Challenge To One Respondent's Maintainability Cannot Dismiss Entire Company Petition: NCLT Guwahati

The National Company Law Tribunal (NCLT) at Guwahati has held that a party cannot seek dismissal of an entire company petition when its pleadings only challenge the maintainability of proceedings against one particular respondent.

A Bench of Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh dismissed an application filed by Meghmellar Estates and Services Private Limited and its directors, who challenged the maintainability of a company petition alleging oppression and mismanagement filed by Aaryan Chilled Infra Private Limited and Jagdish Sharma. It held:

“Whether the Company Petition is maintainable against a particular respondent is a distinct issue from whether the Company Petition itself is liable to be dismissed in its entirety. The Applicants have failed to lay any factual or legal foundation to justify such an omnibus prayer.”

The applicants contended that the respondents did not hold any shares in Meghmellar Estates and were not its members and therefore did not satisfy the eligibility requirement under Section 244 of the Companies Act, 2013, which sets out who can apply to the Tribunal in oppression and mismanagement proceedings. They also alleged suppression of material facts and abuse of process.

The respondents argued that they collectively held 34.21% in Onion Rings Hotel and Resorts Private Limited, which held 97.89% of the shareholding in Sapphire Suppliers Private Limited (SSPL), which in turn held 65.19% equity shares and 100% preference shares in Meghmellar Estates. They claimed that acts attributed to the respondents, including alleged share transfers, sale of investments and the strike-off of SSPL without disclosure, had adversely affected their interests.

The applicants sought a preliminary decision on maintainability and dismissal of the main company petition, along with a stay of further proceedings.

The Tribunal noted that the applicants' principal contention concerned Meghmellar Estates. It observed that although their pleadings were largely confined to the alleged non-maintainability of proceedings against Meghmellar Estates, they had sought dismissal of the entire company petition.

It observed that it was “of the considered view that the relief sought is wholly disproportionate to the grounds pleaded in the application.” It further held that “no independent pleadings have been made questioning the maintainability of the Company Petition against the remaining respondents or the maintainability of the petition as a whole under the various provisions invoked therein. The prayer seeking dismissal of the entire Company Petition, therefore, travels far beyond the scope of the pleadings contained in the present application.”

The Bench reiterated that the relief sought by a party must flow from the pleadings and issues raised before the Tribunal. It stated:

“The Tribunal cannot be called upon to adjudicate the maintainability of the entire Company Petition in the absence of specific pleadings confined to the effect of challenging the maintainability of the proceedings against a particular respondent i.e,R-7 in main Company Petition.”

Accordingly, the NCLT dismissed the application, leaving the other issues to be considered in the main company petition.

For Applicants: CS Biman Debnath

For Respondents: CS Amit Pareek