TaxTMI 
TaxTMI 
2026 (2) TMI 1432
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....lding 4.99% of the share capital of the Respondent No. 1 / Jindal Poly Films Limited, invoking Section 245 of the Companies Act, 2013 (the Companies Act) read with Rules 84 to 87 of National Company Law Tribunal Rules, 2016 (NCLT Rules), on 14.03.3024 seeking following reliefs: a) Declare the sale of OCPS and RPS to SSJ Trust (through its trustees Respondent No. 2 and Respondent No. 3) and Respondent No. 16 / Jindal Poly Investment as being null and void, and reverse the said transactions in the books of the Respondent No. 1; or in the alternative b) Direct the Respondents to compensate Respondent No. 1 with respect to loss on sale of OCPS amounting to INR 2268.03 crores and proportionately to the Petitioners; c) Direct the Respondents to compensate Respondent No. 1 with respect to loss on sale of RPS i.e., INR 250.42 crores and proportionately to the Petitioners; d) Direct the Respondents to compensate Respondent No. l for the loss caused due to the advancement of loan to Jindal Thermal / Respondent No. 15 i.e., INR 127.96 crores and proportionately to the Petitioners; e) Direct the Respondents to compensate Respondent No. I / Jindal Po....
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..... The prayer made in IA-132 of 2024 reads as follows. a) Allow the present application and pass an order dismissing the captioned petition bearing CP No. 58 of 2024 titled as 'Ankit Jain and Ors v. Jindal Poly Film Ltd & Ors.' as being non-maintainable; and / or b) Pass such other order/ orders as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case. 3. Notice of the Application bearing IA(CA)/132/2024 on the maintainability of the Company Petition was issued on 09.04.2024 and in the course of further hearing, hardcopies of the IAs, issue-wise chart, list containing provision of law and judgment compilation cited by the parties, qua maintainability of the main Petition has been filed. On various dates, the objection raised by the Respondent on the maintainability of the petition, were heard. Papers in volumes were filed by each side are taken on record. 4. While it is the stand of Mr. UK Chaudhary, Ld. Sr. Counsel appearing for the Respondent in the main case and the applicant in IA-132 of 2024, that the main company petition is not maintainable for various reasons stated in that application, it is the stand of....
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....tal 167.00 229.70 288.29 18.80 703.79 Para 7.15 at Pg 30 of the petition 4. 07.06.2014 (Terms of RPS) The board of directors of Jindal Powertech / Respondent No. 14 vide a resolution resolved that the number of shares given as RPS would carry 0% dividend and were redeemable within 15 years at a premium of 10%. Para 7.14 at Pg 29 - 30 of the petition 5. 24.06.2015 (Terms of OCPS) The board of directors in another Extra-ordinary General Meeting of Jindal Powertech / Respondent No. 14 resolved that the number of shares given as OCPS shall be converted at par into equity shares of INR 10/- each, fully paid up and the option for conversion will be given between 57 to 60 months of allotment by Jindal Powertech / Respondent No. 14 to the OCPS holders. Para 7.14 at Pg 29 - 30 of the petition 6. FY 2016-2017 Jindal Films India Limited (Wholly owned subsidiary of JPFL) acquired 11.4% stake in Jindal India Thermal Power Limited / Respondent No. 15 (Majority owned by Jindal Powertech) comprising 6.93 crore equity shares for INR 31.18 crores. Para 7.59 at Pg 56 of the petition 7. 31.12.2016 NPA The accounts of Jindal Power....
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....dal Thermal / Respondent No. 15 submitted with the lenders. Para 7.24 at Pg 36 of the petition 14. FY 2020-2021 Mr. Rina Jain Petitioner No. 2 became a shareholder of JPFL / Respondent No. 1. More stake acquired in FY 2021-2022. Para 2.2 at Pg 15 of the petition 15. 23.02.2021 Jindal Thermal share value increases. IBBI registered valuer submitted a report on the value of equity shares of Jindal Thermal (for the purpose of merger of several promoter companies into Concatenate Advest Advisory Private Limited /Respondent No. 6, and valued the shares of Jindal Thermal / Respondent No. 15 at INR 1243 crores (i.e. INR 20.53 per share) as of March 31, 2021. Para 7.40 at Pg 47- 48 of the petition 16. FY 2020-2021 The shares of Jindal Thermal / Respondent No. 15 owned by Jindal Films (comprising 6.93 crore equity shares for INR 31.18 crores) were sold to a related party Champak Niketan Pvt Ltd at INR 1 per share, for a total sum of INR 6.93 crores. Para 7.59 at Pg 56- 57 of the petition 17. FY 2021-2022 Another loan by JPFL to Jindal Powertech. Converted into OCRPS. JPFL provided a loan of INR 106.5 crores to Jindal Powertech / Respondent No. ....
