2020 (3) TMI 266 - Tri - Companies Law

Maintainability of Company Petition - attachment of shares - stay on the proceeding of the auction of the shares of the Petitioner - Company Petition is opposed by the Respondent Nos. l to 4 by filing Statement of Objections dated 26.06.2019, by inter alia raising the maintainability of the Company Petition on the ground that the Petitioner is not a shareholder/member in the 1st Respondent Company. HELD THAT - It is not in dispute that the Petitioner has suffered different Awards passed by the Deputy Registrar of Co-operative Societies, South Zone, Bangalore City District and Nominee of the Registrar of Co-operative Societies at Bangalore in RCS/04/SOU/1029/2015-16 dated 06.06.2016, RCS/04/SOU/1030/2015-16 dated 06.06.2016, RCS/04/SOU/1031/2015-16 dated 06.06.2016, by directing the Respondent therein (Petitioner herein) to pay different amounts and also granting liberty to the Petitioner to recover the amount by Sale of immovable properties or movables properties attached by the Court. Accordingly, the shares of the Petitioner as mentioned below, are auctioned and transferred to the successive bidder. Therefore, the Petitioner admittedly ceased to be Member of the Company by virtue of auction of his shares. Therefore, until and unless, he get back his shares, after succeeding his legal battle he is prosecuting, as mentioned supra he cannot maintain Company Petition. Therefore, Petition can be disposed of by granting liberty to the Petitioner to approach the Tribunal, after becoming member of the Company. Petition disposed off.

Summary

Issues:
- Maintainability of the Company Petition under sections 241 and 244 of the Companies Act, 2013.

Detailed Analysis:
1. The Company Petition CP.No.422/BB/2018 was filed by the Petitioner under sections 241, 242 read with sections 210, 212, and 213 of the Companies Act, 2013 against M/s. Vegus Super Specialty Hospitality Private Limited & 7 Ors. seeking various reliefs such as disclosure of loan amounts, purchase of shares, removal of directors, and more.

2. The Petitioner, holding 22% equity shares of the 1st Respondent Company, fulfilled the criteria under section 244 of the Companies Act, 2013, entitling him to maintain the petition. The Petitioner's shares were auctioned due to defaults, leading to legal battles and challenges against the auction sale proceedings.

3. The Respondents opposed the Company Petition, arguing that the Petitioner was no longer a shareholder/member of the company as his shares were auctioned and transferred to the auction purchaser. They raised objections on the maintainability of the petition based on the Petitioner's lack of necessary qualifications under section 244 of the Companies Act, 2013.

4. The Respondent No.8, Assistant Registrar of Co-operative Societies, filed objections citing the Limitation Act, the Petitioner's default on a loan, legal proceedings, and the auction process following due legal procedures. They contended that the Petitioner's application was intended to harass the Respondent.

5. The Tribunal examined the preliminary objections regarding the maintainability of the Company Petition under sections 241 and 244 of the Companies Act, 2013. It was noted that the Petitioner had lost his membership in the company due to the auction of his shares, rendering the petition not maintainable until he regains his shares through legal proceedings.

6. Consequently, the Tribunal disposed of CP.No.422/BB/2018 as not maintainable, granting the Petitioner liberty to file a fresh Company Petition in compliance with the law once he becomes a member of the company again. No costs were awarded in the judgment.

This detailed analysis outlines the key legal issues, arguments presented by both parties, and the Tribunal's decision regarding the maintainability of the Company Petition under the relevant sections of the Companies Act, 2013.