TaxTMI 
TaxTMI 
2026 (10) TMI 136
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....der Section 244(1)(b) of the Companies Act for the grant of waiver, in initiation of proceedings of CP No. 132 (MB) of 2026, the proceedings, which were intended to be initiated by the Respondents under Section 241, to be read with Section 242 of the Companies Act. 2. By virtue of the impugned order, a waiver has been granted under Section 244(1)(b) of Companies Act, 2013, consequently resulting into the germination of the proceedings under Section 241 and 242, to be determined on merits. 3. The facts, that the Appellant has argued while questioning the Impugned Order. Primarily, the Ld. Counsel for the Appellant had attempted to impress upon as to at what stage the application for waiver under Section 244(1)(b) of the Companies Act could be instituted to be for grant of waiver. What has been argued by the Learned Counsel for the Appellant is that, because of the fact that the Company Petition was instituted on 08.05.2026, its that when the Company Petition was instituted, the Respondent/Petitioner in the Company Petition had, in order to override any possible restrictions or objections being imposed, because of the implication of the provisions contained under Section 244, t....
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....f the Companies Act, 1956, at the relevant point of time, it was being governed by the provisions of Section 8 of the Companies Act 2013, which prescribed for formations with general objects subsisted therein etc. the Appellant in the appeal has contended, that because it was engaged in promotion of film, art, culture, to regulate and facilitate activities in the Indian Films and Televisions Industry, it was pleaded that it was a Section 8 Company. 6. The Respondent/Petitioner, owing to certain acts of operation and mismanagement, which could be widely titled as (i) of misuse and diversion of funds of IMMPA's. (ii) The operational expenditure those were being incurred there was no disclosure/prior approval or intimation. (iii) Improper/no circulation of notice, notes to the agenda and minutes of the executive committee meeting. (iv) Statement of accounts and balance sheet are not in consonance to Article 53 of Article of Associations. (v) Illegal appointment and holding of office by the two Senior vice Presidents. (vi) Illegal suspension and expulsion of Mr. Ratnakar Kumar, i.e. the Petitioner No. 4,and illegal suspension, ex....
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....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 requirements specified in clause (a) or clause (b) so as to enable the members to apply under section 241. Explanation.-For the purposes of this sub-section, where any share or shares are held by two or more persons jointly, they shall be counted only as one member. (2) Where any members of a company are entitled to make an application under subsection (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." 8. So far as the provisions contained under Section 244 of the Companies Act, is concerned, the instant case will not be falling under sub-Clause (a) of sub-Section 1 of Section 244, since it's not a company which is having share capital. The instant company petition in context of the issue of waiver would be maintained, being within the ambit of sub clause (b) of sub-section 1 of Section 244 i.e. the case which company is not having a share capital. ....
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....roceedings of the Company Petition. Para 4 of the order dated 01.06.2026 is extracted hereunder: "4. The Petitioners have obtained consent from 209 members of Respondent No. 1 Company for filing the present company petition, and submit that the said members constitute more than 20% of vote share of the Respondent Company." 10. The said para as extracted above is an expression recorded by the Tribunal, from the pleadings of the Respondent/Petitioner in the Company Petition of having obtained the consent of 209 members of the Respondent company for filing the Company Petition, which itself constituted to be more than 20 per cent of the votes shares of the Respondent company. In fact, the narration given by the Ld. Tribunal in the order of 01.06.2026 is not recording of any objection by the Appellant regarding the maintainability of the Company Petition, rather its only an expression describing the pleadings raised that has been raised by respondent/petitioner in the Company Petition for the purposes of satisfying the conditions of sub Clause (b) of sub Section 1 of Section 244 of the Companies Act, of having requisite number of members of more than 20 per cent of voting s....
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.... Appellant to be of having 1,250 members who were found to be eligible to vote. Hence, according to Para 11 of the application, they submitted that 209 members may not be a satisfactory consent as per Section 244(1)(a) of the Companies Act, as in fact it should have been 250 members, but still they further elaborated to plead that out of 209 members, only 98 were eligible to vote and the remaining 111 members have not paid annual fees, hence they ceased to be eligible members and thus prayed for that the Company Petition may be dismissed as not maintainable under Section 244(1)(b) of the Act. 14. Its under this situation, the Respondent/Petitioners are shown to have filed an application for the grant of waiver under Section 244(1)(b) and in relation thereto they had moved an application in that regard on 05.06.2026. In the application thus preferred, the Respondent/applicant, while reiterating the pleadings already taken by them, as observed above, in the Company Petition, had submitted that the Instant Application has been filed invoking Section 244(1)(b) out of utter precaution, seeking waiver under Section 244 of the Companies Act, and for the aforesaid purpose, it was pleade....
