2017 (11) TMI 163 - Tri - Companies Law

Oppression and mismanagement - Held that - Petitioner is claiming for his arrears of salary in this petition. That is a matter to be agitated in Civil Court. Even according to the petitioner, process house was stopped in February, 2013 and he left the company in May, 2013. Therefore, petitioner, if he is entitled he can claim arrears of the salary provided if it is within the limitation by filing a suit for recovery of amount in Civil Suit but not in this petition. There are no acts of oppression and mismanagement qua the shareholding of the petitioner. Therefore, there are no grounds to establish the allegations of oppression and mismanagement. In view of the above discussion, petitioner is not entitled for any reliefs prayed by him. However, in the interest of justice and in order to safeguard shareholding of the petitioner and his wife and considering the fact that there is no scope for the petitioner to actively participate in the activities of the company, this Tribunal is of the considered view that, petitioner and his wife can be given option to sell their shares for a fair market value fixed by an independent valuer appointed by this Tribunal. Petitioner and his wife, if they are willing to sell their shares, they shall file an application before this Tribunal within two months from the date of this order for appointment of independent valuer to assess fair market value of the shares of the first respondent company as on the date of filing of petition. In case, if the petitioner files such application, this Tribunal shall appoint independent valuer to determine the fair value of shares on the date of filing of petition and further decide the mode and manner of transfer of shares. In case if the petitioner and his wife are willing to sell their shares, respondents No. 2 and 3 shall purchase shares of the petitioner at a fair market value determined by the independent valuer appointed by this Tribunal.

Issues involved:
1. Allegations of oppression and mismanagement in the affairs of the first respondent company.
2. Claim for transfer of balance shares, appointment of directors, investigation into company affairs, and repayment of illegal gains.
3. Eligibility of the petitioner to file the petition based on shareholding.
4. Dispute regarding promised shareholding and directorship.
5. Allegations of lack of notice for meetings and involvement in company activities.
6. Claim for arrears of salary and lack of oppression and mismanagement grounds.
7. Shareholding percentage and eligibility to file the petition.
8. Lack of bona fide intentions in filing the petition.

Detailed Analysis:

1. The petitioner, a shareholder, alleged oppression and mismanagement in the first respondent company due to not receiving the promised shareholding and directorship, leading to disputes regarding investment and ownership in the company.

2. The petitioner sought various reliefs, including transfer of shares, appointment of directors, investigation into company affairs, and repayment of illegal gains, based on the understanding between the parties for a quasi-partnership in setting up a process house.

3. The respondents challenged the petitioner's eligibility to file the petition, questioning the shareholding percentage and the lack of grounds for oppression and mismanagement, suggesting that the matter should be addressed in a civil court.

4. The tribunal found discrepancies in the petitioner's claims regarding promised shareholding and directorship, highlighting the lack of evidence to support the allegations of oppression and mismanagement based on the petitioner's actions and knowledge of company affairs.

5. The petitioner's involvement in the company's activities, notice of meetings, and arrears of salary claims were also scrutinized, with the tribunal emphasizing the need for civil court intervention for such matters instead of the current petition.

6. The shareholding percentage held by the petitioner and his wife was a point of contention, with the tribunal ultimately allowing them the option to sell their shares at a fair market value to safeguard their interests, considering the lack of active participation in the company's affairs.

7. Despite the dismissal of the reliefs sought by the petitioner, the tribunal directed both parties to bear their own costs, concluding the company petition while addressing the related interim application.

8. The judgment highlighted the lack of bona fide intentions in the petitioner's allegations of oppression and mismanagement, suggesting that the real motive behind the petition was to address personal grievances rather than genuine company concerns.

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