7. Mr. Diwakar, who appears for the official respondents says that
since this is a case pertaining to internecine management dispute, the
matter can be remanded to the ROC for necessary deliberation and
decision.
8. I tend to agree with the submission made in this regard by the
counsel for the official respondents.
9. Accordingly, the writ petition is disposed of with the following
directions:
(i) The petitioners will appear before the ROC, on
27.4.2018, at 3.00 p.m.
(ii) The ROC will, thereafter, pass a speaking order; a
copy of which will be furnished to the counsel for the
petitioners. In case the petitioners are aggrieved by the ROC's
order they will have liberty to assail the same in the manner
known to law.
(iii) Pending the decision by the ROC, the operation of
the impugned list of disqualified directors shall remain stayed
insofar as the petitioners are concerned.
(iv) To facilitate the aforesaid exercise, the petitioner's
DIN and DSC will be activated by the ROC.
(iv) Since, the aforementioned interim directions are
passed to facilitate the disposition of the case by the ROC, and
to enable petitioners to function in the interregnum, the ROC,
will have the authority to vary or even withdraw the facility
accorded to the petitioners if the circumstances necessitate such
a move.
10. Dasti.
RAJIV SHAKDHER, J
APRIL 18, 2018
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