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Jai Mahal Hotels Pvt 1 NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI COMPANY APPEAL (AT) NO.270 OF 2018 In the matter of: Jai Mahal Hotels Pvt Ltd Appellant Vs Rajkumar Devraj & Ors Respondents With COMPANY APPEAL (AT) NO.271 OF 2018 In the matter of: Rajkumar Vijit Singh & Anr Appellants Vs Rajkumar Devraj & Ors Respondents With Company Appeal (AT) No.329 of 2018 In the matter of; Rambagh Palace Hotel Pvt Ltd Appellant Vs Rajkumar Devraj & Ors Respondents Present: For Appellants: Dr. U.K. Chaudhary and Mr. Sanjiv Sen, Sr. Advocates with Ms Manisha Chaudhary, Mr Dhruv Gupta, Mr Sayan Ray and Mr. Soumo Palit, Mr Himanshu Handa, Advocates. For Respondents: Mr Salman Khurshid, Sr Advocate with Mr Abhishek K Rao, Mr. Shailesh Suman, Ms Bhavya Bharti and Ms Tushita Ghosh, Ms Sanchita, Advocates. J U D G M E N T SUDHANSU JYOTI MUKHOPADHAYA, J To determine the issue involving these appeals it is desirable to refer the family tree of the contesting parties which is as under: Company Appeal (AT) No.270, 271 and 329 of 2018 2 JAI MAHAL HOTELS (PRT) LIMITED Rajkumar Devraj and Rajkumari Lalitya, showing them as residents of Bangkok, Thailand (Petitioners/1st and 2nd Respondents herein) filed Company Petition 30(ND) of 2006 before the Company Law Board, P:rincipal Bench, New Delhi under Section 397, 398,399 read with Section 237(b), 402 and 403 of the Companies Act, 1956 (now Section 241, 242 of the Companies Act, 2013) against M/s Jai Mahal Hotels (PRT) Ltd, Maharaj Prithvi Raj, Rajkumar Vijit Singh and another alleging oppression and mismanagement on their part. They raised dispute in relation to the 5050 equity shares of Jai Mahal Hotels (PRT) Ltd (1st respondent company/appellant herein). It was Company Appeal (AT) No.270, 271 and 329 of 2018 3 alleged that additional shares of the company were raised by denying right of the petitioners (1st and 2nd respondent herein). The challenge was made on the ground that the same was not informed to Maharani Gayatri Devi and not to the petitioners (1st and 2nd respondent herein). 2. National Company Law Tribunal, Bench III, New Delhi vide judgement dated 01.08.2018 allowed the company petition and passed the following orders:- “I) All the resolutions which have been passed in the meetings of the Board of Directors, or in the Extraordinary General Meeting or Annual General Meeting with regard to appointment of Respondent No.4 to Respondent No.8 as directors of the 1st respondent company including those passed in the Board of Directors meeting held on 31.03.1999 and 27.03.2001 and their subsequent confirmation of Respondent No.5 to 8 in the general meeting held on 30.08.2001 are hereby set aside and in relation to the strength and directors of the Board, this Tribunal restores the position ante immediately upon the death of Late MJS. II) Similarly, all the resolutions which have been passed in relation to the increase in the authorized capital of the 1st respondent in the Board Meeting or in the Extra Ordinary General Meeting dated 27.03.2001 are set aside and in relation to the same this Tribunal restores the position ante 27.03.2001 and any forms filed in this regard with the Registrar of Companies, NCT of Delhi and Haryana shall also stand cancelled. Company Appeal (AT) No.270, 271 and 329 of 2018 4 III) Consequently, all the resolutions passed either in the Board Meeting held on 28.04.2001 in relation to the resolution allotting additional capital of the 1st respondent company to the 2nd and 3rd respondents aggregating to 60,882 equity shares of Rs.100/- each are set aside and, in this regard, restore the position ante immediately upon the death of Late MJS. The 1st respondent company shall rectify its register of members reflecting the status quo ante prior to allotment of 60,882 equity shares as its paid-up equity capital and any forms filed in this regard with the Registrar of Companies, NCT of Delhi and Haryana shall also stand cancelled. The petitioners shall be entitled to any consequential benefits which had accrued, if any, to these equity shares. IV) The Board of the 1st respondent company shall be reconstituted with Respondent No.2 and 3 along with three nominees to the Board to be appointed by petitioner4s within a period of four weeks from the date of this order and the said nominations to the Board shall not be opposed by respondents 2 and 3 and the nominees otherwise qualify for appointment as such. The Chairman for the reconstituted Board shall be elected by itself. V) The duly reconstituted Board in compliance with (IV) as above shall convene a meeting of shareholders by way of an Extra Ordinary General Meeting