The Tribunal's discretion to waive eligibility criteria for filing petitions under the Companies Act must be exercised judiciously, considering public interest and the merits of allegations of oppression and mismanagement.

JUDGMENT

(Hybrid Mode)

[Per: Ajai Das Mehrotra, Member (Technical)]

The Respondents No. 16 to 19 of the present appeal had filed Company Petition bearing CP No. 287/KB/2023 under Sections 241 and 242 of the Companies Act, 2013 (hereinafter referred to as the “Act”) before the Ld. NCLT, Kolkata alleging oppression and mismanagement in running of Respondent No. 1 Company, namely, the Calcutta Cricket & Football Club. Since the Respondents were not fulfilling the eligibility criteria prescribed under Section 244(1)(b) by the Act, an Interlocutory Application bearing I.A. (CA) No. 183/KB/2023 was filed before the Ld. NCLT seeking waiver of the eligibility prescribed in Section 244(1)(b) of the Act by invoking the powers given to the Tribunal in proviso to Section 241(1)(b) of the said Act.

2. The Respondent No. 1 is a Company incorporated under Section 8 of the Companies Act, 2013 and does not have any share capital. The Respondent No. 1 Company has approximately 1850 members. The Respondents No. 16 to 19, who were petitioners before Ld. NCLT, are stated to be members of the general committee of Respondent No. 1 Company. The Appellant herein is also a general committee member of the Respondent No. 1 Company.

3. Before we proceed ahead with the matter, it shall be relevant to go through Section 244 of the Act, which is reproduced below:

“244. Right to apply under section 241.—

(1) The following members of a company shall have the right to apply 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:

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.

Explanation.—For the purposes of this sub-section, where any share or shares are held by two or more persons jointly, they shall be counted only as one member.

(2) Where any members of a company are entitled to make an application under sub-section (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them.”

(Emphasis supplied)

4. Through the impugned order dated 17.01.2024, the Ld. NCLT has allowed the request of the Respondents herein for waiver of eligibility prescribed in Section 244(1)(b) of the Act.

5. The Learned Counsel for the Appellant submitted that they are aggrieved by the said order mainly on two counts, namely, that no notice was given to the Respondents when the matter was taken up for hearing by Ld. NCLT on 17.10.2023 and that the petitioners before the Ld. NCLT (Respondents No. 16 to 19 herein) were only 4 out of 1850 members of the Respondent No. 1 Company, amounting to only 0.002% of the total number of members.

6. It was submitted that Respondent No. 1 Company does not have any share capital and the requirement under Section 244(1)(b) in the case of Company not having share capital is that the petition be filed by not less then 1/5^th of the total number of members, which otherwise means that petition can be filed by at least 20% of the members.

7. On the issue of notice, the Appellant has submitted that no Court notice was issued, though some of the Respondents in CP No. 287/KB/2023 and IA No. 183/KB/2023 were present on advance notice when the order was reserved on 17.10.2023.

8. On the merits of the waiver, it was submitted by the Learned Counsel for the Appellant that Ld. NCLT has not formed any opinion as to whether the said petition related