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2018 (6) TMI 732 - AT - Companies LawOppression and mismanagement - application filed for waiver - application for 'waiver' subject to the question whether (proposed) application under Section 241 relates to 'oppression and mismanagement' - Held that:- Except for appellants 2 and 3 none of the other shareholders can maintain an application of oppression and mismanagement. As per the judgment of Cyrus [2017 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] other minority stake holders cannot be asked or directed to form a group of 10% of the members. This is an exceptional factor and we find substance in the arguments of the learned counsel for Respondent no.1 that the Respondent no.1 (original applicant) has 6.62 per cent shareholding and the appellants 2 to 4 have purposely left a minuscule 0.038 per cent in the hands of others and kept rest of the shares with themselves. The argument is that the number of Members has been increased by transferring 15 shares to employees so that Section 244 could not be satisfied. Going through the application which was filed for waiver by the Respondent no.1 we find that the application pertains to ‘oppression and mismanagement’. We keep in view the pleadings of alleged oppression and mismanagement. There is no dispute that the original applicant/ respondent no.1 is member of the company. It cannot be said that the application is frivolous. It is not a case that similar allegations of ‘oppression and mismanagement’ were earlier made and stood decided or concluded - When any member of the company complaints of ‘oppression and mismanagement’ in the company, in view of the Companies Act, the issue has to be decided by NCLT. Thus only because the Respondent no. 1 filed suit in the High Court would not be a Bar to present application as the question of oppression and mismanagement has to be decided by NCLT. No doubt in the impugned order NCLT, reading the proviso below section 244 as it is, discussed whether prima facie case is made out and observed that the respondents had not shown certain factors, but we are ignoring those observations in view of judgment in the matter of Cyrus. However we on our analysis of the matter find that it is a fit case for grant of waiver. In reply to arguments of the Ld. Counsel for respondent no.1 (original appellant) it is argued by Appellants (see brief written submissions on behalf of the appellants filed on 19.03.2018) that appellant no.5 is not a shareholder of the 1st appellant company, nor is it involved in its management; and that appellant no.5 is only the transferee under a Business Transfer Agreement signed by the 1st appellant company; and that “It is a bona fide third party purchaser of the 1st appellant’s assets at a fail value”. We find that when it is shown that substratum itself of the company has been transferred, it is an exception circumstance, and waiver as sought should be granted.
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