New Delhi, July 6: In the ongoing succession battle in the Abhey Oswal Group, the Supreme Court on Monday set aside the orders of NCLAT and NCLT, Chandigarh, by which the tribunals have held Pankaj Oswal as legal heir entitled to one-fourth share of the property/shares of his late father.
The apex court was also not in agreement with the findings of the tribunals which had held Pankaj Oswal’s plea alleging “oppression and mismanagement” into the affairs of Oswal Agro Mills Ltd as “maintainable” under the Companies Act, PTI reported.
It said it prima facie does not appear to be a case of oppression and mismanagement and refrained itself from deciding the effect of nomination of shares saying the decision may jeopardise parties” rights and interest in the civil suit.
Aruna Oswal, wife of deceased Abhey Oswal, moved the top court challenging the orders of NCLAT and NCLT holding that the petition alleging “oppression and mismanagement” as maintainable and their elder son Pankaj Oswal as legal heir entitled to one-fourth share of the property/shares.
Abhey Oswal”s wife, Oswal Agro Mills Ltd and its associate firm Oswal Greentech Ltd in the top court questioned the maintainability of Pankaj Oswal”s plea as he does not have the required 10 per cent of the total issued, paid-up and subscribed capital of the company to be eligible to file matter under Sections 241 and 242 of the Companies Act, 2013.
A bench of Justices Arun Mishra and S Abdul Nazeer said, “with regard to the dispute as to right, title, and interest in the securities, the finding of the civil Court is going to be final and conclusive and binding on parties”.
It said, “We reiterate that we have left all the questions to be decided in the pending civil suit. Impugned orders passed by the NCLT as well as NCLAT are set aside, and the appeals are allowed to the aforesaid extent. We request that the civil suit be decided as expeditiously as possible, subject to cooperation by respondent No.1 (Pankaj Oswal)..”
It added, “We are of the opinion that the proceedings before the NCLT filed under sections 241 and 242 of the Act should not be entertained because of the pending civil dispute and considering the minuscule extent of holding of 0.03 per cent, that too, acquired after filing a civil suit in company securities, of respondent no. 1 (Pankaj Oswal)”.
The bench said the question of right, title, and interest is essentially adjudication of civil rights between the parties, as to the effect of the nomination decision in a civil suit is going to govern the parties” rights.
“It would not be appropriate to entertain these parallel proceedings and give waiver as claimed under section 244 before the civil suit”s decision. Respondent No.1 (Pankaj Oswal) had himself chosen to avail the remedy of civil suit, as such filing of an application under sections 241 and 242 after that is nothing but an afterthought,” it said.
The top court said Pankaj Oswal should have waited for the decision of the right, title and interest, in the civil suit concerning shares in question and added, “The entitlement of respondent No.1 (Pankaj Oswal) is under a cloud of pending civil dispute”.
“We refrain to decide the question finally in these proceedings concerning the effect of nomination, as it being a civil dispute, cannot be decided in these proceedings and the decision may jeopardise parties” rights and interest in the civil suit,” it said.
On the question of petition alleging oppression and mismanagement, the bench said, “It prima facie does not appear to be a case of oppression and mismanagement. Our attention was drawn by the senior counsel appearing for respondent No.1 (Pankaj Oswal) to certain company transactions. From transactions simpliciter, it cannot be inferred that it is a case of oppression and mismanagement”.
It said it deem it appropriate to direct the dropping of the proceedings filed before the NCLT regarding oppression and mismanagement under sections of the Companies Act with the liberty to file afresh, on all the questions, in case of necessity, if the suit is decreed in favour of Pankaj and his shareholding increases to the extent of 10 percent.
Aruna Oswal, in the appeal against the NCLAT and NCLT orders through advocate Swarupama Chaturvedi contended she was the sole nominee of shares of erstwhile shareholder late Abhey Kumar Oswal and Pankaj lacked requisite shareholding of 10 per cent and therefore his plea alleging oppression and mismanagement was not maintainable.
Senior advocate Siddharth Dave, representing Pankaj Oswal, contended his plea was maintainable and the nomination was made only to hold the shares for the benefit of legal representatives.
The top court noted that the case is the outcome of a family tussle and late Abhey Kumar Oswal, during his lifetime, held as many as 5,35,3960 shares in M/s. Oswal Agro Mills Ltd., a listed company.
Prior to his death on March 29, 2016, in Russia, on or about June 18, 2015, he filed a nomination according to section 72 of the Act in favour of Aruna Oswal, his wife, the bench noted. It noted, name of Aruna Oswal, was registered as a holder on April 16, 2016 as against shares held by her deceased husband.
Pankaj Oswal filed a partition suit claiming entitlement to one fourth of the estate of late Abhey Kumar Oswal and he claimed one fourth of the deceased”s shareholdings who was holding shares to the extent of 39.88 per cent in Oswal Agro Mills Ltd.
Late Abhey Kumar Oswal also held 11.11 per cent shares in associate firm M/s. Oswal Greentech Ltd.