2019 (6) TMI 848 - AT - Companies Law

Oppression and Mismanagement - allegation of renting the premises on rent which would fetch higher rent if used as banquet hall - Interlocutory Application for vacating the interim order - HELD THAT - The Respondents have filed the Report of the Chartered Accountant (G L Harlalka Co.) dated 8th May, 2019 from which we find that income on account of hire charges for Banquet Hall (Special Event) in ground and Mezzanine Floor in respect of premises No. RAA-36, V.I.P. Road, Kolkata- 700059 is ₹ 4,75,000/- for the period from 1st April, 2017 to 31st March, 2018 - we find that for the said premises, the Company received a Term Sheet-cum-LOI from Perky General Retail (a business associate firm of Reliance Corporate IT Part Limited ) on 8th January, 2019 who wished to take the basement, ground and mezzanine floor of the aforesaid premises i.e. same area on a monthly rent of ₹ 5,75,425/. As we find that monthly rent of the same premises is much more than annual amount generated by the Company by giving it rent for banquet purpose, we are not inclined to interfere with the interim order passed by the Tribunal. Appeal dismissed - decided against appellant.

Issues Involved:
1. Interim order under Sections 241-242 of the Companies Act, 2013.
2. Interlocutory Application for vacating interim order.
3. Company Petition for 'oppression and mismanagement'.
4. Proposal for leasing commercial space.
5. Dispute over rental income from banquet hall.
6. Report of the Chartered Accountant.
7. Appeal against the Tribunal's order.

Analysis:
1. The judgment pertains to a pending petition under Sections 241-242 of the Companies Act, 2013, where an interim order was passed on 14th February, 2017. Subsequently, the Respondent filed an Interlocutory Application seeking to vacate the said interim order and requested necessary directions.

2. The National Company Law Tribunal modified the interim order on 5th March, 2019, allowing the Applicant to let out a portion of its building for commercial purposes. The Tribunal emphasized the importance of not keeping the building idle to generate revenue and directed the Applicant to maintain the rent in a separate account until the final order is passed.

3. A Company Petition for 'oppression and mismanagement' was filed by the Appellant/Petitioner, leading to an earlier order by the Tribunal on 14th February, 2017. The order required both parties to maintain the status quo regarding shareholding and board composition, with restrictions on the disposal of immovable properties without consent or court approval.

4. The Respondents presented a proposal from 'Reliance Corporate IT Park Ltd.' for leasing a significant commercial space within a multi-storied building. The proposal outlined terms for a 15-year lease with agreed monthly rent, sparking a dispute over the best use of the premises.

5. The Original Petitioner opposed the modification request, highlighting the current use of the basement area as a Banquet Hall generating substantial daily rent. This opposition led to a debate over the financial implications of leasing the space for commercial versus ceremonial purposes.

6. Following submissions and considerations, the Tribunal granted permission for the Company to lease the space, taking into account the financial aspects and potential benefits to the Company.

7. The Respondents submitted a Chartered Accountant's report indicating income from the Banquet Hall for a specific period, while also receiving a lucrative offer for leasing the same premises, prompting the Tribunal to uphold its decision based on financial viability.

8. Given the significant difference in rental income potential, the Tribunal found no grounds to interfere with the interim order, ultimately dismissing the appeal without costs due to lack of merit.

This comprehensive analysis covers the various issues addressed in the judgment, highlighting the legal proceedings and decisions made by the Tribunal in response to the parties' submissions and contentions.

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