TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1283
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....(JUDICIAL) 1. By the present Appeals, the Appellants are interalia seeking to set aside the Impugned Order dated July 1, 2025, passed in Company Petition No. 149 of 2017, filed by "Ravi Arya Group" i.e., Respondent Nos. 1 to 5. It is alleged the impugned order, amongst other things, a) wrongly directs ERP access to Ravi Arya Group; (b) treats the company as quasi partnership despite absence of any such agreement; and (c) orders a forensic audit of the company based on selective appreciation of facts. 2. Admittedly the company is a private limited entity with a largest shareholder being Palm View Overseas Ltd (PVOL), which holds 49% of the shares and whereas Ravi Arya Group and Pawan Arya group, both rivals, each hold 25.5% shares. It is argued despite knowing the RespondentNo.2 has floated a rival company namely M/s Nachiketa Power & Steel Pvt Ltd and having poached several key employees of the appellant company, the Ld. NCLT has granted the Respondent an ERP access, including confidential business data, pricing, ventures and client details, as are stored in the company's ERP system. It is alleged Ravi Arya group no longer holds any board position having been disqualified under t....
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....vi Arya group (Respondents) and in return there was to be an inter-se bidding of shares in the appellant company, of shares held by the appellants, the Respondent and the shares of PVOL company. However, it did not happen and ultimately the Hon'ble Supreme Court in an appeal had given directions to implement such Consent Terms, but yet again the respondents have filed a civil suit alleging interalia such settlement is not workable and the suit is still pending. The Respondents viz Ravi Arya Group than moved the Ld NCLT with a company petition No.149/2017 alleging Oppression and Mismanagement against Pawan Arya Group viz appellants herein. Admittedly the said Company Petition has since been dismissed vide the impugned order but certain directions were given in para 41 and 42 of the said order. 8. The learned senior counsel for the Respondent argued such directions can be given even at the time of dismissal of a petition for Oppression and Mismanagement to do complete/substantial justice. He referred to various judgements in support of his argument viz Needle Industries (India) Pvt Ltd Vs Needle Industries Newly (India) Holding Ltd and Others, (1981) 3 Supreme Court Cases 333; Sangr....
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....ion No. 149/2017 on the ground no case is made out for Oppression and Mismanagement, yet has given the following directions as are in paras 41 and 42 of the impugned order: 41. RA Group has alleged denial of Financial Information by PA Group and Manish Agarwal when sought by Nakul Arya specifically, however, we are of considered view that no prejudice is caused to RA Group as such information were available in terms of audited financial statements made available to all the directors. As regards access to books of account of the Respondent Company, Section 128(3) of the Companies Act, 2013 clearly mandates that "The books of account and other books and papers maintained by the company within India shall be open for inspection at the registered office of the company or at such other place in India by any director during business hours". We note that dispute has arisen from insistence to make available virtual access to the ERP platform as is available to other directors. PA group has contended that such access cannot be made available in view of past instance of theft by one of employee, who is now employed with RA Group, and RA Group being engaged in competing business under the n....
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....to note the cogent circumstances exist to pass such directions to do substantial justice. In the cases cited above on behalf of the Respondents, admittedly the directions were given either in cases of buy back of shares to give an exit to member(s) and/or in a complete dead lock in the company. It was only in such situations, the powers were exercised while dismissing the petition. Needle Industries (India) Ltd (supra) was a case of buy out of shares; Sangramsinh P Gaekwad (supra) was a case of absolute dead lock; MSDC Radharamanan (supra) was yet another case of dead lock and Atlas Equifin (supra) admittedly was a case of buy out to give an exit to a member. None of these circumstances exist in the present case so as to empower the court to pass directions as are contained, specifically in para 42 of the impugned order as above. Neither the present case is a case of buy- out/exit from the company nor is a case of complete dead lock. Admittedly the Ld. NCLT has observed the Articles of Association of appellant No.1 captures the actual structure of the company and hence it cannot even be said the company is a quasi-partnership. Para 44 of the impugned order needs to be referred to i....
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....ears to be frivolous. 14. Further we may say such a direction could have been passed only under sub Clause (b) of Clause (1) of Section 242 of Companies Act, 2013 when the circumstances were just and equitable for winding up of appellant No.1 and where instead of ordering the winding up of the company, the Ld. NCLT could have passed further directions, maybe, to investigate into its affairs. Admittedly no case was brought before the Ld. NCLT such circumstances ever exist for winding up of the appellant No.1, hence passing a direction to investigate into the affairs of the company upon a complaint of a disgruntled Director and that too without any cogent reasoning, cannot be said to bring an end to the matter. 15. In Shanti Prasad Jain Vs Kalinga Tubes Ltd (1965) 35 COMP CAS 351 the Court held as under:- In Harmer's case, it was held that " the word ' oppressive ' meant burdensome, harsh and wrongful". It was also held that " the section does not purport to apply to every case in which the facts would justify the making of a winding up order under the ' just and equitable' rule, but only to those cases of that character which have in them the requisite elemen....