Tribunal decision: petitioner lacks standing to challenge share capital increase. Termination not oppressive.

The Tribunal found both the petitioner and the second respondent eligible to file their respective petitions. It determined that the petitioner lacked standing to challenge the increase in share capital and allotment of bonus shares. The Tribunal also ruled that the termination of the petitioner's employment did not amount to oppression or mismanagement. While some allegations were not substantiated, the Tribunal recommended the petitioner sell shares to resolve the ongoing dispute, ultimately disposing of both petitions without costs, as no oppression or mismanagement was established.

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Issues Involved:
- Eligibility to file CP 15 of 2016
- Eligibility to file CP 6 of 2016
- Allegations of oppression and mismanagement by the petitioner
- Allegations of oppression and mismanagement by the second respondent
- Relief sought by the petitioner

Detailed Analysis:

1. Eligibility to File CP 15 of 2016:
The petitioner, holding 5% of the paid-up share capital of the first respondent company, is eligible to file CP 15 of 2016. Both parties agree that there are only five shareholders in the company, thus meeting the eligibility criteria under the Companies Act.

2. Eligibility to File CP 6 of 2016:
The second respondent, holding 49.50% of the shareholding, is also eligible to file CP 6 of 2016. Being one of the five members of the company, the second respondent meets the necessary requirements to seek relief under sections 397 and 398 of the Companies Act, 1956.

3. Allegations of Oppression and Mismanagement by the Petitioner:
The petitioner alleged that the second respondent mismanaged the affairs of the company and engaged in acts of oppression. Key points include:
- Unauthorized increase in share capital and allotment of bonus shares without informing the petitioner.
- Termination of the petitioner’s employment as Project Manager.
- Transfer of 1.00 lac shares from Abhishek Masalawala to the second respondent without proper notice.
- Siphoning of Rs. 45.00 lacs from the company’s bank account.
- Denial of statutory information and access to company records.
- Variations in the minutes of meetings and resolutions filed with the Registrar of Companies.

4. Allegations of Oppression and Mismanagement by the Second Respondent:
The second respondent accused the petitioner of acting prejudicially and oppressively towards the company and its members. Key points include:
- Spreading false rumors to paralyze the company’s business.
- Non-payment for goods and failure to return company property after termination.
- Blackmailing and threatening the company and its distributors.
- Disruptive behavior during inspections of statutory records.

5. Relief Sought by the Petitioner:
The petitioner requested multiple reliefs, including:
- Reinstatement as Project Manager.
- Cancellation of the transfer of 1.00 lac shares from Abhishek Masalawala to the second respondent.
- Cancellation of proceedings and resolutions passed at the EOGM and Board meeting on 25.08.2011.
- Transfer of shares to ensure 50% shareholding for the petitioner.
- Appointment of the petitioner as a Director of the first respondent company.

Tribunal’s Findings:
- Eligibility: Both the petitioner and the second respondent are eligible to file their respective petitions.
- Bonus Shares: The petitioner was not a member of the company on 25.08.2011, thus has no right to challenge the increase in share capital or the allotment of bonus shares.
- Termination of Employment: The Tribunal found that the reasons for the petitioner’s termination are not within its jurisdiction to decide unless it amounts to oppression or mismanagement, which was not established.
- Transfer of Shares: The petitioner attended the EOGM on 03.12.2015, and thus the transfer of shares and amendment to the Articles of Association were deemed legal.
- Siphoning of Funds: The petitioner failed to provide substantial evidence to support the allegation of siphoning Rs. 45.00 lacs.
- Statutory Information: The company provided the petitioner with statutory information and allowed inspection of records, negating the petitioner’s claims of denial.
- Discrepancies in Minutes: The discrepancies noted by the petitioner were not material enough to conclude manipulation of resolutions.

Conclusion:
The Tribunal found no acts of oppression or mismanagement by either party. However, recognizing the ongoing dispute and difficulty in the company’s functioning, the Tribunal suggested that the petitioner could sell his shares to other shareholders at a fair value determined by mutual agreement or an independent valuer appointed by the Tribunal. Both petitions, CP 6 of 2016 and CP 15 of 2016, were disposed of accordingly without any order as to costs.

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