NCLT Ahmedabad Removes Vision Elevators MD Over Forged Resignation Of Director, Illegal Share Transfer

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has held that the removal of Suryakanta Kothari as director of Vision Elevators Pvt. Ltd. through a forged resignation letter and the transfer of her shares without consent amounted to oppression.

It also removed Managing Director Jigneshbhai Shivlal Siparia from his position for the conduct.

A bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma found that the resignation letter dated April 20, 2023 and the statutory filing in Form DIR-12, which is filed with the Registrar of Companies to record appointment or resignation of directors, were not genuine.

Explaining its findings, the tribunal observed:

“Upon comparison of signatures on the PAN Card, appended before this Tribunal and on the Passport (issued on 09.01.2023) which is contemporaneous to that alleged to be on the Resignation Letter), it is observed that the Signatures on the disputed resignation letter and Form DIR-12 do not match with the admitted signatures of the Petitioner. The admitted signatures are consistent and identical inter se, whereas the disputed signatures materially differ.”

The tribunal further noted that the genuine signatures were consistent, stating:

“It is further observed that there is no variation between the signatures appearing on the Petitioner's PAN Card and Passport and those appended today before this Bench on Exhibit-X. The said signatures are consistent and appear to be of the same person.”

Kothari was appointed as a director of Vision Elevators Pvt Ltd on October 20, 2020 and held 20% shareholding in the company. She had also mortgaged her personal property to secure a loan of Rs. 65 lakh for the company.

The tribunal recorded that from 2022 onwards, she was excluded from the affairs of Vision Elevators, denied participation in board meetings, and not provided access to company records or communications.

It noted that a resignation was shown as having been submitted in April 2023 and filed with the Registrar of Companies through Form DIR-12, following which her name was removed from the list of directors.

Kothari discovered the alleged resignation only in January 2024 after inspecting MCA records and, thereafter, approached the Registrar of Companies and police authorities before moving the tribunal.

The tribunal also took note of company filings showing that 10,000 shares held by Kothari were transferred to Managing Director Jigneshbhai Shivlabhai Sipariya on April 27, 2023.

The respondents failed to appear despite repeated opportunities, following which the tribunal closed their right to file replies and proceeded against them ex parte.

In the absence of any rebuttal, the tribunal proceeded to examine the legality of the impugned acts and emphasised that fraudulent conduct cannot sustain corporate actions. It observed:

“It is settled law that acts of fraud vitiate all corporate actions, and any resolution or filing founded on such fraud is liable to be declared null and void.”

The tribunal then dealt with the issue of limitation raised in the case and noted that Kothari became aware of the alleged fraud only in 2024 upon inspecting statutory records, after which she pursued remedies before the authorities.

Holding that the exclusion from management and the consequences of the forged filings constituted a continuing course of conduct, the tribunal found that the petition was not barred by limitation.

The tribunal set aside the resignation letter dated April 20, 2023 and the Form DIR-12 filed on April 27, 2023, and held that the transfer of Kothari's shares to Managing Director Jigneshbhai Shivlabhai Sipariya was invalid. It also directed restoration of her position in the company's records.

On the role of the management, the tribunal removed Managing Director Jigneshbhai Shivlal Siparia from his position, holding that the affairs of the company had been conducted in a manner oppressive to the petitioner.