The main legal point established in the judgment is that interim relief for oppression and mismanagement can only be granted if there is a prima-facie case and if the present state of affairs of the company warrants such interim directions. Premature orders lacking in application of mind were found to be flawed and set aside.

JUDGMENT :

Bansi Lal Bhat, J.

1. Respondents No. 1 to 4 herein filed C.P. No. 11/JPR/2018 under Section 241-242 r/w Section 244 of the Companies Act, 2013 (for short ‘the Act’) against Axestrack Software Solutions Pvt. Ltd. (Appellant herein) and others before the National Company Law Tribunal, Jaipur Bench (for short ‘the Tribunal’) alleging some acts of oppression and mismanagement qua the affairs of the Appellant Company. A preliminary objection was taken by the Appellant Company as regards maintainability of the Company Petition on the ground that the Respondents (Original Petitioners) did not fulfill the eligibility criteria as fixed under Section 244 of the Act and in these circumstances they had no locus to file the petition. Even before the pleadings were completed, the Tribunal while declining to go into the merits of the case passed impugned order dated 9th August, 2018 ordering status quo ante in relation to the Directorship of the Appellant Company as well as its shareholding as it existed prior to 30th July, 2018 further staying the resolutions qua removal of Respondent Nos. 1 and 2 herein from the Directorship of the Appellant Company and the follow up action. Subsequently, during pendency of the Company Petition, I.A. No. 271/JPR/2019 preferred by the Respondents herein for preponing the date of hearing of the Company Petition from 1st October, 2019 to an early date came to be disposed of by the Tribunal on 29th August, 2019 preponing the hearing to 20th September, 2019. However, while advancing the date of hearing, the Tribunal passed further directions declaring the Board Meeting dated 12th August, 2019 as invalid, restoring the position of Company to its previous position and restraining the Appellant Company from taking any policy decisions including termination of employees. Aggrieved of the slew of directions passed by the Tribunal in succession in terms of the impugned orders dated 9th August, 2018 and 29th August, 2019 while hearing of the Company Petition was underway, the Appellant has assailed the same through Company Appeal No. 323 of 2018 and 243 of 2019, separately. Since, both orders arise out of the same matter and have been passed before final disposal of the Company Petition which is still sub-judice, both appeals were heard together and same are being disposed of by a common judgment.

2. Learned counsel for the Appellant submitted that the Tribunal, though ignored to consider the merits of the case, but granted status quo ante in relation to the Directorship and shareholding of the Appellant Company as it existed prior to 30th July, 2018, which is in the nature of final relief. It is submitted that nothing is left for adjudicating in the petition which has been decided even without completing the pleadings. He further submits that allotment of shares were made to Respondent No. 1 and 2 as per the Co-founders Agreement dated 17th January, 2015 in contravention of provisions of Companies Act and on account of such illegal allotments shareholding of Respondents is presently 50.32% of the paid up share capital. It is so because allotment of shares and transfer of shares were made to other Respondents as per the terms of Agreement but Respondents 3 and 4 were allotted 4% and 2.5% respectively of the authorized share capital though as per Agreement the allotment should have been from the paid up share capital. It is submitted that at the relevant time Respondents No. 1 and 2 were Directors of the Appellant Company. Respondents 1 and 2 proposed to convene an EoGM on 4th August, 2018 for removal of Ms. Priya Choudhary and Respondent No. 5. This was sought to be done on the strength of shareholding. The Appellant Company convened Board Meeting dated 30th July, 2018 and passed resolutions to rectify the irregularities and also filed the same with the ROC. It is submitted that correction of such mistake does not constitute an act of oppression. It is further submitted that the Company Petition was not maint