TaxTMI 
TaxTMI 
2021 (5) TMI 568
X X X X Extracts X X X X
X X X X Extracts X X X X
....any Application (CA) No. 112/2014, this Hon'ble Tribunal be also pleased to keep in abeyance the main proceeding of TP No. 26/2016 [CP 80/2000] and (c) Further, this Hon'ble Tribunal may be pleased to pass other appropriate & necessary orders/directions as may deem fit and proper for the ends of justice. 2. The facts of the case are that one Sri Kamakhya Kumar Roy (since deceased, Original Petitioner] had filed proceedings before the Company Law Board (CLB) New Delhi, under Section 397/398 of the Companies Act, 1956 in respect to M/s. Bogidhola Tea & Trading Co. Pvt. Ltd. which was registered as CP 80/2000 and was decided by the Hon'ble CLB vide order dated 17.03.2004. The Hon'ble CLB dismissed the Company Petition holding allegations made therein of frivolous nature and giving to Petitioner liberty to exit the Company by selling his shares as he feels oppressed by majority shareholders. However, on appeals, the matter was remanded by the Hon'ble Gauhati High Court to CLB, New Delhi and in the meanwhile during pendency Sri Tarun Kumar Roy (Original Respondent No. 3 in the main Company Petition) being former Director of the Company died in the year 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he said Annexures (A-3), (A-4) and (A-5). A true certified copy of the order dated 29.08.2018 passed by Hon'ble NCLAT, Delhi in Company Appeal; (A.T.) No. 236/2018 is annexed with the application marked as ANNEXURE-A1. 6. That the Applicant states that the Company vide its letter dated 06.09.2018 submitted a copy of the order dated 29.08.2018 passed by the Hon'ble NCALT, Delhi before this Bench and this Bench vide its order dated 22.10.2018 passed in IA No. 59/2018 held that the Registry had complied to the order, however, no records have been received from the Registry of NCLT, New Delhi and the matter was posted to be listed on 28.11.2018. Thereafter, though the matter was listed on 07.12.2018, 18.12.2018, 31.01.2019, 21.02.2019, 28.03.2019, 09.05.2019, 27.06.2019, 23.08.2019, 16.09.2019, 25.10.2019, 28.11.2019 and 23.01.2020; yet the matter pertaining to CA No. 112/2014 has never been taken up and is still pending till date. BE as the case may be, the Hon'ble NCLAT vide its order dated 29.08.2018 clearly held that the NCLT without waiting for the original documents hear the Applicant and the Respondents on the basis of the copies of Annexures A-3 to A-5, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cised by virtue of section 399. Section 399 prescribes certain qualifications to exercise such a right. Thus a member of a company, who is not a shareholder of its subsidiary company, cannot file a petition against the subsidiary by virtue of being a member of the holding company. Similarly, shareholder of a holding company cannot complain of oppression by a subsidiary company in which he is not a member. Shankar Sundaram v. Amalgamations Ltd. (2001) 2 Comp.L.J. 176 (CLB). (c) Simple reading of the sections 397 & 398 make it clear that is applies to only a 'member/s' of a Company provided they have a right to apply in virtue of section 399. Extract of the relevant sections are given below: Section 397 of the Companies Act, 1956 397. Application to Company Law Board for relief in cases of oppression. (1) Any members of a company who complain that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members (including any one or more of themselves) may apply to the [Company Law Board] for an order under this section, provided such members have a right so to appl....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... (1) The following members of a company shall have the right to apply under section 397 or 398: (a) in the case of a company having a share capital, not less than one hundred members of the company or, not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company, provided that the applicant or applicants have paid all calls and other sums due on their shares; (b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members. (2) For the purposes of sub-section (1), where any share or shares are held by two or more persons jointly, they shall be counted only as one member. (3) Where any members of a company are entitled to make an application in virtue of sub-section (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them. (4) The Central Government may, if in its opinion circumstances exist which make it just and equitable so to do, authorise any member or members of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpanies (Court) Rules 1959 88. Petition under section 397 or 398 (1) Where a petition is