Mrs. Latha Balasubramanian vs Igp Engineers Private Limited

NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI (APPELLATE JURISDICTION) Company Appeal (AT) (CH) No. 70/2025 (IA Nos.721 & 722/2025) In the matter of: Mrs. Latha Balasubramanian residing at No. 7, VII Cross Street, Shastri Nagar, Adyar, Chennai - 600020. ...Appellant V 1. IGP Engineers Private Limited CIN: U27200TN1979PTC007868 Having its registered office at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

2. Mr. Narayanaswamy Srinivasan Residing at Old No.263, New No.290, TTK Road, Alwarpet, Chennai - 600018.

3. Mr. Achutha Krishnamurthi Residing at Old No.9, New No.17, Indiranagar 13th Cross Street, Adyar, Chennai - 600 020.

4. Mr. Venugopala Iyer Lakshmanan Residing at 11A Sarangapani Street, T.Nagar, Chennai - 600 017.

5. Mr. Ganesan Umamagesh Residing at 11, 13th Cross Street, Indira Nagar, Adyar, Chennai - 600 020.

6. Mr. Gopalan Ganesan Residing at Old No 11, New No 21, 13th Cross Street,Indira Nagar, Adyar, Chennai - 600 020.

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 1 of 24 7. Mr. Venugopalan Balasubramanian Residing at No 17A, 3rd Seaward Road, Valmikinagar, Tiruvanmiyur, Chennai - 600 041.

8. Mr. Krishnaswamy Shyamsundar Residing at Old No.3, New No.5, South Bank Canal II Street, Mandavelipakkam, Chennai - 600 028.

9. Mr. Rabindran Krishna Swamy Residing at No.5 South Bank II Street, Mandaveli, Mylapore, Chennai - 600 028.

10.Mr. Raman Nataraj Residing at 11 Prakasam Street,1st Lane T.Nagar, Chennai - 600 017.

11.Mrs. Jayashree Narayanan Residing at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

12.Mrs. Meera Suresh Residing at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

13.Mrs. Shobana Jagdish Residing at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

14.Mrs. R. Sumathi Residing at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

15.Karaikal Marketing Private Limited Having its registered office at New No.252 (Old No.134) Angappa Naicken Street, Chennai - 600 001.

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 2 of 24 16.Pathakudi Trading Private Limited Having its registered office at New No.252 (Old No.134) Angappa Naicken Street, Chennai - 600 001. ...Respondents With Company Appeal (AT) (CH) No. 72/2025 (IA No. 723/2025) In the matter of: Mrs. Latha Balasubramanian residing at No. 7, VII Cross Street, Shastri Nagar, Adyar, Chennai - 600020. ...Appellant V 1. IGP Engineers Private Limited CIN: U27200TN1979PTC007868 Having its registered office at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

2. Mr. Narayanaswamy Srinivasan Residing at Old No.263, New No.290, TTK Road, Alwarpet, Chennai - 600018.

3. Mr. Achutha Krishnamurthi Residing at Old No.9, New No.17, Indiranagar 13th Cross Street, Adyar, Chennai - 600 020.

4. Mr. Venugopala Iyer Lakshmanan Residing at 11A Sarangapani Street, T.Nagar, Chennai - 600 017.

5. Mr. Ganesan Umamagesh Residing at 11, 13th Cross Street, Indira Nagar, Adyar, Chennai - 600 020.

6. Mr. Gopalan Ganesan Residing at Old No 11, New No 21, 13th Cross Street,Indira Nagar, Adyar, Chennai - 600 020.

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 3 of 24 7. Mr. Venugopalan Balasubramanian Residing at No 17A, 3rd Seaward Road, Valmikinagar, Tiruvanmiyur, Chennai - 600 041.

8. Mr. Krishnaswamy Shyamsundar Residing at Old No.3, New No.5, South Bank Canal II Street, Mandavelipakkam, Chennai - 600 028.

