TaxTMI 
TaxTMI 
2026 (7) TMI 1010
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....f: M/s Jindutt Safe Vaults Private Limited (Formerly known as M/s Jindutt Vaults and Finance Private Limited) and CA. Rahul M Jain Proprietor of Rahul M Jain & Co., Chennai JUSTICE SHARAD KUMAR SHARMA MEMBER (JUDICIAL) AND JATINDRANATH SWAIN MEMBER (TECHNICAL) For the Appellants : Mr. Srenik S Jain & Mr. A. Vikash, Advocates For the Respondents : Dr. Abhishek Murali, CA for R1-R6 ORDER [ORAL JUDGMENT: Justice Sharad Kumar Sharma, Member (Judicial)] This company appeal is accompanied with a Condone Delay Application, being IA No. 134/2026, wherein the Appellant has sought a condonation of 28 days of delay in preferring the company appeal that, has been preferred by invoking the provisions contain under Section 421 of the Companies Act, 2013. Having heard the Ld. Counsel for the Appellant, as well as the Respondents, who are represented by Dr. Abhishek Murali, the practicing Chartered Accountant and having perused the grounds that, has been taken by the Appellant in para 3 of the application and upon having been satisfied with the same coupled with the fact that, the number of days of delay that, have been sought to be condoned will be falling well within the condon....
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....t directions be issued for transmission of shares, which was said to be standing in the name of Late Mr. Jayantilal M Jain and late Mrs. Lalitha Bai, in favour of the legal heirs as per the law of succession, that a direction be issued to conduct an investigation into the conduct of Respondent No. 2-5 with regards to pertaining to the conduct of affairs of the 1st Respondent company and, surcharge Respondents 2-5 for the loss due to misapplication and diversion of funds and assets of Respondent No. 1 company, that the Managing Director of the board be replaced and that Respondent No. 6 be removed from the post of Auditor of Respondent No. 1 company. 6. During the pendency of the said company petition, an IA was filed by the Appellants, being IA(CA)/96(CHE)/2023, by invoking the provisions contained under Section 242(4) of the Companies Act, to be read with Rule 32 and Rule 11 of the NCLT Rules, 2016, wherein the Appellants / Applicants, to the said application, while referring to contentions as it had been raised in the company petition, sought issue of appropriate direction from the Ld. Tribunal to Respondent Nos. 2, 3, 4, 5 & 6, to produce the bank statements of all the bank a....
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....ith their family members had 58.29% of shares and, as the Respondents would be holding only 41.7% of the shareholding, the Appellants are well within their rights to remove the existing management, take over the management and carry out the investigation as they deem fit by exercising their right as shareholder and to conduct the affairs of the Respondent No. 1 company in the manner they feel appropriate. 10. Further, Ld. Tribunal, after considering the rival contentions, observed that, the evidence that, has been brought on record, by the Appellants is not strong enough to draw an inference with regards to the commission of an act of oppression and mismanagement within the ambit of Section 241 and 242 of the Companies Act and to merit issue of directions for investigation and even for that matter, for production of books of accounts of the company. 11. We note that, the Appellants who are the Petitioners in the company petition, instead of discharging their responsibility of substantiating their stand in the company petition, by production of appropriate evidence had rather on the contrary filed the instant IA for issue of a direction to the Respondents to produce the books ....
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....cause the the Appellants/Petitioners to the company petition will have to stand on their own legs to substantiate the proceedings to be continued and sustained on its merits and that, in the absence of there, being pleading supported with the documents which could have been read in the shape of an evidence, there is no case for interference. Accordingly, the Ld. Tribunal observed as under: - "Therefore, we are not adjudicating on the merits of the case and our observation is only to ensure due process stipulated under the Companies Act is followed by exercising the rights of majority shareholders. If the Applicant decides to take over the management counter, Respondent is directed to render to necessary co-operation including handing over the records of the company. In view of the above, both IA(CA)/96(CHE)/2023 and CA/124(CHE)/2022 are disposed off with above directions and both parties are given liberty to pursue at a later stage if there are is any unresolved issues. 14. The view expressed by the Ld. Tribunal, owing to the above extract, is a clear expression that Ld. Tribunal is not venturing to decide the company petition on its own merits, but rather it i....
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....or either of the parties to the proceedings of the company petition, as all the issues are still left open to be decided, after drawing of an appropriate proceedings because of the fact that the Ld. Tribunal at this stage has not taken a step to decide the controversy on its own merit, thus there is no immediate prejudice. 17. During the course of argument, the Ld. Counsel for the Appellants had argued that the Ld. Tribunal had not considered the entire controversy based upon the pleading, raised by them before the Ld. Tribunal, that the documents presented contain sufficient material to order for investigation, that in the profit & loss statement alone there have been sudden spurts of expenditure which has not been explained by the management, that loan of Rs. 40 Lakhs has been obtained from the one ex-Director without Board Resolution, that assets have been unilaterally purchased, that shares of deceased members are not being transferred to their legal heirs that, Cost of finance has also increased multi-fold which indicates foul play that most of the board meetings and AGMs are being conducted with quorum and following due procedure and that those particulars in respect of pr....