2021 (4) TMI 1359 - SC - Companies Law

Appointment of Special Officer - petition for oppression and mismanagement has been pending since 2016 - compliance with the mandate of Section 422 of the Companies Act 2013 - alternative submission is the shareholding is held within the members of a family and is closely held, it would be appropriate if mediation is resorted to so that any one or more of the groups of shareholders can buy out the shareholding of others. HELD THAT - The appellants are permitted to move the NCLT for expeditious hearing having regard to the mandate of Section 422. Any offer which the appellants have for an amicable solution through a mediatory process can be urged before the NCLT when the proceedings are taken up - no observations or findings made thereon and it is left open to the NCLT to take an appropriate view. Appeal dismissed.

Summary

Issues involved:
1. Validity of the order appointing a Special Officer by the National Company Law Tribunal.
2. Delay in disposing of the petition for oppression and mismanagement.
3. Possibility of mediation for an amicable solution among family-held shareholders.
4. Dismissal of the appeal.
5. Disposal of the pending application.

Analysis:
1. The Supreme Court upheld the order of the National Company Law Tribunal appointing a Special Officer, citing sound reasons provided in the judgment. The decision was affirmed by the National Company Law Appellate Tribunal, with no identified errors warranting interference. The order was based on detailed reasoning outlined in paragraphs 42 and 44 of the judgment dated 1 October 2019.

2. The appellant's counsel highlighted the prolonged pendency of the petition for oppression and mismanagement since 2016. Emphasizing compliance with Section 422 of the Companies Act 2013, the counsel urged for an early disposal of the case. Additionally, considering the closely held family shareholding structure, the possibility of mediation to facilitate a buyout among shareholders was suggested as an alternative approach.

3. The Court acknowledged the submissions made by the appellant's counsel regarding the need for expeditious proceedings in line with Section 422. The Court allowed the appellants to approach the National Company Law Tribunal for a swift hearing. Any proposals for resolving the matter amicably through mediation can be presented before the NCLT during the proceedings, leaving the final decision to the Tribunal's discretion.

4. The appeal was ultimately dismissed, subject to the conditions and considerations discussed in the judgment. The Court's decision to dismiss the appeal was based on the overall circumstances and submissions presented during the proceedings.

5. Furthermore, the Court disposed of the pending application in connection with the case. The order encompassed the resolution of the pending application along with the dismissal of the appeal, effectively concluding the legal proceedings related to the matter at hand.