9. Mr. Rabindran Krishna Swamy Residing at No.5 South Bank II Street, Mandaveli, Mylapore, Chennai - 600 028.

10.Mr. Raman Nataraj Residing at 11 Prakasam Street,1st Lane T.Nagar, Chennai - 600 017.

11.Mrs. Jayashree Narayanan Residing at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

12.Mrs. Meera Suresh Residing at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

13.Mrs. Shobana Jagdish Residing at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

14.Mrs. R. Sumathi Residing at No.79, Valmiki Street, Thiruvanmiyur, Chennai - 600 041.

15.Karaikal Marketing Private Limited Having its registered office at New No.252 (Old No.134) Angappa Naicken Street, Chennai - 600 001.

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 4 of 24 16.Pathakudi Trading Private Limited Having its registered office at New No.252 (Old No.134) Angappa Naicken Street, Chennai - 600 001. ...Respondents

Present : For Appellant : Mr. Arvindh Pandian, Senior Advocate For Mr. Vishnu Jayaram & Mr. Pawan Jhabakh, Advocates For Respondents : Mr. S. Santhanakrishnan & Mr. Jayanth Viswanathan, Advocates for R1 Mr. Ganesan S. Raman, Advocate for R2-R14 JUDGMENT

(Hybrid Mode)

[Per : Justice Sharad Kumar Sharma, Member (Judicial)]

In the instant case, the Appellant has preferred two Company Appeals being

Comp App (AT) (CH) No.70/2025, as well as Comp App (AT) (CH)

No.72/2025, which are interconnected.

2. Since the issue involved herein is confined to a very narrow compass,

and is more or less common to both the Appeals, hence they are being decided

together for the reason being that, if one of the appeals is adjudicated, connected

Company Appeal, would automatically stand answered.

3. The Comp App (AT) (CH) No.70/2025, would be taken up as the lead

company appeal. Precise facts, that engage consideration are, that a Company

Petition, being the Company Petition/CA/96(CHE)/2023, stood initiated by the

Appellant before the NCLT, Chennai Bench, which was accompanied with an

Application that was preferred, under the proviso to Section 244(1) of the

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 5 of 24 Companies Act, 2013, to be read with Rule 11 and Rule 83A of NCLT Rules,

2016, seeking a waiver from the requirements specified in Section 244(1)(a) for

the purposes of initiating proceedings under Section 241 and 242 of the

Companies Act, on the ground that, she is a minority shareholder holding 5.98%

of shares.

4. In the Application, thus preferred by the Applicant/Appellant before the

Learned NCLT. She had submitted that, she is the second daughter of

Late Mr. V. Krishnawamy, that Late Mr. V. Krishnaswamy held about 30% of the

total shareholding of the 1st Respondent Company, from the date when the

company was incorporated i.e., as back as in 1979, till the date of his sad demise,

which had chanced in 2012, that after his death, based upon the testament, which

was executed by the Late Mr. V. Krishnaswamy, 6390 shares, (equivalent to

5.98% of total paid up equity share capital) were held under the trust for 7 years,

by the 8th Respondent, and thereafter the same were transferred to the Applicant

on 15.11.2019 and that accordingly, the shareholding of the Appellant/Applicant,

in the 1st Respondent Company is to the extent of 5.98% of the total paid-up equity

share capital. The Appellant has submitted that affairs of the 1st Respondent

Company is being conducted in a manner prejudicial to her interest and hence she

has applied under Section 241 of the Companies Act for appropriate relief and

that since her shareholding in the company is below the threshold limit of

shareholding as prescribed under Section 244(1)(a) of the Companies Act, 2013,

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 6 of 24 she has filed the Application praying the Tribunal for the waiver of such

requirement under the proviso to Section 244(1) of the Companies Act in order to

enable her to sustain the Company Petition that was preferred under Sections 213,

241, 242, 244, 337 to 341 of the Companies Act, 2013.

