2021 (12) TMI 157 - AT - Companies Law

Seeking direction to Appellant to maintain Status Quo in relation to the shareholding pattern as well as in relation to the properties of the 1st Respondent Company - eligibility to file a petition under Sections 241, 242 of the Companies Act, 2013 - prime plea taken on behalf of the Appellant is that the Tribunal had passed the impugned order in negation of the principles of natural justice as against the well settled the principle of law and judicial precedent - HELD THAT - There is no two opinion of a primordial fact that no waiver application as per Section 244 (1)(b) was filed before the Tribunal (National Company Law Tribunal, Chennai Bench, in main Company Petition) by the Respondent/Petitioner/Applicant. Taking note of the divergent contentions advanced by the Learned Counsel appearing for the parties, in view of the fact that the plea of maintainability of the petition going to the root of the matter is raised on behalf of the Appellant and the same is repelled/repudiated on the side of the Respondent and added further, that the plea of waiver as visualised under the Companies Act, 2013, in the absence of application being filed by the Respondent before the Tribunal is projected before this Appellate Tribunal , at this stage, this Tribunal, simpliciter, without traversing upon the merits of the case and also without expressing any opinion in disregard set aside the impugned order dated 21.02.2020, since the said Ex Parte impugned order was passed in disregard to the ingredients of Section 420 of the Companies Act, 2013 (providing reasonable opportunity of being heard) in negation of the principles of natural justice and in not issuing Notice to the opposite party as required under Rule 37 of the NCLT Rules, 2016 which is required to be adhered to by the Tribunal . This Tribunal allows the Appeal and remits back the matter for passing a de novo order , by granting opportunity to the respective parties to raise all factual and legal pleas before the Tribunal - Appeal disposed off.

Summary

Issues:
- Impugned order dated 21.02.2020 granted ex parte interim relief without considering maintainability of the petition under Sections 241, 242 of Companies Act, 2013.
- Allegation of passing impugned order against principles of natural justice.
- Respondent's lack of shareholding and failure to fulfill requirements of Section 244 of Companies Act, 2013.
- Dispute over maintainability of main Company Petition No.124/2020.
- Lack of waiver application under Section 244(1)(b) before the Tribunal.
- Prohibition on transfer of shares under Articles of Association and absence of instrument of transfer.
- Respondent's claim of holding 15% of issued and paid-up capital of the company.
- Divergent contentions on maintainability of the petition and plea of waiver under Companies Act, 2013.

Analysis:

The Appellant challenged the impugned order dated 21.02.2020, alleging it was granted without considering the maintainability of the petition under Sections 241, 242 of the Companies Act, 2013. The Appellant argued that the order was against the principles of natural justice and highlighted the Respondent's lack of shareholding and failure to meet requirements under Section 244 of the Act, rendering the petition not maintainable in law.

The Respondent countered, asserting that the main Company Petition No.124/2020 was justiciable, focusing on grounds of cancellation of shares and oppression and mismanagement. However, it was noted that no waiver application under Section 244(1)(b) was filed before the Tribunal by the Respondent, as required by law.

A key contention arose regarding the transfer of shares, with the Appellant claiming it was prohibited under the Articles of Association and no instrument of transfer was executed. In contrast, the Respondent maintained holding 15% of the company's capital and cited annual returns as evidence.

The Tribunal, considering the divergent contentions, set aside the impugned order due to procedural irregularities, emphasizing the importance of natural justice and issuing notice to the opposite party. The matter was remitted back for a fresh decision, stressing a fair and unbiased adjudication of the main Company Petition No.124/2020 without influence from the Appeal's observations.