2020 (3) TMI 1008 - AT - Companies Law

Oppression and mismanagement - sum and substance of the allegations in the Petition is that the Company has allotted shares at different premiums on different points of time; without proper notices, company meetings were convened; in the Auditor Report Financial irregularities were found and material information has not been supplied to Respondent Nos. 1, 2 3 (Petitioners) - HELD THAT - From bare reading of this order it seems that the National Company Law Tribunal has appointed an Independent Chairman for interim arrangement till the investigation is completed by the Registrar of Companies and Principal Director of Income Tax (Investigation). However, the scope of enquiry time, for completing the enquiry and to whom the statutory authorities will submit the report, is not mentioned in the impugned order - The impugned order is passed on 22.03.2019, till date about 11 months has lapsed, but Learned Counsel for the parties are unable to apprise the present stage of investigation before the statutory authorities. Thus, in absence of clear directions, the statutory authority will not be able to complete the investigation. Matter remitted to National Company Law Tribunal with a request that after hearing the parties to pass fresh order without being influenced by this order.

Summary

Issues:
1. Allegations of oppression and mismanagement by the Respondents.
2. Removal of Respondent Nos. 1, 2 & 3 from the Directorship of the Company.
3. Petition under Sections 241, 242, 210, 213, and 246 of the Companies Act, 2013.
4. Appellant's challenge to the non-speaking and vague nature of the impugned order.
5. Appointment of an Independent Chairman for M/s. World Schools Private Limited.
6. Lack of clarity regarding the scope of the investigation, time frame, and report submission.
7. Remittal of the matter to the National Company Law Tribunal for fresh orders.
8. Direction for expeditious decision-making on the Petition.

Analysis:
1. The case involved allegations of oppression and mismanagement by the Respondents, leading to the removal of Respondent Nos. 1, 2 & 3 from the Directorship of the Company. The Petition sought various reliefs under Sections 241, 242, 210, 213, and 246 of the Companies Act, 2013, including actions against the contesting Respondents for their alleged illegal actions and financial irregularities.
2. The National Company Law Tribunal disposed of the Petition with directions, appointing an Independent Chairman to oversee the affairs of the Company until investigations by statutory authorities were completed. The Tribunal emphasized the importance of preventing further acts of oppression and mismanagement and appointed a suitable individual with experience in the education field for this role.
3. The Appellant challenged the impugned order as non-speaking and vague, highlighting the lack of specificity regarding the time frame for the investigation report submission and the scope of the enquiry. The Tribunal noted the absence of clear directions, potentially hindering the completion of the investigation by statutory authorities.
4. Due to the uncertainties surrounding the investigation and the lack of clarity in the impugned order, the Tribunal decided to remit the matter back to the National Company Law Tribunal for fresh orders. The decision aimed to ensure that the statutory authorities could proceed with the investigation effectively and without impediments.
5. The Tribunal emphasized that the remittal did not signify a confirmation of the necessity of the investigation by the Registrar of Companies and Principal Director of Income Tax (Investigation) but was a procedural step to facilitate a clearer and more effective process. The parties were directed to appear before the National Company Law Tribunal for further proceedings and expedited decision-making on the Petition.