2021 (7) TMI 1317 - Tri - Companies Law

Court Decisions on Shareholder Disputes and Interim Relief

Prakash Kumar Sinha, Nutan Sinha Versus Felix Tools Private Limited, Manish Kumar Verma, Mrs. Ranjana Verma, Prashant Kumar Sinha (Vice-Versa)

The court addressed petitions and interim relief in cases involving a private Ltd. company, Felix Tools Pvt. Ltd., with disputes among shareholders and ... Injunction from continuing with the competitive business of the Respondent Company - injunction from approaching the customers and suppliers of the Respondent Company for soliciting business of the Respondent Company - restraint from acting detrimental to the interest of the Respondent Company - HELD THAT:- It is noted that the said interim relief as prayed for is same as final relief and imprudent to consider without full perspective of the case. In view of the allegations and cross allegations, besides apparent noncooperation, it is in the interest of the company and the parties that this matter be heard and decided. This is particularly important in view of the fact that admittedly there was a settlement between the parties in August 2020 which seems to have derailed. In subsequent listing of the case, we have directed the parties to file the replies in both CPs as well as in pending CAs and also to furnish written arguments so that the matter can be heard and disposed of accordingly. The matter stands admitted. Issues:1. Admissibility of petitions and interim relief.2. Allegations of favoritism, termination, and settlement between parties.3. Cross petition regarding partnership firms and shareholding ratios.4. Breakdown of trust, interference, and competing businesses among parties.5. Interim relief sought and granted in CP No. 01/241-242/JPR/2021.6. Interim relief claimed in CP No. 194/241/JPR/2020.Analysis:1. The judgment addressed the admissibility of petitions and interim relief sought in two cases involving a private Ltd. company, Felix Tools Pvt. Ltd., engaged in trading hardware tools and machines. The parties involved included shareholders and directors with varying shareholdings in the company.2. Allegations surfaced regarding favoritism towards an employee, leading to termination, and a settlement agreement between the parties in August 2020, which faced disruptions. The issues also highlighted the resignation of a director and subsequent disputes over company matters and interactions with customers and suppliers.3. A cross petition was filed concerning the management of partnership firms before the incorporation of the company, leading to skewed shareholding ratios post-incorporation. Interference by a director's son was alleged, causing a breakdown of trust and conflicts over business operations.4. The judgment delved into the breakdown of trust, interference in company affairs, and disputes over competing businesses among the parties. The court noted the complexities of the relationships and the need for a comprehensive hearing to address the issues effectively.5. In CP No. 01/241-242/JPR/2021, interim relief was sought against the removal of a director from the board of directors, leading to the grant of status quo as of a specific date. No further interim relief was provided at that stage, emphasizing the need for a thorough examination of the case.6. The interim relief sought in CP No. 194/241/JPR/2020 included injunctions against competitive business practices and actions detrimental to the company's interests. However, the judgment highlighted the imprudence of considering such relief without a full understanding of the case's complexities, directing the completion of pleadings and written arguments for a comprehensive hearing and disposal of the matter.