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Judgment
It is a Company Petition mentioned by the shareholders holding 2% in R1 company seeking stay of holding requisition meeting for removal of both the Petitioners as Directors of R1 Company on 05.08.2020, as against this, the Respondents' counsel submits that answering Respondents have 93% shareholding in the company, that apart, he has further submitted that the issues in between the parties have already been resolved in the earlier round of litigation before NCLT in CP/27(ND)/2015. Therefore, this being an exercise to bring in the majority shareholders into the management of R1 Company, these Petitioners cannot raise objection to the requisition meeting to be held on 05.08.2020.
In the back drop of these factual aspects, we are of the view that it is obvious majority will come into the Management, may be, it is a case of family members, but the same being adjudicated in the earlier round of litigation, in case we restrain the majority with 93% shareholding from proceeding with management functions, it will become an impediment to the corporate democracy and Management of R1 Company.
May be, it is right that the Petitioners are father and mother of a son who has majority in the company, but this issue has already been decided and now these Petitioners having only 2% of shareholding in the company, therefore they cannot stall the majority shareholders from taking decisions with regard to functioning of the Company. Now, there is no other go to the parents except to opt out from the management because quasi judicial partnership principle will also not applicable for the parents have only miniscule holding in the company. Therefore we have not found any merit to stay the meeting to be held on 05.08.2020.
With regard to the point that this requisite meeting is scheduled to be held after three months from the date of requisition, in case the same is true, it is a procedural error not covered by Section 241 of the Companies Act 2013.
List this application for hearing on 05.10.2020 with a direction to the Respondents to file their reply within one month hereof and rejoinder, if any, within one month thereof.