Tribunal upheld procedural integrity, emphasizing non-participation forfeits rights to contest earlier decisions; a financial penalty was imposed for obstructive behavior.

ORDER

Per: RADHAKRISHNA SREEPADA, Member (Technical):

1. The present Appeal is filed by the Applicant under Section 241 & 242 of Companies Act , 2016 seeking following reliefs:

a) to reverse/vacate the order passed on 14.12.2023 by this Bench as the C.P 73/BB/2021 was not maintainable on ground eligibility for filing petition under Section 241 -242;

b) to direct the respondents to reimburse the cost incurred by Company with respect investigation report;

c) to pass such orders as the Hon’ble Bench may deem fit, including dismissal of the petition and imposition of a hefty penalty for wasting the valuable time of the Court.

2. The facts of the Petition are as under:

1) It is submitted that in C.P.No. 73/BB/2021, the petition has been filed under a false affidavit with false grounds of eligibility, containing false and frivolous statements and concealing material facts. The petition is not maintainable under law, as Petitioner No.1 ceased to be a shareholder of the company from 30.03.2021, and Petitioners No. 2 and 3 together hold only 3.16% of the total issued, subscribed, and paid-up capital of the company, constituting merely 3.92% (2 out of 46) of the total shareholders. The petition has been filed with the intention of affecting the company’s business in order to promote the business of a newly formed company and to take revenge for the demand of Rs. 85,00,000/- taken by Respondent No.1. This is in reference to the order of the Hon’ble Bench dated 14.12.2023.

2) Further it is submitted that the applicants submits that Petitioner Nos. 2 and 3 of C.P.No.73/BB/2021 are not eligible to make the petition. No application has been filed seeking waiver of eligibility criteria was filed under Section 241 read 244 (1) of the Companies Act ,2013. The independent investigation report dated 06.04.2024, issued by CA Niranjan Prabhu, did not uphold any allegations made in CP 73/BB/2021. The report noted absence of evidence of mismanagement or diversion of funds.

3) Further, upon perusal of the independent investigation report, it was observed by the auditor that certain documents were unavailable for inspection. It is submitted that all financial and accounting affairs of the company from 2004 to 2020 were handled solely by Respondent No.1, and in the absence of Applicant No.2, the complete affairs remained under his control. All documents relating to transactions during 2004–2020 were in his custody, and the applicants had only limited access thereto.

4) Further, after Respondent No.1 resigned from the company, it became difficult for the applicants to trace the documents. Upon being requested to produce all records for the period 2004–2020, Respondent No.1 denied having custody of the same, and the company had no access to them. It is therefore submitted that the applicants have produced all information and documents available with them, and any further information required in this matter can only be obtained from Respondent No.1. In view of the false allegations made, it raises a strong suspicion that certain documents may have been withheld by Respondent No.1 to facilitate the making of such false allegations.

5) Applicant No.1 and Respondent No.1 are family members, with R-1 being the nephew of A-1. Respondent No.1 was brought up and resided with A1 from 1978 until 2019. He was always treated as part of A-2’s family and, over the decades, had earned A-2’s trust. Subsequently, on the basis of trust and confidence, Respondent No. 1 was inducted by Applicant No. 2 as a shareholder and director in Sagar Leasefin Ltd. and its group companies, and was entrusted with full powers to manage and operate the business of the group.

6) Thereafter, Respon