Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(NCLT) 8082

NATIONAL COMPANY LAW TRIBUNAL
Ms. Lakshmi Gurung, Member (Judicial), Sh. Hariharan Neelakanta Iyer, Member (Technical)
Jayantilal Bhimshi Gangar – Appellant
Versus
Gangar Opticians Private Limited – Respondent
Company Petition No. 403 of 2019 | Company Petition No. 4065 of 2019 | Company Application No. 205/2021

Advocates:
For the Petitioners: Sr. Adv. Chetan Kapadia, Adv. Rohan Agarwal, Adv. Burzin Bharucha, Adv. Kaushal Popat, Adv. Jhanavi Shah a/w Adv. Nilesh Tribhuvanni/b White & Brief
For Respondents: Adv. Pulkit Sharma, Adv. Naman Jain, Adv. Rohan Vasa, Adv. Anushree Koparkar i/b SSB Legal and Advisory

The court held that procedural violations in company meetings constituted oppression, affirming the necessity of good faith and fair play within family-owned businesses under the Companies Act.

Headnote:(A) Companies Act, 2013 - Sections 241-242 - Company petitions filed for relief against oppression and mismanagement - Petitioner alleged that board meetings were convened without notice due to family disputes, leading to revocation of their authority and removal as directors - Tribunal found board resolutions invalid due to procedural violations including lack of notice, thus affirming their rights as shareholders and directors. (Paras 35, 55, 66)

(B) Oppression and mismanagement - Conduct of directors deemed harsh and burdensome; operational authority of the petitioners stripped without due procedure or justification, violating principles of good faith and fair play. (Paras 57, 59)

Facts of the case:
Petitioners filed company petitions against Gangar Opticians Private Limited and its majority shareholding family members over acts of oppression and mismanagement, including invalid board meetings and removal from director positions.

Findings of Court:
The court held that the meetings and resolutions invoked were improper, thus validating the petitioners’ claims of unfair treatment within a quasi-partnership family business.

Issues: Whether the actions of the company’s board constituted oppression or mismanagement under sections 241 and 242 of the Companies Act.

Ratio Decidendi: The court highlighted that oppression requires a breach of mutual fiduciary duty owing to shareholders in family-held companies, emphasizing the importance of due process in decision-making.

Result: The petitioners were restored to directorship, with all resolutions passed subsequently being declared void.

Table of Content
1. petitioners and respondents company background (Para 1 , 2 , 3 , 4 , 5 , 6 , 7)
2. shareholding and family disputes initiated (Para 8 , 9 , 10)
3. petitioners filing for relief against oppression (Para 15 , 16 , 17 , 18)
4. notice and procedures for board meetings (Para 19 , 20 , 21 , 22)

1. The CP/403/2019 and CP/4065/2019 have been filed under sections 240-242 of the Companies Act, 2013 (‘the Act’) invoking powers of this Tribunal to pass orders to bring end to the acts of oppression and mismanagement. Both these company petitions and the company application CA No. 205/2021 have been filed by the same Petitioners namely Mr. Jayantilal Bhimshi Gangar (Petitioner No. 1) and his son, Mr. Pragnesh Jayantilal Gangar (Petitioner No. 2) (together they are referred as “Petitioners”). As the petitions involve common set of facts, they were heard together and are being disposed of by this common order.

Factual Matrix

2. The Respondent Company namely, M/s Gangar Opticians Private Limited (‘the Company’) was incorporated on 25.04.2000 with the following object:

“To carry on, manage, maintain and conduct the business as supplier, dealer, importers, exporters and acting as Commission and/or indenting agent of spectacles, Ophthalmic Lenses, Spectacles Frames and Glasses, including Sunglasses, all types of Lenses including Contact Lenses and related Solutions and all other items, articles, things, machineries, equipments, consumables, stores and any other accessories by whatever name called but related to the eyes.”

3. The Company is a ‘flagship company’ engaged in the business of selling eyewear products. It is one of India’s leading chain of optician eye-wear retail stores. It is undisputed position that the Company is a closely held family unit with Petitioner No.1 being the founding member and director of the company.

4. The entire shareholding of the Company is held by the families of six brothers, who are sons of Mr. B. P. Gangar. The six sons of Mr. B.P. Gangar are:

1) Jayantilal B Gangar, (Brother 1/ B-1)

2) Devchand B Gangar, (Brother 2/ B-2)

3) Kishore B Gangar, (Brother 3/ B-3)

4) Jagdish B Gangar, (Brother 4/ B-4)

5) Surendra B Gangar, (Brother 5/ B-5)

6) Champaklal B Gangar, (Brother 6/B-6).

5. At the time of incorporation of the Company, each brother had subscribed to 1000 equity shares each. The shareholding pattern of the six families, as on 31.03.2018 is:

6. The family tree along with their shareholding pattern is given below:

7. From the above chart, it can be seen that the sons of the six brothers (representing second generation), have been allotted equal number of shares i.e. 50,000 shares each constituting 5% of the shareholding. Further, as per the Articles of Association of the Company, the six brothers were named as the First Directors of the Company and upon incorporation of the Company, all of them were appointed as directors of the Company. Subsequently on 02.05.2008, the sons of the six brothers were inducted as directors of the Company.

8. The list of directors of the Company as on 31.03.2018 is:

9. Some dispute arose in 2018 among the family members relating to the transfer of shares of a sister concern of the Company, namely M/s Gangar Enterprise Pvt. Ltd. (Gangar Enterprise). This was the beginning of full-blown battle between the Petitioners on one side (representing Family of B-1) and rest of the five families on the other side.

10. Apprehending some action from the Respondents, the Petitioner 1 had sent letter dated 26.11.2018 to the Registrar of Companies (RoC) about ongoing dispute amongst the directors of the Company and requested not to entertain any request for change in directorship or shareholding of the Company.

11. The Petitioners also filed Company Petition No. 4409/2018 on 31.11.2018 under sections 241-242 of the Companies Act, 2013 (Act against Gangar Enterprise and other Respondents which is pending before another Court of this Tribunal. This appears to be the trigger point for taking decis

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2025 Supreme(Online)(NCLT) 8082

The court held that procedural violations in company meetings constituted oppression, affirming the necessity of good faith and fair play within family-owned businesses under the Companies Act.

Cases Referred (2)