5. While the said application filed under Section 244(1) of the Companies

Act for waiver, was pending consideration before the Learned NCLT, Chennai,

and the pleadings were being exchanged, the Appellant submitted that she will

exit the company if right value if paid for her shares. Thereafter the parties agreed

to find out a valuer acceptable to both parties on 20.12.2023 and subsequently

agreed for appointment of M/s. Deloitte India, Mumbai office as the valuer. Based

upon the consensus that was arrived at between the parties, Learned NCLT on

31.01.2024 appointed the valuer and directed it to submit the valuation report

which was submitted on 20.09.2024. There had been various controversies that

emanated from the said valuation report leading to arguments and counter-

arguments, but ultimately, the controversy which has now emerged for

consideration by us in the instant Company Appeal is the one which has emanated

from the Impugned Order dated 05.03.2025, which has been passed by the

Learned NCLT. The said order is extracted hereunder:-

"Ld. Sr. Counsel Mr. P.H. Arvindh Pandian is present for the Petitioner. Ld. Counsel Mr. Santhakrishnan is present for the Respondent no.1 Ld. Counsel Mr. Gautam Raman is present for the Respondent. Case Heard.

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 7 of 24 We find that the parties are not in agreement with the valuation submitted by the Valuer and therefore the exercise of providing an exit to one of the parties is futile at this stage. Therefore this Court finds the Application has to be decided for maintainability / waiver u/s 244 of CA, 2013.

List the petition for physical hearing, top of the list, on 04.06.2025".

6. On a simpliciter reading of the observation, that, has been made by the

Learned NCLT in the Impugned Order, it could be very easily derived that, there

had been disagreement interse between the parties qua the valuation of the 1st

Respondent Company, that exercise of exit option is possible only when valuation

is mutually agreed upon and that therefore no purpose will be served by proceeding

further in respect of valuation of the company. Owing to the aforesaid

circumstances, Learned Tribunal decided to abandon the process of providing the

exit route to the Appellant and instead, directed that, the application under Section

244(1) of the Companies Act may be taken up on merits, to decide the question of

maintainability of the proceedings of the Company Petition initiated at the behest

of the Appellant. If we scrutinize the impugned order on judicial side, the finding,

which has been recorded that the parties are not in agreement with the valuation

report is yet again a controversy has to be examined from the angle as to whether

this finding happens to be correct especially after Learned NCLT passing a series

of orders in connection with appointment of valuer, calling for the valuation report,

and inviting comments/objections from the parties and then abruptly abandoning

the process without adjudicating on the claims and counter-claims made on the said

valuation report. The order of 05.03.2025 was subsequently prayed to be rectified

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 8 of 24 by filing of an IA (CA) 68(CHE)/2025, by 1st Respondent Company and the same

was accordingly rectified by the order of 16.04.2025, which is the subject matter

of challenge, in the connected Comp App (AT) (CH) No.72/2025. The main

contention of the Appellant is qua the observation that has been made in the order

of 05.03.2025, where it has been recorded that it will be futile to pursue the exit

option and accordingly the Application relating to the issue of

maintainability/waiver under Section 244 of the Companies Act, may be taken up

for consideration. The Appellant has attempted to contend that since there was a

consensus arrived at between the parties, at the initial stage of the proceedings for

providing an exit option to the Appellant and accordingly the valuer was appointed

and valuation report was called for, it has to be assumed that, no independent orders

are required to be passed for considering the application under Section 244(1) of

the Companies Act, 2013, as calling for valuer's report will amount to admitting

the existence of oppression and mismanagement of the 1st Respondent Company

causing prejudice to the Appellant.

7. It is seen that the proceedings, which were held before the Tribunal as

back as on 01.09.2023, the parties had put an appearance and the Learned Tribunal,

at that stage of proceedings had called for an objection to the application preferred

under Section 244 of the Companies Act, in order to facilitate the Tribunal to decide

the Application under Section 244 on merits, before the right of the Appellant is

crystallized to be considered about the sustainability of the proceedings at her

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 9 of 24 behest, owing to the embargo of not holding the threshold percentage of shares for

maintaining the proceedings under Section 241 and 242 of the Companies Act,

2013. Counter was filed and in response there to the rejoinder, too was filed.

Thereafter 06.12.2023 was fixed for hearing argument on the issue of

maintainability of the Company Petition.

