TABLE OF CONTENT

Sr. No. Content Page No.

1. Abbreviations 2

2. Index of authority 3

3. Statement of Jurisdiction 4

4. Statement of Facts 5-8

5. Issued Raised 9

6. Summary of Agreement 10-12

7. Argument Advanced 13-32

8. Prayer 33

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 ABBRIVIATIONS

& And

Hon’ble Honourable

HC High Court

CLB Company Law Board

Lalji-Premji Group LPG

NCLT National Company Law tribunal

NCLAT National Company Law Appellate Tribunal

SC Supreme Court

No. Number

AIR All India Rank

Govt. Government

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 INDEX OF AUTHORITY

STATUE:
• The Companies Act, 2013
• Indian Trusts Act, 1882

CASES REFEERED:
• Tata Consultancy Services Ltd. v. Cyrus Investments (P) Ltd., (2021) 9 SCC
449
• National company law appellate tribunal, new delhi company appeal (at) no.
77 of 2022 the hamlin trust and ors versus lsfio rose investments s.a.r.i and
ors
• Rajeev Saumitra v. Neetu Singh, 2016 SCC OnLine Del 512
• Sangramsinh P. Gaekwad and others v.Shantadevi P. Gaekwad (Dead)
through LRs. And others, (2005) 11 SCC 314
• Dr. T.A. Qureshi v. Commissioner of Income Tax, Bhopal, 2007 (2) SCC
759
• Vijay Narayan Thatte and Ors. v. State of Maharashtra & Ors. - 2009 (9) SCC
92
• Shanti Prasad Jain v. Kalinga Tubes Ltd., (1965) 2 SCR 720
• Rajahmundry Electric Supply Corpn. Ltd. v. A. Nageshwara Rao, (1955) 2
SCR 1066
• Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding
Ltd., (1981) 3 SCC 333
• Vaish Degree College v. Lakshmi Narain , (1976) 2 SCC 58 : 1976 SCC
(L&S) 176
• S. Dutt v. University of Delhi, 1959 SCR 1236 : AIR 1958 SC 1050
• Central Bank of India Ltd. V. Hartford Fire Insurance Co. Ltd., AIR 1965 SC
1288
• M.I. Builders (p) Ltd. V. Radhe shyam Sahu, (1999) 6 SCC 464

WEB SITE REFFERED:

• India Code http://www.indiacode.nic.in/

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 STATEMENT OF JURISDICTION

The Appellant in the instant case, seek to invoke the jurisdiction of the Hon'ble Supreme
Court by virtue of Section 423 of The Companies Act, 2013.

“423. Appeal to Supreme Court.

Any person aggrieved by any order of the Appellate Tribunal may file an appeal to
the Supreme Court within sixty days from the date of receipt of the order of the
Appellate Tribunal to him on any question of law arising out of such order:
Provided that the Supreme Court may, if it is satisfied that the Appellant was
prevented by sufficient cause from filing the appeal within the said period, allow it
to be filed within a further period not exceeding sixty days.” 1

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 STATEMENT OF FACTS

1. Indiva has twenty-eight states in a republic form of government in the southeast and
is currently one of the most populous countries in the world. Indiva is filled with
multilingual diversified cultures and religions. The Constitution of Indiva declares
it to be a sovereign, socialist, secular, democratic republic that envisages the
principles of justice, liberty, equality, and fraternity to the citizens of Indiva.

2. Kota Sons Ltd. is a holding company with controlling interests in various

companies operating globally comprising of “Kota Trusts” which is a private Trust
situated at Mombay, Parashtra. It has had a long-standing joint venture with the
Lalji-Premji Group (LPG) led by Mr. Nikolas. The two groups have developed trust
and confidence through their business collaborations over the years.

3. Mr. Mohan Kota, the founder of Kota Sons Ltd., and his family members are
actively involved in the company's operations. The Kota family collectively holds
over 80% of the shareholding of Kota Sons Ltd., while the LPG holds over 20% of
the same.

4. Kota Sons Ltd. is a national and international service provider and contributor in
several sectors viz. Communication, Information Technology, Consumer and Retail
market, financial services, Manufacturing, and Promoter of companies etc. The
business association between the two groups, namely the Shareholders of Kota
Sons Limited', represents the culmination of a longstanding connection between the
‘LPG' and the ‘Kota Family spanning 60 years.

5. It is important to note that there was no explicit establishment of a formal business

partnership between the two groups in accordance with legal requirements. Instead,
the regulation of the relationship between the ‘LPG' and the ‘Kota Sons’ relied less
on legal obligations and formalities.

6. In the spirit of interdependence and mutual trust, Mr. Nikolas was chosen as the
'Executive Chairman' of ‘Kota Sons Limited' through a rigorous selection process
based on his qualifications and merits. His appointment explicitly recognized his
significant shareholder status, both as an insider and outsider, highlighting the
connection between his appointment and his role as a significant shareholder.

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7. In this same spirit of trust, Mr. Nikolas sought advice periodically regarding matters
of transition and historical legacy issues, where crucial decisions had to be made to
minimize losses or undertake restructuring, in the best interests of ‘Kota Sons
Limited' and the Kota Group Companies.

8. Mr. Nikolas showed great respect and deference towards the past leadership of
‘Kota Sons Limited', going above and beyond to safeguard their legacy. He
addressed these legacy issues internally, without making public statements about
them during his tenure as the 'Executive Chairman', along with his team. During his
tenure, Mr. Nikolas made significant decisions to cut losses and restructure the
company, leading to a substantial increase in its market value.

