w w w . L a w y e r S e r v i c e s . i n



M/s. India Awake for Transparency Shristi Crescendo v/s M/s. Hasham Investment & Trading Company Pvt. Ltd.


Company & Directors' Information:- HASHAM INVESTMENT AND TRADING CO PVT LTD [Active] CIN = U67120KA1983PTC074543

Company & Directors' Information:- P V T INVESTMENT LIMITED [Amalgamated] CIN = U74899DL1988PLC121600

Company & Directors' Information:- B M G CRESCENDO (INDIA) LIMITED [Not available for efiling] CIN = U00095KA1995PLC018237

Company & Directors' Information:- P V T INVESTMENT LTD [Not available for efiling] CIN = U67120PB1988PLC008068

Company & Directors' Information:- S T INVESTMENT PRIVATE LIMITED [Amalgamated] CIN = U65993WB1990PTC050032

Company & Directors' Information:- H. L. INVESTMENT COMPANY LIMITED [Amalgamated] CIN = U65990WB1975PLC128186

Company & Directors' Information:- J G TRADING & INVESTMENT PVT LTD [Active] CIN = U65929WB1990PTC048704

Company & Directors' Information:- M M INVESTMENT PRIVATE LIMITED [Converted to LLP] CIN = U65921CT2008PTC020533

Company & Directors' Information:- G. N. G. INVESTMENT LIMITED [Active] CIN = U65910GJ1981PLC004128

Company & Directors' Information:- A S G S INVESTMENT PRIVATE LIMITED [Active] CIN = U74120DL2008PTC173938

Company & Directors' Information:- G L INVESTMENT PVT LTD [Active] CIN = U65993WB1991PTC051072

Company & Directors' Information:- C & C INVESTMENT LTD [Active] CIN = U67120AS1976PLC001654

Company & Directors' Information:- S M S INVESTMENT CORPORATION PRIVATE LIMITED [Active] CIN = U74899DL1963PTC003988

Company & Directors' Information:- V R V INVESTMENT PRIVATE LIMITED [Active] CIN = U67120WB1985PTC039793

Company & Directors' Information:- S P INVESTMENT PVT LTD [Active] CIN = U70109WB1961PTC025099

Company & Directors' Information:- R H INVESTMENT PRIVATE LIMITED [Active] CIN = U99999MH1978PTC020633

Company & Directors' Information:- T N B INVESTMENT PRIVATE LIMITED [Active] CIN = U74899DL1986PTC025590

Company & Directors' Information:- A R S INVESTMENT PVT LTD [Active] CIN = U65993WB1990PTC048513

Company & Directors' Information:- V P INVESTMENT PRIVATE LIMITED [Active] CIN = U74899DL1983PTC015714

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- S M D INVESTMENT LIMITED [Strike Off] CIN = U65993TN1995PLC033139

Company & Directors' Information:- G R D INVESTMENT PVT LTD [Amalgamated] CIN = U67120WB1980PTC032727

Company & Directors' Information:- C AND N INVESTMENT PRIVATE LIMITED [Active] CIN = U74899DL1983PTC015710

Company & Directors' Information:- R INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U65993TZ1988PTC002181

Company & Directors' Information:- H N G L INVESTMENT PRIVATE LIMITED [Active] CIN = U74899DL1995PTC066774

Company & Directors' Information:- K M S INVESTMENT PRIVATE LIMITED [Active] CIN = U67120UP1993PTC015287

Company & Directors' Information:- U M INVESTMENT PVT LTD [Active] CIN = U70101WB1979PTC032160

Company & Directors' Information:- R V S INVESTMENT AND TRADING CO PVT LTD [Under Process of Striking Off] CIN = U65993MH1976PTC018785

Company & Directors' Information:- A S T INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U67120DL1996PTC082812

Company & Directors' Information:- B N E INVESTMENT LTD [Not available for efiling] CIN = U67120WB1974PLC029360

