Tribunal orders purchase of shares at fair value after finding no oppression or mismanagement

The tribunal found no acts of oppression and mismanagement in the case. However, it acknowledged the petitioner's investment and directed respondents No. 2 and 3 to purchase the petitioner's and his wife's shares at fair market value if they wished to sell. The petition was disposed of with each party bearing their own costs.

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Issues Involved:
1. Eligibility of the petitioner to file the petition.
2. Alleged promise to allot 50% shares to the petitioner.
3. Allotment of additional shares to respondents No. 2 and 3.
4. Removal of the petitioner as Director.
5. Alleged acts of oppression and mismanagement.
6. Handling over the process unit to third parties.
7. Reliefs sought by the petitioner.

Detailed Analysis:

1. Eligibility of the Petitioner to File the Petition:
The petitioner, a shareholder in the first respondent company, claimed eligibility to file the petition on behalf of himself and his wife, who together hold 32.66% of the paid-up share capital. The respondents contested this, arguing that the petition did not explicitly state it was filed on behalf of his wife. However, the tribunal found it implied that the petition was filed on behalf of both, as the wife had executed a special power of attorney in favor of the petitioner. Thus, the petitioner was deemed eligible to file the petition.

2. Alleged Promise to Allot 50% Shares to the Petitioner:
The petitioner claimed that respondents No. 2 and 3 promised him 50% of the shares, but he and his wife were only allotted 32.66%. The tribunal noted that there was no documentary evidence supporting the claim of an agreement to allot 50% shares. Therefore, the grievance regarding the non-allotment of 50% shares was unfounded.

3. Allotment of Additional Shares to Respondents No. 2 and 3:
The petitioner challenged the allotment of 5,00,000 shares each to respondents No. 2 and 3 in 2010 and 2011, claiming it was done without his knowledge. The tribunal found that the petitioner, being a Director until 2015, did not raise this issue timely. The belated challenge in 2015 was not sufficient to establish oppression.

4. Removal of the Petitioner as Director:
The petitioner argued that his removal as Director was illegal and without valid reasons. The tribunal found that the petitioner had stopped attending the company from May 2013 and joined another company. The reasons provided for his removal, including non-attendance and revealing trade secrets, were deemed sufficient. The tribunal upheld the removal, distinguishing it from cases where removal was without due process or valid reasons.

5. Alleged Acts of Oppression and Mismanagement:
The petitioner alleged various acts of oppression and mismanagement, including being denied access to accounts and not being served notices for meetings. The tribunal found no evidence of such acts. The petitioner’s inaction and delayed response to the alleged issues weakened his case. The tribunal concluded that no acts of oppression and mismanagement were established.

6. Handling Over the Process Unit to Third Parties:
The petitioner contended that handing over the process unit to Devi Processors was illegal. The tribunal recognized it as a business decision taken in the absence of the petitioner, who had left the company. It was not deemed an act of oppression as no prejudice or loss to the petitioner and his wife as shareholders was demonstrated.

7. Reliefs Sought by the Petitioner:
The petitioner sought various reliefs, including restraining the EGM, declaring the handing over of the process house illegal, and appointing relatives as Directors. The tribunal dismissed these reliefs due to the absence of proof of oppression and mismanagement. However, it acknowledged the petitioner’s investment and directed respondents No. 2 and 3 to purchase the petitioner’s and his wife’s shares at fair market value, to be determined by an independent valuer.

Conclusion:
The tribunal found no acts of oppression and mismanagement but acknowledged the petitioner’s investment. It directed the respondents to purchase the petitioner’s shares at fair market value if the petitioner and his wife wished to sell. The petition was disposed of with both parties bearing their own costs.

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