8. The issue that now becomes relevant to be considered for us is that, in the

order passed by the Tribunal on 20.12.2023, the finding was recorded that, the

Applicant is willing to exit the company, if right price is offered for the shares and

that both the counsels have agreed that they would discuss amongst themselves and

find out a valuer for the purpose of valuing the shares and report back to the

Tribunal. In the proceeding, which was held on 08.01.2024, it was agreed that the

petitioner will recommend will the valuer's name to the Tribunal. By an order of

31.01.2024, "Deloitte India, Mumbai" were appointed as the valuer for the

purposes of carrying out the valuation of shares of IGP Engineers Private Limited,

as per the existing laws and the regulations. Further on 15.04.2024, the Tribunal

directed the valuer, to submit the valuation report in accordance with the order

passed by the Tribunal on 31.01.2024, and submit the same directly to the Tribunal

and that, there would be no intervention by any of the parties to the proceedings in

the process of methodology, to be adopted by the valuer for the purpose of arriving

at the valuation.

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 10 of 24

9. The valuer submitted the valuation report on 20.09.2024, and the same

was opened by the Tribunal, in the presence of both the parties on 27.09.2024, and

further the copy of the valuers report was directed to be supplied to both the parties,

calling upon them to submit their comments/objections to the said valuation report,

within a period of two weeks, as it was observed in the order of 27.09.2024.

Appellant is stated to have filed her affidavit of objections to the said valuation

report on 10.12.2024. 1st Respondent Company is stated to have filed the synopsis

on behalf of the Respondents on 21.01.2025, accepting the valuation report.

10. In the proceedings before the Tribunal that was held on 25.02.2025, the

1st Respondent has stated that he would abide by the valuation report given by the

valuer. Both the parties were directed to exchange their affidavits confirming the

offer made by them on or before 28.02.2025, and the case was listed for hearing,

top of the board on 05.03.2025.

11. Thus, both parties were given ample opportunity to file their objection to

the valuer's report thus submitted, but since the parties could not agree with the

valuation submitted by the valuer, Learned Tribunal vide its order dated 05.03.2025

decided to proceed to address the Company Petition on its merit.

12. The argument extended by the Respondents, who are represented, has

been that, as a matter of fact the instant Company Appeal would not be

maintainable, owing to the ground that, looking to the nature of the order, which

has been impugned in the instant Company Appeal, it takes a shape of an

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 11 of 24 Interlocutory Order for the reason being that no lis or a right has been decided by

the impugned order, which is still a subject matter of controversy in the Company

Petition, pending consideration before the Learned Adjudication Authority. They

have submitted that since the right of the Appellant is yet to be crystallised by the

Learned Adjudication Authority, the Company Appeal would not lie, and even

though as per the provisions of Section 421 of the Companies Act, the Appeal

against an order of Learned Tribunal, is maintainable, the term "order", will always

denote an order which decides the right of a party on merits, which in the instant

case is yet to happen, and therefore an appeal against an order given at an

interlocutory stage, which itself is procedural in nature, would not be maintainable.

