IN THE NATIONAL COMPANY LAW TRIBUNAL

KOCHI BENCH
KOCHI

CP (C/Act/14/KOB/2022
(Under Sections 241 and 242 of the Companies Act, 2013)

In the matter of:

1. Mr. K. Pramod, Bright Villa, Near Talap Govt. Mixed U.P. School, Talap P.O.,
Kannur- 670 002;

2. Mr. Mohammed Najeeb Thuthiyan, Reefas, Azhikode P.O., Kannur- 670 009;

3. Mr. Preeth P.K., P.P II-1053, Bright Villa, Near Talap Govt. Mixed U.P. School,
Talap P.O., Kannur- 670 002;

4. Mr. Jithin Poolkaruvath, Karuvath House, Thana P.O., Kannur- 670 012;

5. Mr. Anil Maampallil Joseph, Abhishekh, Near Kripa Nursing Home, Talap P.O.,
Kannur- 670 002;
… Petitioners
-Versus-
1. M/s. Kannur Institute of Medical Science and Technology Private Limited,
Having its Registered Office at Building No. PP 554, Union Shopping Complex,
South Bazar, Kannur, Kerala- 670 002 Represented by its Director.

2. Mr. Sooraj N.K., Panoyil House, Azhikode P.O., Balaipatam, Kannur- 670 009
Email: - soorajnk@hotmail.com.

3. Mr. Sreejith N.K., Panayil House, Azhikode P.O., Kannur- 670 009. Email: -
nkjithu@gmail.com.

4. Mr. D.K. Ramesh, Khalifa Mohammed Ali Al Kamda Flat 102 (Water Sub
Meter) 232, 17 St. Al Ghusais, D.M. No. 14 Post Box: 1620 Dubai, UAE, Email:-
dkramesh@hotmail.com.

5. Mr. Kalathil Edward Joy, Kalathil House, Near Railway Station, Pappinisseri,
Kannur- 670 561. Email:- joy.kalathil@yahoo.com.

6. Mr. M.N. Abdurahman Farz, Kuttikunnu, Mangattidam, Kannir- 670 009.

Email:- rahmanmn12@gmail.com.

7. Mr. Sanoop Kumar M.N., Aiswarya, Payyannur, Thaliparamba, Kannur. Email:-

kmsanoop@gmail.com.

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 IN THE NATIONAL COMPANY LAW TRIBUNAL
KOCHI BENCH
CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

8. Mr. Najeeb Kadri, Zuhra Manzil, Pappinisseri West, Kannur- 670 565. Email:-
headsply@gmail.com.

9. Mr. Shakkir Thiyathikandy, T.M. House, Koodali P.O., Kannur- 670 592.
Email: - sabeeksports@gmail.com.

10. Mr. Muhammed Nazeer, Pallivalappil Nazeers, Old Post Office Road,
Payambalam, Kannur- 670 001. Email: - nazeer@sjmetals.net.

11. Mr. Jayadevan Kolangara, Thejus, Pullambil Road, Thiruvangad, Thallassery,

Kannur- 670 103.

12. Mr. Rajeevan, Daiva Kripa, Near Edachery Vayal, Muthappan, Pallikunnu
P.O., Kannur- 670 004. Email:- rajeevanpayyanadan@gmail.com.

13. Mr. Moidu K., Manakadavu, Aroli P.O., Kannur- 670 563. Email:-
moiduatlas@gmail.com.

14. Mr. A.P. Jayasenen, Ayachatty House, Near Pallikunu Temple. Pallikunnu
P.O., Kannur- 670 103. Email:- jayasenan51@gmail.com.

15. Mr. Jagadeep M.P., Jasrag, Thana, Kannur- 670 012. Email:-
mpjagadeep2426@gmail.com.

16. Mr. Siddique Rayaroth Parampath, Rayaroth Parambath (H), Velam P.O.,
Kuttiadi, Kozhikode- 673 508. Email:- sidique.rps@gmail.com.

