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TMI Blog2023 (2) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany (1st Defendant in Suit). When that be the fact situation, and as per Section 241 of the Companies Act, a Petition, can be preferred, only by the Member(s) of the Company, and all the more, the eligibility of the Member(s), who can sustain a Petition, under Section 241 of the Companies Act, 2013, is prescribed, and when the Appellant / Petitioner, has no Right to file a Petition, under Section 241 of the Companies Act, because of his ineligibility (not being a Shareholder / Member of the 1st Respondent / Company), then, in Law, he has no Locus whatsoever, to seek waiver of the requirement, in IA/644/2020 in CP/289/2020, enabling him, to Apply, under Section 241 of the Act. Viewed in that perspective and looking at from any angle, the IA No. 644/2020 in CP/289/2020, filed by the Petitioner / Appellant (before the National Company Law Tribunal, Division Bench I, Chennai), seeking to Waive all the requirements, specified in Clauses (a) and (b) of Section 244 of the Companies Act, 2013, and resultantly, permitting him to prefer a Petition, as per Section 241 and 242 of the Companies Act, 2013, is per se, not Sustainable, in the eye of Law, as held by this Tribunal. Appeal dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant, when working as the Managing Director of the 1st Respondent / Company , came to know that the Company , was endeavouring to evade payment of taxes on numerous occasions, without his knowledge. One such instance which took place, was in relation to a Project with Citibank N.A. , which was internally called as Project ASLAN . In fact, the 3rd Respondent along with few of its Subsidiaries , had entered into an Asset Purchase Agreement ( APA ) dated 13.03.2017 with Citibank N.A. , and Citibank Overseas Investment Corporation , to purchase certain Assets of the Citibank , which were situated in several countries. 6. The Assets of Citibank , situated at different countries were sought to be purchased through the respective Regional Subsidiaries of the 3rd Respondent . The Assets of Citibank , in India were to be purchased by the 1st Respondent , at a price of USD 5,625,000 even though, the actual costs of the Assets in India, was USD 21,850,511. 7. The 3rd Respondent, without the Appellant s knowledge, had planned to pay the Balance Sum of USD 16,225,511 to Citibank , through its Subsidiaries, situated in other Countries, to evade payment of T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal in TNSE Appeal No. II of 2020 (on the file of the Labour Commissioner, Chennai). 14. In the interregnum, Wirecard Singapore, was being investigated by the Authorities at Singapore, suspecting the several illegal activities being carried on through the said Company. Subsequently, the 3rd Respondent, came under an Independent Special Investigation , by an Auditing Firm KPMG , and that, the 3rd Respondent, had admitted that sum of EURO 1.9 Billion, alleged to exist in the 3rd Respondent s Trust Accounts , did not exist. This was termed as one of the biggest Accounting Frauds , to take place in Germany, and that the 2nd and 3rd Respondent / Companies, are undergoing the Process of Liquidation . 15. Even after the Appellant s Termination , from the Employment of the 1st Respondent / Company , he continued to act as a Director , in the Board of Directors of the Company. He realised, that the 1st Respondent / Company, would continue to operate through illegal methods and he filed a Petition, under Section 241 and 242 of the Companies, Act, 2013, against the Respondents in CP/289/2020, before the Tribunal , and he also filed IA/644/2020, praying to waive the requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IA/644/2020 (Filed by the Petitioner / Appellant , under Section 244 of the Companies Act, 2013, in CP/289/2020), through its Order dated 16.02.2022. 20. The Learned Counsel for the Appellant comes out with an argument that a Director of the Company , carries all the characters / trappings of a Member , of a Company and he is barred as Director , to file a Suit , in regard to the matters that fall within the domain of Section 241 and 242 of the Companies Act, 2013. 21. The Learned Counsel for the Appellant takes a stand that the Tribunal , had committed a grave error in passing the impugned order of dismissing the IA / 644 / 2020 in CP/289/2020, by means of an Order dated 16.02.2022, and in fact, the Tribunal , had failed to take into account of the continuous, illegal acts, committed by the 1st Respondent / Company , in breach of the Laws of the Land , causing huge losses to the Exchequer of the Country . 22. The Learned Counsel for the Appellant emphatically points out the Right of the Appellant , to pray for Reliefs , before the Civil Courts , are similar to the one s provided, under Section 241 and 242 of the Companies Act, 2013, is barred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o enable a person, to exercise the Rights of a Member . When once, a person , becomes a Member , he is entitled to exercise all the Rights of a Member , till, he ceases to be a Member , as per the ingredients of the provisions of the Companies Act, 2013. 29. A Petition , under Section 241 of the Companies Act, 2013, for the Relief , against an Oppression or Mismanagement , in the conduct of Affairs of a Company , can be maintained by a person(s) , who are shown as Members , in the Register of Company . If the persons , who desire to prefer a Petition , are not shown as Members , either rightly or wrongly , then, they are to rectify , the Register first, before bringing a Petition , as per the decision in Wade Prakash v. Iron Traders (P) Ltd., reported in 1961 31 Compcas 122 (Pun.). Shareholder and Holder of a Share : 30. The term Shareholder and Holder of a Share , are employed in the Companies Act , in same manner, meaning a person , who holds Share , in a Company , and is Registered , as Member , in the Register of Members . Hence, only a person , who as a Shareholder , and his name entered on the Register of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , to call for information , inspect books and conduct enquiries , by the Registrar of Companies . Section 207 of the Act, provides for an inspection and enquiry . Section 208 of the Act 2013, specifies submission of report , by the Registrar / Inspector to the Central Government . Section 209 of the Act, pertains to search and seizure . Section 210 of the Act, relates to an Investigation , into the Affairs , of a Company . Section 211 of the Act, 2013, concerns with an Establishment of Serious Fraud Investigation Office . Section 212 of the Companies Act, 2013, deals with an Investigation into the Affairs of the Company , by Serious Fraud Investigation Office . Section 213 of the Act, relates to Investigation , in to Company s Affairs , in other cases. 