13. The question, which emerges for consideration for us, as pressed upon

by the Learned Counsel for the Appellant is whether by permitting the request to

appoint a valuer and to obtain the valuation report, by accepting the same on record,

and letting the parties to the proceedings to file their objection and to exchange

their affidavits confirming the offers made by them before 28.02.2025, which has

been recorded in the proceedings held by the Tribunal on 25.02.2025, Learned

Tribunal has expressed his opinion on merits as if it is proceeding to hear the

Company Petition itself on its merit. The Learned Counsel for the Appellant

submits that from the observation made by Learned Tribunal in the order of

25.02.2025, there will be the deeming presumption that their Application seeking

a waiver from the provisions of Section 244(1)(a) for initiation of proceedings,

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 12 of 24 under Section 241 & 242 of the Companies Act, 2013, will be deemed to have been

allowed. The interpretation as above, given by the Learned Counsel for the

Appellant to the observations that has been made in the series of the orders that has

been discussed above, may not be a correct one for the reason being that, an order

obtained by consent by the parties to the proceedings calling for a valuation report

or the process adopted by the Tribunal calling for an objection on the valuation

report and subsequent proceedings carried thereof, will not amount to overriding

the statutory proceedings contemplated under Section 244, particularly when the

Appellant not having her required percentage of shares could not have initiated the

proceeding under Section 241 until or unless she obtains a specific waiver under

the proviso as contained under Sub-Section (1) of Section 244 of the Companies

Act, 2013. The provision contained under Section 244, which is extracted

hereunder: -

"244. Right to apply under Section 241.-- (1) The following members of a company shall have the right to sapply under Section 241, namely:--

(a) in the case of a company having a share capital, not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company, subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares;

(b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members:

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 13 of 24 Provided that the Tribunal may, on an application made to it in this behalf, waive all or any of the requirements specified in clause (a) or clause (b) so as to enable the members to apply under Section 241".

14. The aforesaid provision is complete in its term for the reason being that,

under Sub-Clause (a), in fact, the statute prohibits initiation of proceedings at the

behest of the member holding less than one tenth of the issued share capital of the

company, except in cases where an waiver is obtained under the proviso to Section

244(1)(a). The process and procedure contemplated under the proviso to Section

244(1) of the Companies Act, 2013 has to be mandatorily followed, so as to

override restrictions of Section 244(1)(a) of the Companies Act and an applicant to

the proceedings under Section 241 of the Companies Act, can override the

restrictions imposed by Sub-Section (1) of Section 244 of the Companies Act, only

after the adjudication made by the Tribunal, by passing of an order of waiver on

merits, under the proviso, which the Appellant has sought for by filing of an

specific application in that regard before the Tribunal.

15. In the instant case, the process so far adopted till the order of 05.03.2025

emanating out of consensus between the parties and also from the act of exercise

of discretion by the Tribunal, in order to find a mutually acceptable solution to the

controversy, cannot be interpreted as allowing of the application for waiver, as it

has been attempted to be read by the Appellant, so as to press for adjudication of

proceedings under Section 241 & 242 on its own merits without even a prior order

being passed on application under Section 244(1) of the Companies Act. We are

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 14 of 24 of the considered view that when the Tribunal had exercised its discretion, it was

on the joint and unanimous request of the parties calling for a report, which is not

a specific process contemplated under law before deciding Section 244 application.

Hence, it will not create any statutory obstacle for the Tribunal to proceed to decide

an Application under Section 244 for the purposes of deciding the proceedings

under Section 241 & 242 of the Companies Act, 2013.

16. We are of the view that the valuation report, which was called for by

consent of parties and was later submitted, is only a document, which will facilitate

the Tribunal to decide the controversy, if at all, it is legally mature to be considered

and decided on merits. The valuation report thus submitted prior to passing of any

order under Section 244 cannot be read as if no specific order on waiver was

required to be passed under Section 244(1)(a). Had the valuation report been

accepted by all, exit to the Appellant as sought for could have been provided

leading to amicable settlement, without reference to application under Section 241

alleging oppression and mismanagement. Since valuation report was not accepted

by the Appellant, there will be no amicable settlement and then the law will have

to take its own course. This being so, the proceedings at the behest of the Appellant

under Section 241 and 242 of the Companies Act, legally matures to be considered

on merit, only when she gets an waiver under Section 244(1) and till the process of

the order of passing of an order under Section 244(1) and its proviso is exhausted,

she is not even qualified to sustain the proceedings under Section 241 and 242 of