Company & Directors' Information:- K S J INVESTMENT COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL1994PTC061335

Company & Directors' Information:- B AND M TRADING AND INVESTMENT CO LTD [Active] CIN = U65993DL1980PLC011184

Company & Directors' Information:- P T INVESTMENT PVT LTD [Strike Off] CIN = U65999WB1995PTC067065

Company & Directors' Information:- K. S. R. INVESTMENT LIMITED [Strike Off] CIN = U65992UP1988PLC010253

Company & Directors' Information:- M M TRADING AND INVESTMENT COMPANY PRIVATE LIMITED [Strike Off] CIN = U65990MH1980PTC023258

Company & Directors' Information:- A P K TRADING AND INVESTMENT PRIVATE LIMITED [Active] CIN = U51100MH1997PTC112742

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- R M INVESTMENT & TRADING CO PVT LTD [Strike Off] CIN = U65993WB1980PTC032521

Company & Directors' Information:- P V TRADING & INVESTMENT PVT LTD [Strike Off] CIN = U70101WB1993PTC057663

Company & Directors' Information:- N V TRADING & INVESTMENT PVT LTD [Strike Off] CIN = U51909WB1992PTC054412

Company & Directors' Information:- J T INVESTMENT PVT LTD [Strike Off] CIN = U65923WB1979PTC032344

Company & Directors' Information:- J. B. TRADING & INVESTMENT CO PRIVATE LIMITED [Active] CIN = U51101MH2011PTC225513

Company & Directors' Information:- R K INVESTMENT LTD [Strike Off] CIN = U65993WB1969PLC027398

Company & Directors' Information:- N M G C INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U74899DL1982PTC014603

Company & Directors' Information:- M R R TRADING AND INVESTMENT COMPANY LIMITED [Active] CIN = U65990MH1980PLC023259

Company & Directors' Information:- T M INVESTMENT CO PVT LTD [Active] CIN = U67120WB1971PTC028172

Company & Directors' Information:- S. A. F. INVESTMENT LIMITED [Active] CIN = U67120DL1997PLC088611

Company & Directors' Information:- H K (INVESTMENT) COMPANY PRIVATE LIMITED [Active] CIN = U65990GJ1950PTC000511

Company & Directors' Information:- P N INVESTMENT PRIVATE LIMITED [Under Liquidation] CIN = U65910GJ1988PTC010715

Company & Directors' Information:- INVESTMENT CORPORATION LIMITED [Under Liquidation] CIN = U65993KL1942PLC000449

Company & Directors' Information:- S R M INVESTMENT PVT LTD [Strike Off] CIN = U67120WB1979PTC031888

Company & Directors' Information:- A TO Z INVESTMENT PVT LTD [Dissolved] CIN = U67120WB1988PTC044464

Company & Directors' Information:- R J INVESTMENT PRIVATE LIMITED [Active] CIN = U67120MH1976PTC018954

Company & Directors' Information:- B N K INVESTMENT CO PVT LTD [Active] CIN = U65993WB1971PTC028169

Company & Directors' Information:- A D INVESTMENT CO PVT LTD [Active] CIN = U67120WB1971PTC028170

Company & Directors' Information:- T D INVESTMENT CO PVT LTD [Strike Off] CIN = U65921CH1987PTC007637

Company & Directors' Information:- C G K INVESTMENT P LTD [Strike Off] CIN = U65910AP1986PTC006088

Company & Directors' Information:- R S P TRADING AND INVESTMENT COMPANY PVT. LTD. [Active] CIN = U51909WB1986PTC041004

Company & Directors' Information:- L D INVESTMENT COMPANY PVT LTD [Strike Off] CIN = U65921HP1988PTC008425

Company & Directors' Information:- CRESCENDO TRADING PRIVATE LIMITED [Active] CIN = U51909DL2004PTC127512

Company & Directors' Information:- S S TRADING & INVESTMENT PVT LTD [Active] CIN = U52520MP1988PTC004578

