JUDGMENT :

Balvinder Singh, Member (Technical)

1. This appeal has been preferred by the appellants against order dated 19.01.2017 passed by National Company Law Tribunal Chandigarh Bench filed under sections 397, 398, 402, 403 and 406 of the Companies Act, 2013 alleging oppression, mismanagement, siphoning off funds and illegal removal of Appellant from his directorship from the respondent No. 1 company.

2. The Tribunal after hearing the parties and perusing the record held as under in paras 37, 39 and 40 of the impugned order:

37. xxx Prima-facie therefore the termination of petitioner as director is not legal though the same would be subject to the final decision in the pending civil suit filed by the petitioner, if the same is maintainable.

xxx

39. xxx Yet the fact remains that the respondents are getting the remunerations of Rs. 3,60,000/- per annum as - whole time Directors as reflected in the annual returns. As per additional documents attached with CA No. 14 of 2014, the petitioner has flied the financial statements of the Company for the years 2014-15 and 2015-16, which shows that the remunerations are being paid to R-2 and R-3. From the said statements, it is quite clear that R-3 shown as Chairman and whole time Director receives Rs, 2, 10,000/- per annum as remuneration, whereas R2 whole time Director receives Rs. 1,50,000/- per annum. The petitioner has categorically stated that no dividends of the Company are being paid for the past many years and this fact is also reflected in these financial statements. The respondents have not even contradicted the aforesaid allegation that the dividends have not been paid to the petitioner since the time of his induction as Director. The petitioner also wanted to say that nothing was even paid to his mother, who was a shareholder during her life time, but mother of the petitioner never raised any such issue before any forum. This aspect would however give rise to a cause as to how the affairs of the Company are being managed just to ignore the interest of the petitioner, who has maximum shareholding in the Company out of four shareholders.

40. Looking into the aforesaid aspects, it is quite clear that functioning of the respondent No. 1 Company is in a total mess because of the distrust between the petitioner on the one hand and the respondents on the other. We find it just and proper to provide exit to the petitioner because respondent nos. 2 to 4 jointly hold majority shares in the Company, whereas the petitioner is a minority shareholder. We take cut off date as end of financial year 2014-15 i.e. 31.03.2015 for evaluating the fair value of the shares of the Company as soon thereafter i.e. on 07.05.2015, the petitioner was prima-facie illegally removed from the Board of Directors. We thus issue the following directions:

(i) M/s Khurana Rajiv & Company, Chartered Accountant, SCO No. 83940, Sector 22-A IInd Floor, Chandigarh (from out of the panel of Valuers approved by the High Court of Punjab and Haryana as informed by Official Liquidator to the Registrar of our Bench) are appointed as independent Valuer for determining the fair value of the shares held by the petitioner with cut off date as 31.03.2015. The Valuer shall determine the fair value of the shares keeping in mind that the manufacturing business of the Company is closed for many years and the factory of the Company except for 1000 square yards of vacant land has been leased out for about eight years, as apparent from terms of the lease deed. The Valuer shall determine the value by all the recognised methods and applicable rules and regulations on the said date i.e. 31.03.2015.

(ii) The parties are directed to extend cooperation to the said Valuer. The Company shall submit all the official documents/papers for the purpose for valuation as desired/ required by the Valuer.

(iii) The Valuer shall supply to the parties the copy of the report to which the parties would be at liberty to file their objections within two weeks and the