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.... petition. Since in the petition itself, this ground was already pleaded and even if it is presumed that the Respondent/Petitioner had precautionary later filed an application under Section 244 of the Companies Act for the grant of the waiver after the observation made in the order of 01.06.2026, that itself would not be construed that the Company Petition lacked its competence to maintain itself due to the restrictions of Section 244 of the Companies Act. In relation thereto, it would be apt to extract Para 5 to 8 of the Company Petition itself, which deals with the stipulation of maintainability as objected by the Appellant. "5. The Petitioners submit that as on 31/03/2025, there are in all 10,649 Members in the Respondent No. 1 Company. Also, as on 31/03/2025, there are 20 Committee Members in the Respondent No. 1 Company. Hereto annexed and marked "Annexure C-Colly" are the list of Members and Committee Members as on 31/03/2025, extracted from Form MGT 7. 6. The Petitioners submits that as on 01.04.2022 there were in all 977 voting members who were eligible to participate and vote in the elections comprising of only Prime Members, Associate I Members ....
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.... alleging from the prospective thereof that there were 10,649 members and the consent letter of 209 may not satisfy the requirement of sub-Clause (b) of sub-Section (1) of Section 244. However, there was no plausible reply extended by the Appellant qua the circular that was utilised for the purposes of conducting the elections, based on which the elections were conducted, which showed only 977 members were there who had the voting rights. Since the validity of the circular itself was not questioned by the Appellant, it cannot be said that the so-called plea taken by the Appellants in their objection/application for the dismissal of the Company Petition, as not maintainable is substantiated or by documentary evidence on record, rather it endorses the position of Respondents/Petitioners that no waiver is required for filing the company petition. 17. The Appellant had developed and had rather carved out a case by way of an exception and an afterthought contending there the consent of 209 members was alleged to be forged and thus submitted that the said aspect should have been considered by the forensic examination and said powers ought to have been exercised by the Ld. Tribunal, it....
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....he is entitled to certain land in the possession of B, by reason of facts which he asserts and which B denies, to be true. A must prove the existence of those facts." 18. The burden of proof is required to be discharged by a person who desires the court to solicit an order or to proof of an existence of fact which he asserts that, those facts did exist. Since the appellant had not discharged his burden of proof qua the list of consenting members, they cannot contend that the circular of list of members who participated in their voting which had 997 members, was at all doubtful. The lists of consecutive members to the petition was drawn from these 997 members of the IMPPA Circular list. Another important feature that is required to be taken note of it is that if at all there was any sanctity in the stand taken by the Appellant, that there were some of the signatures of the members, which were appearing in the list of consenting members are fraudulent. In that eventuality too, yet again, the burden shifted upon the Appellant to have at least produced those members before the Tribunal, who could have at least established creation of a doubt on the list of consenting member....
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.... is being attempted to be argued otherwise, that the consenting members have not applied their minds. But the inference of the same has to drawn in favour of applicants, to the contrary that when these two applications which were being considered by the Ld. Tribunal being CP 153 (MB) 2026 and Company Application No 175/MB/2026, at least some members should have come forward to deny the contents and sanctity of the letter. If we go into the factual entirety of the dispute restricted to the provisions contained under Section 244 of the Companies Act, it rather satisfies the guiding principles of "Cyrus Investments", as laid down in its Para 140 governing the principles for grant of waiver and more particularly if we scrutinize the impugned order it justifies the test as prescribed under Para 140 of the Cyrus Investments, for the grant of waiver, which in the instant case, cannot be faulted of. The Para 140 of Cyrus investments Judgment is extracted hereunder: "140. For the aforesaid reasons we hold that the Tribunal while deciding an application for 'waiver' under proviso to sub-section (1) of Section 244 to enable the members to apply under Section 241 cannot decide....