B.S.V. Prakash Kumar, Member - (1.) The Petitioners, Shapoorji Pallonji group, filed CA 26/2017 in CP 82/2016 seeking waiver of the qualification mandate set out in section 244(1) of the Companies Act 2013 (hereafter referred as "Act") to enable them to pursue their Petition filed u/s. 241 of the Act on the ground that the interest of the Petitioners in Tata Sons Limited (R1) is substantial, the issues raised in the Petition are more appropriate to be dealt with u/s. 241 and the cause raised is substantial in importance to the Petitioners, to class of members, to the Company itself and to the Public.
(2.) The basic claim of the Petitioners is that they together hold 18.37% equity in Tata Sons and the affairs of the company have been/being conducted in a manner not only prejudicial and oppressive to them but also to the company and public on various grounds mentioned in the later part of this Order.
(3.) Though it is conventional to introduce the case with facts before discussing legal proposition involved, the petitioners counsel, to our perception, having slightly digressed from the legal proposition relevant to decide waiver plea, this Bench hereby discusses the legal proposition first, then factual aspect and then to observe as to whether waiver plea can be granted or not. Before get into it, Sections 241, 241(2), and 244 being relevant, the text of them are placed below. Chapter XVI Prevention of Oppression and Mismanagement 241. Application to Tribunal for relief in cases of oppression, etc. (1) Any member of a company who complains that- (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or (b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter. (2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter. 242. Powers of Tribunal (1) If, on any application made under section 241, the Tribunal is of the opinion - (a) that the company's affairs have been or are being conducted in a manner prejudicial or oppressive to any member or members or prejudicial to public interest or in a manner prejudicial to the interests of the company; and (b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding-up order on the ground that it was just and equitable that the company should be wound up, the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit. (2) Without prejudice to the generality of the powers under sub-section (1), an order under that sub-section may provide for- (a)......... (b)..........Etc, 244. Right to apply under section 241 (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, not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company, subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares; (b) in the case of a company not having a share capital, not 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 (a) 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. (2) Where any members of a company are entitled to make an application under Sub-section (2), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them.";