Back
2025 Supreme(Online)(NCLT) 2015
NATIONAL COMPANY LAW TRIBUNAL
Shri Prabhat Kumar, Shri V.G. Bisht, JJ
Summan Aggarwal – Appellant
Versus
The Chikhal Market Company Limited – Respondent
C.P. No. 83/MB/2024 | I.A. 8 OF 2025
For the Appellants/Petitioners: Mr. Doctor Mustafa, Sr. Adv, Nausher Kohli, Nipa Ghosh, Shruti Kulkarni
For the Respondents: Mr. Shyam Kapadia, Mr. Rahul Sarda, Mr. Chirag Sarangi, Sneha Mahavar, Tushar Goradia, Adv.
The court ruled that the resolutions passed in the 88th AGM were invalid due to procedural lapses, emphasizing the necessity for compliance with statutory requirements and transparency in voting processes.
Headnote:(A) Companies Act, 2013 - Sections 100(2)(a), 115, 160, 169, 241, 242, and 21(1)(f) - Application seeking to quash resolutions from the 88th AGM due to procedural lapses - Court found that the AGM was not conducted in accordance with statutory requirements, leading to the invalidation of the resolutions passed therein. (Paras 1, 7.1, 8)
(B) Procedural Fairness - The principle of procedural fairness mandates that voting processes must be transparent and in compliance with statutory provisions, including proper verification of proxies and voting procedures. (Paras 7.2, 7.9)
(C) Company Meetings - The necessity for clear communication regarding the number of directors to be appointed and the procedures to be followed during voting is emphasized to avoid ambiguity and ensure compliance with the Articles of Association. (Paras 7.7, 8)
Facts of the case:
The application was filed by shareholders alleging oppression and mismanagement, seeking to invalidate resolutions from the 88th AGM held on December 16, 2024, due to alleged procedural lapses.
Findings of Court:
The court determined that the AGM was not conducted properly, leading to the decision to set aside the proceedings and direct a new meeting to be held by April 30, 2024.
Issues: The main issues included the validity of the voting process, adherence to procedural requirements, and the clarity of communications regarding the appointment of directors.
Ratio Decidendi: The court held that the AGM's resolutions were invalid due to significant procedural lapses, emphasizing the importance of compliance with statutory requirements and the need for transparency in the voting process.
Result: Proceedings of the 88th AGM set aside; new meeting ordered.
| Table of Content |
|---|
| 1. application for relief against agm resolutions (Para 1 , 2 , 3) |
| 2. arguments on conduct of agm (Para 4 , 5 , 6) |
| 3. observations on voting process and validity (Para 7) |
| 4. court's conclusion and directions for new agm (Para 8 , 9 , 10 , 11 , 12 , 13) |
ORDER
1. This Application IA 8/2021 is filed by Summan Aggarwal (Applicant), the Original Respondent No. 3 & 4 in CP 83/2024 under Rule 11 of NCLT Rules, 2016, seeking following reliefs:
a. To quash and set aside the resolutions purportedly approved in the 88th AGM of Respondent No.1 Company held on 16th December 2024 as provided in the report submitted by the Scrutinizer on 18th December 2024 with respect to 88th AGM;
b. To quash and set aside the Report submitted by the Scrutinizer on 18th December 2024 with respect to the 88th AGM of Respondent No.1 Company;
c. Declare the voting process conducted during the 88th AGM of Respondent No.1 Company on 16th December 2024 as invalid due to the procedural lapses and misconduct;
d. Direct revoting on the agenda items mentioned in the Notice dated 22nd November 2024 and Addendum Notice dated 12th December 2024;
e. To appoint an Administrator/ Special Director to manage, administer and control the affairs of Respondent No.1 Company;
f. Pending the hearing of this Application and the Company Petition, be stay the effect, operation and implementation of the resolutions purportedly approved in the 88th AGM of Respondent No.1 Company held on 16th December 2024 as provided in the report submitted by the Scrutinizer on 18th December 2024 with respect to 88th AGM;
g. Pending the hearing of this Application and the Company Petition, the Petitioners be restrained from acting in furtherance of and/or taking any steps whatsoever pursuant to the resolutions purportedly approved in the 88th AGM of Respondent No.1 Company held on 16th December 2024 as provided in the report submitted by the Scrutinizer on 18th December 2024 with respect to 88th AGM;
h. Pending the hearing and final disposal of the Application and this Company Petition, the ROC be restrained from taking any action and /or levying penalty against the Respondent No. 1 Company and the Applicants;
i. Interim and ad-interim reliefs in terms of prayer clause (a) & (h);
j. For such further and other appropriate orders, reliefs and directions as this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of this case;
2. A Company Petition 83/2024 was filed by 110 Shareholders of the Respondent No. 1 Company alleging oppression and mismanagement in terms of Section 241 & 242 of the Companies Act, 2013. In terms of this petition, amongst others, the petitioners had called upon Respondent Nos.2 to 4 to hold an Extraordinary General Meeting of Respondent No.1 under the provisions of the Act and under the supervision and aegis of this Tribunal pursuant to Section 100(2)(a) of the Act and the applicable rules.
3. Subsequent to filing of this Petition, four Petitioners viz. Petitioner Nos. 28, 32, 97 and 105, holding 1.33% of the issued and paid-up capital of Respondent No. 1 Company, withdrew from the Petition for the reason that their consents to file the Petition were invalidly obtained. Consequently, the remaining Petitioners hold 20.67% of the issued and paid up capital of Respondent No. 1 Company.
3.1. During the hearing of the Petition on 20th September 2024, the Petitioners pressed for directions from the Tribunal to convene AGM on or before 31st October 2024. Accordingly, the Tribunal vide its Order dated 20th September 2024, directed Respondent No.1 Company to convene its 88th AGM on or before 31st October 2024, and to issue Notice to the shareholders of Respondent No.1 Company for the said AGM.
3.2. On 18th September 2024, the Respondent No.1 Company had filed an Application before the Registrar of Companies, Mumbai (“ROC”) seeking an extension for conducting the AGM which was due on 30th September 2024. The ROC vide its Order dated 25th September 2024, was pleased to grant
