The appellate tribunal NCLAT has directed Vadilal Enterprises and Vadilal International to maintain the status quo of the structure of their boards until further orders. Passing an interim order, a two-member NCLAT bench said it has already listed the appeal for final hearing on September 26, 2024, over a dispute of the Vadilal Gandhi family, hence any change in the board structure would further complicate the issues.
“Considering the fact that on August 6, 2024, we have already passed an order not to precipitate the matter and hence the removal of a director and an appointment of a new one would further complicate the issues involved when we have already set the appeal for final hearing the matter being listed on September 26, 2024,” the NCLAT said.
“In the circumstances, the status quo be maintained qua the directorship(s) of the companies involved till further orders.”
The National Company Law Appellate Tribunal (NCLAT) order came over a petition filed by Rajesh R Gandhi.
He has sought a direction to maintain the status quo of the position of Board of Directors of VIL and VEL, prevailing prior to the judgement passed by the Ahmedabad bench of the National Company Law Tribunal (NCLT).
The NCLT on July 10, 2024, partly allowed the petition filed by Virendra R Gandhi against VIL, Rajesh R Gandhi, Devanshu Gandhi and others alleging oppression and mismanagement under sections 241 and 242 of the Companies Act 2013.
The dispute over the control of the family business is among VRG (Virendra Ramchandra Gandhi), RRG (Rajesh Ramchandra Gandhi) and DLG (Devanshu Laxmanbhai Gandhi).
The NCLT had declared a board resolution authorising the retirement of Virendra R Gandhi from the Board of VIL and VEL as “null and void”. It had also directed Vadilal Gandhi family businesses be divided amongst the three families – VRG, RRG and DLG by appointing Court Commissioner.
This was challenged before the appellate tribunal NCLAT.
Rajesh R Gandhi’s counsel Abhishek Manu Singvi argued as per an Agreement dated October 20, 2020, the applicant is to remain on Board as MD till the year 2025 and the opposite parties are trying to remove him as a Director.
It is alleged on August 06, 2024, an agenda was circulated showing the applicant is liable to retire by rotation, said Singhvi.
“On September 6, 2024, Board Meeting of VIPL viz the opposite group unilaterally authorised Virender Gandhi to vote on behalf of VIPL in AGM of VIL. Further on September 9, 2024, Virender Gandhi issued a notice for amending the agenda to include the appointment of Virender Gandhi as MD of the company. It is submitted that these litigations are a result of a fight between three groups, all of whom have equal stakes in all the companies, including the VIL,” the NCLAT order said while noting Singhvi’s submissions.
It is also alleged voting on the agenda would start from Monday and the AGM shall be held on September 26, and in case the agenda is approved and Virender Gandhi is appointed as MD, it would change the substratum of this appeal, Singhvi submitted.
He argued the order dated August 6, 2024, of the NCLAT to be followed in true spirit.
Source: Economic Times