TaxTMI 
TaxTMI 
2025 (4) TMI 376
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.... R - 13 JUDGMENT ( Hybrid Mode ) [ Per : Ajai Das Mehrotra, Member ( Technical ) ] The Respondents No. 16 to 19 of the present appeal had filed Company Petition bearing CP No. 287/KB/2023 under Sections 241 and 242 of the Companies Act, 2013 (hereinafter referred to as the "Act") before the Ld. NCLT, Kolkata alleging oppression and mismanagement in running of Respondent No. 1 Company, namely, the Calcutta Cricket & Football Club. Since the Respondents were not fulfilling the eligibility criteria prescribed under Section 244(1)(b) by the Act, an Interlocutory Application bearing I.A. (CA) No. 183/KB/2023 was filed before the Ld. NCLT seeking waiver of the eligibility prescribed in Section 244(1)(b) of the Act by invoking the powers given to the Tribunal in proviso to Section 241(1)(b) of the said Act. 2. The Respondent No. 1 is a Company incorporated under Section 8 of the Companies Act, 2013 and does not have any share capital. The Respondent No. 1 Company has approximately 1850 members. The Respondents No. 16 to 19, who were petitioners before Ld. NCLT, are stated to be members of the general committee of Respondent No. 1 Company. The Appellant herein is also a gene....
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....of the total number of members, which otherwise means that petition can be filed by at least 20% of the members. 7. On the issue of notice, the Appellant has submitted that no Court notice was issued, though some of the Respondents in CP No. 287/KB/2023 and IA No. 183/KB/2023 were present on advance notice when the order was reserved on 17.10.2023. 8. On the merits of the waiver, it was submitted by the Learned Counsel for the Appellant that Ld. NCLT has not formed any opinion as to whether the said petition related to "oppression and mismanagement" or was frivolous. Reference was made to the judgment of this Tribunal in the case of Cyrus Investments Pvt. Ltd. & Anr. v. Tata Sons Ltd. & Ors. reported in 2017 SCC OnLine NCLAT 261 wherein in paras 148 to 152, reproduced below, this Tribunal has laid down the guidelines for considering application for waiver: "148. Now there is a clear departure from earlier provision i.e. sub-section (4) of Section 399 whereunder the Central Government was empowered to permit the ineligible member(s) to file an application for 'oppression and mismanagement' by its executive power. Under proviso to sub-section (1) of Section 244 now the....
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.... 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 application under Section 241 forms opinion that the application does not relate to 'oppression and mismanagement' of the company or its members and/or is frivolous, it will reject the application for 'waiver'. Otherwise, the Tribunal will proceed to notice the other factors. (iii) Whether similar allegation of 'oppression and mismanagement', was earlier made by any other member and stand decided and concluded? (iv) Whether there is an exceptional circumstance made out to grant 'waiver', so as to enable members to file application under Section 241 etc.? 152. The aforesaid factors are not exhaustive. There may be other factors unrelated to the merit of the case which can be taken into consideration by the Tribunal for forming opinion as to whether application merit 'waiver'." (Emphasis supplied) 9. The Learned Counsel for the Appellant referred to another judgment of this Tribunal in the case of ID Chugh & Ors. v. Vikram Kapur & Ors., Company Appeal (AT) No. 229 of....
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....was also submitted that the matter was reserved for order on 17.10.2023 and the order was pronounced on 17.01.2024 and none of the parties had requested to file reply to the petition in the intervening period. Even after hearing on 17.10.2023, when the order was reserved, no application was filed for recalling of the said order or for filing a reply. It was submitted that challenge to the order on the ground of insufficient opportunity was an afterthought. 14. The Learned Counsel for the contesting Respondents submitted that impugned order is reasonable. It was submitted that in their waiver application and the company petition, the petitioners had raised various allegations regarding oppression and mismanagement, some of which are as under : (a) the respondent Nos. 2 to 14 have wrongfully convened the Annual General Meeting on 11th September, 2023 and wrongfully elected themselves as General Committee Members; (b) Defalcation and Embezzlement of funds and concealment of related parties status by the respondent No.14; (c) The respondent Nos 2 to 14 illegally contended that the petitioner Nos 1 to 4 have ceased to be General Committee Members of the Clu....