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....tions")] that make it mandatory to seek approval of all the shareholders, including the minority shareholders (which in the given case, also includes the Petitioners). Notably, no approval (minority public) shareholders were ever taken. Had said transactions been undertaken at its actual value, the same would have exceeded the minimum threshold requiring seeking the approval of minority shareholders. Para 7.32 - 7.33 at Pg 41 of the petition Para 6(vi) of reply at Pg 8 23. 16.06.2022 Email by Petitioner An email was sent by Petitioner No. 1 requesting Company Secretary of JPFL to explain the rationale for the investments made by JPFL. Petitioner No. 1 also sought, through this email, the disclosure of certain information and documents pertaining to the investments made by JPFL. Para 7.34 at Pg 42 of the petition 24. 03.11.2022 and 10.11 2022 Emails by Petitioner Emails were sent by Petitioner No. 1 to JPFL to provide a copy of the valuation report (basis which the sale value of OCPS and RPS was arrived at). No response received till date .. Para 7.34 at Pg 42 of the petition 25. 23.06.2022 Refusal by JPFL to share any information. An email was....
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....the Respondent and that is an admitted fact. Details of the shareholding of the Petitioners in the Respondent No. 1 Company is tabulated below: Name of the Shareholder Shareholding acquired in Financial Year Number of Shares held Shares held (in % ge) to total Paid up capital of the Company Ankit Jain 2017-18 13,40,000 3.06 Rina Virendra Jain 2020-21 4,12,400 0.94 Ruchi Jain Hanasoge 2020-21 4,32,521 0.99 Total 21,84,921 4.99 Therefore, the primary issue is whether there is a case for invoking section 245 pleadings. 9. We heard Ld. Senior Counsels for either side and perused the documents on record. The contention of the Respondents to determine the main Company Petition primarily revolves around the plea that on the facts as pleaded in this case, the Petitioners have chosen a wrong provision and filed the petition under Section 245 of the Companies Act. The entire pleading on facts and cause of action as stated in the petition, it would fall for a case under Section 241 of the Companies Act. 10. Ld. Sr. Counsel appearing for the Respondent has submitted that the petition in essence is a derivative action a....
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....ourt in the case of Valluvar Kuzhumam Put. Ltd Vs. APC Drilling & Construction Put. Ltd. and Ors., CRD (NPD) No. 2044/2022 and CMP Nos. 10516 and 10518 of 2022. The relevant portion of the same reads as follows :- .... 57. A derivative action is an action taken in the interest of the company by any shareholder, either by himself oralong with other such shareholders by impleading the company also as a defendant. As it is stated already, it is an exception to the general rule that the plaintiff should be the one who is affected or against whom a wrong is done. Since the Company should be represented through its Directors or other stake holders, it may not be possible for the company to file a suit for itself because of the obvious indifference of the Directors, who alone are the wrong doers. Even though the Company has not filed the suit by being a plaintiff, the member of the company who files the suit will be presumed as the Company, whose interest is affected. The derivative action is an exception to the general procedure. Even though the affected company is arrayed as defendant, it is construed as the plaintiff only. In class action, it is not the interest of th....
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....n and should remain that stated in Grimes-, Kramer and Parnes. That is, a court should look to the nature of the wrong and to whom the relief should go. The stockholder's claimed direct injury must be independent of any alleged injury to the corporation. The stockholder must demonstrate that the duty breached was owed to the stockholder and that he or she can prevail without showing an injury to the corporation. Decision of Hon'ble High Court of Delhi passed in Rajeev Saumitra Vs. Neetu Singh and Ors. 2016 SCC online Del 512. The relevant portion of the judgment reads as follows :- .... 53 Now, I shall deal with the next submissions addressed on behalf of defendants No. 1 and 2 that the suit filed by the plaintiff as derivative action is not maintainable. It is submitted on behalf of the plaintiff that the plaintiff has instituted the present action for and on behalf of defendant No. 3 as derivative action because defendant No. 3 is unable to from instituting the present action in its own name. It is alleged in the plaint by the plaintiff that the inability has attached to defendant No. 3 as plaintiff and defendant No. 1 are equal share-holders in....
