NCLAT dismisses appeals filed by the Murugappa Group against NCLT
NCLAT dismisses appeals filed by the Murugappa Group against NCLT
Following the death of the executive chairman of the company, his wife and two daughters had sought the tribunal's intervention
The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) has dismissed the appeals filed by Ambadi Investments Limited, the holding company of the Murugappa Group, challenging an order of the National Company Law Tribunal (NCLT).
NCLT had allowed an application filed by Valli Arunachalam, the eldest daughter of the late executive chairman MV Murugappan of Murugappa Group, and her family to withdraw an 'earlier' waiver petition.
The bench of Justice M Venugopal (judicial member) and Kanthi Narahari (technical member) observed that NCLT's views had no legal flaws.
Following the death of her father in 2017, Valli, her sister and their mother held an 8.21 percent stake in Ambadi. Valli hit the headlines in 2020 when she openly accused the Murugappa Group of denying her a seat on the board of Ambadi despite having a substantial stakeholding. She also alleged gender bias in not appointing her.
Thereafter, Valli dragged Ambadi to the tribunal under a company appeal in an alleged oppression and mismanagement case. On the other hand, Ambadi moved the NCLAT with an appeal that NCLT's order had wrongfully allowed the withdrawal of the first waiver application. It argued that the second waiver application was filed for the same cause of action as the first waiver application and was barred under the law.
The NCLAT bench stated, "Going by the tenor and spirit of the Companies Act, 2013, it is held that the ingredients of the Civil Procedure Code are inapplicable in stricto sensu of the term."
Ambadi pointed out that the first waiver application was full of errors and required dismissal. However, NCLT had allowed Valli to withdraw the application and file a fresh application, along with a new company petition.
In March 2021, while approaching the NCLT, Valli and her mother M V Valli Murugappan (collectively referred to as the MVM family), made the holding company Ambadi respondents No. 1 and Murugappa family members respondents No. 2-10.
Valli, her sister and their mother sought a waiver of the minimum 10 percent shareholding required to ensure the alleged oppression and mismanagement case against Ambadi. They also sought board representation or alternatively for the 8.21 percent stake in the company to be bought out.
Valli argued before the NCLAT that the first waiver application was withdrawn entirely without any effective hearing being conducted. Thereafter, a fresh company petition and a fresh waiver application were filed.
She submitted that Ambadi and Murugappa Group members avoided hearing on merits of the matter and prayed for the dismissal of the appeals.