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 15 of 24 the Companies Act, 2013. The pleading of the Appellant to initiate proceedings

under Section 241 on the pretext that valuation report has already been obtained is

misconceived because an act contemplated under the statute which is procedurally

mandatory, cannot be permitted to be overridden by an order passed by the Tribunal

by the consent of the parties or even by the exercise of discretion of the Tribunal

by calling for the valuation report. Thus, the argument extended by the Learned

Counsel for the Appellant that, the finality ought to have been given to the valuation

report prior to recording the finding to decide the application of waiver under

Section 244 of the Companies Act, is absolutely a misconception, for the reason

being that at the stage when the valuation report was called it was with the consent

of the parties and which was accepted on record by consent and that it was not an

act or procedure that was contemplated under law, but rather, an exercise of a

discretion or an equity by the Tribunal to find an amicable settlement.

17. Accordingly it has to be held that the provision of waiver contemplated

under the proviso to Sub-Clause (a) of Sub-Section (1) of Section 244, is intended

to override the restriction that has been imposed by Sub-Clause (a) of Sub-Section

(1) of Section 244 of the Companies Act, before the petition is made maintainable,

and that any statutory obligation which has been required to be satisfied by passing

of a statutory order which is procedurally contemplated under law, cannot be

overridden by any Interlocutory proceedings or by an order of the Tribunal as in

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 16 of 24 the instant case of calling for the valuation report, that too based upon the consent

of the parties to the proceedings.

18. There would be yet another question, which may incidentally arise for

consideration, that is, as to whether, at all, when admittedly the application under

Section 244 of the Companies Act, has not yet been decided, whether at all the

Appellant could maintain the Appeal because his right to contest the proceedings

under Section 241 and 242 of the Companies Act, is yet to be matured to be decided

by the Tribunal, and until or unless the same is considered and decided on merits.

Prima Facie, the Petitioner/Appellant does not appear to have any crystallized right

to maintain the proceedings by way of an Appeal or even by way of a proceeding

under Section 241 and 242 of the Companies Act, as satisfying of the condition

under Section 244 of the Companies Act, is a stepping stone for the Appellant to

sustain the proceeding under Section 241 and 242 of the Companies Act, which is

yet to be demonstrated by her.

19. The Learned Counsel for the Appellant, in support of his contention, has

relied upon the Judgment rendered by the Principal Bench as reported in 2019 SCC

OnLine NCLAT 166 in the matters of Amritsar Swadeshi Woolen Mills Private

Limited Vs Vinod Krishna Khanna and Others, to support his case. Particularly

he has made reference to the contents of para 41 of the said Judgment. If the

implications of para 41 is taken into consideration in the light of facts and

circumstances, as it was engaging consideration in the matter of Amritsar Swadeshi

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 17 of 24 Woolen Mills Private Limited, it was based up on altogether a distinct set of facts

and it is not akin to the case at hand as involved consideration in the instant appeals,

because in the said case, even though valuation was being disputed, it was at the

stage when the Application under Section 244 of the Companies Act, already stood

decided and the proceeding under Section 241 and 242 of the Companies Act, was

put to motion. This Judgment will not apply under the facts and circumstances of

the instant case, where a valuation report has been solicited by consensus among

parties and the exercise of discretion by the Tribunal, much prior to the

consideration of the Application under Section 244 of the Companies Act.

Therefore the need to finalize the valuation report as directed in the matters of

Amritsar Swadeshi Woolen Mills Private Limited in the instant case where the

proceedings under Section 241 is yet to take birth. Hence, the contents of para 41,

which are extracted hereunder, may not be applicable under the facts and

circumstances of the instant case.

