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2025 Supreme(Online)(NCLT) 2695
NATIONAL COMPANY LAW TRIBUNAL
Shri Vinay Goel, Smt Madhu Sinha, JJ
Mini Baby – Appellant
Versus
M/s. Ceecon Ready Mix Concrete Private Limited – Respondent
CP/(C/ACT)/16/KOB/2024
For the Appellants/Petitioners: Mr. Isaac Thomas
For the Respondents: Mr. Ameerul Millath, Mr. Nebil Niza
The court established that a director with sufficient shareholding can challenge board decisions if procedural requirements under the Companies Act are not met, but allegations must demonstrate substantial oppression.
Headnote:(A) Companies Act, 2013 - Sections 241 and 242 - Petition for relief against oppression and mismanagement - The Petitioner, a director, challenged the legality of a board meeting and EGM convened without proper notice, asserting violation of procedural requirements under Sections 169 and 100 - Court held that the Petitioner has locus standi to file the petition due to her shareholding of 19.18% - The Tribunal quashed proceedings affecting the Petitioner’s directorship but upheld other resolutions passed - The conduct of the Respondents was noted to lack transparency and trust, however, allegations of petty nature do not constitute oppression. (Paras 17, 23, 29)
| Table of Content |
|---|
| 1. petitioner's claims regarding board meeting legality (Para 1 , 2 , 3 , 4 , 5) |
| 2. allegations of mismanagement and oppression (Para 6 , 7 , 8 , 9) |
| 3. respondents' denial and counterarguments (Para 10 , 11 , 12 , 13 , 14) |
| 4. court's evaluation of petition maintainability (Para 16 , 17 , 18) |
| 5. court's analysis and observations on evidence (Para 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28) |
| 6. resolution quashing affecting petitioner's directorship (Para 29) |
| 7. conclusion and order of the tribunal (Para 30 , 31 , 32) |
ORDER
Per: Coram.
1. The present Company Petition has been filed by Ms. Mini Baby (hereinafter collectively referred to as the under Sections 241, 242 of the Companies Act, 2013 against M/s. Ceecon Ready Mix Concrete Private “Petitioner”) Limited, and five others (hereinafter collectively referred to as the “Respondents”), seeking the following reliefs:
a) Declare the board meeting convened on 07.06.2024 by the 1st Respondent company, and the decisions taken therein, to be illegal and all decisions taken therein to be null and void.
b) Direct the Respondents to provide the Petitioner with a copy of the minutes of the Board Meeting held on 07.06.2024
c) Direct the Respondents to maintain status quo of the Board and shareholding pattern of the 1st Respondent Company as on 06.06.2024 until further orders.
d) Direct that an investigation into the accounts of the company.
e) Direct that full access be given to the Petitioner to all documents of the 1st Respondent Company, by way of copies being furnished to assess the situation and to quantify the business loss caused to the 1st Respondent Company and of the mismanagement and oppression of the 2nd and 3rd Respondents and the supporting Respondents in the business of the 1st Respondent Company.
f) Restrain the Respondents from conducting any meetings of the 1st Respondent Company without the leave of this Hon’ble Tribunal, pending disposal of the present Company Petition. Remove Majority Shareholders as directors of the Company under Section 242 (2) (h) of the Companies Act, 2013;
g) Defer the EGM of the 1st Respondent supposedly scheduled on 05.07.2024 or such other date, and seeks to ratify an illegal decision taken at the Board Meeting dated 07-06-2024.
h) Remove the 2nd Respondent from the Board of Directors of the 1st Respondent Company in view of the fact that he is a practicing lawyer, acting in violation of the laws of the land.
i) Pass such further or other orders as this Hon’ble Tribunal may deem fit and proper in the light of justice, equity, and good conscience. Declare that Respondents 2 to 8 are jointly or severally liable for all damages/losses caused to Respondent No. 1 by way of diverting and siphoning off funds through Respondents 2 to 6 and Respondent No. 8, as determined by the independent auditor appointed by this Bench.
The Brief facts of the case are as follows: -
2. It is stated that the 1st Respondent Company was incorporated on 12/01/2005. The 1st Respondent has an authorized share capital of INR 1,25,00,000 (Rupees One Crore Twenty-Five lakhs) and fully paid-up share capital. The shareholding of the 1st Respondent is as follows:
3. It is stated that the Petitioner is the director of the first respondent company. Respondents 2-6 are the majority shareholders. Respondents 2 and 3 are the executive director and the managing director of the company. The Petitioner assumed the office of director in 2021, following the death of her husband, and since then, the Petitioner has been facing harassment from Respondents 2 and 3. Respondent No. 7 is the Chief Executive Officer of Respondent No. 1 Company. Respondents Nos. 2-8 are referred to as the Executive Management.
4. It is stated that the board meeting held on 07.06.2024, seeking the removal of the Director, was convened without following the proper procedures prescribed under the Companies Act, 2013, and is a blatant violation of the rights of the Petitioner as a shareholder and director of the company
