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TMI Blog2022 (1) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... s derivative action can be filed before the NCLT, but it is equally true Rajeev Saumitra [ 2016 (2) TMI 134 - DELHI HIGH COURT ] says there is no provision in the Companies Act to approach the Company Law Board for a wrong done to the company by a director. The Hon ble Supreme Court in Ahmed Abdulla Ahmad Al Ghuriar vs Star Health and Allied Insurance Company Limited [ 2018 (11) TMI 1408 - SUPREME COURT ] says a derivative action is maintainable in a Civil Court though only in a particular situation and as an exception. No doubt contrary views are expressed by this Court, but in view of Ahmed Abdulla Ahmad Al Ghuriar, prima facie one can say such an action cannot be brushed aside in its infancy. Thus, summons of suit and application are her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Hi Tech Audio Systems Private Limited/defendant No.6 which has been created by lots of efforts over several decades. It is alleged, the plaintiff and defendant No.1 are 50% share holder of defendant No.6 and that defendant No.1 is instrument in creating defendant No.5 namely Hi Tech AVI India LLP in the name of his son and daughter-in- law and thus diverting substantial business of defendant No.6 to defendant No.5. 5. The learned counsel for the plaintiff has argued over the last three decades, the value of the company has been increasing. In the year 2005 the sale was of Rs.1070.49 lacs with a net profit of Rs.35.40 lacs; in the year 2019 the sale was of Rs.17227.95 lacs with a profit of Rs.725.15 lacs; but in the year 2020, the sales we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by defendant No.1 wherein he had taken over all major functions of the company without consulting the plaintiff and thus usurping all powers of the Board, including diverting of business of defendant No.6. Hence, a notice dated 16.10.2021 was sent by the plaintiff to defendant No.1 for his conducting of business in an oppressive manner - and also qua diversion of business to defendant No.5. Instead of giving a reply to notice, defendant No.1 filed a petition before NCLT by impleading the plaintiff as respondent No.2 saying plaintiff is not allowing to run defendant No.6. A reply has been filed by the plaintiff before the NCLT giving all details of oppression of defendant No.1 and in rejoinder defendant No.1 had though allegedly admitted al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for defendants No.1, 4 6 has argued the entire plaint deals with allegations of mismanagement by defendants No. 1 4 and their acts being oppressive to defendant No.6 company. He argued this Court has no jurisdiction in cases of oppression and mismanagement by the director(s) of the company and thus relied upon Section 430, 241 and 242 of the Companies Act, 2013. 12. He even referred to DDCA vs Sudhir Aggarwal Others 2020 SCC OnLine 1223 wherein the Court held no civil Court shall have the jurisdiction to entertain any suit or proceeding in respect of which the Tribunal or the Appellate Tribunal is empowered to deal with, i.e. to say to relegating the parties to a civil suit would not be appropriate form, especially considering the manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embers but also when affairs are being conducted in a manner prejudicial to public interest and interests of the company itself. Thus, it held a derivative action can be filed before the NCLT to protect the interest of the company within the ambit of Section 241 of the Companies Act and a civil suit would not be maintainable. 16. I have heard the arguments. Though, ICP Investments (Mauritius) Ltd. (supra) says a civil suit would not be maintainable as derivative action can be filed before the NCLT, but it is equally true Rajeev Saumitra (supra) says there is no provision in the Companies Act to approach the Company Law Board for a wrong done to the company by a director. The Hon ble Supreme Court in Ahmed Abdulla Ahmad Al Ghuriar vs Star He ..... X X X X Extracts X X X X X X X X Extracts X X X X
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