…Respondents
Coram:
Shri. P. Mohan Raj : Member (Judicial)
Shri. Satya Ranjan Prasad : Member (Technical)
Parties/Counsel present (through video conference):
For Petitioner : Mr.Navod Prasannan, Adv.,
Mr. K.V. Krishna Kumar, Adv.
For Respondents : Mr. Yogindunath S., PCS,
Mr. Gokul R.I., PCS.
Order reserved on: 20.01.2023
Order pronounced on: 21.04.2023

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 IN THE NATIONAL COMPANY LAW TRIBUNAL
KOCHI BENCH
CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

ORDER

This Company Petition has been filed under Section 241 and 242 of the
Companies Act, 2013, seeking the following reliefs:

i. Declare that the acts of Respondent Nos. 2 to 15 are prejudicial to the

interest of the Company.
ii. Declare that Annexure-A5 and Annexure-A9 Notices of Intention are
arbitrary and illegal.
iii. Declare that special business mentioned in the Annexure- A12 Notice
for the Extraordinary General Meeting of the Company to be held on
07.05.2022 are oppressive and against the interest of the Company.
iv. Order costs of and incidental to this Petition be paid by the
Respondents Nos. 2 to 15.
2. The facts as narrated in the Petition and explained by the Petitioners are
summarized hereunder:

i. The 1st Respondent Company was incorporated on 20th November 2014

for the purpose of establishing hospitals to provide treatment at a reasonable
cost and to establish and run in any part of India colleges. schools,
institutions, or academies where general, scientific, medical, nursing,
commercial, engineering or any other type of education is imparted to
students orally or through post. Respondent Nos. 2 to 15 are the
shareholders of the 1st Respondent Company. Among them Respondent
Nos. 2 to 7 are members of the Board of Directors of the 1st Respondent
Company.

ii. It is stated that on 25.03.2022, the Respondent Nos. 2 to 15 had issued a

Notice of Intention to the Board of Directors of the 1st Respondent
Company under Section 169 read with Section 115, Section 100 (2) and
Section 160 (1) of the Act, to convene Extraordinary General Meeting in
order to move a resolution for the removal of Directors and to fill up the
resultant vacancies in the Board of Directors. Resolution Nos. 1 and 2 of

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 IN THE NATIONAL COMPANY LAW TRIBUNAL
KOCHI BENCH
CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

the Notice of Intention was to remove the 1st and 3rd Petitioners from the
Office of the Directors of the Company. The Resolution Nos.3 and 4 of the
Notice of Intention was to appoint the 14th and 11th Respondents herein
respectively to the vacancy of the 1st and 3rd Petitioners as Directors of the
Company. The Respondent Nos. 2 to 15 had stated the reason for moving
the aforesaid resolution as the 1st and 3rd Petitioners herein had caused
much loss to the Company due to mismanagement, conflict of interest and
have been prejudicial to the interests of the Company and its shareholders.
They have consistently, individually and collectively, caused or tried to
cause hindrances in administrative and technical aspects in the governance
of the business which in turn had badly affected the performance and growth
of the Company.

iii. It is stated that the Chairman of the Company issued notice dated
01.04.2022 convening a meeting of the Board of Directors of the Company
to be held on 11.04.2022. The 1st Petitioner issued notice dated 07.04.2022
to the Chairman of the Company requesting to consider agendas for the
meeting of the Board of Directors of the Company on 11.04.2022. The 3rd
Petitioner also issued notice dated 08.04.2022 to the Chairman of the
Company requesting to consider some more agendas for the meeting of the
Board of Directors of the Company on 11.04.2022. On 10.04.2022, the 6th,
2nd and 3rd Respondents respectively issued Notice of' Intention dated
10.04.2022 to the Board of Directors of the 1st Respondent Company under
Section 169 read with Section 115 and Section 100 (2) of the Act, to move
resolutions for the removal of Directors. Resolutions Nos.1 and 2 of the
Notice of Intention dated 10.04.2022 was to remove the 2nd Petitioner and
one Sri, Kaliyath Valappil Rajan (D1N:02742033) respectively from the
office of the Director of the Company. The Resolution No.3 of the Notice
of Intention dated 10.04.2022 was not to fill the vacancies on the Board
arising on account of the removal of the above two directors, for the time
being and that the board shall be entitled to make such appointments after

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 IN THE NATIONAL COMPANY LAW TRIBUNAL
KOCHI BENCH
CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

considering the credentials of the new proposed candidates as and when the
board deems fit. The reason mentioned by the 2nd, 3rd and 6th Respondents
for moving the Resolution Nos.1 and 2 was that the performance of the
directors has not been up to the mark and their conflict of interest has been
prejudicial to the interests of the company and its shareholders and it has
been noticed that they have never strived for the good governance of the
business which in turn had badly affected the performance and growth of
the company to the expected levels. The reason for the Resolution No.3 was
that the 2nd, 3rd and 6th Respondents does not wish to nominate any person
in place of the directors proposed to be removed and proposes to keep the
positions vacant for the time being.

