The present case was looked after, thoroughly researched and argued by our firm, White and Brief, Advocates and Solicitors. In the present case, we were representing Mr. Rahul Visaria. The issue arising for consideration in the present case was a dispute over alleged fraudulent shares transfer leading to the dilution of Mr. Visara’s share in the company, prompting legal action under section 241-242 of the Companies Act, 2013.
The factual basis of the present case was such that Mr. Rahul Hemchandra Visaria (“Applicant”) was originally a holder of 51.67% of shares in the company. However, the Respondents herein fraudulently changed the address of the company and subsequently, removed the Applicant from the directorship of the company. Being aggrieved, the Applicant approached the Hon’ble National Consumer Law Tribunal (“NCLT”) under Section 241-242 of the Companies Act, 2013.
However, at the time when the Respondents filed its reply challenging the maintainability of the said Company Petition, the Applicant learnt that the Applicant’s shares in the company had been diluted by the Respondents herein, without any knowledge of the Applicant. Hence, the Applicant approached the NCLT seeking waiver of the requirement specified under Section 244(1)(a), which came to be allowed, thereby granting an opportunity to the Applicant to proceed with the Company Petition, despite being disqualified as a member of the company, on account of the fraudulent shares transfer.
Therefore, the Tribunal held that the alleged fraudulent transfer of the shares itself has disentitled the Applicant from maintaining the Company Petition on account of him becoming a non-member, therefore, such fraudulent transfer itself would constitute a case of oppression qua a member, who ceased to be a member on account of such fraudulent transfer. Therefore, the Hon’ble Tribunal found it appropriate to waive the conditions stipulated under Section 244(1)(a) of the Companies Act, 2013.
This decision highlights the importance of addressing fraudulent activities that impact shareholding and demonstrates the Tribunal’s commitment to enabling individuals to seek redress for such actions.