2019 (3) TMI 1596 - Tri - Companies Law

Oppression and Management - HELD THAT - The applicant has sufficiently explained its reason to let out a portion of its building for earning money. In a case of oppression and mismanagement keeping idle a building which would fetch rent would cause hardship to the business interest of the Company. The letting can be terminated by giving 6 month notice on either side. The issues that higher rent would fetch if the vacancy in the building is advertised, that the applicant had fabricated the offer letter are cannot be considered at this preliminary hearing stage. It requires larger evidence. Therefore, in the better interest of the RI company, it appears to me that permission to let out the building basement floor referred to above can be allowed subject to passing final order in the IA with a direction to the applicant to keep the rent in a separate account in the name of the company which could not be utilised for any purpose until the disposal of the CP and file periodical report in every three month in the Tribunal by giving copy to the respondent. List the IA for hearing along with the CP to 10.05.2019.

Summary

Issues:
- Application for vacation of order dated February 14, 2017
- Stay of proceedings pending disposal of application
- Ad interim order sought
- Allegations of oppressive and prejudicial management
- Request for modification of injunction order
- Proposal for leasing premises to Reliance Corporate IT Park Ltd.
- Objections raised against leasing proposal
- Argument regarding current utilization of premises as a banquet hall
- Consideration of reasonable rent offered for leasing
- Decision on granting permission to let out premises

Analysis:
The judgment by the National Company Law Tribunal, Kolkata involved the consideration of an application seeking various reliefs, including the vacation of an order dated February 14, 2017, and a stay on further proceedings pending the disposal of the application. The applicant contended that due to the interim order preventing dealing with immovable property without consent, the company was facing economic loss and prejudice. The respondent alleged oppressive and prejudicial management by the applicant, leading to the issuance of the interim order maintaining status quo on shareholding and property disposal.

The main issue revolved around the request for modification of the injunction order to allow leasing of vacant premises to Reliance Corporate IT Park Ltd. The applicant argued that the premises were being kept idle due to the injunction, causing financial hardship. The proposed lease agreement detailed the area and rental terms, emphasizing the need to generate regular income for the company. The respondent objected to the leasing proposal, claiming the offer letter was fabricated and that the petitioner's consent was not obtained in writing.

During the hearing, both parties presented their arguments regarding the utilization of the premises, with the respondent highlighting the current rental income from banquet hall usage. However, the applicant justified the need to lease the premises for consistent revenue generation. The tribunal acknowledged the applicant's reasoning and granted permission to let out the building basement floor, subject to certain conditions like keeping the rent in a separate account and providing periodic reports to the tribunal.

In conclusion, the tribunal allowed the leasing of the premises to Reliance Corporate IT Park Ltd., emphasizing the importance of generating income for the company's business interests. The decision balanced the need for financial stability with the ongoing legal proceedings, ensuring proper monitoring of the rental income until the final resolution of the case.