TaxTMI 
TaxTMI 
2017 (4) TMI 477
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....pellants/Petitioners was dismissed as not maintainable. 2. The relevant facts as detailed and placed on record by the appellants are as follows: The 1st respondent Crystal Thermotech Limited & Others (hereinafter referred to as "Company") was incorporated on 31st October 2013 under the Companies Act, 1956. At that stage the appellants subscribed 28.57% of shares in the 1st respondent Company and also a Director of the company. The grievance of the appellants is that without any notice to the appellants, without their consent and knowledge, on 11th February 2014, the respondents made additional allotment to outsider i.e. M/s Jupiter Goods Private Limited reducing the joint share value of the appellants below 10%. 3. The further case of the appellants is that similar illegal additional allotment of shares were made in favour of outsiders or others on 1st March 2014, 25th March 2014 and 29th March 2014 without notice to the appellants and without their consent and knowledge. They came to know of illegal allotment of shares, additional shares to outside company and others on 30th April 2014 from the Audited Balance Sheet. 4. Further case of the appellants is that subsequent....
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....ts came to know only on 30th April 2014 from audited Balance Sheet. 9. The respondents on appearance filed one Company Application under Section 399 of the Companies Act, 1956 questioning the maintainability of the Company Petition on the ground that the share value of the appellants as on the date of filing i.e. May 2016 was less than 10%. 10. According to the respondents the authorised share capital of the company was Rs. 15,00,00,000 divided into 1,50,00,000 equity shares of Rs. 10/- each and issued and subscribed share capital of the Company was Rs. 15,00,00,000/- divided into 1,50,00,000 equity shares of Rs. 10/- each. The appellants jointly hold 4,50,000 equity shares in the 1st respondent Company which is equal to 3% of the total shareholding. Before the Company Law Board, they placed reliance on a copy of the Annual Accounts for the financial year 2014-2015 in support of their claim. 11. The respondents also claimed that the 1st appellant had signed annual accounts for the Financial Year ended on 31st March 2014, as per which Rs. 15,00,00,000 divided into 1,50,00,000 equity shares of Rs. 10/- each and issue and subscribed share capital of the Company was shown at R....
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....397 of the 1956 Act held that the date of filing is the crucial date to decide whether the appellant had minimum 10% of the share capital to maintain the petition under Section 397. 16. Having heard the parties we are not inclined to dismiss the appeal on the ground of delay or acquiescence nor on the ground of estoppel as none of those grounds were taken by the respondents before the Tribunal. The Tribunal has also not dismissed the Company Petition on such ground(s). The only ground for which Tribunal has dismissed the Petition is non- maintainability of the petition as the shareholding of the appellants was less than 1/10th of the shareholding of the Company as on the date of presentation of the petition. 17. The decision of Supreme Court in "Joint Action Committee of Air Line Pilots' Association of India (ALPAT) v. Director General of Civil Aviation "[2011] 5 SCC 435 and "Cauvery Coffee Traders Vs. Hornor Resources (International Company Limited)" [2011] 10 SCC 420 on the question of estoppel is also not applicable in the present case. 18. The appellants have explained the delay of two years in filing the Company Petition. It is pleaded that they came to know on 30....
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....areholding below 1/ 10th of shareholding, whether such petition under Sections 397 and 398 of the Companies Act, 1956 can be dismissed as not maintainable on the ground that shareholding of the petitioner is below 1/10th of the shareholding on the date of filing of the petition. 25. The question relating to maintainability of Company Petition under Sections 397 and 398 alleging 'Oppression and Mismanagement' was considered by Supreme Court in "Bhagwati Developers Private Limited Vs. Peerless General Finance Investment Company", (2013) 5 SCC Page 455. In the said case, the Supreme Court held as follows: - "12. The right to apply for the winding up of a company is available provided that the applicant satisfies the requisite requirements under Sections 397, 398 and 399 of the 1956 Act with respect to holding 10% shares in the total shareholding of the company. It is not necessary that the petitioner(s) must hold the same individually. Such a winding-up petition can even be filed after obtaining the consent of other shareholders, so as to meet the requirement of having an aggregate of 10% out of the total shareholding. 13. The said application is maintainable under....
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....ate of 10% out of the total shareholding, will be deprived to avail remedy under Section 397 and Section 398, without their fault. He will be remediless. In 'Bhagwati Developers (P.) Ltd.' (supra) and 'Rajahmundry Electric Supply Corpn. Ltd. v. State of Andhra' AIR 1954 SC 251 aforesaid issue was not raised nor decided. For the reasons aforesaid, we are of the view that the law laid down by Supreme Court in 'Bhagwati Developers (P.) Ltd.' (supra) and 'Rajahmundry Electric Supply Corporation Ltd.' are not applicable in the case where an applicant alleges 'oppression and mismanagement' in bringing down his shareholding below the requirement of 1/ 10th of the total shareholding of the company, thereby deprived him of his right to sue. 28. For the reasons recorded above, we hold that in the cases where an applicant alleges that his shareholding has been brought down by way of oppression and mismanagement below 1/10th of the total shareholding without notice and knowledge then it is the duty of the Tribunal to determine whether the applicant had 1/10th of the shareholding prior to the date of alleged oppression and mismanagement. Such petition ....