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2021 (6) TMI 731 - Tri - Companies LawSeeking grant of stay on AGM to be held - subsequent events of acts of oppression and mismanagement occurred in the Respondent Company while conducting the Annual General Meetings - HELD THAT - In the present case, while discussing the scope of permitting amendments, this Tribunal examined whether the proposed amendment substantiate, elucidate and expand the pre-existing facts already contained in the original pleadings. In the application, the Applicant alleges the subsequent events of acts of oppression and mismanagement occurred in the Respondent Company while conducting the Annual General Meetings. It appears from the records that the original Company Petition was filed on 03.07.2019 before the Chennai Bench. The Applicant alleged procedural irregularities occurred while convening the Annual General Meetings to avail the benefit of the Companies Fresh Start Scheme 2020 for the financial years 2015-2016, 2016-2017, 2017-2018, 2018-2019 according to the Companies Act, 2013. The complaint of the Applicant in the Original Company Petition is that no AGM for the Financial Years 2015-2016 and 2016-2017 was conducted. This Tribunal is of the opinion that only based on the conclusion that whether the petition is maintainable or not, then only subsequent events can be considered to do complete justice between the parties and to make appropriate orders for removing the oppression and mismanagement in the Respondent Company - Application dismissed.
Issues:
Application for amendment of Company Petition based on subsequent events of oppression and mismanagement during Annual General Meetings. Analysis: 1. The application for amendment of the Company Petition was filed by the Petitioner seeking to amend the Company Petition based on subsequent events of oppression and mismanagement during Annual General Meetings (AGMs) held by the Respondent Company. 2. The Applicant alleged that the AGMs conducted by the Respondent Company, particularly the 11th AGM for the financial year 2015-2016, lacked transparency and adherence to proper procedures. The Balance Sheet, Profit & Loss Statement, Auditor's Report, and Director's Report were not adequately presented or circulated to shareholders, leading to objections from the Petitioner and other minority shareholders. 3. Subsequent AGMs, including the 12th, 13th, 14th, and 15th AGMs, also faced issues such as incorrect venue, lack of prepared financial statements, and non-circulation of necessary reports to shareholders. Despite objections raised by the Petitioner and minority shareholders, decisions were made without proper consideration of their concerns. 4. The Respondents argued that the Petitioner's objections were duly considered, and resolutions were passed in accordance with the Companies Act, 2013, with the required majority. They also questioned the maintainability of the Company Petition under Sections 241-242 of the Companies Act, 2013, based on the original pleadings. 5. The Respondents further highlighted the "Companies Fresh Start Scheme 2020" that allowed for regularization of filings and statutory compliance, emphasizing that the Petitioner participated in the AGMs and was aware of the proceedings. They contended that the Petitioner's attempt to amend the Company Petition at this stage was an effort to delay the final hearing. 6. The Tribunal considered the scope of permitting amendments and examined whether the proposed amendments added to the existing facts in the original pleadings. It was noted that subsequent events of oppression and mismanagement alleged by the Applicant were already under consideration by the Tribunal in a previous order. 7. Referring to legal precedent, the Tribunal emphasized that subsequent events could only be considered if the main petition succeeded on its merits. Therefore, the Tribunal concluded that subsequent events could be taken into account only after determining the maintainability of the petition to ensure appropriate relief for removing oppression and mismanagement in the Respondent Company. 8. Consequently, the Tribunal dismissed the application for amendment, stating that subsequent events could only be considered based on the conclusion of the main petition's maintainability to ensure justice between the parties and address the alleged oppression and mismanagement effectively.
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