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2017 (3) TMI 1108 - Tri - Companies LawMppression and mismanagement - Maintainability of petition - members / petitioners holding less than l/10th of the Issued - Held that:- As no change or new concept was brought in Section 244 of the 2013 Act. Indeed, the old Section of law is in toto bodily lifted from Section 399 to Section 244, change is there to the extent of sub-section (4) in Section 399 to a proviso to sub-section (1) of Section 244, as to the phrase 'issued share capital' or as to its rigors no change has come, indeed, the word 'namely' has been introduced. For further confirmation that qualification is limited to the 'members' mentioned in the Section, not to others, thereby the ratio decided in Northern Projects (2008 (4) TMI 505 - HIGH COURT OF BOMBAY ) is still relevant and makes it not open to the Petitioners to say that 'issued share capital' means 'issued equity share capital'. That the phrase 'class of members' mentioned in the mismanagement clause in Section 241 cannot be said as percentage of shareholding for qualification is to be counted within the 'class of members', over this aspect, we have elaborately discussed and said that the member complaining can as well fight for the cause of 'class of members' if mismanagement is qua against a 'class of members'. But, it cannot be read that a 'class of members' themselves have to be treated separately attaining qualification u/s 244. It is only an additional relief that a member qualified u/s 244 can ask for relief. We already said that the addition of 'class of members' is inconsequential to the qualification mentioned u/s 244. When the legislature has taken every care in creating rights on class basis, had the legislature intended to introduce class concept, they would have introduced the same in Section 244 as well. But that has not been done. Therefore, there is no point in the argument of Petitioners saying that 'members' mentioned in Section 244 has to be read as 'class of members'. That we do not find any merit in the argument of the Petitioners' Counsel saying that since the redeemable preference shareholding be shown as debt in the Accounting Treatment, preference shareholding cannot be equated with the equity shareholding to invoke Section 244, because showing in Accounting Treatment for the convenience of Accounting Treatment will neither change the concepts of Company Law nor have any bearing on the mandate of the Statute. That we do not find any merit in the argument of the Petitioners' Counsel saying that by introduction of waiver clause, Section 244(1)(a) has become directory, because by making waiver clause as an exception to 244(1)(a), the qualification clause has become further strong for two reasons - one, by introduction of word 'namely', it has become a third reiteration in respect to qualification and (2) by introduction of waiver clause as proviso, that unconditional authorisation available the old Act to the Central Government has been made as a discretionary relief u/s 241(1)(a). There is neither a context in Section 244 in respect to 'class of members' nor in complaint/application/cause of action Section 241, it is only inclusion of class of members giving a window to the complainant to canvass for the grievance of class of members as well, not more than that. Therefore, the meaning of the definitions enumerated in Section-2 will remain applicable; the meanings cannot be taken otherwise unless an explicit or implicit context comes into play saying that particular word's meaning is very much different from the meaning given in the definition. Therefore, we do not find any merit in the argument of R11's Counsel. Petitioners' side has failed to satisfy this Bench that this Petition is maintainable.
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