The Chennai bench of National Company Law Tribunal (NCLT) on Wednesday reserved its order on a withdrawal plea relating to an earlier waiver petition filed by Valli Arunachalam and her family members for maintaining an alleged oppression and mismanagement case against Ambadi Investments (AIL), the holding firm of the Murugappa Group and its family members.
NCLT, in its last hearing, had directed Arunachalam and her family (MVM family) to file a withdrawal plea on an earlier waiver petition, in order to file a fresh one, in their case against AIL and the Murugappa family members.
Though Arunachalam had sought to file a fresh waiver petition, rectifying the errors in the previous one, AIL strongly opposed the move, in the hearing. AIL and Murugappa family members had filed around 10 applications seeking rejection of the waiver application itself.
The MVM family, which has the wife and daughters of MV Murugappan, the late executive chairman of Murugappa Group, has been fighting a battle of oppression against the Murugappa family, seeking a board position and equal representation in the Murugappa family business.
Given that the MVM family holds less than 10% of the shareholding, they had moved a waiver application, seeking permission from the NCLT to press their company petition alleging oppression and mismanagement against Murugappa family members and companies under the control of AIL. MVM family holds 8.21% stake in AIL.
The trigger for filing the petition was Murugappa family members voting against the appointment of Arunachalam, eldest daughter of MV Murugappan, as a director on the board of the AIL, after asking her to apply through the AGM.
When the matter was taken up on Wednesday, Pinky Anand, representing MVM family, submitted that the provisions of Civil Procedure Code (CPC), will not apply to the instant case, which is governed by the NCLT rules. The point of CPC being applicable was raised by counsels of AIL in the last hearing.
The submissions of the counsels centered around Order 23 Rule 1 of the CPC as also the NCLT rules and both side advanced technical arguments on the same, with AIL pleading that the withdrawal application should not be allowed.
Anand contended that while the original proceedings started on March 15, 2021, it is already September and the respondents are trying to delay the proceedings on hyper technical arguments, without addressing the main issue of oppression of shareholders.
Tribunal was also told that AIL has called for the annual general meeting and Arunachalam has raised certain questions on the conduct of business by the holding company. The tribunal, after hearing both the parties, gave five days to file brief written submission and has reserved the matter for order.
Arunachalam had in earlier hearings told the tribunal that applications filed against her suit on behalf of the group family members citing technical errors were delaying tactics to keep her out.
She had said there was no error in the waiver application since notary rules have been relaxed during the pandemic, and even if the tribunal considers that there was an error, it can be rectified by filing a fresh affidavit and stamp paper as required.