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2022 (11) TMI 701 - AT - Insolvency and BankruptcyApplication filed by a minority shareholder as well as a director holding 7.29% of the total issued, paid up and subscribed share capital in the Respondent No. 1 company - prayer for exemption under the proviso to Section 244(1)(a) of the Companies Act, 2013 for enabling him to initiate action against the Respondent No. 1 Company and its Directors - Section 213, 241, 242 and 244 of the Companies Act, 2013 - HELD THAT - On going through the record that the matter is still pending before the Tribunal, the instant Appeal is disposed off with the following observations without entering into the merit of the case - i) The National Company Law Tribunal (Kolkata Bench, Kolkata) is requested to expedite the matter and dispose of at an early date and ii) The parties are at liberty to raise all the issues before the Tribunal and after hearing the parties, the Tribunal to pass appropriate orders. Appeal disposed off.
Issues:
1. Appeal under Section 421 of the Companies Act, 2013 against the order of National Company Law Tribunal (NCLT) Kolkata Bench. 2. Interpretation of Section 244 of the Companies Act, 2013 regarding the right of a single member to avail remedies. 3. Application filed by a minority shareholder and director under Sections 213, 241, 242, and 244 of the Companies Act, 2013. 4. Relief sought by the Respondent including framing a management scheme and declaring the sale of company assets null and void. 5. Arguments regarding the waiver of requirements specified in Section 244(1) of the Companies Act, 2013. 6. Comparison with previous judgments regarding the inherent powers of NCLT under Rule 11 of National Company Law Tribunal Rules, 2016. 7. Disposal of the appeal by the Appellate Tribunal with observations for expediting the matter before NCLT. Analysis: 1. The judgment pertains to an appeal under Section 421 of the Companies Act, 2013 against an order of the NCLT Kolkata Bench. The appeal was filed by the Appellants, aggrieved by the order dated 03.03.2020 passed by the NCLT. The order pertained to an application filed by a minority shareholder and director under Sections 213, 241, 242, and 244 of the Companies Act, 2013, seeking exemption to initiate action against the company and its directors. The NCLT passed interim orders directing the company to submit accounts related to the sale of its registered office and for parties to file replies within specified timelines. 2. The main issue raised during the appeal was the interpretation of Section 244 of the Companies Act, 2013, specifically regarding the right of a single member to avail remedies under the section. The Appellants argued that the intent of the legislature was to restrict this right to members holding a specified shareholding, not allowing a single member with less than 1/10 of the issued share capital to have such a right. They contended that the order passed by the NCLT waiving the requirements specified in Section 244(1) was not in line with the legislative intent and should be set aside. 3. On the other hand, the Respondent argued that the NCLT had the power to waive the requirements under Section 244(1) and had passed interim orders in accordance with the law. The Respondent cited a previous judgment to support the contention that NCLT had inherent powers under Rule 11 of the NCLT Rules to pass necessary orders to prevent abuse of process and regulate company affairs. The Respondent maintained that the interim orders were in line with Section 242(4) of the Companies Act, 2013. 4. The Appellate Tribunal, after considering the arguments, disposed of the appeal without delving into the merits of the case. The Tribunal urged the NCLT to expedite the matter and allowed the parties to raise all issues before the NCLT for appropriate orders. The judgment concluded with directions for the Registry to upload the judgment on the Appellate Tribunal's website and send a copy to the NCLT Kolkata Bench. This detailed analysis covers the key issues raised, arguments presented, and the final disposition of the appeal by the Appellate Tribunal.
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