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....her shareholders may make the company a defendant and obtain his reliefs. Where a wrong has been done to the company and an action is brought to restrain its continuance or to recover the company's property or damages or compensation due to it, it is a derivative action. Here the company is the only true plaintiff. The dispute is not an internal one between those who constitute the membership of the company but one between the company on the one hand and third parties on the other. It makes no difference in principle that the third parties may accidentally happen to be the directors or controlling shareholders of the company. Foss v. Harbottle itself is an illustration of such an action. Where such an action is allowed the member is not really suing on his own behalf nor on behalf of the members generally but on behalf of the company itself. In a derivative action, in the framing of the suit for the purpose of compliance of the formalities the plaintiff had to describe himself as a representative suing for and on behalf of all the members other than the wrong-doers. In a true derivative action the plaintiff shareholder is not acting as a representative of the other shareholders....
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....the company has a right to sue but being indulgent in the matter is not likely to sue and, therefore, he gets a derivative authority to sue. (Birch v. Sullivan; 1958 (1) All ER 56]. Decision of Hon'ble High Court of Gujarat passed in Mohanlal Ganpatram and Anr. Vs. Shri Savaji Jubilee Cotton and Jute Mills Co. Ltd., 1964 SCC Online Guj 66. The relevant portion of the judgment reads as follows :- 26. Turning to Sections 397 and 398, I find that the language of these Sections also far from conferring any power on the Court to set aside of interfere with past and concluded transactions between a Company and third parties which are no longer continuing wrongs, confines the power of the Court to making an order for the purpose of putting an end to oppression or mismanagement on the part of controlling share-holders, it is undoubtedly true that the power of the Court under Sections 397 and 398 is very wide - it is conferred in terms of the widest amplitude - and the Court can make such order as it thinks fit, but this power is conditioned by the purpose for which it can be exercised, namely, "with a view to bringing to end the matters complained of" in a case under ....
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....g the purpose for which it can be exercised under the Sections. That the remedy provided by Sections 397 and 398 is essentially preventive in character is also borne out by the second part of Section 398 which applies when a material change has taken place ia the management or control of a Company and by reason of such change jt is likely that the affairs, of the Company would be conducted in a manner prejudicial to the interests of the Company and empowers the Court in such a case to make an order with a view to preventing the matters apprehended, namely, the prejudicial conduct of the affairs of the Company, so that such prejudicial conduct may not at all result from such change and may be totally prevented. 27. ... The heading read with the sub-heading clearly shows that Sections 397 and 398 deal with powers of Court for prevention of oppression and mismanagement in the affairs of the Company and that the remedy given by these Sections is, therefore, of a preventive nature intended to prevent occurrence or continuance of oppression or mismanagement in the affairs of the Company and is not intended to set at naught what has already been done by, controlling shareholders ....
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....tory. There must be continuous acts on the part of the majority shareholders, continuing up to the date of petition, showing that the affairs of the company were being conducted in a manner oppressive to some part of the members. The conduct must be burdensome, harsh and wrongful and mere lack of confidence between the majority shareholders and the minority shareholders would not be enough unless the lack of confidence springs from oppression of a minority by a majority in the management of the company's affairs, and such oppression must involve at least an element of lack of probity or fair dealing to a member in the matter of his proprietary rights as a shareholder." 140. It will be evident that in order to pass orders under Section 397 of the Companies Act, 1956, the CLB has to be satisfied that the Company's affairs are being conducted in a manner oppressive to any member or members and that the facts would justify the making of a winding-up order on the just and equitable principle, but that such an order would unfairly prejudice the applicant before the CLB. Decision of Hon'ble High Court of Supreme Court of India passed in Sangramsinh P. Gaekwad....
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....ction 245. Ld. Senior Counsel submitted that such number of member or members or any class of them, as the case may be, as are may, if they are of the opinion that the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members can file an application. Further, Rule 84(3)(ii)(b) of NCLT Rules prescribe the threshold to initiate a proceedings i.e. the member or members must hold a minimum of 2% of the issued share capital of a listed company. A cumulative reading of both the provision makes it clear that a members holding 2% shareholding in a listed company can institute a cause under Section 245 if it is of their opinion, the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members (including the petitioner). If the above criteria is met, the said member(s) (herein the Petitioner(s), who are holding cumulatively 4.99% shareholding in Respondent No. 1) are perfectly eligible and entitled to institute the Section 245 petition. Any objection in relation thereto is untenable. The plea for dismissing the case without not....
