2021 (4) TMI 630 - Tri - Companies Law

Tribunal allows substitution in petition, upholds locus standi, sets hearing date

M/s. Bogidhola Tea & Trading Co. (P) Ltd. & Ors. Versus Kamakhya Kumar Roy & 2 others

M/s. Bogidhola Tea & Trading Co. (P) Ltd. & Ors. Versus Kamakhya Kumar Roy & 2 others - TMI Issues Involved:1. Locus standi of the petitioner to maintain the petition under Section 241/242 of the Companies Act, 2013.2. Substitution of the petitioner in place of the deceased original petitioner.3. Allegations of mismanagement and oppression.4. Validity of the nomination form and its acknowledgment.5. Shareholding and transmission of shares.6. Alleged manipulation and misconduct by respondents.Detailed Analysis:1. Locus Standi of the Petitioner:The applicants contended that the petitioner does not fulfill the criteria to maintain the petition under Section 241/242 of the Companies Act, 2013, as he is not a member of the company. They argued that merely by virtue of a purported nomination, the petitioner has not accrued the right to pursue the proceeding. The tribunal, however, noted that Rule 53 of the NCLT Rules, 2016, allows for the substitution of legal representatives of a deceased person who is a party to the proceeding, and this does not require the substituted party to be a shareholder.2. Substitution of the Petitioner:The original petitioner, Late Kamakhya Kumar Roy, died in 2017, and his son filed for substitution. The tribunal allowed this substitution, noting that the petitioner had provided the necessary nomination form and supporting documents. The tribunal emphasized that the substitution was necessary to continue the proceedings without loss of the original application’s rights.3. Allegations of Mismanagement and Oppression:The original petition filed by Late Kamakhya Kumar Roy alleged mismanagement and oppression by the respondents, including illegal removal from the office of Managing Director and failure to file annual returns and balance sheets. The tribunal decided to hear the original case without further delay, emphasizing the need to address these core issues.4. Validity of the Nomination Form and Its Acknowledgment:The respondents challenged the validity of the nomination form, claiming it was fabricated and not properly acknowledged by an authorized person. The tribunal, however, found the nomination form to be filled by Kamakhya Kumar Roy and witnessed by Dinanath Bordoloi, thus accepting its validity.5. Shareholding and Transmission of Shares:The tribunal noted the shareholding structure and the need for transmission of shares to the legal heirs. It was observed that the original 90 shares held by Late Kamakhya Kumar Roy were to be shared among his son and four daughters. The tribunal emphasized that the legal heirs must be taken on record immediately after the demise of the petitioner to preserve their rights.6. Alleged Manipulation and Misconduct by Respondents:The petitioner alleged that the respondents manipulated the company’s balance sheet, sold company assets clandestinely, and allotted shares to themselves without offering them to other shareholders. The tribunal noted these allegations and decided to address them during the proceedings of the main petition.Order:1. The tribunal decided to proceed with the original case [CP No.80/2000] without further delay, allowing the substitution of Shri Sajay Kumar Singh in place of his deceased father.2. The prayer to declare the petitioner as having no locus standi was rejected.3. The tribunal clarified that it was not addressing the issue of shareholding percentages at this stage, which would be heard during the main petition proceedings.4. Any further attempts to delay the proceedings by filing frivolous IAs would be dismissed with heavy costs and penalties.5. The original company petition (CP No.80/2000) was listed for hearing on 23.03.2021 along with other IAs in the company petition.6. IA No.04/2020 became infructuous as IA No.73/2019 was disposed of.