within a period of eight weeks from the date of reconstitution of the Board and the shareholders of the 1st respondent company will be at liberty to confirm or reject the Company Appeal (AT) No.270, 271 and 329 of 2018 5 candidature of all or any of the persons of the Board re-constituted as per (IV) above and to choose such persons to the Board of the company in accordance with law, to manage the affairs of the 1st respondent company thereafter. VI) No major policy decision in relation to the affairs of the 1st respondent company shall be taken by the existing Board consisting of Respondents No.2 and 3 till the Board of the Company is re-constituted in terms of paragraph (IV) as above. VII) Mr. Amarjit Chopra, FCA, Chartered Accountant having Mobile No.098101-00299 is hereby appointed as an independent auditor to conduct a Special Audit in respect of the accounts of the 1st respondent company and the said audit shall be carried out from 05.02.1997, being the date of demise of Late MJS, until the period 31.03.2018. The purpose of the Special Audit shall be in relation to identifying any siphoning of amounts of the 1st respondent company by the other respondents as well as in relation to identifying transactions, if any prejudicial to the interest of the 1st respondent company. The amounts so identified resulting in the siphoning or leakage of funds and thereby loss to the 1st respondent company shall be duly recovered from such of the respondents who had been party to the same. The 1st respondent company and other respondents and persons in the management of the company shall duly co-operate with the auditor appointed herein by making available all documents including books of Company Appeal (AT) No.270, 271 and 329 of 2018 6 accounts in this regard. The fees payable to the auditor shall be negotiated with the auditor by the parties and the petitioners will be responsible to pay the same to be suitably reimbursed by the 1st respondent company and recoverable from other respondents, if found culpable to funds leakage. VIII) Reliefs, other than those granted above, however which may have been sought for, if any, stands denied. IX) Respondents 2 to 4 shall be liable to pay costs of Rs.10 lakhs (Rupees Ten Lakhs) to the petitioners. X) The Company Petition is accordingly disposed of in the above terms along with all Company applications, if any, pending.” Rambagh Palace Hotel (P) Ltd 3. Another Company Petitioner No.59(ND)/2008 was filed by Rajkumar Devraj and Rajkumari Lalitya, showing them as residents of Bangkok, Thailand (Petitioners/1st and 2nd Respondents herein) before the Company Law Board, P:rincipal Bench, New Delhi under Section 397, 398,399 read with Section 237(b), 402 and 403 of the Companies Act, 1956 (now Section 241, 242 of the Companies Act, 2013) against M/s Rambagh Palace Hotel (PRT) Ltd, Maharaj Prithvi Raj, Maharaj Jai Singh, Rajkumar Vijit Singh and another alleging oppresson and mismanagement on their part. In the said case no specific judgement was delivered. The said case was heard by National Company Law Tribunal, Court III, New Delhi alongwith Company Company Appeal (AT) No.270, 271 and 329 of 2018 7 Petition No.30/2006 but no specific finding has been given therein. On 28th August, 2018 the Tribunal passed the following order:- “In the light of Order passed by this Tribunal on 1st August, 2018, the matter was posted for clarifications in relation to CP- 59/ND/2008. The petitioner has filed a note on the point of difference in CP-30/2006 and CP-59/2008. However, in relation to Respondent and other respondents, there has been no appearance to clarify the position. In the circumstances, let the matter be posted for the appearance on the part of Respondents on 26.9.2018.” 4. M/s Jai Mahal Hotels Pvt Ltd and Rajkumar Vijit Singh alongwith Maharaj Prithvi Raj have challenged the aforesaid order dated 1st August, 2018 passed in Company Petition No.30/2006. 5. In the aforesaid background, we will deal with the relevant facts and case of Jai Mahal Hotels Pvt Ltd, to understand the dispute between the parties. Jai Mahal Hotels (Pvt) Ltd Facts of the Case: 6. At the age of 8 years, Late Maharaj Jagat Singh was adopted by the late Maharani Gayatri Devi and Late Maharaja Sawai Man Singh as adopted son. 7. Rajkumar Devraj and Rajkumari Lalitya (1st and 2nd Respondent), the children of Late Maharaj Jagat Singh have claimed to have got several properties mutated in their names belonging to Late Maharaj Bahadur Singh’s Company Appeal (AT) No.270, 271 and 329 of 2018 8 family claiming that Late Maharaj Jagat Singh was the adopted son of Late Maharaj Bahadur Singh.
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