Company & Directors' Information:- G K INVESTMENT PRIVATE LIMITED [Active] CIN = U65993TZ1987PTC001919

Company & Directors' Information:- G V INVESTMENT PRIVATE LIMITED [Active] CIN = U65993TZ1987PTC001920

Company & Directors' Information:- B C K H INVESTMENT CO PVT LTD [Active] CIN = U67120MH1982PTC026819

Company & Directors' Information:- H V INVESTMENT PRIVATE LIMITED [Active] CIN = U67120MH1997PTC107686

Company & Directors' Information:- S M R TRADING AND INVESTMENT COMPANY PRIVATE LIMITED [Active] CIN = U51900MH1980PTC023260

Company & Directors' Information:- K M R TRADING INVESTMENT COMPANY PRIVATE LIMITED [Active] CIN = U51900MH1980PTC023261

Company & Directors' Information:- M L INVESTMENT PVT LTD [Strike Off] CIN = U67120WB1979PTC032180

Company & Directors' Information:- S & G INVESTMENT COMPANY PRIVATE LIMITED [Active] CIN = U65100DL2012PTC244271

Company & Directors' Information:- C S P TRADING AND INVESTMENT PRIVATE LIMITED [Active] CIN = U65910GJ1988PTC010943

Company & Directors' Information:- S B INVESTMENT PVT LTD [Liquidated] CIN = U99999RJ1959PTC001090

Company & Directors' Information:- R AND P INVESTMENT PVT LTD [Strike Off] CIN = U67120PB1995PTC016124

Company & Directors' Information:- M M B INVESTMENT PRIVATE LIMITED [Active] CIN = U65993RJ1996PTC012698

Company & Directors' Information:- M G A INVESTMENT COMPANY PRIVATE LIMITED [Strike Off] CIN = U99999MH1980PTC022406

Company & Directors' Information:- D P TRADING AND INVESTMENT PVT LTD [Strike Off] CIN = U99999MH1981PTC024298

Company & Directors' Information:- M P TRADING AND INVESTMENT PVT LTD [Strike Off] CIN = U51900MH1981PTC024297

Company & Directors' Information:- D S N INVESTMENT PVT LTD [Strike Off] CIN = U65993TG1988PTC008554

Company & Directors' Information:- V. I INVESTMENT PVT LTD [Strike Off] CIN = U67120HR1988PTC030206

Company & Directors' Information:- R J P INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U65993GJ1981PTC004678

Company & Directors' Information:- D D P INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U65910GJ1981PTC004695

Company & Directors' Information:- C J P INVESTMENT PVT LTD [Strike Off] CIN = U99999GJ1981PTC004662

Company & Directors' Information:- M P INVESTMENT CO PRIVATE LIMITED [Under Process of Striking Off] CIN = U65993KA1974PTC002646

Company & Directors' Information:- INVESTMENT COMPANY PRIVATE LIMITED [Dissolved] CIN = U65990KL1946PTC000461

Company & Directors' Information:- INVESTMENT CORPORATION LIMITED [Not available for efiling] CIN = U99999MH1943PLC007730

    Company Appeal (AT) No. 362 of 2017

    Decided On, 07 February 2018

    At, National Company Law Appellate Tribunal

    By, THE HONOURABLE MR. JUSTICE A.I.S. CHEEMA
    By, JUDICIAL MEMBER & THE HONOURABLE MR. BALVINDER SINGH
    By, TECHNICAL MEMBER

    For the Appellant: S. Subramanian, Arnav Dash, Advocates. For the Respondent: P.B. Suresh, Vipin Nair, Abhay P. Singh, Advocates.



Judgment Text

A.I.S. Cheema, J.

(Oral)

This appeal raises the question of law whether a non-member can seek waiver under Section 244 of the Companies Act, 2013 ('Act' in brief).

