Appeals allowed, impugned order set aside, matters remanded for reconsideration.

The appeals were allowed, and the impugned order dated 06.12.2022 was set aside. The matter was remanded back to the Tribunal to consider and decide CA No. 272 of 2016 as a preliminary issue and CA No. 533 of 2020 after giving due opportunity to the respondents. The Tribunal was directed to decide the matter preferably before 30th September, 2023.

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Issues Involved:
1. Maintainability of the petition under Sections 397, 398, 402, 403 of the Companies Act, 1956.
2. Waiver of the qualification mandated in Section 244 of the Companies Act, 2013.
3. Preliminary issue regarding the validity of consents given by the consenting shareholders.

Summary:

This order disposes of four appeals against a common impugned order dated 06.12.2022. The original Company Petition No. 18/ND/2015 was filed by two shareholders against the Company and its shareholders and directors, invoking Sections 397, 398, 402, 403 of the Companies Act, 1956. The petition sought to supersede the Board, declare independent management of the Sonepat Unit, recommend demerger, and other reliefs. The petition was initially dismissed by the Company Law Board but was restored by the Punjab and Haryana High Court.

Issue 1: Maintainability of the Petition

Respondents raised an issue regarding the maintainability of the petition under Section 399 of the Companies Act, 1956, by filing CA No. 272 of 2016. The Company Law Board ordered that this application be taken up with the main case. The Tribunal later heard an application for waiver of the qualification mandated in Section 244 of the Companies Act, 2013, filed by the original petitioners (I.A. No. 533 of 2020).

Issue 2: Waiver of Qualification under Section 244

The Tribunal granted the waiver without providing reasons, which was contested by the appellants. The Tribunal's decision was challenged on the grounds that it was arbitrary and lacked a speaking and reasoned order. The appellants relied on the decision in Cyrus Investments Pvt. Ltd. & Anr. Vs. Tata Sons Ltd. & Ors., which emphasized that waiver orders must be judicial in nature and not arbitrary.

Issue 3: Preliminary Issue on Validity of Consents

The Tribunal did not decide the preliminary issue raised in CA No. 272 of 2016 regarding the validity of consents given by the consenting shareholders. The Tribunal's approach of not addressing this preliminary issue and proceeding with the waiver application without hearing the respondents was found to be against the principles of natural justice.

The Appellate Tribunal found serious errors in the Tribunal's order, particularly in granting the waiver and holding the petition maintainable without a reasoned order. The appeals were allowed, and the impugned order was set aside. The matter was remanded back to the Tribunal to consider and decide CA No. 272 of 2016 as a preliminary issue and CA No. 533 of 2020 after giving due opportunity to the respondents. The Tribunal was directed to decide the matter preferably before 30th September, 2023.

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