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2025 Supreme(Online)(NCLT) 6117
NATIONAL COMPANY LAW TRIBUNAL
SHRI. VINAY GOEL, SMT. MADHU SINHA, JJ
Nikhil Soman – Appellant
Versus
M/s. Eka Visual Concepts Private Limited – Respondent
Companies Act, 2013 | CP(C/Act)/42/KOB/2024
For the Petitioner: Ms. Karthika K. J.
For the Respondents: Mr. M. Thobias Powell, PCS
Minority shareholders seeking to file for oppression must exceed statutory thresholds of shareholding and support to invoke tribunal powers effectively.
Headnote:(A) Companies Act, 2013 - Sections 244 and 241 - Waiver to file application for oppression and mismanagement - Petitioner holds less than 10% of shareholding, not meeting threshold requirements - Allegations of financial mismanagement and lack of transparency cannot substantiate a claim for oppression - Tribunal emphasizes accountability of members in maintaining company affairs. (Paras 2, 8, 12, 20)
(B) Legal Standards for Oppression - Powers of Tribunal include waiving eligibility criteria under Section 244 - Continuous and burdensome conduct must be established for it to be deemed oppressive - No prima facie case of oppression made out. (Paras 6, 9, 17)
Facts of the case:
The Petitioner, a minority shareholder seeking relief against the managing director and company for alleged oppression, fails to garner support from other shareholders and does not meet the shareholding threshold stipulated in the Companies Act.
Findings of Court:
The Tribunal found that the allegations of oppression lacked merit, as they were unsubstantiated and did not meet statutory requirements for filing under the Companies Act.
Issues: The main issue is whether the Petitioner qualifies to apply for remedy under Section 241 of the Companies Act based on shareholding and support from other members.
Ratio Decidendi: The Tribunal ruled that a mere claim of oppression without substantial support or threshold shareholding does not justify waiving the requirements under Section 244; remedies other than under the Companies Act are available to the Petitioner.
Result: Petition dismissed.
| Table of Content |
|---|
| 1. petitioner holds inadequate shareholding. (Para 2 , 3 , 5) |
| 2. allegations must be substantiated for claims of oppression. (Para 4 , 6 , 20) |
| 3. continuous oppressive conduct is necessary for a valid claim. (Para 8 , 9 , 12) |
| 4. tribunal must evaluate exceptional circumstances for waivers. (Para 10 , 11 , 17) |
| 5. petition dismissed; lack of merit and support. (Para 21 , 22 , 23 , 24) |
ORDER
Per Coram:
1. This Petition has been filed under Section 244 (1) of the Companies Act, 2013 , by the shareholder of M/s. Eka Visual Concepts Private Limited is seeking the following reliefs: -
i. An order to grant waiver of the requirements stipulated in Section 244 (1)(b) of the Companies Act, 2013 enabling the Petitioners herein to apply under Section 241 by filing the Company Petition seeking reliefs against the acts of oppression and mismanagement.
2. The brief facts of the case are as follows:
3. M/s. Eka Visual Concepts Private Limited is a Company duly incorporated under Companies Act having CIN U 45100KL2017PTC051299 and Registered Office at XIX/3112, Govind Palace Outer Ring Road, Guruvayur, Thrissur, Kerala, India, 680101 and Respondent No.2 is the Managing Director of Respondent No.1. The Company had share capital of Rs.1,50,00,000/- divided into 300 equity shares of Rs.50,000/- each. The paid-up capital of the first respondent Company is Rs. 1,05,00,000/- divided into 210 equity shares of Rs. 50,000/- each. The Petitioner holds 10 equity shares with a face value of Rs.50,000/- (Rupees Fifty Thousand Only) per share, representing a total shareholding of Rs. 5,00,000/- (Rupees Five Lakhs Only) in the share capital of the Company, which constitutes less than one tenth of the total shareholding of the Company. In addition, the Applicant has extended an unsecured loan of Rs.55,00,000/- (Rupees Fifty-Five Lakhs Only), disbursed in the following tranches: Rs.20,00,000/- on 02-12-2021, Rs.15,00,000/- on 01-06-2022, Rs.5,00,000/- on 07-06-2022, and Rs.15,00,000/- on 20-06-2022, accordingly it can be seen that the applicant has invested an aggregate amount of Rs. 60,00,000/- (Rupees Sixty Lakhs Only) in the Company and receipts for each tranche enumerating the amount so invested by the Petitioner was duly issued to the Petitioner. It is alleged that Petitioner has been denied inspection of account books, details of asset purchases and the minutes books of the extraordinary engagement of General Meetings despite the request.
4. It is further alleged in the Petition that Respondents are guilty of tampering with records and there is a lack of transparency in the financial management of the Company.
5. Further, there are allegations of advances given by the Company for the purchase of land, allotment of 38 equity shares to three parties, tampering of books, and improper meetings. The Petitioner has claimed a status quo order. The Petitioner submitted that another shareholder has joined him to file this Petition, and he sought a waiver of the requirement stipulated under Section 244 of the Companies Act, 2013 , enabling the Petitioner to pursue the matter under Sections 241 and 242 of the Companies Act, 2013 .
6. Respondents appeared and on 09.01.2025, filed their Counter Affidavit and denied the allegations made in the Application. It is brought to the notice of this Tribunal that there are in all 21 shareholders of the Company and all are Directors. Petitioner was admitted as an Additional Director on 19.11.2021 and was regularized in Annual General Meeting held on 30th September, 2022 and Petitioner attended the Board and General Meetings on 17.09.2022, 22.06.2023, 30.09.2023, 23.01.2024, 16.08.2024, 10.09.2024 physically and on 30th September, 2022 and 05.09.2023 through online. It is alleged that the father of the petitioner, Sri. Soman is a civil contractor engaged in construction contracts in the Middle East, as is known to the respondents. He participated as an invitee in several board meetings, with an ambition to obtain a contr
