The court ruled that without evidence of oppression or mismanagement, a company cannot effectuate a reduction in share capital, even with a Settlement Agreement in place.

ORDER

This Interlocutory Application (hereinafter referred to as the “IA”) has been filed, vide Diary No. 3501 dated 25.10.2023, under Rule 11 of the National Company Law Tribunal Rules, 2016 (hereinafter referred to as the “NCLT Rules”) by AMA India Enterprises Private Limited (hereinafter referred to as the “Applicant Company”) through its authorised representative against the Mr. Rishi Magoo (hereinafter referred to as the “Respondent No.1”), Mrs. Asha Magoo (hereinafter referred to as the “Respondent No.2”) and Mrs. Neelima Malhotra (hereinafter referred to as the “Respondent No.3”) (hereinafter collectively referred to as the “Respondents”) in respect to the Company Applications (hereinafter referred to as the “ CA ”), bearing C.A. No.80/2022 and 81/2022, which were filed by the Applicant Company in relation to the order dated 21.01.2019 passed by the National Company Law Tribunal, Chandigarh Bench (hereinafter referred to as the "NCLT" or “This Tribunal”), further modified by the Hon'ble National Company Law Appellate Tribunal (hereinafter referred to as the "NCLAT") vide order dated 11.02.2020, directing the Applicant Company to purchase the shares held by Lt. Mr. Ravinder Kumar Magoo (hereinafter referred to as the "Original Petitioner) at the determined value with 9% interest per annum. The Applicants have prayed inter alia for the following reliefs:

(a) take on record Settlement Agreement dated 20.10.2023 annexed with the IA as Annexure A-1;

(b) pass an order disposing of Applications, bearing C.A. No. 80/2022 and 81/2022, in terms of Orders dated 11.02.2020 and 04.05.2023 passed by the Ld. NCLAT and in terms of the Settlement Agreement dated 20.10.2023, recording payment of Rs.4,27,26,120/- made by the Applicant Company to Respondent No.1 against cancellation and reduction of the 14,03,408 shares of Rs.10/- each held in name of Respondent No. 1 in the Company.

(c) pass any other order and/ or direction that this Tribunal may deem fit in the interest of justice.

FACTS OF THE CASE

2. The brief facts, as stated by the Applicants in the IA, are as below:

(i) Late Mr. Ravinder Magoo, Petitioner (hereinafter referred to as the “Original Petitioner”), as on 11.02.2020, held 14,03,408 (Fourteen Lakh Three Thousand Four Hundred and Eight) shares of Rs.10/- each in the Applicant Company (hereinafter referred to as the “Subject Shares”)

(ii) The Original Petitioner filed a filed a Petition under Sections 397 , 398, 401 and 402 to the Companies Act, 1956 , bearing Company Petition No. 89(ND)/2009 before the Company Law Board, New Delhi (hereinafter referred to as the “CLB”) against the Applicant Company and its director alleging oppression and mismanagement in the Applicant Company.

(iii) The Ld. CLB disposed of the said Petition, vide Order dated 02.01.2015 and pursuant to the said order, the Ld. CLB directed to provide exit to the Original Petitioner from the Applicant Company on a fair valuation as on 31.03.2014.

(iv) Pursuant to the order of the Ld. CLB, the Appointed Valuer submitted the Valuation Report on 16.04.2015. The Applicant Company filed an application, bearing CA No. 133/C-II/2015, challenging the said Valuation Report before the Ld. CLB, which was later transferred to NCLT consequent to the coming in effect of the Companies Act, 2013 . The Hon’ble NCLT disposed of the application of the Company by order dated 21.01.2019, upholding the Valuation Report given by the Appointed Valuer dated 12.10.2015, but altering part of the valuation price.

(v) The Original Petitioner as well as the Applicant Company challenged the order of the NCLT dat