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2016 (10) TMI 1100 - AT - Companies LawOppression and Mismanagement - maintainability of petition as shareholding of the petitioner is below 1/10th of the shareholding on the date of filing of the petition - Company Petition under Section 397 and 398 of the Companies Act 1956 - Held that:- In the cases where an applicant alleges that his shareholding has been brought down by way of oppression and mismanagement below 1/10th of the total shareholding without notice and knowledge then it is the duty of the Tribunal to determine whether the applicant had 1/10th of the shareholding prior to the date of alleged oppression and mismanagement. Such petition cannot be dismissed on the ground that the applicants shareholding is below 1/10th of the total shareholding of the Company on the actual date of presentation of the Company Petition. In the present case, the Tribunal failed to apply the aforesaid principle and erred in holding that the Company Petition preferred by the appellants under Section 397 and 398 of the Companies Act 1956 was not maintainable on the date of presentation of the Company Petition. The question of oppression and mismanagement and maintainability in the present case is a mixed question of facts and law. As the petition was filed on the ground that the shareholding of the applicant(s) has been brought down below 1/10th of the total shareholding of a Company by oppression and mismanagement, Tribunal was required to decide the question of maintainability at the time Of final hearing of the Petition. Both the merit and question of maintainability were required to be decided together. On hearing the parties, in case the Tribunal forms opinion that there was no oppression and mismanagement on the date of cause of action as alleged by the applicant then in such case it was open to the Tribunal to dismiss the petition as not maintainable in view of Section 399 of the Companies Act 1956.
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