38. Section 210 (1) of the Companies Act, 2013, is a Discretionary Power . The word necessary , means what is indispensable , needful and essential . However, the Power , under Section 210 (2) of the Companies Act, 2013, is an Obligatory one. 39. The words Affairs ought to be Investigated , are not defined and in reality, the term Investigation , contains the Allusion / Suggestion , a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies Act, 2013 , as well, and hence, sought for an appropriate investigations , to be conducted by the Revenue Authorities , and the Registrar of Companies , into the Affairs of the Company . 47. Added further, the Appellant / Petitioner , had stated that the 1st Respondent / Company , was engaged in such acts of Oppression , over its Executives , and Mismanagement of the Company , which are prejudicial , to the interest of the public . 48. Also, the Petitioner /Appellant in his main CP/289/2020, had averred about the Contract dated 21.08.2017, entered into between the 1st Respondent / Company and M/s. Positive Moves (India) Consulting Pvt. Ltd. , the Contract , entered into between the 1st Respondent / Company and M/s. InTandem Advisors LLP , losses caused by the 4th Respondent , etc. 49. Not resting with the above, the Petitioner / Appellant , had mentioned that, he continues to be one of the Directors , in the Board of the Directors , in the 1st Respondent / Company , and he was taking part in all the Meetings of the Board of Directors . Also that, he was terminated , from the Post of Director , as per Letter of Termination date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad entered into several suspicious contracts , without the knowledge of the Appellant / Petitioner , and hence, he had filed the Petition , under Section 241 and 242 of the Companies Act, 2013, with an intention to bring all the aforesaid unlawful activities of the 1st Respondent / Company . 53. The Appellant / Petitioner in IA/644/2020 in CP/289/2020, had also stated that the 1st Respondent / Company , was engaged in several instances of Oppression , against him and ultimately, had sought waiving of all the requirements , specified in Clauses (a) and (b) of Section 244 of the Companies Act, 2013, and to permit him to file the main CP/289/2020, as per Section 241 and 242 of the Companies Act, 2013. 54. According to the Petitioner / Appellant, in IA/644/2020 in CP/289/2020, he held the Post of Managing Director of the 1st Respondent / Company from 01.05.2015 to 13.05.2019 and further that, he is currently, the one of the Directors , in the Board of Directors of the 1st Respondent / Company . 55. It is not in dispute that the Petitioner / Appellant , had preferred an Appeal , before the Deputy Commissioner of Labour , Tamilnadu, vide TNSE Appeal No. II of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reover, he was removed from the Directors , on 28.09.2020, in compliance with the prescriptions of extent Company Law and Secretarial Standards . 58. A mere perusal of the reliefs, made before the Deputy Commissioner of Labour, in TNSE Appeal (filed by the Appellant in December 2019), before the Tribunal ( National Company Law Tribunal , Chennai) and the Civil Court , will unerringly point out that the Appellant / Plaintiff , had sought to present the same factual matters, mainly with a view to secure similar reliefs before Three Various Forums . 59. It was deemed fit in the wisdom of the Shareholders that the Plaintiff ( Appellant / Petitioner ), may be removed from the Board of Directors at the earliest, in the interests of the 1st Defendant / 1st Respondent Company , and being an urgent matter, it could not have been delayed, in further, as projected on the side of the 1st Respondent /1st Defendant Company . 60. According to the 1st Respondent / Company ( 1st Defendant ), the Petitioner / Appellant ( Plaintiff ) had not revealed the material facts of his gradual demotion from his positions, with the 1st Respondent / Company . Further, he is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iary No.367 dated 04.05.2022). Therefore, the contra plea of the Appellant , seeking to convert the main CP/289/2020 in to a Petition , under Section 213 of the Companies Act, 2013, is not acceded to , by this Tribunal , in as much as the Relief of Oppression and Mismanagement , stand on a different footing altogether, in Law , especially, when the Appellant , is not a Member of the 1st Respondent / Company , and also, against his removal and relief of Re-instatement , is pending in TNSE No. II of 2020, before the Labour Commissioner, Chennai. 66. In the instant case on hand, the Appellant , in Comp. App (AT) (CH) No. 127 of 2022, had tacitly admitted that he is / was not a Shareholder of the 1st Respondent / Company ( 1st Defendant in Suit). When that be the fact situation, and as per Section 241 of the Companies Act, a Petition , can be preferred, only by the Member(s) of the Company , and all the more, the eligibility of the Member(s) , who can sustain a Petition , under Section 241 of the Companies Act, 2013, is prescribed, and when the Appellant / Petitioner , has no Right to file a Petition , under Section 241 of the Companies Act, because ..... X X X X Extracts X X X X X X X X Extracts X X X X
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