2024 (4) TMI 1245 - SC - Companies Law

Oppression and Mismanagement - Sections 241 and 242 of the Companies Act 2013 - HELD THAT - The NCLAT noted that the decision of this Court in TATA Consultancy Services Limited Vs Cyrus Investments Private Limited Ors 2021 (3) TMI 1181 - SUPREME COURT was delivered after the order of the NCLT. Thereafter the NCLAT extracted from the judgment in Tata Consultancy Services Limited. Having done so it remanded the proceedings back to the NCLT. The NCLAT held that the NCLT will have to reexamine the original petition in light of the judgment of this Court in TATA Consultancy Services Limited 2021 (3) TMI 1181 - SUPREME COURT . Simply remanding the matter to the NCLT without examining the facts and without analysing the extent of the application of the decision in TATA Consultancy Services Limited to the facts at hand would amount to an abdication of the appellate jurisdiction of the NCLAT. Appeal is restored to the file of NCLAT for fresh examination.

Summary

The Supreme Court reviewed an appeal from an NCLAT order dated December 14, 2023. The case originated from a petition filed under Sections 241 and 242 of the Companies Act 2013, alleging "oppression and mismanagement." The NCLT had previously ruled in favor of the petitioners, declaring an EOGM and a resolution for the removal of a director as "illegal, null and void," and restoring the director's position.The NCLAT, however, remanded the case back to the NCLT, citing the Supreme Court's judgment in TATA Consultancy Services Limited Vs Cyrus Investments Private Limited & Ors (2021) 9 SCC 449, which was delivered after the NCLT's decision. The Supreme Court found this remand unsustainable, stating that the NCLAT should have examined the impact of the TATA Consultancy Services judgment on the case rather than simply remanding it.The Supreme Court allowed the appeal, set aside the NCLAT's order, and restored Company Appeal No 233 of 2020 to the NCLAT for "fresh examination," clarifying that all rights and contentions of the parties remain open. Pending applications were disposed of.