2019 (6) TMI 217 - AT - Companies Law

Exit to the petitioner as director - the functioning of the company was totally in mess because of the distrust between the petitioner on the one hand and the Respondents on the other - HELD THAT - The Appellant cannot ask for any interest, in absence of any direction given by this Appellate Tribunal and the said matter cannot be re-agitated for deciding the issue afresh by this Appellate Tribunal which was decided on 21st July, 2017. The Tribunal was required to decide the matter within the four corners of the direction of this Appellate Tribunal given on 21st July, 2017 and not beyond the same. In absence of any merit, the appeal is dismissed.

Summary

Issues:
- Decision of National Company Law Tribunal on company petition under Sections 397, 398, 402, 403 & 406 of the Companies Act, 1956.
- Challenge of the order before the National Company Law Appellate Tribunal.
- Directions given by the Appellate Tribunal on 21st July, 2017.
- Compliance with the directions by the parties.
- Appeal regarding payment of remuneration and interest.
- Impugned order dated 28th February, 2019.

Analysis:
The National Company Law Tribunal, Chandigarh Bench, Chandigarh, made a decision on a Company Petition filed under various sections of the Companies Act, 1956. The Tribunal found that the functioning of the company was disrupted due to a lack of trust between the petitioner and the respondents. It was deemed appropriate to allow the petitioner to exit the company as the 2nd and 4th Respondents collectively held the majority of shares, while the petitioner was a minority shareholder.

The order of the National Company Law Tribunal was challenged before the National Company Law Appellate Tribunal, which, on 21st July, 2017, issued several directions. These directions included restoring the appellant as a director of the company until the exit, providing the acquisition value per share to the appellant, granting the appellant the right to purchase the shareholding of other respondents at a discount, setting a timeline for exercising these rights, and restricting remunerations until accounts were finalized.

The Appellate Tribunal, in its order dated 28th February, 2019, addressed a submission regarding the payment of remuneration to the appellant. The Tribunal clarified that the direction to pay remuneration had already been given and did not need reiteration. It also stated that the appellant could not claim interest without a specific direction to do so. The Tribunal emphasized that it was bound by the directions given on 21st July, 2017, and could not revisit issues already decided within that framework.

Ultimately, the Appellate Tribunal declined to interfere with the impugned order dated 28th February, 2019, dismissing the appeal due to lack of merit. The decision was made without imposing any costs on the parties. The petition for delay was condoned, and the relevant application was disposed of accordingly.