2018 (5) TMI 573 - AT - Companies Law

Appellant eligibility to file an application under sections 397 The Applicant/Appellant (Petitioner) misled the Hon ble Supreme Court by stating that the Tribunal has recorded a finding that the Applicant/Appellant (Petitioner) has 14.017% shareholding.

Summary

Issues Involved:
1. Eligibility to file an application under Sections 397 & 398 of the Companies Act, 1956 (now Section 241 of the Companies Act, 2013).
2. Whether the Applicant/Appellant holds more than 10% of the issued share capital of the Company.
3. The Tribunal's findings regarding the Applicant/Appellant's shareholding.
4. Misleading statements made to the Hon’ble Supreme Court about the Tribunal's findings.

Detailed Analysis:

1. Eligibility to File an Application Under Sections 397 & 398 of the Companies Act, 1956 (Now Section 241 of the Companies Act, 2013):
The main question addressed in the judgment was whether the Applicant/Appellant is eligible to file an application under Sections 397 & 398 of the Companies Act, 1956. According to Section 399 of the Companies Act, 1956, eligibility is defined as holding not less than one-tenth of the issued share capital of the company. The judgment also refers to Section 244 of the Companies Act, 2013, which maintains similar eligibility criteria.

2. Whether the Applicant/Appellant Holds More Than 10% of the Issued Share Capital of the Company:
The Applicant/Appellant claimed to hold more than one-tenth of the issued share capital, specifically 14.017%. This claim was supported by pleadings and documents submitted, including the assertion that the Applicant/Appellant had contributed 34.68% of the equity but was shown as holding only 0.16% in the Balance Sheet as of 31st March 1988.

3. The Tribunal's Findings Regarding the Applicant/Appellant's Shareholding:
The Tribunal observed that the Applicant/Appellant's claim of holding 14.017% of the equity was based on calculations that included amounts shown as unsecured loans. The Tribunal noted that the Applicant/Appellant had not produced any share certificates to substantiate his claim. The Tribunal concluded that the Applicant/Appellant did not meet the eligibility criteria as he did not hold one-tenth of the issued share capital either at the time of filing the petition or at the time of the alleged acts of oppression.

4. Misleading Statements Made to the Hon’ble Supreme Court About the Tribunal's Findings:
The judgment highlighted that the Applicant/Appellant misled the Hon’ble Supreme Court by stating that the Tribunal had recorded a finding that he held 14.017% shareholding. The Tribunal clarified that its observations were based on hypothetical calculations and not on actual findings. The Tribunal ultimately rejected the Applicant/Appellant's claim of holding more than 10% of the shareholding.

Conclusion:
The Appellate Tribunal concluded that:
1. The Applicant/Appellant is not eligible to maintain the petition under Sections 397 & 398 of the Companies Act, 1956 (now Section 241 of the Companies Act, 2013).
2. The Applicant/Appellant misled the Hon’ble Supreme Court by stating that the Tribunal had recorded a finding of 14.017% shareholding.

The Review Application (AT) No. 01 of 2017 and Company Appeal (AT) No. 22 of 2017 were dismissed with no order as to costs.