Non-member of Co. lacks locus to seek permission for filing plea u/s 241/242: NCLAT

Case Details: Jithendra Parlapalli v. Wirecard India (P.) Ltd. - [2023] 147 taxmann.com 360 (NCLAT-Chennai)

Judiciary and Counsel Details

• • M. Venugopal, Judicial Member & Shreesha Merla, Technical Member
  • K.R. Arun Shabari, Adv. for the Appellant.

Facts of the Case

In the present case, a question was raised before the Appellate Tribunal whether the petition u/s 241 of the Companies Act, 2013 for relief, against oppression or mismanagement, in the conduct of affairs of a company can be maintained by a person, who is shown as a member in the register of the company.

NCLAT Held

The NCLAT observed that pursuant to Section 241, read with sections 242 and 244 of the Companies Act, 2013, a complainant, must be a member of a company, in relation to which, a petition, is to be filed.

Section 244 of the Companies Act, 2013, read as follows –

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 100 members of the company or not less than 1/10th of the total number of its members, whichever is less, or any member or members holding not less than 1/10th of the issued share capital of the company;

(b) in the case of a company not having a share capital, not less than 1/5th 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.

It was further observed that only a member of a company, can prefer a petition, in relation to the company. Also, a `Directorial Complaint’, cannot be a basis for filing a petition, under section 241/242, as `complaints’, in such a petition, should relate to rights, in status / capacity of a member.

The NCLAT held that the appellant was not shareholder/member of the company against which relief of oppression and mismanagement was sought, he had no `locus’ whatsoever, to seek a waiver of the requirement, enabling him, to apply, under section 241 of the Companies Act, 2013. Therefore, permitting him to prefer a petition as per sections 241 and 242 of the Act would not be sustainable in the eye of the law.