before the company law board - Company Law Board Mumbai Bench

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22that the meeting is validly held meeting. With regard to the BoardMeeting dated 27.8.2003 the Respondents 6 to 9 contended that the saidmeeting was a counter blast to the decisions taken in the Board Meetingdated 4 th August, 2003. On perusal of the minutes of the meeting, it isseen that R2 and 3 have attended the meeting and shown their positionas Whole Time Director and Director respectively. R4 and 5 have alsoattended the meeting as Special Invitee. The grievance of theRespondents 6 to 9 was that no notice for the said meeting given to theother directors and the Respondent No.2 ceased to be a director,therefore, the meeting was invalid for want of quorum on the ground thatthe Respondent No.3 only attended the meeting. There is no proof toestablish that the notice was given to the other directors. The decisionstaken in the Board Meeting dated 4 th August, 2003 were valid and legaland there is no challenge to the said decision by the 2 nd respondent. Inpursuance of the said decision, the 2 nd Respondent ceased to be adirector and the Respondent No.3 being the only other director cannotconvene and hold the meeting and if it was held, is deemed to be illegaland invalid. I hold that the Board Meeting dated 27 th August, 2003 isinvalid meeting for want of quorum and all the decisions taken thereinare illegal and invalid and the same are set aside. Accordingly the issueis answered.CP 28/2010Union vs Gwalior
2313. Now I deal with Issue No.2, 3 and 4 collectively:The allegation of the petitioner is that the Company advancedloans to various entities without approval of the Board of Directors andthe Central Government in accordance with law. It is further allegedthat the 2 nd Respondent was directly and indirectly interested in thoseentities. The petitioner had given the details that various loans havebeen advanced to M/s. Central India Sulphonators a sole proprietorshipconcern of R2 and the same has been confirmed by M/s.S.K.Sharma &Company, Auditors. The 2 nd respondent in his reply stated that when theloan was given to Central India Sulphonators, the R6 was the ManagingDirector at that time and he himself had signed and issued the chequesand the said cheques were deposited by that Company in to their BankAccount. The Respondent No.6 simply denied the allegation and had notgiven any reasonable explanation. The Inspecting Officer in his reportconfirmed that the loans advanced to the Central India Sulphonators bythe 2 nd Respondent while acting as whole time director of R1 and thesaid Company was a proprietorship of R2. It was also confirmed thatthe loan was given without informing the Board of Directors of R1 andwithout taking approval/permission of the Central Government asrequired under Sec.295 of the Act. It is to be noted that both group ofdirectors mainly the Respondent No.2 and 6 have not denied that theloans have been given to CIS. It is not in dispute that the R6 was theManaging Director at that point of time. Sec.295 of the Companies ActCP 28/2010Union vs Gwalior
Page 5 and 6: 5and M/s.Vishwa Extrusions Pvt. Ltd
Page 7 and 8: 7this regard under Sec.292(1)(e) of
Page 9 and 10: 9present petition is not maintainab
Page 11 and 12: 11sole proprietor of Central India
Page 13 and 14: 13directorship due to alleged contr
Page 15 and 16: 15(ii) Shri Anil P.Sahu (R3) 29.10.
Page 17 and 18: 17the Company for the Financial Yea
Page 19 and 20: 191) Whether Board Meetings dated 4
Page 21: 21clauses mentioned in Sec.22 of th
Page 25 and 26: 25was the responsibility of the ex-
Page 27 and 28: 27the subscribers to the Memorandum
Page 29 and 30: 29International Limited by the Comp

before the company law board - Company Law Board Mumbai Bench

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