iv. It is further stated that on 11.04.2022, as scheduled, the meeting of the

Board of Directors of the Company was conducted through video
conferencing. The meeting was having the required quorum as all the
Directors of the Company attended the meeting. The meeting was presided
over by the Chairman of the Company (the 2nd Respondent). Before
discussing the agendas, the Chairman briefly intimated about the operation
of hospital and issue related with management of affairs of hospital. Then
the Chairman informed that he is not willing to continue as Chairman and
he resigned as Chairman which was accepted. Thereafter, one Mr. Abdul
Baree Shaduli was appointed as the new Chairman of the Company by the
Board of Directors. Then, the 1st Petitioner was given the authorisation by
the Board of Directors to file the necessary forms with the Registrar of
Companies and to do all such acts, deeds and things as may be necessary to
give effect to these resolutions. The Board of Directors took the agenda Nos.
8 and 9 of the Notice dated 01.04.2022. The Board of Directors discussed
about the notice received from shareholders of the Company under Section
169 read Section 115 and Section 100(2) and 160(1) of the Act for the
removal of two Directors Mr.Pramod Koovan (1st Petitioner) and Mr.Preeth
P.K. (3rd Petitioner) and decided to call Extra Ordinary General meeting as

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 IN THE NATIONAL COMPANY LAW TRIBUNAL
KOCHI BENCH
CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

soon as possible. Other agendas such as the vacation of office of Mr. Najeeb
Thuthiyan, removal of Mr. Koovan Pramod from the post of Managing
Director, Appointment of Mr. M.N. Abdurahman as Managing Director,
changes of authorised signatories of Bank accounts, closing unwanted bank
accounts, Authorisation of Mr. Sooraj N. K. for filing of Forms,
Appointment of Mr Suhas P. K., Company secretary as consultant on
Corporate and secretarial matters mentioned in Notice dated 01.04.2022
were not taken at the meeting for discussion. Also the Board did not take
the agendas proposed by Mr.Pramod Koovan and Preeth PK vide letter
dated 08.04.2022 such as the discussion about the writ order issued by the
Hon’ble High Court of Kerala with regard to the disqualification of Mr.
Muhammed Najeeb Thuthiyan, Director and discuss in detail about the
allegations against Mr.Koovan Pramod and Mr.Preeth PK raised by the
shareholders in the notice submitted with the Board under Section 169 of
the Companies Act, 2013.

v. It is stated that as per the minutes of the meeting dated 11.04.2022, the
Board of Directors did not consider the agendas proposed by the 1st and 3rd
Petitioners in the notice dated 07.04.2022 and 08.04.2022 respectively.
Thereafter the notice dated 16.04.2022 was issued by the 1st Petitioner as
the Managing Director for convening a meeting of the Board of Directors
of the Company on 22.04.2022 through an online platform.

vi. It is further stated that on 22.04.2022, the meeting of the Board of Directors
of the Company was held in full quorum as all the Directors had attended
the online meeting. In the said meeting it was resolved to approve the
minutes of the meeting of the Board of Directors held on 11.04.2022, to
appoint Sri. Pramod Kumar Taliparamaba, IBBI Registered Valuer
(IBB1/RV/02/2019/12367) as the registered valuer for conducting
valuation of Assets of the Company, to conduct the EGM of the Company,
to appoint the Company Secretary Sri Naseej and Chartered Accountant

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 IN THE NATIONAL COMPANY LAW TRIBUNAL
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CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

Sri. Reji C.A. as the scrutinizer to conduct the poll and other related works
for the EGM and to authorise the Chairman of the Company Sri. Abdul
Baree Shaduli to file the E forms with the Ministry of Corporate Affairs and
other Government authorities. It is stated that the minutes of the meeting of
the Board of Directors of the Company held on 22.04.2022 is to be approved
at the next meeting of the Board of Directors of the Company. It is further
stated that on 22.04.2022, notice for convening an EGM of the Company
to be held on 07.05.2022 at Hotel Royal Omars, Thavakkara, Kannur was
issued by the Managing Director, the 1st Petitioner. The notice dated
22.04.2022 was issued on the requisition from some of the shareholders that
they hold 56% of the paid-up equity share capital of the Company.