"41. The appellant has on the basis of section 634A of the old Act stressed that this was an order required to be treated as a decree made by court in a suit pending. We have already noted the judgments relied on by the appellant but when we examined this order of the Company Law Board, it could be seen that the Company Law Board had itself directed the valuer to determine the fair valuation of the shares within a period of 30 days and "thereafter" the valuer was required to hear objections, if any, of both the parties within 15 days and "thereafter" submit final valuation report to the original respondent No. 1-company, to the petitioners and to the Company Law Board within further period of 15 days from the hearing of the objections of the parties. It was not an order which stated that the

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 18 of 24 valuation report of the valuer, once submitted, shall be treated as final and the petitioners shall transfer their shares to the respondents without demur. When the valuation report is prepared and submitted, the party had a right to address the Company Law Board/National Company Law Tribunal to either accept the report or question the valuation and manner of valuation. Apparently, the order dated April 1, 2011 required further application of mind on the part of the National Company Law Tribunal with regard to the valuation report on its receipt. The execution which this order dated April 1, 2011 required was that the valuer should give the report which was done. The further binding part of the report is on the respondents-original petitioners that they are to go out of the company on receipt of fair valuation. The respondents-original petitioners have not backed out from this willingness recorded in order dated April 1, 2011. But then, they do have a right to address the National Company Law Tribunal whether the valuation report is correct. We discard the argument of counsel for the appellant that it was merely an executing court and should have enforced the valuation report as it is. If this was to be accepted, it would mean that once valuation report is received, it should be accepted as it is or rejected as a whole. It would amount to putting fetters on the powers of the Tribunal. There is no section shown under the new Act with wordings like section 634A of the old Act. In fact, even under the old Act, proviso inserted in section 634A vide section 124 of the Act 11 of 2003 mentioned that:

"Provided that the provisions of this section shall not apply on and after the commencement of the Companies (Second Amendment) Act, 2002"''.

20. By way of a repetition, if the entire proceedings, which constitutes to be

the (part of Volume 9) of the appeal, is taken into consideration, we are of the

considered view that the proceeding under Section 244 of the Companies Act, at

the behest of the Appellant cannot be clouded to avoid a specific decision to be

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 19 of 24 taken, on an application under Section 244 of the Companies Act, under peculiar

circumstances, which have emerged consideration due to the prior calling of the

valuation report by the Tribunal, which has been accepted by consent of both the

parties and which obviously could have been subjected to consideration only when

the actual proceeding under Section 241 and 242 of the Companies Act, takes its

legal birth only after the consideration of the Application under Section 244 under

the Act and not otherwise. Owing to aforesaid, the Company Appeal lacks merit

and the same accordingly deserves to be dismissed.

21. In the connected Company Appeal, being Comp App (AT) (CH)

No.72/2025, the challenge has been given by the Appellant to the Impugned Order

of 16.04.2025, which has been passed in IA(CA)/68(CHE)/2025, by virtue of

which the order of 05.03.2025, passed in CP/(CA)/96(CHE)/2023, is being

marginally modified, recording the correctly the contends of para 8(a) of the

affidavit which was filed by 1st Respondent in the proceedings on 28.02.2025, that,

"the Respondents are in agreement with the valuation carried by the Hon'ble NCLT

appointed valuers". In the order of 05.03.2025, Learned NCLT has recorded that

"we find that the parties are not in agreement with the valuation submitted by the

valuer". However, in this order dated 28.02.2025, Learned Tribunal had recorded

that "counsel for 1st Respondent stated that he would like to strictly abide by the

valuation given in the valuation report". Therefore, based on the application by 1st

Respondent and based on the averment made by him affidavit filed on 27.02.2025,

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 20 of 24 Learned Tribunal directed that the rectification to be carried to the effect that

"Respondents in the main appeal had agreed to accept the valuation report are

in league with the contents of para 8A of affidavit dated 28.02.2025 as well as the

order sheets". Hence, the modification, which has been permitted to be made was

only rectification of a clerical mistake, which has chanced in the order of

05.03.2025, which does not call for any interference. Hence, this Company Appeal

lacks merit and the same is accordingly dismissed.

