Rachit Suresh Gangar & Ors vs Triveni Bialleti Industries Private ...

Rachit Suresh Gangar & Ors. Appellants

Versus

Triveni Bialleti Industries Private Limited & Ors. Respondents

Present: For Appellants: Appellant No. 1 in person.

For Respondents Nos. 1 & 5: Shri Arun Kathpalia, Senior Advocate with Shri Sahil Narang and. Ms. Suriti Chowdhary, Advocates

ORDER

26.07.20 17 The appellants have challenged the order dated 8th

March, 2017 passed by the National Company Law Tribunal

(hereinafter referred to as 'Tribunal'), Mumbai Bench, Mumbai in C. P.

No. 48/397-398/NCLT/MAH/201 1, whereby and whereunder the

application preferred by the appellants/ petitioners under Sections

397, 398, 402, 403 and 406 of the Companies Act, 1956 has not been

entertained on the ground that the appellants/ petitioners have failed

to prove their case in all respects with the following observations and

directions

"62. Though the petitioners have failed to prove

their case in all respects, since the company is in

losses and not making anything, and since many -2-

years have gone by and the demerger process is

pending before the Hon'ble High Court of Bombay,

this Bench being conferred with the jurisdiction to

pass orders which are just and equitable to bring

the dispute to a logical end and in the interest of

justice, the respondents are hereby directed to

provide exit to the petitioners on fair valuation

taking 31st March 2016 as cut-off date within 15

days from the date order is made available.

Accordingly, this petition is disposed of."

2. 1st Appellant, present in person, while assailing the impugned

order, submits that apart from the fact that the appellants were

removed as Directors of the first Respondent Company in 2011,

during the pendency of the petition before the Tribunal i.e. on 1st

June, 2016, the appellants could come to know further act of

'oppression and mismanagement' on the part of the respondents they

having sold. the property of the first Respondent Company without

any notice to the appellants or calling for any Extra Ordinary General

Meeting. However, it is accepted that the aforesaid fact was not

brought to the notice of the Tribunal and that the facts as now

highlighted arises out of subsequent cause of action than the cause

of action as taken place in their removal as Directors of the Company -3-

for which company petition under Sections 397 and 398 of the

Companies Act, 1956 was preferred.

3. Learned counsel for the respondent submits that no act of

'oppression and mismanagement' has been committed even during

the pendency of the petition and the appellants/ petitioners had the

knowledge about all the. actions at all relevant point of time. However,

we are not inclined to give any finding in regard to such allegations

as the aforesaid facts were not brought to the notice of the Tribunal

and no such pleading was made in the petition as was preferred before

the Tribunal.

4. However, from the last portion of the impugned order, we find

that the Tribunal while held that the appellants/ petitioners have

failed to prove their case in all respects giving reference to a demerger

process pending before the High Court of Bombay, the Tribunal

exercised its powers conferred under Sçction 242 of the Companies

Act, 2013 in passing order on 'just and equitable ground' to bring so

called dispute to a logical end and directed the respondents to provide

exit to the appellants/ petitioners on fair valuation taking 31st March,

2016 as cut-off date.

5. We are of the view that the Tribunal has no jurisdiction to pass

such directions under Section 242 once, it comes to a definite

-4--

conclusion that there was no oppression and mismanagement, and

merely stating "just and equitable ground to bring the dispute to

logical end". ma petition preferred by the petitioners once the

Tribunal hold that the petitioners have failed to prove their case, in

all respects, no power is vested with the Tribunal under Section 242

of the Companies Act, 2013 to pass any direction under Section 242

of the Companies Act. Learned counsel for Respondents Nos. 1 and

5 also accepts such legal proposition and submits that the

respondents have no objection if the last portion of the direction given

by the Tribunal is deleted from the impugned order.

6. In such circumstances, while we uphold the order passed by

the Tribunal to the extent that the appellants/ petitioners have failed

to prove their case in all respects, rest part of the observations and

directions given in paragraph 62 of the impugned order and quoted

above are set aside.

7. Appellant No. 1, who is present in person, representing

Appellants Nos. 2 and 3, sought liberty to file a separate Company

Petition on the basis of fresh cause of action of which they came to

know after 1st June, 2016. In this regard, we may observe that no

such liberty is required to be given to any member of a Company as

it is always open to the aggrieved member(s), if they feel that they have -5-

been oppressed and the Company is mismanaged, to prefer a petition

under Sections 241 and 242 of the Companies Act, 2013 for a fresh

cause of action, subject to qualifying under Section 244. However,

the aforesaid observation as made by us should not be treated as an

observation in favour of either of the parties or a liberty granted to the

appellants to file a petition under Sections 241 and 242 of the

Companies Act, 2013.

8. With the aforesaid observations, the appeal stands disposed of.

However, in the facts and the circumstances of the case, there shall

be no order as to costs.

[Justice S.J. Mukhopadhaya I Chairperson

[Balvinder Singh] Member (Technical)

/ ng/