vii. It is stated that the Petitioners are aggrieved by the issuance of notice dated
22.04.2022 for convening an EGM of the Company with the special
business of removing the 1st, 2nd, 3rd Petitioners along with one Sri. Rajan
K.V. from the office of the Director of the Company. The notice dated
22.04.2022 for the EGM also proposes a special business to appoint the 11th
and 14th Respondents as Directors of the Company.

viii. It is further stated that the Company always attained profits under the
guidance and management of the 1st Petitioner and has never been in loss.
As per the Audited Statement of Profit & Loss for the year ended 31.03.2021
and the Balance Sheet as of 31.03.2021, the Company is having a profit
available for appropriation for Rs.26,67,749.59/- (Rupees Twenty-Six
Lakhs Sixty-Seven Thousand Seven Hundred and Forty-Nine and Fifty-
Nine Paise only).

3. On 14.06.2022 the Respondents 2 to 6 and 8 to 16 filed their reply statement.

Respondents 1 and 7 have been set ex parte vide Order dated 04.07.2022. In
the reply it is stated that the majority shareholders do not have in the board
and the board was governed by minority shareholders. Decisions have always

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KOCHI BENCH
CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

been taken by the minority shareholders. The minutes of the board meeting
dated 11.04.2022 submitted by the Petitioners to the Company Petition states
that the 1st Petitioner himself is being authorized to file the forms with the
ROC, which reveals the fact that as to who is governing the board and
Company. The video recording reveals that the ousted Managing Director has
forced the decisions and declared the same. Minutes and resolutions of the
board decided by the majority of the board who represent the minority
shareholders do not reflect the sentiments of the majority shareholders of the
Company.

4. It is stated that the appointment of the Registered Valuer for valuation of the
Company was not approved by the Board and also stated that the EGM notice
dated 22.04.2022 has been issued by the first petitioner himself and he is
estopped from disputing the same. It is further stated that the Petitioners
instead of airing their grievances about removal in EGM, they have chosen
not to attend the EGM and forfeited their right. The respondents are mostly
NRI businessmen who have appointed these petitioners with trust and believe
in order to run the affairs of the company in a fair and transparent manner.
But they have breached the trust of respondents and indulged in malpractices
and hence they were sought to be removed. The 1st petitioner was appointed
as Managing Director of the company since 2013 and he is currently drawing
a salary of Rs. 9,60,000/- per annum as per the late financial statements filed
with MCA.

5. It is also stated that due process has been followed for the removal of
petitioners and there is no arbitrary move or unjustness behind the same. The
petitioners were given many opportunities to improve the affairs of the
company but they failed to meet the standards of transparency and good
governance expected from them. The company should be governed by the will
of the majority. It is further stated that the reasons mentioned against the
petitioner’s removal were ample proof of their misconduct in running the

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In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

affairs of the company. There was a huge diversion of funds to concerns

related to then Managing Director. The Managing Director has not attended
office for the last 2 years citing covid and has drawn the entire salary due to
him whereas there was a cut of 50% in the salary of employees during the
Covid pandemic period.

6. It is stated that the 1st petitioner has submitted to all the bankers some false
resolutions changing the respective authorized signatories of the Company
and tried to prevent the bankers from clearing the cheques pertaining to the
disbursal of salary of the employees of the company for the month of May
2022, which has caused a lot of hardship in the normal functioning of the
company. It is further stated that the 1st petitioner has been removed in the
EGM dated 07.05.2022, and the same is still in force as this Tribunal has
ordered to maintain status quo as of the date of order i.e. 24.05.2022. The
meeting convened on 19-05-2022 at the instance of Mr. Abdul Baree Shaduli,
former Chairman of the board, which was attended by the removed Directors
is illegal and invalid and a clear case of contempt of court.

7. It is stated that the Respondents have ample proof against the petitioners for
their mismanagement and they cannot hide behind the so-called facade of
profit track record. That does not entitle them to misappropriation and
diversion of funds. The respondents are not intending to oust minority
shareholders and they can continue as shareholders. The fact being the
minority has been ruling the majority for such a long time, and the allegations
of oppression of the minority are denied. The minutes of the board meeting
held on 19.05.2022 and which was attended by the representative of the
minority shareholders who were removed at the EGM dated 07.05.2022 and
chaired by an ousted Chairman and further the letters given to the bankers of
the Company are ample proof that how a minority can manipulate and rule
the company under the cover of minority rights.