22. Owing to the aforesaid analysis of the respective arguments as it has been

extended by the Learned Counsel for the parties, we can ultimately analyse the

controversy from the following perspective: -

1. Admittedly the petition under Section 241 and 242 of the Companies Act,

was accompanied with an application preferred under Section 244 of the

Companies Act which was filed by the Appellant, which was yet to be

decided on merits.

2. Until or unless the Application under Section 244 of the Companies Act,

is decided and a waiver is granted to the Appellant by a judicial order,

owing to the fact that she does not hold the required amount of share

capital as prescribed under law, no proceedings could be said to have been

initiated as passing of an order on application under Section 244 of the

Companies Act, was a pre-condition.

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 21 of 24

3. Admittedly, at the stage when the Tribunal has called for the valuers

report, there were no specific orders or any adjudication made under

Section 244 of the Companies Act, and as such, the Company Petition

has not yet matured under law, to come into existence in the eyes of law.

4. The proceedings were being carried before the Learned Adjudicating

Authority, by consent, which was extended by both the parties to find an

amicable settlement by calling for a valuer's report, will not obviate the

need for a decision of the application under Section 244 of the Companies

Act, unless the dispute is amicably settled.

5. Calling for a valuers report prior to passing of an order under Section 244

of the Companies Act will not amount to an establishment of the fact that,

the proceeding under Section 241 of the Companies Act, 2013, stood

initiated, and that there is no need for a specific order to be passed on the

application under Section 244 (1) of the Companies Act, 2013.

6. The passing of an order of calling for a valuation report or the

appointment of a valuer, was not an order, which was put to challenge by

the Appellant at any stage of time, which means that it was an order

obtained by consent.

7. The order sheet reflects that the submission of the valuer's report was the

fact, which was admitted by the parties, owing to the finding, which has

been recorded in the order sheet. But it will not automatically lead to the

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 22 of 24 inference that, it will have a consequential effect of allowing of an

application under Section 244 of the Companies Act, which itself is an

independent proceeding in its own, which has to be decided being a

condition precedent, to be decided before a right is fructified of the

Appellant to sustain the proceeding is fructified under Section 241 and

242 of the Companies Act, 2013.

8. The order of rectification of the Impugned Order of 05.03.2025, which is

the subject matter of consideration of the accompanying Company

Appeal of 72 of 2025, was absolutely justified owing to the recordings in

the order dated 28.02.2025 and the averment made in the affidavit of 1st

Respondent and the fact of Appellant along disagreeing with the

valuation report which were in contradiction with the finding

inadvertently recorded by the Tribunal in its order dated 05.03.2025

which has been rectified by the Impugned Order, which is the subject

matter of challenge in the accompanying Company Appeal.

9. Because of the fact that the Application under Section 244(1) of the

Companies Act, was yet to be considered and decided on merits, before

proceedings take birth in the eyes of law, no logical inference could be

derived that merely because of the fact that the Tribunal has directed the

parties by way of a consent to call for a valuers report. It could be treated

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 23 of 24 as if the Application under Section 244 of the Companies Act, itself has

been adjudicated upon.

10. Owing to the fact and as argued by the Learned Counsel for the

Respondent, that the impugned order, since it was not deciding a lis and

since it was not deciding any of the right of the parties in the proceedings

it will not be an order which can be appealed against Section 421 of the

Companies Act, as this appellate provision contemplates of preference of

appeal against an order, which decides the right of the party or even a

marginal right and not otherwise.

11. Since the controversy pertaining to the maintainability of the

proceedings at the hands of the Appellant is still a subject matter under

consideration before the Learned Tribunal, until or unless the Application

under Section 244 of the Companies Act is decided, the instant Company

Appeals can not be sustained, and the same deserves to be dismissed, and

the same is accordingly dismissed.

All pending applications would stand closed.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical) 18.08.2025 VG/MS/RS

Comp App (AT) (CH) Nos. 70 & 72/2025 Page 24 of 24