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TMI Blog2018 (2) TMI 2008X X X X Extracts X X X X X X X X Extracts X X X X ..... ad it with Section 244, and kept in view the old provisions of Section 398 and 399. We find that not much is required to be stated as Section 244 of the Act, to us, appears to be quite clear. A mere glance at the Section shows that the Proviso which has been added below Clauses (a) and (b) gives power to waive all or any of the requirements specified in Clauses (a) or (b) so as to enable the members to apply . There are no substance in the arguments which are being raised by the learned counsel for the Appellant. The learned counsel for the Respondents submitted that busy bodies in the name of public interest cannot be allowed to resort to Section 241 and 244 otherwise the companies would not be able to function. There is substance in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d acts of oppression and mismanagement. NCLT heard the Petitioner in the light of Section 244 of the Act and concluded that as the applicant was not a member, he could not maintain the petition and non-member cannot seek waiver. The petition was thus rejected. Hence the present appeal. 3. We have heard the learned counsel for the Appellant and the learned counsel for the Respondents. 4. The learned counsel for the Appellant has submitted that if the provisions of Section 244 of the Act are perused the proviso permits waiver of all the requirements of sub-clause (a) or sub-clause (b) which refer to numerical strength or voting strength and even a non-member can maintain the petition. Section 244(1) of the Act reads as under: (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artments. According to the learned counsel, as the Appellant found that there was mismanagement in the Respondent Company, petition was filed. The submission is that if Section 241(1)(a) is perused, it lays down that where the affairs of the company are being conducted in a manner prejudicial to public interest , that could also be a ground for filing the petition under Section 241. It is submitted that earlier the word public interest was not there in the provisions and it was introduced in Section 398 of the Companies Act, 1956 (old Act - in short) by an amendment brought into force with effect from 1st January, 1964. The counsel submitted that under the old Act, the Central Government could permit a member otherwise not eligible to mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the company or its members and/or is frivolous, it will reject the application for waiver . Otherwise, the Tribunal will proceed to notice the other factors. (iii) Whether similar allegation of oppression and mismanagement , was earlier made by any other member and stand decided and concluded? (iv) Whether there is an exceptional circumstance made out to grant waiver , so as to enable members to file application under Section 241 etc.? 8. Referring to (i) in the above paragraph, the learned counsel submitted that the observations of this Tribunal that if the person is not a member the application is to be rejected outright should be treated as obiter as it was not a question which was necessary to decide in that matter. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gued that sub-section (2) of Section 241 also makes it clear that if Central Government is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may apply to the Tribunal for an order under this Chapter. But that would be circuitous route. The learned counsel submitted that the orders of the NCLT rejecting the petition were passed without notice to the Respondents and now he has filed reply to show that there were disputes between the present Appellant and the Respondents and the petition was moved with ulterior motives. 12. Heard counsel for both sides. We find that in spite of adding words relating to public interest on 01.01.1964 in the old Act, even when Act of 2013 was en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the Appellant. The learned counsel for the Respondents submitted that busy bodies in the name of public interest cannot be allowed to resort to Section 241 and 244 otherwise the companies would not be able to function. There is substance in the submission. There are remedies available to the non-members or public, in case the company was functioning against public interest for which there are provisions in Chapter XIV of the Act, and Section 242(2) of the Act is also there. 15. We thus hold the above question of law in negative. 16. We do not find any substance in the appeal. The impugned order does not call for any interference. The appeal is dismissed with costs quantified at ₹ 2 lakhs to be paid by the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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