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 IN THE NATIONAL COMPANY LAW TRIBUNAL
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CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

8. It is stated that there is no arbitrariness in removing the petitioners as they

abdicated their right to represent themselves by not attending EGM and also,
they misled shareholders by stating that this Tribunal is considering the matter
while in fact the Petition was not even lodged before this Tribunal. that the
respondents have complied with provisions of Companies Act 2013 and there
is no arbitrariness in removing petitioners from the post of Directors as the 1st
petitioner himself has issued the notice of the respective EGM and the
removed Director Mr. K.V. Rajan has not been made a party nor has
consented to this Petition. 4th Petitioner Mr. Jithin had consented to the
removal of the fellow Petitioners which evidences that the Petitioners have
lost the case even before the lodging of this Company Petition, and hence the
allegation is denied by the respondents.

9. It is stated that the respondents submit that the EGM for removal of Directors
has been convened on 07.05.2022 by the board controlled by the Petitioners
at the instance of the shareholders holding 56% of the shares in the Company
pursuant to Section 169 r/w section 115 and section 100(2) of the Companies
act 2013. The said provisions of the Act provide the platform of EGM for
exercising the lawful right of shareholders to deliberate, discuss and decide
the matters stated in the petition. The EGM was not attended by the
petitioners and the Chairman of the Board Mr. Abdul Baree Shaduli on behalf
of the petitioners sent a misleading email with false statement to the
shareholders stating that there is a case pending before this Tribunal on the
evening before the date of EGM and that the EGM was postponed. This false
statement prevented many of the shareholders from attending the EGM.
However, all the shareholders who attended the EGM voted in favour of the
removal of Directors. It is further to be noted that the 4th Petitioner Mr.Jithin
Jayanand had also voted in favour of the removal of Directors. It is also stated
that the Petition has become infructuous as the EGM is already over by due
process of law and petitioners are at no point in time in the Petition questioned
the validity of the EGM. It is further stated that none of the reliefs sought in

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CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

the Company Petition can be granted as it has become infructuous as there

was no stay on EGM either by this Tribunal nor Hon’ble High Court of Kerala
and the meeting was held after the due procedure was followed.

10. On 14.09.2022, the Petitioners filed their rejoinder and stated that as per the
records of the Registrar of Companies, Ernakulam, the 1st Petitioner is still
continuing as the Managing Director of the 1st Respondent Company. Also,
as per the records of the Registrar of Companies, Ernakulam, Petitioner Nos.
1 to 3 are still continuing as members of the Board of Directors of the 1st
Respondent Company. They obtained a stay Order from the Hon’ble High
Court of Kerala which was in effect till 03.06.2022. Hence, no changes in the
statutory records were made by the Registrar of Companies, Ernakulam till
03.06.2022. This Tribunal vide Order dated 24.05.2022 had specifically
directed the Respondents in the Company Petition to maintain status quo as
on 24.05.2022. Therefore, as per the statutory records maintained with the
Registrar of Companies, Ernakulam, the 1st Petitioner is still continuing as the
Managing Director of the 1st Respondent Company, Chairman of the 1st
Respondent Company is still Sri. Abdul Baree Shaduli and also the Petitioner
Nos. 1 to 3 are still continuing as members of the Board of Directors of the 1st
Respondent Company. Hence, the averment of the Respondents that the
meeting convened on 19.05.2022 at the instance of Mr. Abdul Baree Shaduli,
former Chairman of the board, which was convened and attended by the
removed Directors is illegal and invalid and a clear case of contempt of court.
The very convening of the EGM stated to be held on 07.05.2022 is under the
consideration of this Tribunal.

