Tribunal dismisses petition, orders second petitioner's appointment as Director.

The tribunal dismissed the petition, finding no evidence of oppression or mismanagement after the first petitioner became a member of the respondent company. The tribunal held that the cancellation of land allotment by APIIC and subsequent refund were in the best interest of the company. However, the tribunal directed the respondent company to appoint the second petitioner as a Director due to his experience and the first petitioner's significant shareholding. Interim orders were vacated, and related applications were dismissed with no order as to costs.

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Issues Involved:
1. Validity of the Equity Term Sheet.
2. Eligibility of the second petitioner to join the petition.
3. Legality of not re-electing the second petitioner as a Director.
4. Validity of actions taken by the company prior to the first petitioner becoming a member.
5. Alleged acts of oppression and mismanagement after the first petitioner became a member.
6. Cancellation of land allotment by APIIC and subsequent refund.

Detailed Analysis:

1. Validity of the Equity Term Sheet:
The petitioners presented an Equity Term Sheet signed by relevant parties, which allegedly outlined the partnership terms. However, the tribunal noted that there was no reference to this term sheet in the Memorandum and Articles of Association of the respondent company. The tribunal found no nexus between the term sheet and the payment of Rs. 13,12,50,000 for share allotment. Thus, the tribunal did not accept that the issues raised in the petition arose from the term sheet.

2. Eligibility of the Second Petitioner:
The second petitioner was not a shareholder of the respondent company and thus could not join the petition in his individual capacity under Sections 397 and 398 of the Companies Act, 1956. However, he could represent the first petitioner as its Chairman. The tribunal held that the petition was maintainable only with respect to the first petitioner, who held 20.79% of the shares.

3. Legality of Not Re-electing the Second Petitioner as a Director:
The tribunal found that the second petitioner was not re-elected as a Director during the AGM held on 24.06.2010, in accordance with Section 255 of the Companies Act, 1956. The tribunal concluded that the second petitioner's case for re-election was duly considered and rejected by the shareholders. Therefore, the legality of not re-electing him could not be questioned in this petition.

4. Validity of Actions Taken by the Company Prior to the First Petitioner Becoming a Member:
The tribunal stated that a member could only raise issues of oppression and mismanagement occurring after becoming a member. Thus, the first petitioner, who became a member on 21.03.2011, could not question actions taken by the company prior to this date.

5. Alleged Acts of Oppression and Mismanagement After the First Petitioner Became a Member:
The tribunal examined the alleged acts of oppression and mismanagement, including the cancellation of land by APIIC. The tribunal found no evidence of oppression or mismanagement after the first petitioner became a member. It was noted that the decision to surrender the land to APIIC was pragmatic and in the best interest of the company, as it prevented the forfeiture of Rs. 51.7 crores.

6. Cancellation of Land Allotment by APIIC and Subsequent Refund:
The tribunal concluded that the cancellation of land by APIIC and the subsequent refund of Rs. 49.75 crores were bona fide actions in the best interest of the respondent company. The tribunal dismissed the allegations made by the petitioners regarding this transaction.

Conclusion:
The tribunal held that the affairs of the respondent company were not conducted in a manner oppressive to any member or members. The petition was dismissed, but the tribunal directed the respondent company to appoint the second petitioner as a Director within a reasonable time, recognizing his experience and the first petitioner's significant shareholding. The interim orders were vacated, and related applications were dismissed with no order as to costs.

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