NCLT Mumbai Rejects Ex-SNVG Logistics Director's Plea Claiming Forced Share Transfer And Oppression

The Mumbai Bench of the National Company Law Tribunal (NCLT) has dismissed a petition alleging oppression and mismanagement in the affairs of S.N.V.G. Logistics Private Limited, holding that former director and shareholder Sachin Natrajan failed to establish that his exit from the company and transfer of shares were the result of coercion or intimidation.

The tribunal observed:

“…..the Petitioner had not filed any complaint in relation to purported threat or intimidation alleged to be caused by the Respondent to deprive him from the legitimate rights/ interest in the Respondent company by causing him to transfer his shares. Further, the present petition has been filed on 16.06.2023. Ordinarily, a person who is caused to do some acts under threat and intimidation would take steps to undo the commission of those acts once such perceived threat or intimidation vanishes”

The bench comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar was hearing a petition filed by Natrajan alleging oppression and management by majority shareholders.

Natrajan alleged that he was forced to transfer his 50% shareholding in S.N.V.G. Logistics to Karan Vasudeo Gondal, son of co-promoter Vasudeo Hari Gondal, for Rs. 50,000, which he claimed was below the fair value of the shares. He alleged that he was threatened and intimidated during a meeting attended by union leaders, compelling him to sign share transfer documents and resign from the company's board.

He also accused the management of financial irregularities, alleging siphoning of company funds, false accounting entries, inflated expenses, and assets being wrongly shown as expenditures.

But the tribunal noted that Natrajan never filed any complaint about the alleged threats or intimidation. It also pointed out that while he returned the Rs 50,000 paid for the share transfer, he did not take any legal steps to challenge the transfer on the ground that his consent had not been freely given under the Indian Contract Act, 1872.

The NCLT also looked at Natrajan's own conduct. It noted that he voluntarily stepped down as a bank signatory and took steps connected with the release of his personal guarantee, which, in the tribunal's view, weakened his claim that he had acted under coercion.

The bench also referred to the handwritten note on his resignation letter and photographs placed on record, saying these did not support his allegation that he had signed the documents under threat.

Rejecting the allegations of oppression and mismanagement, the tribunal held that the petition appeared to be an afterthought aimed at securing an enhanced value for the shares and dismissed the petition.

For Applicant : Advocates Pooja Singh along with PCS Amit Jaste

For Respondent: PCS Ajay Thrivedi