Oppression and prejudice under company law require more than challenging removal from directorship; statutory procedure and no reinstatement power matter.

A petition under Sections 241 and 242 of the Companies Act, 2013 was maintainable because the first petitioner's substantial shareholding and the sworn petition on behalf of the second petitioner met the threshold objection. Removal of the petitioners from directorship was treated as compliant with Section 169, as special notice, notice of the EGM, and the surrounding record showed observance of the statutory procedure. The Tribunal further held that a challenge to removal alone does not establish oppression or prejudice under Sections 241 and 242, and that reinstatement is not an implied power under Section 242. No continuing oppressive conduct was proved, so no relief was granted.

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Issues: (i) Whether the petitioners were eligible to maintain the petition under Sections 241 and 242 of the Companies Act, 2013; (ii) Whether the removal of the petitioners from directorship was illegal; (iii) Whether the removal amounted to oppression or prejudice so as to attract Sections 241 and 242 of the Companies Act, 2013.

Issue (i): Whether the petitioners were eligible to maintain the petition under Sections 241 and 242 of the Companies Act, 2013.

Analysis: The petitioner's affidavit and shareholding material showed that the first petitioner held a substantial shareholding and had sworn the petition on behalf of the second petitioner. On that basis, the maintainability objection was not accepted.

Conclusion: The petitioners were held eligible to maintain the petition.

Issue (ii): Whether the removal of the petitioners from directorship was illegal.

Analysis: Section 169 of the Companies Act, 2013 permits removal of a director by ordinary resolution after special notice and an opportunity of hearing. The record showed issue of special notice, service of notice of the EGM, and the petitioners' participation in the share-transfer documentation, and the removal was treated as having been carried out in accordance with the statutory procedure.

Conclusion: The removal from directorship was not held to be illegal.

Issue (iii): Whether the removal of the petitioners from directorship was oppressive or prejudicial so as to attract Sections 241 and 242 of the Companies Act, 2013.

Analysis: Relief under Sections 241 and 242 is attracted only where the conduct complained of is oppressive or prejudicial. A challenge confined to the legality of removal does not by itself justify relief, and reinstatement is not an implied power under Section 242. The removal was found to be within the shareholders' rights and no continuing oppressive conduct was proved.

Conclusion: The removal was not oppressive or prejudicial within the meaning of Sections 241 and 242.

Final Conclusion: The company petition was found to be without merit and no relief was granted to the petitioners.

Ratio Decidendi: In a petition under Sections 241 and 242 of the Companies Act, 2013, the Tribunal cannot grant relief merely because the removal of a director is challenged; relief is available only if the impugned removal forms part of oppressive or prejudicial conduct, and reinstatement of a removed director is not an implied power under Section 242.

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