2020 (11) TMI 985 - Tri - Companies Law

Oppression and mismanagement - validity of Board Meeting wherein there was removal from position of Head of Finance and Head of Operations - Section 241-242 of the Companies Act, 2013 - HELD THAT - When the matter is before the Tribunal, arising under Section 241-242 of the Companies Act, 2013, read with Rule 11, irrespective of what the parties plead, say or do, the paramount consideration of the Tribunal is to keep in view as to what is in the interest of the company. The interest of parties is subservient to the interest of company. Indira IVF Hospital Private Limited, i.e. the company is a very popular and most successful company in the concerned field. Continuation of friction for long time between the two groups will definitely be against the interests of the company. Hence, the CPs are required to be decided finally at the earliest. List both the CPs along with CAs therein, for final disposal on 18.12.2020.

Summary

Issues Involved:
Company petitions filed under Section 241-242 of the Companies Act, 2013 alleging oppression and mismanagement, removal of directors, validity of board meeting decisions, and stay of annual general meeting.

Analysis:

1. Allegations of Oppression and Mismanagement:
The company petitions were filed by two factions of the company, each alleging serious allegations against the other under Section 241-242 of the Companies Act, 2013. Dr. Ajay Murdia filed CP No.163/241-242/JPR/2020 against Shri Ashish Lodha and Shri Manish Khatri, while Shri Ashish Lodha and Shri Manish Khatri filed CP No.164/241-242/JPR/2020 against Dr. Ajay Murdia and others. The Tribunal acknowledged the serious nature of the allegations and decided to examine them in detail after giving both sides the opportunity to complete their pleadings.

2. Shareholding Pattern and Board Composition:
The shareholding pattern of the company, M/s Indira IVF Hospital Private Limited, was detailed in the judgment, showing the distribution of equity shares among various shareholders. The composition of the Board of Directors was also provided, listing the names of the directors. These details are crucial in understanding the corporate structure and dynamics of the company.

3. Decisions Regarding Board and Annual General Meeting:
Shri Ashish Lodha and Shri Manish Khatri challenged the decisions taken in the Board Meeting dated 07.11.2020, where they were removed from their positions. They sought a declaration that the meeting was invalid and filed an application seeking a stay on the Annual General Meeting scheduled for 01.12.2020, where their removal from the Board of Directors was proposed. The Tribunal decided that all decisions taken in these meetings and any future actions were subject to the outcome of the company petitions.

4. Tribunal's Consideration and Directions:
The Tribunal emphasized the paramount consideration of the company's interest in matters arising under Section 241-242 of the Companies Act, 2013. It highlighted that the company's interest supersedes the interests of the parties involved. Given the popularity and success of the company, the Tribunal stressed the need to resolve the disputes promptly to avoid harm to the company. Notices were issued in both company petitions, and directions were given for the completion of pleadings and maintenance of status quo until the next hearing scheduled for final disposal on 18.12.2020.

In conclusion, the judgment addressed the complex corporate dispute involving allegations of oppression and mismanagement, challenges to board decisions, and the importance of prioritizing the company's interests. The detailed analysis of the shareholding pattern, board composition, and legal principles applied by the Tribunal provided a comprehensive overview of the case and the steps taken to resolve the issues effectively.