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....vestment be declared as null and void and entire transaction be rescinded / reversed. Seeking restrains on the company from doing anything which is not in compliance with applicable laws, strictly falls within the contours of 'class action' under Section 245 of the 2013 Act. Similar are the other reliefs as per the provision of Section 245. 18. On submission of Respondents, relying upon reflective loss theory being the concept of derivative action, which is different from class action, Ld. Senior Counsel, Mr. Vashist submitted that prayer "b" has been sought inter alia against directors of Respondent No. 1. Perusal of Section 245(1)(g)(i) makes it evident that compensation or damage may be claimed from or against the company or directors or any other person for any fraudulent, unlawful or wrongful act or conduct. Hence, it is incorrect to allege that a class action under Section 245 shall only survive if relief has been sought against the Company. Further, it has been highlighted that derivative action and class action has not been defined under the scheme of the Companies Act 2013. The two Sections 241-242 and 245 of the Companies Act, 2013 have to be understood on its ....
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....powerful groups for power to manage the Company. (Emphasis Supplied) 20. Another decision relied upon is Satyabrata Ghose v. Mugneeram Bangur & Co. [(1953) 2 SCC 437] wherein the Hon'ble Supreme Court reiterated the above position that when an Indian statute deals with a particular subject, it is exhaustive upon the same then it is not permissible to import the principles of English law dehors statutory provisions. The Hon'ble Court noted that the decisions of the courts in English law only possess a persuasive value. 21. The distinction between class action and derivative action in the laws of the United States has been developed in a different legal context and cannot be mechanically applied to the Indian legal framework under Section 245 of the Companies Act. 22. It has been submitted on behalf of the Petitioners that the Application of the Tooley test in Valluvar Kuzhumam (Supra) demonstrates that the direct derivative distinction as is being relied upon by Ld. Counsel for the Respondents as maybe applicable in the context of United States, is not rigid but requires careful analysis of the specific harms alleged and the remedies sought. It further shows that....
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....roceedings. 26. IVN.P/7(PB)2024 has been filed under Section 424 of the Companies Act, 2013 read with Rule 11 of the NCLT Rules, 2016 by Ms. Seetha Kumari against the Respondents seeking following relief: a. Permit the Applicant to intervene in the captioned Petition, being Company Petition No. 58 of 2024; b. Permit the Applicant to file affidavits /' written submissions / additional pleadings in the captioned Petition, and to address oral submissions before this Hon'ble Tribunal, before passing any further orders in the captioned Petition. c. pass such other order(s) as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case. Applicant in this intervention application is stated to be holding 21,66,052 equity shares i.e., 4.95% (approximately) in the Respondent No. 1 Company and therefore comes under minority public shareholders of R-1 Company. The Applicant is directly and substantially affected from actions stated in the Petition. The intervener has submitted that issues raised in the Petition are bona fide based on publicly available record. It has been added that the Applicant has on various occasions....
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....is a case of the Ld. Sr. Counsel for the petitioners in the main case that the pleadings in the petition more fully extracted, demonstrates that there is a direct loss to the Petitioners because of the fraudulent action undertaken by the Respondents and the same (appendix 2 to note filed on 27.11.2024 filed by the petitioners) is reproduced below: APPENDIX - 2 Extracts from the Company Petition S. No. Extracts from the Company Petition Reference from the Company Petition Reliefs should be sought against the company - the primary relief "a" is against the Company itself 1. Declare the sale of OCPS and RPS to SSJ Trust (through its trustees Respondent No. 2 and Respondent No. 3) and Respondent No. 16 / Jindal Poly Investment as being null and void, and reverse the said transactions in the books of the Respondent No. 1; or in the alternative - The said prayer is directly in relation to the actions of the management of the Company vide which the Petitioners have prayed that the sale of OCPS and RPS, inter alia, to the Promoter Trust (SSJ Trust) and Jindal Poly Investment be declared as null and void and entire transaction be rescinded / reversed. Hence, the said....
