The court ordered a majority shareholder to buy out minority shareholders to resolve corporate deadlock arising from personal disputes.

ORDER

CP/83(MB)2022

1. Adv. Surbhi Sharma proxy counsel for Respondent no. 2 and 3 present and Adv. Ninad Deshpande a/w Adv. Aishwarya Darda for the Petitioner are present.

2. This Application has been filed by Mr. Merwyn Savio Sequiera under Section 241 & 242 of the Companies Act, 2013 seeking following reliefs:-

a. Issue appropriate orders, directions and reliefs under Sections 241 , 242 and other applicable provisions of the Companies Act, 2013 to end the aforesaid acts of oppression and mismanagement being perpetrated by respondents, including the orders, directions and reliefs prayed for herein;

b. Pass an order for removal of Second Respondent and Third Respondent as the directors of the Company;

c. Issue appropriate orders and/or directions for conducting Extra Ordinary General Meeting of the Company to consider and approve appointment of two new directors on the Board of Directors of the Company, and dispense with the quorum requirement specified in the AOA of the Company if the Second Respondent and Third Respondent do not attend the said Extra Ordinary General Meeting;

d. Award cost of the present proceedings in favour of the Petitioner; and

3. The Respondent company was promoted and incorporated in the year 1998 by the Petitioner along with one Mrs. Mariam Frederick. The Company is inter alia engaged in the business of providing Recruitment Management Solutions to its clients. The Petitioner is Chairman and Managing Director of the said Company. The Second Respondent is the wife of the Petitioner and she was inducted as director of the Company in the year 2007, on account of departure of Mrs. Mariam Frederick from the Company. The Second Respondent also holds 20% equity shareholding in the Company.

4. The Third Respondent is the daughter of the Petitioner born out of wed- lock with Second Respondent. The Third Respondent is also one of the directors of the Company and she holds 5% equity shareholding in the Company.

5. It is alleged by the Petitioner that the Second Respondent and Third Respondent have brought the family dispute into corporate domain, and they are seeking to settle the family dispute on their terms by creating a deadlock situation in the Company, through the misuse of their majority position in the Board of Directors and holding of substantial equity shares in the Company.

6. It is further alleged that the Second Respondent and Third Respondent are deliberately not attending the Board Meetings and/or General Meeting, and thereby making it impossible for the Company to either hold a meeting of Board of Directors or a General Meeting of shareholders for want of valid quorum. As a result, the Company is unable to approve its financial statements for FY 2020-2021 and also hold the Annual General Meeting.

7. Accordingly, the Petitioner has alleged the such acts of the 2^nd and 3^rd Respondents are causing oppression and mismanagement through:

a. absolute failure to perform their fiduciary as well as statutory duties as directors of the Company;

b. misusing their position in the Board of Directors of the Company and substantial shareholding to block the holding of any Board Meeting or General Meeting of the Company;

c. causing obstruction in the smooth functioning of the Company; and d. harassing the Petitioner, retained professionals and employees of the Company through false and baseless allegations.

8. The Respondent No 2 and 3 has filed common reply stating that: – a. The Petitioner is misusing his majority shareholdings and authority over staff as full t