Valli case: File replies to notice by December 15, NCLT tells Murugappa holding company

The NCLT has fixed December 15, 2021 as the next date, while providing a last opportunity for the respondents to file their replies before the next date and said that it will hear the arguments thereafter.

NCLT
The respondents’ counsel further pointed out that a letter has been filed before the NCLAT for listing of the matter for hearing and that continuation of hearing before the NCLT would make the appeal infructuous.

The Chennai bench of the National Company Law Tribunal (NCLT) on Wednesday directed Murugappa Group holding company Ambadi Investments (AIL), and other family members, to file their replies to the notice issued by the tribunal after admitting the fresh waiver application moved by Valli Arunachalam, and her family members.

The NCLT has fixed December 15, 2021 as the next date, while providing a last opportunity for the respondents to file their replies before the next date and said that it will hear the arguments thereafter. Valli Arunachalam and her mother M V Valli Murugappan, collectively referred to as the MVM family, had made the holding company AIL as respondent number 1 and respondents 2 to 10 are family members of the Murugappa family, also holding the position of directors in AIL, while moving the NCLT in March this year seeking waiver of minimum shareholding norm for maintaining the alleged oppression and mismanagement case against AIL.

Both of them collectively have 8.21% of the equity shareholding in AIL, which was less than the norm of 10% of the total paid-up capital of the company. Valli Arunachalam has been fighting a battle against the Murugappa Group, seeking a seat on the board of the holding company or demanding that the family buys back the 8.21% stake from them to settle their rights. Though she said she had applied for a board position, the Murugappa family unanimously voted against her nomination.

During the legal procedures at the NCLT, the MVM family was directed to file a fresh waiver application by the tribunal when the respondents raised objections with the first plea, pointing that it contained errors and was not maintainable.

When NCLT took up the matter on Wednesday, the respondents’ advocate submitted they have filed an appeal at the NCLAT against the NCLT order of September 29, 2021, allowing withdrawal of the first waiver application. He further submitted that the appeal has been numbered and pending the hearing in appeal, the NCLT ought not to hear the second waiver application.

The petitioners’ counsel argued that respondents cannot prolong the disposal of the second waiver application on the ground of filing of the appeal, especially when no stay on hearing of the second waiver application has been granted in the appeal.

The respondents’ counsel further pointed out that a letter has been filed before the NCLAT for listing of the matter for hearing and that continuation of hearing before the NCLT would make the appeal infructuous. In response, the petitioners’ counsel highlighted the sequence of events – that on February 8, 2021 the first waiver application and company petition was filed, March 10, 2021 notice on the same was issued, and thereafter the many applications have been filed by the respondents to delay the matter.

She also explained on the last date in the matter, i.e., on October 13, 2021, the respondents had raised the same objections for opposing issuance of notice in the second waiver application. However, the notice was issued and respondents were directed to file a reply and matter was listed for December 8, 2021.

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