Non-arbitrability of oppression and mismanagement claims: Tribunal jurisdiction preserved, arbitration reference set aside, and contempt not made out.

An order of the NCLT allowing reference of an oppression and mismanagement petition to arbitration was appealable under Section 421 of the Companies Act notwithstanding the limited appeal structure under the Arbitration and Conciliation Act. Proceedings under Sections 241 and 242 are statutory remedies involving reliefs reserved to the Tribunal and are non-arbitrable by necessary implication, so the company petition had to proceed on merits before the Tribunal. The transfer and impleadment requests were rejected for want of sufficient grounds, and the contempt/perjury applications failed because no wilful disobedience of any express order was shown.

---

---

Issues: (i) Whether the appeal against the order allowing the application under Section 8 of the Arbitration and Conciliation Act, 1996 was maintainable under Section 421 of the Companies Act, 2013; (ii) Whether a company petition alleging oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013 could be referred to arbitration; (iii) Whether the transfer application and impleadment application were liable to be rejected; and (iv) Whether the contempt applications disclosed any willful disobedience warranting proceedings under Section 340 of the Code of Criminal Procedure, 1973 and Section 425 of the Companies Act, 2013.

Issue (i): Whether the appeal against the order allowing the application under Section 8 of the Arbitration and Conciliation Act, 1996 was maintainable under Section 421 of the Companies Act, 2013.

Analysis: An order passed by the Tribunal is appealable under Section 421 of the Companies Act, 2013. The fact that Section 37 of the Arbitration and Conciliation Act, 1996 expressly provides an appeal only against refusal to refer parties to arbitration does not exclude an appeal under the Companies Act against an order of the NCLT. The appellate remedy under the Companies Act remains available against an order of the Tribunal.

Conclusion: The appeal was maintainable and the issue was answered in favour of the appellant.

Issue (ii): Whether a company petition alleging oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013 could be referred to arbitration.

Analysis: Proceedings under Sections 241 and 242 involve a statutory remedy conferred on members and a wide jurisdiction vested in the Tribunal to grant reliefs affecting the conduct of the company, shareholding, management, and related corporate rights. Such disputes are governed by a special statutory forum and concern matters that are not capable of being decided by a private arbitral tribunal. The statutory scheme and the nature of the reliefs exclude arbitration by necessary implication.

Conclusion: The order allowing the Section 8 application was unsustainable and the issue was answered in favour of the appellant.

Issue (iii): Whether the transfer application and impleadment application were liable to be rejected.

Analysis: The bench had already been seized of the matter and had been hearing connected applications for a substantial period, and the transfer request disclosed no sufficient ground for reassignment. The impleadment request was made belatedly, the applicant's claimed status remained contentious, and no prejudice from non-impleadment was shown. The Tribunal therefore found no justification to disturb the existing bench arrangement or to add the applicant as a petitioner.

Conclusion: The transfer application and the impleadment application were rightly rejected and the issue was answered against the appellant.

Issue (iv): Whether the contempt applications disclosed any willful disobedience warranting proceedings under Section 340 of the Code of Criminal Procedure, 1973 and Section 425 of the Companies Act, 2013.

Analysis: The pleadings and affidavits relied upon in support of contempt and perjury allegations concerned disputed questions still awaiting adjudication in the main company petition. No express order was shown to have been wilfully violated, and the earlier directions did not restrain the filing of the later Section 8 application. The materials therefore did not justify initiation of contempt or perjury proceedings.

Conclusion: The contempt applications were not maintainable on the facts and were answered against the applicants.

Final Conclusion: The challenge to the transfer and impleadment orders failed, the contempt matters did not disclose any actionable disobedience, but the order referring the oppression and mismanagement dispute to arbitration was set aside and the company petition was directed to proceed on merits before the Tribunal.

Ratio Decidendi: A statutory oppression and mismanagement proceeding under the Companies Act is a non-arbitrable dispute falling within the exclusive jurisdiction of the Tribunal, and an order of the Tribunal may be appealed under the Companies Act notwithstanding the limited appeal provision in the Arbitration and Conciliation Act.

---