11. It is stated that the Petitioners had filed the above Company Petition on
05.05.2022. The fact that the Petitioners had filed the Company Petition on
05.05.20222 is already on record on the files of this Tribunal. The Petitioners
had also duly intimated the Chairman of the 1st Respondent Company Sri.
Abdul Baree Shaduli of the filing of the above Company Petition. The

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CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

Petitioner Nos. 1 to 3 had filed Writ Petition (Civil) No. 15846 of 2022 before
the Hon’ble High Court of Kerala stating the fact that the above Company
Petition was filed on 05.05.20222 and this Tribunal was on vacation from
06.05.2022 till 16.05.2022 and urgent Orders are required. The Hon’ble High
Court of Kerala on being convinced about the filing of the above Company
Petition and on finding that the Petitioners in Writ Petition (Civil) had
established a prima facie case in their favour, was pleased to issue an Order
dated 13.05.2022 in Writ Petition (Civil) No. 15846 of 2022. Therefore, the
averment of Respondent Nos. 2 to 6 and 8 to 16 that petition was not even
lodged before the Tribunal is incorrect and is only made with the intention to
mislead this Tribunal. The averment that the Petitioners forfeited their right
to represent themselves by not attending EGM is incorrect. It is stated that the
Chairman of the 1st Respondent Company Sri. Abdul Baree Shaduli had on
06.05.2022 itself, had clearly stated to all the shareholders of the 1st
Respondent Company that the EGM scheduled to be held on 07.05.2022 is
postponed because of the filing of the above Company Petition on 05.05.2022.
It was under such circumstances; the Petitioners did not attend the EGM
stated to be held on 07.05.2022. It is also stated that the 2nd Respondent in a
hasty manner and by overriding the decision of the Chairman to postpone the
EGM on 07.05.2022, had decided to issue a letter dated 06.05.2022 to the
members of the Company stating that the EGM of the 1st Respondent
Company will be held on the scheduled time and place and it will not be
postponed. The sole intention of the 2nd Respondent by issuing the said letter
was to arbitrarily oppress the rights of the Petitioners.

FINDINGS

12. We have heard the learned counsel for both parties and perused the entire case
records/documents. We have also gone through the evidence on record. In
order to arrive at a decision in the matter, we have framed the following
points: -
i. Whether the removal of the Petitioners from the Directorship is valid?

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In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

ii. Whether the removal of the Petitioners from the Directorship will be
oppressive or prejudicial to attract Section 241-242 of the Companies
Act?
13. Point No. 1: - The case of the respondents is that in the EGM held on
07.05.2022 the petitioners were removed from the post of directors. This is
disputed by the petitioners. The meeting held on 07.05.2022 is not disputed but
the validity of said meeting is questioned by the petitioners. The entire case
revolves upon the validity of the EGM held on 07.05.2022.

14. The companies Ac, 2013 laid down the procedure how the meetings to be
convened. As far as removal of directors of the company other than one
appointed by Tribunal, under section 169(1) of the Companies Act, 2013 simple
majority is enough. In respect of notice for removal of directors and appointment
new director in the in the place of removed directors special notice shall be issued
as provided in section 169(2) of the Companies Act 2013. For the purpose of
convening meeting for special purpose as per Article 24 of the 1st respondent
company at least 10 days clear notice shall be given.

15. On perusal of Annexure A5 & A9 filed by the petitioners reveals that the said
notices were issued after complying all the legal requirements. The Punjab-and
Haryana High Court in its judgment in Suresh Chandra Marwaha vs Lauls Private
Ltd. And Ors. ( (1973) 75 PLR 558) wherein the Court held that as follows:-

“14. In the present case, the appellant was a director and was
removed by a resolution of the company as provided in Section
284 of the Companies Act and it has not been shown how the
resolution removing him from directorship was illegal. It is only
improper or illegal removal from directorship that may affect the
right of a shareholder but not the removal in accordance with the
provisions of the Act.

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In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

Further the Hon’ble Supreme Court in its judgement in Life Insurance Corporation
of India Vs Escorts Ltd. & Ors (1986 AIR 1370) wherein the Court held that: -
“Thus, we see that every shareholder of a company has the right,
subject to statutorily prescribed procedural and numerical
requirements, to call an extraordinary general meeting in accordance
with the provisions of the Companies Act. He cannot be restrained
from calling-a meeting and he is not bound to disclose the reasons for
the resolutions proposed to be moved at the meeting. Nor are the
reasons for the resolutions subject to judicial review. It is true that
under Section 173(2) of the Companies Act, there shall be annexed
to the notice of the meeting a statement setting out all material facts
concerning each item of business to be transacted at the meeting
including, in particular, the nature of the concern or the interest, if
any, therein, of every director, the managing agent if any, the
secretaries and treasurers, if any, and the manager, if any. This is a
duty cast on the management to disclose, in an explanatory note, all
material facts relating to the resolution coming up before the general
meeting to enable the shareholders to form a judgment on the
business before them. It does not require the shareholders calling a
meeting to disclose the reasons for the resolutions which they propose
to move at the meeting. The Life Insurance Corporation of India, as
a shareholder of Escorts Limited, has the same right as every
shareholder to call an extraordinary general meeting of the company
for the purpose of moving a resolution to remove some Directors and
appoint others in their place. The Life Insurance Corporation of
India cannot be restrained from doing so nor is it bound to disclose
its reasons its reasons for moving the resolutions.