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....s (discussed in detail below) of Jindal Powertech. Further, as it now emerges, various irregular transactions were undertaken by the Respondent No. 1 during FY 2013-2014 till FY 2021-2022 in relation to such financial instruments, which have resulted in immense losses to the Respondent No. 1 and its public shareholders. These irregular transactions eventually culminated in the sale of such financial instruments to promoter group entities of the Respondent No. 1, namely, (i) Respondent No. 16 (Jindal Poly Investment); and (ii) SSJ Trust (of which the trustees are Respondents No. 2 and 3, i.e., Mr. Shyam Sundar Jindal and Subhadra Jindal respectively), at a grossly undervalued valuation. Para 3.14 / Pg. 18 & 19 5. The Respondent No. 15, Jindal India Thermal Power Limited ("Jindal Thermal") is a company registered under the Companies Act, 1956 and is majority owned and promoted by Jindal Powertech i.e., Respondent No. 14. Respondent No. 1 has provided large amounts of monies as loans to Jindal Thermal, which was eventually written off purposefully to the detriment of Respondent No. 1 and its public shareholders. Para 3.15 / Pg. 19 6. Bearing in mind the above holding....
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....rring losses even at the time when the Respondent No. I was making the investments in the OCPS and RPS. The notes in the Respondent No. I's financial statements fail to provide any justification for the revised understanding in respect of the negative net worth of Jindal Powertech / Respondent No. 14, or the necessity to write the investments off on that account, or at that particular stage. As it now emerges, this was clearly a part of a larger fraud which was being planned and played upon Respondent No. 1 and its minority members. Para 7.19 / Pg. 32 9. The Respondents' refusal to cooperate and share information in respect of the irregular transactions further buttresses the Petitioners' assertion that the transactions in question have been carried out purposely and in a mala fide manner, in order to siphon away assets/investments of Respondent No. 1 into group entities of the parties and to give undue benefit to the promoters and cause losses to the Respondent No. I and minority shareholders of the Respondent No. 1. Para 7.35 / Pg. 43 10. By the aforesaid illegal, wrongful acts undertaken by and at the behalf of the promoters, the offending Responden....
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....red that benefit. Para 8.3 / Pg. 65 14. That from the above facts and circumstances, it is clear that the Respondents are adversely affecting the rights and interests of the Petitioners and acting in a manner which is highly oppressive of the Petitioners as a shareholder and the Respondent No. 1 is being managed in a manner that is oppressive and prejudicial to the non-promoter/public shareholders. It is humbly submitted that the actions of the Respondents are in clear departure from fair dealing and probity and discharging their fiduciary responsibility in the conduct of the affairs of the Respondent No. 1. The business of Respondent No. 1 is being conducted and managed by Respondents Nos. 7-17 in connivance with Respondents Nos. 2-6 with intent to cause losses to its members in a manner prejudicial to the public interest. Clearly, grounds exist for winding up Respondent No. 1, but such winding up would be prejudicial to the Petitioner and their similarly situated public/minority shareholders. Para 8.7 / Pg. 66 15. That the Petitioners state and submit that this petition has been made bona fide and in the interest of justice for securing the rights of the minorit....
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....eptember 9,2016) (2) Without prejudice to the generality of the powers under sub-section (1), an order under that sub-section may provide for- (a) the regulation of conduct of affairs of the company in future; (b) the purchase of shares or interests of any members of the company by other members thereof or by the company; (c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of its share capital;(Effective from September 9,2016) (d) restrictions on the transfer or allotment of the shares of the company; (e) the termination, 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 ....
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....rder, to make, without the leave of the Tribunal, any alteration whatsoever which is inconsistent with the order, either in the memorandum or in the articles. (6) Subject to the provisions of sub-section (1), the alterations made by the order in the memorandum or articles of a company shall, in all respects, have the same effect as if they had been duly made by the company in accordance with the provisions of this Act and the said provisions shall apply accordingly to the memorandum or articles so altered. (7) A certified copy of every order altering, or giving leave to alter, a company's memorandum or articles, shall within thirty days after the making thereof, be filed by the company with the Registrar who shall 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 with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to o....
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.... liability shall be of the firm as well as of each partner who was involved in making any improper or misleading statement of particulars in the audit report or who acted in a fraudulent, unlawful or wrongful manner. (3) (i) The requisite number of members provided in sub- section (1) shall be as under :- (a) in the case of a company having a share capital, not less than one hundred members of the company or not less than such percentage of the total number of its members as may be prescribed, whichever is less, or any member or members holding not less than such percentage of the issued share capital of the company as may be prescribed, 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. (ii) The requisite number of depositors provided in sub- section (1) shall not be less than one hundred depositors or not less than such percentage of the total number of depositors as may be prescribed, whichever is less, or any depositor or depositors to whom the company....