2. The Appellant - original Petitioner is admittedly a non-member in Respondent No.1 Company. The Appellant filed application, (treated as) Company Petition 15 of 2017 before the National Company Law Tribunal, Bangluru Bench ('NCLT' in short) for waiver under Section 241 read with Section 244 of the Act. Petitioner claimed it was acting to safeguard public interest. It was claimed that Respondent Companies had merged with Respondent No.1 and in the process assets had been transferred for private benefit. Grounds were raised trying to show that the Respondent companies were acting more for private benefit rather than in public interest and committed acts of oppression and mismanagement. NCLT heard the Petitioner in the light of Section 244 of the Act and concluded that as the applicant was not a member, he could not maintain the petition and non-member cannot seek waiver. The petition was thus rejected. Hence the present appeal.

3. We have heard the learned counsel for the Appellant and the learned counsel for the Respondents.

4. The learned counsel for the Appellant has submitted that if the provisions of Section 244 of the Act are perused the proviso permits waiver of all the requirements of sub-clause (a) or sub-clause (b) which refer to numerical strength or voting strength and even a non-member can maintain the petition.

Section 244(1) of the Act reads as under:

"(1) The following members of a company shall have the right to apply under section 241, namely:-

(a) in the case of a company having a share capital, less than one hundred members of the company less than one-tenth of the total number of its members, whichever is less, or any member or members holding less than one-tenth of the issued share capital of the company, subject to the condition that the application or applicants has or have paid all calls and other sums due on his or their shares;

(b) in the case of a company having a share capital, less than one-fifth of the total number of its members:

Provided that the Tribunal may, on an application made to it in this behalf, waive all or any of the requirements specified in clause (1) or clause (b) so as to enable the members to apply under section 241.

Explanation - For the purposes of this sub-section, where any share or shares are held by two or more persons jointly, they shall be counted only as one member."

5. Referring to the above section, it is submitted by the counsel that the proviso clearly provides that all or any of the requirements could be waived. Thus, it is claimed requirement of being member also can be waived.

6. It has been submitted that the Appellant - original Petitioner is NGO and Company registered under Section 8 of the Act. The Appellant takes up social causes in corporate world relating to grievances about mismanagement of the Companies as well as Government Departments. According to the learned counsel, as the Appellant found that there was mismanagement in the Respondent Company, petition was filed. The submission is that if Section 241(1)(a) is perused, it lays down that where the affairs of the company are being conducted "in a manner prejudicial to public interest", that could also be a ground for filing the petition under Section 241. It is submitted that earlier the word "public interest" was there in the provisions and it was introduced in Section 398 of the Companies Act, 1956 (old Act - in short) by an amendment brought into force with effect from 1st January, 1964. The counsel submitted that under the old Act, the Central Government could permit a member otherwise eligible to move application under Section 399 by resorting to sub-section 4. It is stated that when Section 398 was amended, amendment to Section 399(4) remained to be done and this has been corrected when the new Act came into force by giving powers to the NCLT to waive all or any of the conditions.

7. It has been argued that Judgement in the matter of "Cyrus Investments Pvt. Ltd. & Anr. v. Tata Sons Ltd. & Ors. - 2017 SCC Online NCLAT 261" does apply to the facts of the present matter as in that matter, the present question was involved. There, the Petitioner was admittedly a member of the company and thus for him, the question of waiver was considered. The learned counsel referred to para 151 of that Judgement which reads as under:

"151. Normally, the following factors are required to be noticed by the Tribunal before forming its opinion as to whether the application merits 'waiver' of all or one or other requirement as specified in clauses (a) and (b) of sub-section (1) Section 244:-

(i) Whether the applicants are member (s) of the company in question? If the answer is in negative i.e. the applicant(s) are member(s), the application is to be rejected outright. Otherwise, the Tribunal will look into the next factor.

(ii) Whether (proposed) application under Section 241 pertains to 'oppression and mismanagement'? If the Tribunal on perusal of proposed application under Section 241 forms opinion that the application does relate to 'oppression and mismanagement' of the company or its members and/or is frivolous, it will reject the application for 'waiver'. Otherwise, the Tribunal will proceed to notice the other factors.