presented under section 397 or 398 on behalf of any members of a company entitled to apply under section 399(1), by any one or more of them, the letter of consent signed by the rest of the members so entitled authorizing the petitioner or petitioners to present the petition on their behalf, shall be annexed to the petition, and the names and addresses of all the members on whose behalf the petition is presented shall be set out in a Schedule to the petition, and where the company has a share capital, the petition shall state whether the petitioners have paid all calls and other sums due on their respective shares. Where the petition is presented by any member or members authorized by the Central Government under section 399(4), the order of the Central Government authorizing such member or members to present the petition shall be similarly annexed to the petition. A petition under section 397 shall be in Form No. 43, and a petition under section 398 shall be in Form No. 44. (2) A petition under section 397 or 398 shall not be withdrawn without leave of the Court, and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oceeding of TP No. 26/2016 [CP 80/2000] and 13. It is observed that the prayers made by the Petitioner here have been heard at length by the Hon'ble Company Law Board, New Delhi Bench in CA/112/2014 in CP No. 80/2000 and the Hon'ble Company Law Board passed the order on 08.02.2016 admitting the Application CA/112/2014 for substitution of the name of the Applicant - Shri Abhya Kumar Singh in place of his deceased father Late Tarun Kumar Roy as Respondent No. 3 in the original CP No. 80/2020. Hence, it is essential to reproduce the Order of the Hon'ble Company Law Board, New Delhi dated 08.02.2016 before passing an appropriate order in IA 28/2020. The relevant portion of the said Order of the Hon'ble CLB, New Delhi dated 08.02.2016 is reproduced below: "BEFORE THE COMPANY LAW BOARD, NEW DELHI BENCH NEW DELHI CA 112/2014 IN CP No. 80/2000 Present: S.V. Prakash Kumar, Member (Judicial) In the matter of: Companies Act, 1956, Sections 297, 398 and In the matter of: Kamakhya Kumar Roy Petitioner Versus M/s. Bogidhola Tea & Trading Co. Pvt. Ltd. & Ors. ... Respondents The counsel for the Petitioner: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the tea gardens of the R1 Company and pocketed the sale proceeds valuing more than 13 Cores, therefore for any reason, the applicant shall not be permitted to substitute R3 as legal representative of R3. 4. The counsel for R1 & R4 also submits that since this applicant has filed Power of Attorney as executed by other Legal Representatives on 22.2.2014 itself, i.e. within 15 days of the demise of deceased R3, it could not be construed that the LRs could not come out of the shock and trauma of death of deceased R3 within 30 days from the date of demise of R3 therefore, the reason of the applicant remained in attending the rituals to his father cannot be taken into consideration as sufficient reason for condoning the delay taken place in filing this application, hence sought for dismissal of this Company Application. 5. The respondents counsel relied upon R.C. Chaudhry v. Prestige Finance and Chit Fund Co. Pvt. Ltd. [AIR 1996 Del, 382] and Ajay Sharma & Anr. v. Shiv Mandir and Shiv Bari Development & Welfare passed by Hon'ble High Court of Himachal Pradesh (Civil Revision No. 393/2001 decided on 24.12.2010) to say that unless there is an application for condonin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he applicant. 11. As other objection raised about the applicant membership in the company, the respondents submit that this applicant has not filed any application for transmission of his father's shares in favour of him, whereas the applicant has filed a letter addressed to Board of Directors seeking transmission of these shares in the name of him basing on the authorization given by other legal heirs for transmission of these shares in the name of the applicant. It is a fact in dispute. 12. The respondents raised an objection that the company has grievances in relation to plucking tea leaves by the applicant, one it is not proved, even otherwise also, it will not have any bearing on bringing in LRs on record, therefore this bench holds that the said allegation has no bearing on substitution of the applicant in the place of R3. 13. However, I am of the opinion that, to protect the interest of the heirs, legal representatives have to come on record immediately after the demise of deceased, or else the precious right of hearing will be lost. There is no mandate under any law saying that LRs shall not become a party to the proceedings unless he has beco....