2021 (5) TMI 733 - Tri - Companies Law

Tribunal Upholds Company Petition, Appoints Administrator for Mall Management

The Tribunal dismissed the challenge to the maintainability of the Company Petition, emphasizing substantial compliance with procedural laws. An ... Oppression and mismanagement - security of the mall has been a matter of grave concern - sections 241-242 read with 244 of the Companies Act, 2013 - HELD THAT:- The plea that the Directors of the Company have abdicated their responsibility in maintaining the Mall properly itself is sufficient to prima facie hold that all is not well and smooth in the Company. The fact that the Dreams Mall Commercial Premises Workers Association had written to the Hon’ble Minister for Energy for electricity connection itself goes to show that the Company has abandoned its responsibility and has put a deaf ear to the plight of the majority of the shop owners. It is trite that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred and the courts may in the larger interests of administration of justice may excuse or overlook a mere irregularity or a trivial breach of law for doing real and substantial justice to the parties and pass orders which will serve the interest of justice best - The materials available on record clearly indicate that the Petitioners, a motley group of shop-owners had come together to raise concerns regarding the running of the Mall to their detriment. The ‘common cause’ had brought them in to unison itself is indicative of the fact that their sole intention was redressal of their grouses and they were themselves aware what they wanted to do by authorising Mr. Nitin to take up cudgels on their behalf. They were conscious of the import and intent of the authorization. Considering the facts of the case and the law thus settled it can be safely be held that the consent by the Petitioners given to Mr. Nitin Bangera to present the Petition would accordingly be not susceptible to any misgivings nor can be invalidated - Admittedly, the Constituents / Members / Shop-owners of the Mall have not been regular in paying the CAM charges fixed by the Tribunal as per order dated 10.12.2018. Therefore, for the better maintenance and proper administration of the Mall, the prayers made by the Administrator in CA No. 1069 of 2020 may have to be allowed in part as indicated infra. Application disposed off. Issues Involved:1. Maintainability of the Company Petition under Sections 241 and 242 of the Companies Act, 2013.2. Appointment and actions of the Administrator for the Mall.3. Payment and collection of Common Area Maintenance (CAM) charges.4. Mismanagement and maintenance issues of the Mall.5. Specific reliefs sought by the Administrator and various Respondents.Detailed Analysis:1. Maintainability of the Company Petition:The Company (R1) challenged the maintainability of the Company Petition, arguing that the Petitioners did not comply with Section 244 of the Companies Act, 2013, as the consent given was not informed and lacked proper authorization. The Tribunal found the authorisation given to Mr. Nitin Bangera by the Petitioners sufficient and a substantial compliance of Section 244(2) of the Act. The Tribunal emphasized that procedural laws should aid justice and not obstruct it, citing various precedents to support the view that technical objections should not override substantial justice. Consequently, the Tribunal dismissed the challenge to the maintainability of the Company Petition.2. Appointment and Actions of the Administrator:The Tribunal had appointed an Administrator to manage the common area maintenance of the Mall due to the Company's consistent losses and inability to maintain the Mall. The Administrator faced significant challenges, including non-cooperation from major stakeholders and public authorities. Despite the Tribunal's orders, the Administrator struggled to collect CAM charges and manage the parking area effectively. The Tribunal granted the Administrator certain powers, including police assistance for enforcing orders and the authority to float a tender for parking management.3. Payment and Collection of CAM Charges:The Tribunal directed all shop owners, except R4 (a hospital), to pay CAM charges at Rs. 15 per sq. ft. per month from 01.09.2018 until further orders. R4 was required to pay Rs. 1.5 per sq. ft. per month from 06.05.2020, considering its separate maintenance arrangements. The Tribunal mandated the Administrator to submit periodic status reports on the collection of CAM charges.4. Mismanagement and Maintenance Issues of the Mall:The Tribunal noted severe mismanagement of the Mall, including issues with electricity, water supply, security, and overall maintenance. The Company had failed to address these issues, leading to significant hardships for shop owners and visitors. The Tribunal's intervention aimed to rectify these issues through the appointment of an Administrator and specific directives to improve the Mall's condition.5. Specific Reliefs Sought by the Administrator and Various Respondents:The Administrator sought various reliefs, including police assistance, recovery of CAM charges, removal of unauthorized constructions, and proper management of the parking area. The Tribunal granted several of these reliefs, emphasizing the need for cooperation from all stakeholders to ensure effective management of the Mall. The Tribunal dismissed applications challenging the Administrator's actions and upheld the orders requiring payment of CAM charges and other necessary actions for the Mall's maintenance.Conclusion:The Tribunal's judgment addressed multiple issues related to the mismanagement of the Mall, the maintainability of the Company Petition, and the Administrator's role in managing the Mall's common areas. The Tribunal's orders aimed to ensure proper maintenance and management of the Mall, protect the interests of shop owners, and enforce compliance with CAM charges.