16.In the instant case the Extraordinary General Meeting was convened in the
Respondent Company on 07.05.2022. The Extraordinary General Meeting was
called by the Respondents/shareholders mainly for the purpose of removing

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 IN THE NATIONAL COMPANY LAW TRIBUNAL
KOCHI BENCH
CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

the Petitioners 1,2 and 3/ directors of the Respondent Company. The decision
of the shareholders in the matter of appointing or removing the directors of the
company from the Board cannot be a subject matter of judicial scrutiny since
the right to appoint or remove directors is supreme as a part of corporate
democracy. In the circumstances, since there is no flaw in the notices and the
respondents convened the meeting on 07.05.2022 after complying all the
requirements, hence it is answered that the removal of the Petitioners from the
Directorship is valid.

17.Point No.2: - From the answer arrived to the previous point, it is made clear
that the respondents exercised their rights after following the due process of
law. In the legal process if any inconvenience is caused to the other side it will
not vitiate the legal acts. Accordingly, removal of the petitioners from the
director post will dis comfort to them, but decision of majority will prevail. In
this perspective the removal of the petitioners from the post of directors will not
amounts to act of oppression and prejudicial to the petitioners. In this regard
the Hon’ble Supreme Court in TATA Consultancy Services Limited Vs. Cyrus
Investments Pvt. Ltd. and Ors. (Civil Appeal Nos. 440-441 of 2020) may be held that
Even in cases where the Tribunal finds that the removal of a Director was not in
accordance with law or was not justified on facts, the Tribunal cannot grant a relief under
Section 242 unless the removal was oppressive or prejudicial. Further observed that
The Company Tribunal is not a labour Court or an administrative Tribunal to focus
entirely on the manner of removal of a person from Directorship. In the
aforementioned judgement the Hon’ble Supreme Court held that “under
Subsection (1) of Section 242 of the Company Act, 2013 the Tribunal may, with
a view to bringing to an end the matters complained of, make such order
as it thinks fit” cannot be interpreted as conferring on the Tribunal any
implied power of directing reinstatement of a director or other officer of the
company who has been removed from such office duly following the procedure
and that even in cases where the Tribunal finds that the removal of a Director
was not in accordance with law or was not justified on facts, the Tribunal

Page 15 of 16
 IN THE NATIONAL COMPANY LAW TRIBUNAL
KOCHI BENCH
CP (C/Act/14/KOB/2022
In re: Mr. K. Pramod Vs. M/s. Kannur Institute of Science and Technology Private
Limited & Others.

cannot grant a relief under Section 242 unless the removal was oppressive or
prejudicial. It is seen from the records that the removal of the Petitioners from
the Directorship of the Respondent Company was done following all the
mandatory requirements in accordance with law. We could not find any
oppression and mismanagement in the Company. In the circumstances, it is
answered that the removal of the Petitioners from the Directorship is not
oppressive or prejudicial to attract Section 241-242 of the Companies Act.

18. In view of the answers arrived to the supra points this Petition is
DISMISSED.

19. In view of the dismissal of the main Company Petition, the pending
Interlocutory Applications IA(C/Act)/77/KOB/2022 and IA
(C/Act)/101/KOB/2022 are also stand dismissed.

19. Registry is directed to communicate this order to the respective parties and
their counsels through email.

20. Certified copy of the order be issued on request of the parties as per the
procedure.

21. File be consigned to records.

SATYARANJAN PRASAD Digitally signed by SATYARANJAN PRASAD

Date: 2023.04.21 15:12:34 +05'30'
PANDIAN MOHAN Digitally signed by PANDIAN
MOHAN RAJ
RAJ Date: 2023.04.21 14:28:55 +05'30'

Satya Ranjan Prasad P. Mohan Raj

Member (Technical) Member (Judicial)

Signed on this, 21st day of April, 2023.

Rajasree R. Nair.

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