TMI Blog2020 (9) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... ares at this rate, nobody is compelling to part with his shares. What he wants to get is, since respondents are selling the shares, he has to get some consideration for the so-called brand value created by his father for the company. This issue will not fall under the ambit of oppression and mismanagement. To create a scenario that there is oppression and mismanagement in R1, the applicant makes a general complaint that R1 company issued rights shares without issuing notice to him. The applicant has not even given the details of rights issue and bonus issue of shares. Hence, we hold that the petition is a frivolous one. This application for waiver is dismissed. - MA No. 2769 of 2019 C.P. No. 2952 of 2018 - - - Dated:- 1-9-2020 - Mrs. Suchitra Kanuparthi, Member (Judicial) And Mr. V. Nallasenapathy, Member (Technical) For the Applicant : Advocate Aditya Khanna For the Respondents : Mr. Kunal Kataria, Ms. Disha Mehta i/b. Solomon for Respondent Nos. 1 2 ORDER Per : V. Nallasenapathy, Member (Technical) 1. The Applicant herein, who is the Petitioner in CP No. 2952 of 2018, filed this MA 2769 of 2019 seeking waiver of the qualification requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No. 2 also promised and assured the applicant that the respondents will provide him equal share for the brand valuation of R1 Company, to be received by R1 company in the purported sale of shares by respondents in R1 Company to one Bajaj Electricals Limited (Bajaj), in view of the fact that the brand value of the Respondent No. 1 Company was created by the joint efforts of the father of R2 and the father of the applicant. However, no details were disclosed by Respondent No. 2. i) The Respondents refused to respond to any of the communication made by the applicant to the respondents regarding the sale of shares of R1 Company to Bajaj. Respondent No. 2 taking advantage of relations between the parties acted in breach of mutual faith and understanding and also siphoned off the assets of the R1 Company and blocked the access to information to the applicant. j) The sole motive of the respondents is to exclusively take the sale proceeds of shares of R1 Company. 3. The Respondent No. 1 and 2 filed reply and submitted as below:- i. The applicant never complained of oppression and mismanagement against the respondents and not objected to allotment of shares for over 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illegal demands of the applicant, this present petition is filed by him to hinder the transaction with Bajaj. viii. The applicant has an option of selling 85 shares to Bajaj for INR 532 per share just the way all other shareholders in R1 Company have received by selling their shares to Bajaj. The applicant decided not to sell his shares and is now demanding an exorbitant amount of compensation i.e. 20% of the transaction amount and the applicant has the malicious intention not only to retain his shares in R1 Company but also to obtain compensation of an exorbitant amount. ix. The applicant has filed this application only to blackmail the R1 Company and to hinder the smooth takeover of R1 by Bajaj. 4. The member of a company who complains that there is oppression and mismanagement under section 241 has to satisfy the condition prescribed under section 244 (1) of the Act and the provisions are extracted below: 241. Application to Tribunal for relief in cases of oppression, etc (1) Any member of a company who complains that- (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m . 5. The Hon ble NCLAT in the case of Cyrus Investments Pvt. Ltd. and ors. vs. Tata sons Ltd. and Ors. (MANU/NL/0100/2017) held as below: 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 the following issues:- (i) Merit of the case (ii) Issues dependent on merit based on claim and counter claim, such as: a. Whether a prima facie case has been made or not b. Whether the petition is barred by limitation, c. Whether it is a case of arbitration, d. Whether allegation relates to/pertains to another company (Third party). e. Whether the allegations are in the nature of directorial complaint. f. Whether the applicants' conduct disentitled them from seeking relief. g. Whether the proposed application under Section 241 is barred by acquiescence or waiver or estoppel. 141. Section 244 of the Companies Act 2013 came into force from 1st June 2016. Prior to the same, eligibility clause was laid down under Section 399(1) of the Companies Act 1956, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icious or arbitrary manner and can be passed only by a speaking and reasoned order after notice to the (proposed) respondent(s). The basic principle of justice delivery system is that a court or a Tribunal while passing an order is not only required to give good reason based on record/evidence but also required to show that after being satisfied itself the Court/Tribunal has passed such order. To form an opinion as to whether the application merits waiver, the Tribunal is not only required to form its opinion objectively, but also required to satisfy itself on the basis of pleadings/evidence on record as to whether the proposed application under Section 241 merits consideration. 144. The Tribunal is required to take into consideration the relevant facts and evidence, as pleaded in the application for waiver and (proposed) application under Section 241 and required to record reasons reflecting its satisfaction. 145. The Tribunal is not required to decide merit of (proposed) application under Section 241, but required to record grounds to suggest that the applicants have made out some exceptional case for waiver of all or of any of the requirements specified in clauses (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Hon ble NCLAT in Cyrus Investments Pvt. Ltd. case (supra). b. The main issue raised in the petition is that the applicant has to get value for the brand created by his father s contribution to the company. It seems that another company is taking over the R1 company by purchase of shares from the shareholders at the rate of INR 532 per share. The respondents are selling their shares on their own volition, the shares of R1 are transferrable and if the applicant wants to sell the shares he can do so and if he is not willing to sell his shares at this rate, nobody is compelling to part with his shares. What he wants to get is, since respondents are selling the shares, he has to get some consideration for the so-called brand value created by his father for the company. This issue will not fall under the ambit of oppression and mismanagement. To create a scenario that there is oppression and mismanagement in R1, the applicant makes a general complaint that R1 company issued rights shares without issuing notice to him. The applicant has not even given the details of rights issue and bonus issue of shares. Hence, we hold that the petition is a frivolous one. c. Further it sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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