2021 (1) TMI 1116 - Tri - Companies Law

Seeking grant of status quo order or any interim directions in the Application for consideration before this Tribunal - HELD THAT - The Application in simpliciter is an Application seeking early hearing of the main Company Petition. The Applicants / Petitioners seem to have been frustrated by the Covid-19 pandemic as that has put an effective break upon the mediation proceedings undertaken by the Mediator as well as the valuation exercises and aggrieved by it and in the circumstances they seem to have filed this Application - It is also evident from the record of proceedings that at the instance of the Applicants / Petitioners this Tribunal has evolved a mechanism for sale of the properties giving adequate representations to all the family group concerned all being closely related to each other vide order dated 16.04.2019 under the instance of the Applicants / Petitioners. Further this Tribunal has also ordered for a change of the independent Observer appointed by this Tribunal namely one Mr. Sankara Narayanan Senior Advocate to Mr. 0m Prakash Ellanty Senior Advocate vide its order dated 12.06.2019. Taking into consideration the pendency of the Mediation proceedings as well as the overall interests of the parties concerned and that of the 1 st Respondent Company the mediation proceedings should be expedited as it is more than a year since passing of the order dated 03.01.2020 wherein we had given a time frame to complete the mediation proceedings by the Mediators - it is appropriate for the Mediator in case the Mediator is not comfortable with the mediation proceedings being conducted in physical mode at the least to conduct the same virtually. The Mediator are directed to re-commence the mediation proceedings at the earliest commencing from 1st February 2021 and complete the process of mediation by March 15 2021 after giving advance notice to the parties concerned - application disposed off.

Summary

Issues:
1. Urgent listing of the Company Petition for hearing.
2. Allegations of oppression and mismanagement in the Company Petition.
3. Failure of mediation proceedings and subsequent urgent hearing application.
4. Unilateral conduct of committee meetings by the Respondents.
5. Request for interim direction to prevent disposal of properties.
6. Counter affidavit filed by Respondents regarding mediation and committee meetings.
7. Submissions by Applicants and Respondents during the hearing.
8. Consideration of maintainability of the Petition.
9. Impact of Covid-19 pandemic on mediation and valuation exercises.
10. Order for re-commencement of mediation proceedings.

Detailed Analysis:

1. The Applicants sought urgent listing of the Company Petition due to alleged oppression and mismanagement continuing in the company. They claimed that mediation efforts had failed, leading to the urgent application for early hearing.

2. The Respondents were accused of unilaterally conducting committee meetings and fixing rates for land sites, potentially causing harm to the Applicants. The Applicants requested an early hearing to prevent the disposal of company properties.

3. The Respondents, in their counter affidavit, refuted the allegations of unilateral conduct of meetings and stated that all actions were in compliance with tribunal orders. They argued that the Application did not seek interim relief and highlighted the need to consider maintainability issues before the main Company Petition.

4. During the hearing, the Applicants emphasized the need for overriding powers to prevent oppressive decisions by the majority. They also raised concerns about the sale of land bank by the Respondent Company without proper procedures.

5. The Respondents defended their actions, stating that proper procedures were followed in committee meetings and valuation exercises. They highlighted the impact of the Covid-19 pandemic on mediation proceedings and requested the re-commencement of mediation for resolution.

6. The Tribunal considered the submissions and ordered the re-commencement of mediation proceedings by a specified date, emphasizing the importance of resolving the dispute through mediation. The Mediator was directed to conduct proceedings virtually if necessary and provide a report by a set deadline.

7. The Tribunal disposed of the Application, instructing parties to comply with all previous orders until the Mediator's report was submitted. The decision aimed to expedite the mediation process and address the grievances raised by both parties effectively.