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....judgments cited by the Appellant herein are not relevant to the facts of the present case. 19. The Learned Counsel for the Appellant referred to paras 13 and 14 of the judgment of Hon'ble Supreme Court in Wander Ltd. and Another v. Antox India P. Ltd. reported in 1990 (Supp) SCC 727 wherein the Hon'ble Supreme Court has held that appeal court cannot substitute its discretion in place of the discretion exercised by the trial court. The relevant portion of the said judgment is reproduced bellow: "13. On a consideration of the matter, we are afraid, the appellate bench fell into error on two important propositions. The first is a mis-direction in regard to the very scope and nature of the appeals before it and the limitations on the powers of the appellate court to substitute its own discretion in an appeal preferred against a discretionary order. The second pertains to the infirmities in the ratiocination as to the quality of Antox's alleged user of the trademark on which the passing-off action is founded. We shall deal with these two separately. 14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such app....
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.... refusal of interlocutory injunction. An appeal against exercise of discretion is said to be an appeal on principle. The appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion (see Wander Ltd. v. Antox India (P) Ltd. and N.R. Dongre v. Whirlpool Corpn.). However, the present one is a case falling within the well-accepted exceptions. Neither the trial court nor the High Court have kept in view and applied their mind to the relevant settled principles of law governing the grant or refusal of interlocutory injunction in trade mark and trade name disputes. A refusal to grant an injunction in spite of the availability of facts, which are prima facie established by overwhelming evidence and material available on record justifying the grant thereof, occasion a fa....
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....est. Further it is nobody's case that these allegations were made earlier in any proceedings and stand decided/concluded. Thus, the requirements prescribed in sub clauses (i), (ii) and (iii) of para 151 of the judgment of Cyrus Investments Pvt. Ltd. & Anr. (supra) are fulfilled. The only issue left is whether the Ld. NCLT was satisfied about the exceptional circumstances made out to grant waiver or not. 25. The Ld. NCLT has noted the allegations of oppression and mismanagement, and differences between the members, and has noted the public interest involved in the Section 8 company promoting sports. 26. The issue of waiver has been considered and allowed in the following judgments of this Tribunal: i. Brookefiled Technologies Pvt. Ltd., Represented by Director, Mr. Pawan Kumar Jain and Another v. Shylaja Iyer and Others, reported in 2020 SCC OnLine NCLAT 829, wherein this Tribunal had granted waiver and relevant portion of the judgment is reproduced as under: "Power of Waiver 49. Under the Companies Act, 2013 the exercise of power by a Tribunal to waive the requirements to file a petition under section 241 of the Act is at its discretion, which may be exer....
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....ition 54. The First Respondent/Petitioner has 9% of the total share capital even after a shareholding was reduced from 45%, by means of 'Rights Issue' which is a subject matter of the main company petition. The Tribunal, has exercised its discretion and opined that a meritorious litigation cannot be thrown at threshold without examining the merits of the case and further observed that the First Respondent/Petitioner had made out a prima facie case to entertain the main company petition for its final adjudication and resultantly allowed the waiver application IA No.170 of 2020 inC.P.No.110/BB/2019 dated 05.06.2020 which in the considered opinion of this Tribunal requires no interference. Viewed in that perspective the instant Appeal fails. In fine, the Appeal is dismissed. No costs." (Emphasis supplied) ii. This Tribunal in the case of Photon Infotech Pvt. Ltd. and Others v. Medici Holdings Ltd. and Others, reported in 2018 SCC OnLine NCLAT 632, has allowed waiver and the relevant portion of the judgment is reproduced below: "16. Going through the application which was filed for waiver by the Respondent no. 1 we find that the applicatio....
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....ions are to be so exercised that it should not be arbitrary or whimsical. Interest of justice has always been the guiding factor. 18. No doubt in the impugned order NCLT, reading the proviso below section 244 as it is, discussed whether prima facie case is made out and observed that the respondents had not shown certain factors, but we are ignoring those observations in view of judgment in the matter of Cyrus. However, we on our analysis of the matter find that it is a fit case for grant of waiver. 19. In reply to arguments of the Ld. Counsel for respondent no. 1 (original appellant) it is argued by Appellants (see brief written submissions on behalf of the appellants filed on 19.03.2018) that appellant no. 5 is not a shareholder of the 1st appellant company, nor is it involved in its management; and that appellant no. 5 is only the transferee under a Business Transfer Agreement signed by the 1st appellant company; and that "It is a bona fide third party purchaser of the 1st appellant's assets at a fail value". We find that when it is shown that substratum itself of the company has been transferred, it is an exception circumstance, and waiver as sought should ....