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NCLAT: When application merits waiver under Companies Act

In Anant Kajare v. Eknath Aher, decided on 30-11-2017, the appellant has challenged the order dated 14th July, 2017 passed by National Company Law, Tribunal, Chennai Bench wherein the Tribunal granted ‘waiver’ under the proviso to Section 244(1) of the Companies Act, 2013. According to the Tribunal, the petitioner had made out the case for grant of waiver under Section 244.

The NCLAT, New Delhi, while adjudicating the grant of waiver by the Tribunal, opined that the impugned order had been passed in a mechanical manner by the Tribunal without considering any exceptional circumstances to allow the application for ‘waiver’ under the proviso to sub-section (1) of Section 244, the Tribunal has not applied its mind as to whether (proposed) application under Section 241 merits consideration and whether it relates to ‘oppression and mismanagement’.

NCLAT also explicitly held in Cyrus Investments case that The Tribunal is required to take into consideration the relevant facts and evidence, as pleaded in the application for waiver under Section 241 and required to record reasons reflecting its satisfaction to suggest that the applicants have made out some exceptional case for waiver and to form opinion on whether the proposed allegation pertains to ‘oppression and mismanagement’ of the company or its members.

Article referred: http://blog.scconline.com/post/2017/10/18/nclat-lays-factors-forming-opinion-whether-application-merits-waiver/

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