TaxTMI 
TaxTMI 
2023 (8) TMI 414
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....r. Manusumyer Singh Mr. Shravan Chandrashekhar, Advocates for R2 and R3 Ms. Amrita Tonk, Advocates for 10 to 13 Mr. Virender Ganda, Sr. Adv. with Mr. SP Singh Chawla, Aditya, Mr. Ayandeb Mitra, Rohan S. Nandy, Advocates for R1 For the Appellant : Mr. P. Nagesh, Sr. Adv. with Ms. Amrita Tonk, Mr. Shouryabitya, Mr. Akshay Sharma, Advocates For the Respondent : Mr. Divij Kumar & Varun Tandon, Advocate for R11 to R15 Mr. Manusumyer Singh Mr. Shravan Chandrashekhar, Advocates for R2 and R3 Mr. Virender Ganda, Sr. Adv. with Mr. SP Singh Chawla, Aditya, Mr. Ayandeb Mitra, Rohan S. Nandy, Advocates for R1 For the Appellant : Mr. Manusumyer Singh Mr. Shravan Chandrashekhar, Advocates For the Respondent : Ms. Amrita Tonk, Advocates for R3 to 6 Mr. Divij Kumar & Varun Tandon, Advocate for R7 to R11 Mr. Virender Ganda, Sr. Adv. with Mr. SP Singh Chawla, Aditya, Mr. Ayandeb Mitra, Rohan S. Nandy, Advocates for R1 ORDER Per: Justice Rakesh Kumar Jain : ( Oral ) This order shall dispose of four appeals i.e. CA (AT) No. 299 of 2022, CA (AT) No. 13 of 2023, CA (AT) No. 14 of 2023 and CA (AT) No. 23 of 2023 as all these appeals have been filed against the common impugned order dated 06.....
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....e High Court is reproduced as under;- "I have heard Learned Counsel for the parties and appraised the impugned order. The Company Law Board, while declining the interim relief, has also dismissed the main petition. It is a matter of record that the respondents had not filed counter/defence or any documents in pursuance to the petition filed under Section 397, 399 and 402 of the Compaies Act, 1956. The Company Law Board ought not to have dismissed the petition on merits while declining the interim relief to the petitioner. It appears that the matter has been decided in utter haste without commenting upon the merits of the matter/petition. Without adverting to the merits and de-merits of the matter, much less the plea/counter pleas of the parties to this lis deem it appropriate to set aside the impugned order and remand the matter back to the Company Law Board by restoring the appeal to its original number. Parties are directed to appear before the Company Law Board on 28.04.2015. The Petitioner shall be at liberty to pray for interim relief afresh. The aforesaid order of mine shall not construe as expression on the merits/de-merits of the matter. With the aforementione....
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.... stipulated under Section 399 of the Companies Act, 1956 and Clause (a) of Sub-Section (1) of Section 244 of the Companies Act, 2013 for filing petition under Section 241-242 of the Act. However, under Section 399 the Petitioner has the necessary and valid consents. But to ensure that no injustice is caused on technical grounds and the Petitioner's claims that the balance of convenience is in their favour and irreparable injury will be caused to the Petitioners in the event this Bench does not intervene, the Petitioners seeks a waiver of the requirements as stipulated under Clause (a) of Sub-Section (1) of Section 244 of the Companies Act, 2013. A copy of the chart depicting the shareholding pattern of the members of the Kapur Family is already annexed to the rejoinder to the company petition as Annexure A." 8. There was only one prayer made in this application which requires to be mentioned and read as under:- "(a) Grant waiver to the Petitioners in order to enable them to file application under Section 241 of the Companies Act, 2013." 9. Counsel for the Appellant has submitted that on the one hand the application i.e. 272 of 2016 was kept to be decided alongwith main petiti....
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.... 241, but required to record grounds to suggest that the applicants have made out some exceptional case for waiver of all or of any ofthe requirements specified in clauses (a) and (b) of sub-section (1) of Section 244. Such opinion required to be formed on the basis of the (proposed) application under Section 241 and to form opinion whether allegation pertains to 'oppression and mismanagement' of the company or its members. The merit cannot be decided till the Tribunal waives the requirement and enable the members to file application under Section 241. 151. Normally, the following factors are required to be noticed by the Tribunal before forming its opinion as to whether the application merits 'waiver' of all or one or other requirement as specified in clauses (a) and (b) of sub-section (1) Section 244:- (i) Whether the applicants are member(s) of the company in question? If the answer is in negative i.e. the applicant(s) are not member(s), the application is to be rejected outright. Otherwise, the Tribunal will look into the next factor. (ii) Whether (proposed) application under Section 241 pertains to 'oppression and mismanagement'? If the Tribunal on perusal of proposed....
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....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 onefifth 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 the company to apply to, the 1 Company Law Board] under section 397 or 398, notwithstanding that the requirements of clause (a) or (b), as the case may be, of sub- section (1) are not fulfilled. (5) The Cent....
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....er. (2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter. [Provided that the applicants under this sub-section, in respect of such company or class of companies, as may be prescribed, shall be made before the Principal Bench of the Tribunal which shall be dealt with by such Bench.] (3) Where in the opinion of the Central Government there exist circumstances suggesting that-- (a) any person concerned in the conduct and management of the affairs of a company is or has been in connection therewith guilty of fraud, misfeasance, persistent negligence or default in carrying out his obligations and functions under the law or of breach of trust; (b) the business of a company is not or has not been conducted and managed by such person in accordance with sound business principle or prudent commercial practices; (c) a company is or has been conducted and managed by such person in a manner which likely to cause, or has caused, serious injury or damage to the interest of the trade, industry or business to which such ....
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....setting aside or modification, of any agreement, howsoever arrived at, between the company and the managing director, any other director or manager, upon such terms and conditions as may, in the opinion of the Tribunal, be just and equitable in the circumstances of the case; (f) the termination, setting aside or modification of any agreement between the company and any person other than those referred to in clause (e): Provided that no such agreement shall be terminated, set aside or modified except after due notice and after obtaining the consent of the party concerned; (g) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property made or done by or against the company within three months before the date of the application under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference; (h) removal of the managing director, manager or any of the directors of the company; (i) recovery of undue gains made by any managing director, manager or director during the period of his appointment as such and the manner of utilisation of the recovery including....
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....register the same. (8) If a company contravenes the provisions of sub-section (5), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable 2*** with fine which shall not be less than twenty-five thousand rupees but which may extend to 3[one lakh rupees]. 244. Right to apply under section 241.- (1) The following members of a company shall have the right to apply under section 241, namely:-- (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, subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or 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: Provided that the Tribunal may, on an application made to it in this behalf, waive all or any of the requirement....
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....ary manner and can be passed only by a speaking and reasoned order after notice to the (proposed) respondent(s)". The decision taken by this Tribunal in the aforesaid case i.e. Cyrus Investment Pvt. Ltd. (Supra) has never been challenged before the Hon'ble Supreme Court and thus attained finality. 19. Even otherwise, it is a basic tenet of law that nobody should be condemned without hearing and in the present case when the application bearing 272 of 2016 was being contested tooth and nail by the Respondents therein and they had made a prayer to the Tribunal to frame their question about the maintainability of the petition as a preliminary issue, the Tribunal did not frame the preliminary issue rather it ordered that it shall be heard with the main case and when the main case was heard no order was passed on this application and thus it appears that the said application has been just ignored and the Tribunal has thereafter considered the application bearing 533 of 2020 for the purpose of passing the order of waiver that too without giving any hearing to the contesting Respondents and recorded that the Petitioner has been heard at length and number of opportunity has been given to t....