A petition for oppression and mismanagement under Sections 241 and 242 cannot be maintained against a dissolved company, as no legal entity exists to enforce tribunal orders.

ORDER

Per: Manoj Kumar Dubey, Member (Technical)

1. This Company Application has been filed by M/s. Simplex TMC Pvt. Ltd. and two others (hereinafter referred to as ‘Applicants’ being the Respondent Nos. 2, 3 and 5 in the main Company Petition) under Section 242 (4) and other applicable provisions of the Companies Act, 2013 read with Rules 11 and 32 of the National Company Law Tribunal Rules, 2016 against aforementioned ‘Respondents / Non-Applicants’ seeking the following reliefs:

(a) Allow the present Application and dismiss the captioned petition for being devoid of merits and non-maintainable;

(b) Allow the Applicants herein to buy the entire shareholding of the Petitioners / Non-Applicants herein at the cost of their initial investment made at the time of the incorporation of the Respondent No. 1 Company along with a simple interest between 12% to 18% per annum. The Applicants will repay the External Commercial Borrowings (“ECB”) as in the books of the Company as per a revised schedule which may be determined by this Hon’ble Tribunal in the order passed by this Hon’ble Tribunal while deciding the captioned petition;

Or in the alternative (c) Allow the Applicants to sell their entire shareholding in favour of the Non-Applicants at the cost of their initial investment made at the time of the incorporation of the Respondent No. 1 Company along with a simple interest between 12% to 18% p.a.;

Or in the alternative (d) Allow the Applicants to sell their entire shareholding to third party as specified in Para 15(iii) of the instant Application;

(e) Pass such other and further order(s) as this Hon’ble Tribunal may deem fit and proper in the circumstances of the case and in the interest of justice.

2. Brief facts of the case as stated by the Applicants are given hereunder:

(a) Respondent Nos.2, 3 and 4 herein have filed the main Company Petition bearing C.P. No.115/BB/2022 titled ‘Tokyo Foundry Company Ltd. & Ors. v. Simplex Naigai Castings Pvt. Ltd. & Ors.’ u/s 241 and 242 of the Companies Act, 2013 inter alia alleging oppression and mismanagement by the Applicants and others in Respondent No. 1 Company, pending before this Tribunal.

(b) Respondent No. 1 Company (‘R-1 Company’) ceased business operations amid disputes between Applicant Group and Non-Applicants, resulting in a deadlock over its functioning and management. Non-Applicants’ Petition alleging oppression and mismanagement by Applicants is baseless due to the Company’s closure and absence of business activities for years. Moreover, recent data from the MCA Portal confirms the R-1 Company’s striking off by the Registrar of Companies. As the Company is non-existent, grant of relief under Sections 241 and 242 of the Companies Act, 2013 is impractical, as Tribunal orders cannot be enforced against a defunct entity and thus reviving the R-1 Company is necessary for Tribunal orders to be executable.

(c) It is stated that the Non-Applicants, acting as oppressors, approach this Tribunal with unclean hands, manipulating facts to level baseless oppression allegations against the Applicants. Non-Applicants in the Petition are implicated in serious misconduct, such as tampering with meeting minutes, financial misappropriation of R-1 Company, employee harassment, and breaching the Joint Venture Agreement’s terms. Given these actions, they cannot be allowed to seek relief from this Tribunal under its equitable jurisdiction.

(d) The Applicants earlier filed Company Petition No. 20/BB/2019 aga