2019 (11) TMI 188 - Tri - Companies Law

Maintainability of petition - Oppression and mismanagement - name of respondent-company was struck off during the pendency of company petition - sections 397 and 398 of the Companies Act, 1956, read with sections 402 and 406 of the Companies Act, 1956 - HELD THAT - We are not in agreement with learned counsel for the petitioner that since the Registrar of Companies is not justified for strike off in question and thus the petition is maintainable. Admittedly, neither the petitioner nor respondents stated to have brought to the notice of the Registrar of Companies about pending of the case, when they have issued notices for striking off the name of companies leading to striking off the name of company. Moreover, it is the responsibility of the concerned parties to bring to the notice of the Registrar of Companies, when STK notices were issued by the Registrar of Companies proposing to struck off the company. The petitioner/the company, etc., who are eligible to file any application under section 252 of Companies Act, 2013, can file an application/petition seeking to restore the name of the company, and in such a case, the Tribunal can consider the issue whether the Registrar of Companies is justified to strike off the company, while the present company petition is pending. Petition is hereby disposed of by granting liberty to the petitioner to file a fresh company petition, in accordance with law, after the name of respondent No. 1-company restored to file by the Registrar of Companies.

Issues:
1. Maintainability of the company petition due to striking off the name of respondent No. 1-company.
2. Allegations of oppression and mismanagement under sections 397 and 398 of the Companies Act, 1956.
3. Relief sought by the petitioner against the respondents.
4. Shareholding pattern and investments made by the petitioner in the first respondent-company.

Issue 1: Maintainability of the company petition
The case involved a petition under sections 397 and 398 of the Companies Act, 1956, where the respondent No. 1-company's name was struck off during the pendency of the petition. The petitioner argued that the strike off was illegal and should be ignored. However, both parties acknowledged that the company was struck off, rendering the petition not maintainable as alleged acts of oppression and mismanagement must exist at the time of filing and during the proceedings. The Tribunal held that since the company was struck off and no steps were taken to restore its name, the petition could not be considered. It was suggested that a fresh petition could be filed after the company's name was restored by the Registrar of Companies.

Issue 2: Allegations of oppression and mismanagement
The petitioner alleged acts of oppression and mismanagement under sections 397 and 398 of the Companies Act, 1956. The petitioner, a member and director of the first respondent-company, invested in the company following its association with L. J. Hooker, a renowned real estate company. The petitioner held 20% of the company's paid-up capital and played a significant role in maximizing benefits from the tie-up with L. J. Hooker. The petitioner sought various reliefs, including declaring that the respondents conducted the company's affairs oppressively and prejudicially.

Issue 3: Relief sought by the petitioner
The petitioner sought reliefs such as directing business brought in through the association with L. J. Hooker to be routed only through the first respondent-company, restraining respondents from associating with L. J. Hooker, and preventing certain respondents from using L. J. Hooker's name and brand. These reliefs were aimed at addressing alleged oppressive conduct and protecting the interests of the petitioner and the company.

Issue 4: Shareholding pattern and investments
The petitioner's investment in the first respondent-company and the subsequent shareholding pattern were crucial aspects of the case. The petitioner held 20% of the company's paid-up capital, and additional shares were issued to other respondents based on their contributions. The petitioner's role went beyond that of a mere shareholder, as evidenced by the significant investment made and the impact on the company's growth due to the association with L. J. Hooker.

In conclusion, the Tribunal disposed of the case by allowing the petitioner to file a fresh company petition once the name of respondent No. 1-company was restored by the Registrar of Companies, emphasizing the importance of maintaining the company's legal status for the petition to be considered.

← Previous Next →