2020 (8) TMI 580 - AT - Companies Law

Appellate Tribunal remands case for fresh decision after finding lack of detailed reasoning.

Yamini Bipinchandra Shah, Mr. Bhavik Bipinchandra Shah, Mr. Arpit Bipinchandra Shah Versus Trimbak Estate Pvt. Ltd. And Others

Yamini Bipinchandra Shah, Mr. Bhavik Bipinchandra Shah, Mr. Arpit Bipinchandra Shah Versus Trimbak Estate Pvt. Ltd. And Others - TMI Issues Involved:1. Allegations of oppression and mismanagement.2. Maintainability of the petition under Section 399 of the Companies Act, 1956.3. Limitation period for filing the petition.4. Previous adverse orders and their impact on the current petition.Detailed Analysis:1. Allegations of Oppression and Mismanagement:The appellants, legal heirs of the founder shareholder, alleged that after the founder's illness and subsequent death, the affairs of the Target Company were managed solely by Kamal Kumar Bhageria. They claimed mismanagement and oppression, including unauthorized share allotments and dilution of their shareholding from 50% to 0.10%. Specific instances included:- Unauthorized allotment of 9,800 shares on 11.12.2002.- Appointment of Kamal Kumar Bhageria's wife as director on 10.02.2004.- Removal of Mr. Bipin Chandra Shah's name from the shareholders' list on 30.09.2004.- False statements regarding shareholding on 19.05.2006.- Increase in authorized share capital and number of shareholders.- Further share allotments on 15.03.2012.2. Maintainability of the Petition under Section 399 of the Companies Act, 1956:The Tribunal dismissed the petition based on the appellants not meeting the threshold of holding 1/10th of the paid-up equity share capital or 1/10th of the total number of members. The appellants argued that the eligibility should be considered on the date of the alleged oppression and mismanagement, not on the date of filing the petition. The Appellate Tribunal supported this view, citing previous judgments that the crucial date for determining eligibility should be when the alleged oppression and mismanagement occurred.3. Limitation Period for Filing the Petition:The respondents argued that the cause of action accrued in 2006 when the appellants first requested the transfer of shares, making the 2013 petition time-barred. The Tribunal did not explicitly rule on the limitation issue but dismissed the petition on grounds of delay and laches. The Appellate Tribunal noted that the limitation issue is a mixed question of law and fact and should be decided at the final hearing. The appellants contended that the right to sue accrued only on 08.05.2013, making the petition timely.4. Previous Adverse Orders and Their Impact:The respondents highlighted previous adverse orders, including a dismissed civil suit in 2007 and a Company Law Board petition in 2011. The appellants argued that the previous petition was dismissed with liberty to refile after obtaining a succession certificate, and the civil suit was dismissed for non-appearance, allowing for a fresh suit. The Appellate Tribunal emphasized that the Tribunal should have considered these arguments and provided specific findings.Conclusion:The Appellate Tribunal found the impugned order to be a non-speaking order, lacking detailed reasoning on key issues. It held that the questions of oppression, mismanagement, maintainability, and limitation are mixed questions of law and fact, requiring a final hearing on merits. The order was set aside, and the matter was remanded to the Tribunal for a fresh decision after hearing both parties. The parties were directed to appear before the Tribunal on 15.07.2020.