(iii) Whether similar allegation of 'oppression and mismanagement', was earlier made by any other member and stand decided and concluded?

(iv) Whether there is an exceptional circumstance made out to grant 'waiver', so as to enable members to file application under Section 241 etc.?"

8. Referring to (i) in the above paragraph, the learned counsel submitted that the observations of this Tribunal that if the person is a member the application is to be rejected outright should be treated as obiter as it was a question which was necessary to decide in that matter. The question was neither argued nor deliberated and thus these observations should be treated as obiter.

9. It is argued by the learned counsel for the Appellant that provisions of Section 244(1) are quite clear and when the section is clear, it should be applied as it is. According to him the words "all or any" used in the proviso make it clear that the NCLT has wide powers to waive all or any of the requirements mentioned in Clauses (a) and (b) for the purpose of permitting the petition under Section 241.

10. It is submitted that if it is found that the Section is vague then purposive of interpretation should be resorted to in order to see which mischief was sought to be remedied when the amendments were made. According to him, the concept of "public interest" was introduced with effect from 01.01.1964 and which is also covered in Section 241(1)(a), should be kept in view and to safeguard public interest even a non-member should be able to maintain the petition.

11. The learned counsel for the Respondents has opposed the contentions raised by the learned counsel for the Appellant. It is claimed that Section 244(1) clearly refers to only members who would be able to apply and maintain the application/petition and there is no ambiguity. According to the counsel for non-members, there are other options like resorting to Section 210 of the Act and the public interest being referred to can be taken care by the Central Government which can take necessary actions. It is argued that sub-section (2) of Section 241 also makes it clear that if Central Government is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may apply to the Tribunal for an order under this Chapter. But that would be circuitous route. The learned counsel submitted that the orders of the NCLT rejecting the petition were passed without notice to the Respondents and now he has filed reply to show that there were disputes between the present Appellant and the Respondents and the petition was moved with ulterior motives.

12. Heard counsel for both sides. We find that in spite of adding words relating to "public interest" on 01.01.1964 in the old Act, even when Act of 2013 was enforced Section 241, 242 and 244 continue to refer to Members of the Company to deal with question of oppression and mismanagement. Thus there is no scope to make alleged purposive interpretation as claimed. We have perused Section 241 and read it with Section 244, and kept in view the old provisions of Section 398 and 399. We find that much is required to be stated as Section 244 of the Act, to us, appears to be quite clear. A mere glance at the Section shows that the Proviso which has been added below Clauses (a) and (b) gives power to waive all or any of the requirements specified in Clauses (a) or (b) so as to "enable the members to apply". The Proviso does do away with "members". Apart from this, the Proviso controls and refers only to Clauses (a) and (b) and does control what is part of Clauses (a) and (b). The opening words of the Section are (i) "The following members of a company shall have the right to apply under Section 241, namely: - " Then clauses as mentioned above are there.

13. The Proviso below Clauses 'a' and 'b' does not waive or control the opening words of the Section which clearly say that the right would be of the members to apply. The Proviso also gives

Please Login To View The Full Judgment!

rights to only "members" to seek waiver of all or any of the requirements specified in Clauses (a) and (b). Even Section 241 says that any "member of company" can complain under the Section. 14. We thus do not find any substance in the arguments which are being raised by the learned counsel for the Appellant. The learned counsel for the Respondents submitted that busy bodies in the name of public interest cannot be allowed to resort to Section 241 and 244 otherwise the companies would not be able to function. There is substance in the submission. There are remedies available to the non-members or public, in case the company was functioning against public interest for which there are provisions in Chapter XIV of the Act, and Section 242(2) of the Act is also there. 15. We thus hold the above question of law in negative. 16. We do not find any substance in the appeal. The impugned order does not call for any interference. The appeal is dismissed with costs quantified at Rs. 2 lakhs to be paid by the Appellant to the Respondent No.1
O R