The Punjab Produce & Trading Co. Pvt. Ltd vs Pilani Investments & Corporation Ltd & ...

National Company Law Appellate Tribunal31 March 2017

CitationCompany Petition No. 20 of 2016 belare ra Bench under section SQ? S98, S 403, 409, 406, 407 of the Ca

Ratio decidendi

The rule this decision rests on

A shareholder of a holding company cannot, merely by virtue of that shareholding, maintain a petition under sections 397 and 398 of the Companies Act, 1956 (read with section 210 of the Companies Act, 2013) complaining of oppression and mismanagement in the affairs of a subsidiary company in which the petitioner holds no shares, since the statutory right to seek relief is confined to members of the company whose affairs are impugned. Where the petitioner has no locus to challenge the conduct of a particular company, acts of oppression and mismanagement alleged against that company cannot be adjudicated in proceedings brought by that petitioner, and the affairs of the other company, which are not the subject of a valid petition, cannot be set aside on that basis; decisions taken in another company cannot be rendered void or illegal merely because the petitioner's complaint concerning that company is held to be not maintainable.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

The Punjab Produce & Trading Co. Pvt. Ltd vs Pilani Investments & Corporation Ltd & ... on 31 March, 2017 iN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL COMPANY APPELLATE JURISDICTION Company Appeal (ATI No. 44, 45 and 46 of 2017 . farising ont of Grder dated 23°9 December 2016 passed by NCLT, Kolkata Bench, Kolkata in 1.ANo. 08/2016 in C.F.No. 30/2016) The Panjab Produce & Trading Co. Prt. Lid. - Appellaat Ve Pilani levestments & Corgsorstion Lid & Ors . Respondents Present: For Appelianta: Dr. UL. Chaudhary, Senior Adwooate with Mr. Himanshu Vij, Mr. Rrishmands Datta, Myr. Abbrafit Mites, Sr. Advocate, Mr. Sanjiv Trivedl, Mr. Siddharth Vaid and Mr Intwar Mohanty, Advocates For Reepsendent:Mr. Abhinay Vashisht, Sr. Advooste with Mr. Ajay Bhargava with Mr. Rohan Jaitlhy, Mr. Nikhil Jhunjhunwala and Ms M. Anand, Adivoostes for Respondents No.l io 8. Myr. Sabyasachi Chaudhary, Sr. Advocate with Mr. Vikas Mehta and Mr. KRarandeep Rhanna, Advocates for Respondents No.9 te 2k. Mr. Abhijeet Sinka with Ms Pallavi Sharma and Ms Titask Sen, Advocates for Respondent No. 12. Mr. Nikhil Rohetgi with Mr. Mohit Rhuubchandant, Advocates for Respondent We.d.

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On the date af pre presentation of the petition, the 1st yp ESPUNCeNt COMPANy WAS As single largest shareholder of the G respondent comp ipany. Qubin spite of these fers, the Tet respondent company has ne contraliing power over the afaire af the Oth Teapandent company. 29. The Tribunal tightly held that che balding company and subsidiary ~ AMNHES and oven if appeliantypednen has « P and 398 against is respondent company, and they qualifier! the oriteria of Seaton 3¢ 8 af the Compares Act, oven on that baste, the apg ne, WHE mal get a2ry right to ques x han Dppression and TITIAN Ageia' a: Sabet the Qe respondent company, as the appetiant dass Hol Possess the requisite qualifieation for STINGING @ petition agaimar the oo resporcient OMIA. = SQ. Therefore, ones the & ppellant has ne right sstion the oonressias and sismanagement' of the ot reapandent ogy ao one: question of act af 'oppression and miwnis amagemeny qua the O&8 resncnder eS &8 and 1S" pespondents ww oh Lo COMAPANY EU So fer H relates fo IES Pps pom poe concerned, who were not the shareholders af the [st respondent comypary but sharchaiders of the O ressondens COIN f Xp Vi.

Hi the action af the ather respormdonts are held to he QPETOSRSVE ALAiAh the appellant ar mismanagement of the 1% re Sponcent company, that aiff das render any decisien taken in another SaMpanyY La. the Gs COMIBSHY 88 val] or legal, SS, In view of the aforeaaie ground, the Tribal having direc the Gh. TO P7O 1S and Yaw pe capmidents from: arena of che respondents, we finel no ground te interfere with impugned orders all dated 23° December ak 2018. In abacnece of any thet, the apoeais are dismisses. Nowe er, ip the teeta ane circumetanoes af the case there shall be no arder as ip cust, iMr. Balvinder Sin Member (Technics NEAV DELAY Si" March, 201% SIN

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