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....pany and all its members, depositors and auditor including audit firm or expert or consultant or advisor or any other person associated with the company. (7) Any company which fails to comply with an order passed by the Tribunal under this section shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. (8) Where any application filed before the Tribunal is found to be frivolous or vexatious, it shall, for reasons to be recorded in writing, reject the application and make an order that the applicant shall pay to the opposite party such cost, not exceeding one lakh rupees, as may be specified in the order. (9) Nothing contained in this section shall apply to a banking company. 34. The distinction as is evident in this case, is that the proceeding under Section 241-242 has a wider amplitude to cover several issues that may be raised while invoking p....
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....olders, who, in their opinion on the various transactions alleged to be wrong in law as stated above, have filed this petition, stating that the management or conduct of the affair of the company have been and are conducted in a manner prejudicial, not only to the interest of the company, but to its members also. This two-prong requirement prima facie is good enough to justify the issuance of notice. They plead belated knowledge which is a point in issue to be adjudicated. 37. The Section 245 of the Companies Act, 2013 gives a right in both contingencies, namely, prejudicial to the interest of the company and prejudicial to the interest of the members. This distinction and the concept under Section 245 has been introduced in the Companies Act 2013 and prima-facie appears to be different from the law in US Jurisdiction. 38. We have considered the decision of Patrick Tooley and Kevin Lewis Vs. Donaldson Lufkin & Jenrette Inc., which has been usefully extracted in the Hon'ble High Court of Madras decision in Valluvar Kuzhumam Put. Ltd Vs. APC Drilling & Construction Put. Ltd. and Ors. The Hon'ble Madras High Court only reiterated the view of the Patrick Tooley and Kevin ....
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....legal argument on the factual aspects. The Respondents may have a valid defence. For the purpose of prima-facie case to issue notice, we are of the opinion that the ingredients of Section 245 of the Companies Act, 2013 having been satisfied in this case, there is no necessity to go into various factual aspects of the case, as pleaded by the Respondents to come to a conclusion that there is no case under Section 245 of the Companies Act, 2013. This will amount to prejudging the issues. 43. Section 245(4) is a provision which enables the Tribunal to decide the issues raised by the parties after the Petition is admitted. These are pointers which enable the Tribunal to adjudicate the case on merits. (4) In considering an application under sub-section (1), the Tribunal shall take into account, in particular- (a) whether the member or depositor is acting in good faith in making the application for seeking an order; (b) any evidence before it as to the involvement of any person other than directors or officers of the company on any of the matters provided in clauses (a) to (f) of sub- section (1); (c) whether the cause of action is one which the memb....
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....er of all of them is impracticable, where the question of law in relation to such fact is common to the class. The representative parties will fairly and adequately protect the interest of the class. The inconsistency or multiple adjudication can be avoided in a class action, which is not the case in derivative action. Therefore, this Tribunal under Section 245 has the power to grant relief to shareholders or depositors or class of them, and that can include to the benefit of the Company. We prima facie hold in favour of petitioners for issuance of notice. 45. It is another argument of the respondent that the in case of Class Action, shareholders file petition against the Company, its directors, officers etc. seeking relief in respect of acts in presnti or act likely to occur. The interest of a particular 'class' of individuals that is sought to be protected and the remedy lies against the company and its governance / management. Damages / compensation is payable to such class of shareholders. whereas in the present case, the petitioner seeks relief in favour of Respondent No. 1 company. This distinction in Indian law is evident from reading of Section 245. Section 245 (....
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....ot cause any prejudice to the Respondents. 49. Accordingly, we reject the contention of the Respondents on its plea of maintainability that the Petitioners are non-suited to filed a case under Section 245 of the Companies Act, 2013 and we cause the issuance of notice. 50. Accordingly, Application on maintainability being IA(CA)- 132/2024 is Dismissed. The Petition being CP No. 58/245/PB/2024 is Admitted to an extent of issuance of Notice. Notice is issued in terms below. 51. As per Rule 87 of the NCLT Rules 2016, public notice of the Petition has to be issued upon admission. The rule is extracted below: 87. Publication of notice .- (1) For the purposes of clause (a) of sub section (5) of section 245 of the Act, on the admission of an application filed under sub-section (1) of section 245 of the Act, a public notice shall be issued by the Tribunal as per Form No. NCLT-13 to all the members of the class by- (a) publishing the same within seven days of admission of the Application by the Tribunal at least once in a vernacular newspaper in the principal vernacular language of the State in which the registered office of the company is situated and at ....