2020 (8) TMI 613 - AT - Companies Law

Oppression and Mismanagement - maintainability of petition - application was filed preliminary objection that in terms of Section 244(1) (a) of the Act - HELD THAT - Admittedly, the Appellants instead of filing reply to the Petition, filed preliminary objection that in terms of Section 244(1) (a) of the Act the petition is not maintainable because the Respondent No. 1 and 2 has not paid the consideration towards the shares allotted to them. It is settled law that an objection as to maintainability of the Company Petition is only to be allowed at an initial stage if there is absolutely, no doubt that the Petition is not maintainable. It is general principle that a Petition is to be thrown out at an initial stage if it is unarguable on the demurrer. The issue of qualification was a mixed question of fact and law and the correct position is required to be ascertained on hearing the parties on merits. Respondent No. 1 and 2 at an initial stage satisfied that they hold 19.38% of the paid up share capital and therefore, they satisfy the requirements under Section 244(1) (a) of the Act. It is however made clear that issue of qualification in the present Petition is a mixed question of fact and law and therefore, the correct position is required to be ascertained on hearing the parties on merits as well - the issue of maintainability of the Petition is still open and it will be decided finally after hearing the parties on merits. Appeal dismissed.

Issues Involved:
1. Maintainability of the Company Petition under Section 244 of the Companies Act, 2013.
2. Validity of the call notice issued by the Appellants.
3. Allegations of non-payment for shares by Respondent No. 1 and 2.
4. Consideration of the plea of bonafide mistake in accounts.

Issue-wise Detailed Analysis:

1. Maintainability of the Company Petition under Section 244 of the Companies Act, 2013:
The Tribunal examined whether the Company Petition filed by Respondent No. 1 and 2 was maintainable under Section 244 of the Companies Act, 2013. The Appellants argued that Respondent No. 1 and 2 had not paid the consideration for the shares held by them, making the petition non-maintainable. However, the Tribunal found that the Appellants had admitted receipt of ?17.65 crores towards the allotment of shares to Respondent No. 1 and 2, which were shown as capital in the financial statements. Therefore, the Tribunal concluded that Respondent No. 1 and 2 held 19.38% of the paid-up share capital, satisfying the requirements under Section 244(1)(a) of the Act. The Tribunal emphasized that at the initial stage, only the averments in the Company Petition and the enclosed documents are to be considered, not the defense of the Appellants.

2. Validity of the call notice issued by the Appellants:
The Tribunal addressed the issue of the call notice dated 01.07.2019 issued by the Appellants to Respondent No. 1 and 2 for the payment of final call money. The Tribunal found that this notice was issued after the Tribunal had already dealt with the issue of maintainability and held that Respondent No. 1 and 2 held fully paid-up shares. The Tribunal deprecated the issuance of the call notice, considering it an attempt to disturb the findings of the order dated 01.04.2019. Consequently, the Tribunal stayed the call notice and directed the Appellants to file their reply to the Petition within 15 days.

3. Allegations of non-payment for shares by Respondent No. 1 and 2:
The Appellants contended that Respondent No. 1 and 2 had not made any investment in the Appellant Company, except for ?90 lakhs, and that the amount of ?14.75 crores was paid towards the acquisition of shares in Cetex Petro Chemicals Pvt. Ltd. The Respondents, however, asserted that they had paid a total sum of ?35.26 crores against which shares worth ?34.44 crores were allotted to them by the Appellant Company and Cetex Petro Chemicals Ltd. The Tribunal found that the Appellants had admitted receipt of ?17.65 crores and held that the Respondents satisfied the requirement under Section 244(1)(a) of the Act.

4. Consideration of the plea of bonafide mistake in accounts:
The Appellants argued that the sum of ?14.75 crores was mistakenly appropriated towards the allotment of shares to the Appellant Company instead of Cetex Petro Chemicals Pvt. Ltd. The Tribunal noted that this plea was raised for the first time during the arguments before the Appellate Tribunal and was not mentioned in the preliminary counters filed earlier. The Tribunal opined that such a plea could not be considered at this stage and emphasized that the issue of qualification in the Petition was a mixed question of fact and law, requiring a hearing on merits.

Conclusion:
The Tribunal dismissed the appeals, upholding the orders dated 01.04.2019 and 04.07.2019. It found no merit in the Appellants' arguments and directed the parties to appear before the Tribunal for further proceedings. The Tribunal reiterated that the issue of maintainability of the Petition would be decided finally after hearing the parties on merits.

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