9. Subsequently, on April 1, 2019, Mr. Nikolas was abruptly removed as the

Executive Chairman of Kota Sons Ltd., after a meeting of the board of directors and
called for approval through the general resolution, without providing substantial
reasons by inter alia linking it to performance misconduct.

10. He decided to appeal before the Board of Directors and challenge his removal
stating the reasons for the sacking were not specified by Kota and Sons and
negating the fiddling with the culture of such a reputed company and the credential
of the office and his reputation.

11. He blamed the board for tarnishing his image before the shareholder of the
company. The Board of the company decided against the appeal and gave Mr.
Nikolas substantial time to make things in order and leave the company peacefully.

12. At the same time of the removal of Mr. Nikolas another issue rose up wherein Kota
Sons Ltd. decided to restructure its share capital by converting existing surplus
reserves into rights shares for existing shareholders at a discounted price. Some
shareholders exclusively belonging to LPG but not associated with the Kota and
Sons filed an application to Mr. Mohan Kota, alleging that the rights shares were
only allotted to shareholders representing the Kota and Sons.

13. Mr. Nikolas filed a case against the company in the National Company Law
Tribunal (NCLT) bench in Bombay for wrongful removal from the post of
chairman and accused the company of ‘Oppression and mismanagement in the

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 company, claiming that Kota and Sons were trying to further reduce the stake of
LPG in the company and reduce the voting rights of shareholders.

14. In response Company filed its statements by alleging that Mr. Nikolashad started
his Dream project, something that he had been working on for years even before his
employment with the company. The said project started without the expressed
permission of the board of the company.

15. In response Company filed its statements by alleging that Mr. Nikolashad started
his Dream project, something that he had been working on for years even before his
employment with the company. The said project started without the expressed
permission of the board of the company.

16. There was unequal distribution of profits between the directors and other
shareholders. These charges and manipulation of funds under gratification were
raised by the board and the matter came to light through the media and digital
media and newspapers. Then the company started to think about the
mismanagement and embezzlement or illegal business being carried out under his
supervision. Therefore, with immediate effect, he was dismissed and removed from
the post.

17. He claimed before the Company Law Board Tribunal against the decision of the
Board of Directors on the basis of his credentials of business and claimed that he
was not indulged in the illegal activities in the Kota and Sons. The performance of
the company during Nikolas’s regime acclaimed the sincerity of his decision for the
welfare of the shareholders and stakeholders. A chairman cannot be sacked on
fictitious grounds.

18. The flagship business of Kota Sons Ltd., the Hydrophone Project, suffered losses,
impacting other ventures of Kota Trust miserably. The internal operations systems
were modified, requiring permission and approval from Mr. Mohan Kota and his
family members for every decision. Mr. Nikolas was not willing to operate under
such a model.

19. The Governing bodies of the company had to take the decision in a meeting of the
board of director’s approval of the sacking of Mr. Nikolas. Relentless allegations

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 appeared from Mr. Nikolas’s side for interfering in his decisions in the company’s
decision-making.

20. NCLT upheld the decision of the board to remove Mr. Nikolas from the post of
Executive Chairman.

21. Mr. Nikolas appealed to the National Company Law Appellate Tribunal (NCLAT),
challenging the decision. The NCLAT reversed the NCLT's decision. Aggrieved by
the NCLAT's decision, Kota Sons Ltd. has now approached the Supreme Court of
India.

22. The NCLAT observed that Mr. Nicholas was removed from the post of
chairmanship illegally and the board of directors did not have a right to remove him
on the grounds that such power can be exercised only in exceptional circumstances
and in the interest of the company.

23. Moreover, before exercising such power, reasons for removal should be recorded in
writing and intimated to the respective shareholders whose rights will be affected.
Therefore, the Hon’ble Tribunal ordered Kota Sons Ltd. to reinstate Mr. Nicholas.

24. The Supreme Court is currently hearing the case, which involves issues of
corporate governance, oppression and mismanagement, shareholder rights, and the
removal of Mr. Nikolas as the Executive Chairman of Kota Sons Ltd.

25. The Supreme Court has scheduled this matter for the final hearing.

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 ISSUES RAISED

ISSUE: 1
Whether the suit is maintainable before the Hon’ble Supreme Court under Section 423 of
The Companies Act, 2013?

ISSUE: 2
Whether the decision of the “Kota Sons limited” to restructure its share capital by
converting existing surplus reserves into rights share for existing share holder at
discounted price leads to oppression and mismanagement in the company?

ISSUE: 3
Whether the removal of the Mr. Nikolas as the “Executive Chairman” of the Kota Sons
Limited was unlawful?

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 SUMMARY OF ARGUMENTS

ISSUE: 1: Whether the appeal is maintainable before in Hon’ble Supreme Court

under Section 423 of The Companies Act, 2013?
Yes, appeal is maintainable before the Hon’ble Supreme Court under section 423 of the
Companies Act, 2013.

Section 423 of the Companies Act, 2013 provides the ground to approach Supreme Court
to any person who are aggrieved by the decision of the National Company Law Appellate
Tribunal, when NCLAT has not rightfully interpreted the law in addition, National
Company Law Appellate Tribunal's (NCLAT) order reinstating Mr. Nikolasas executive
chairman of Tata Group the tribunal "seems to have committed errors in adjudicating and
seems to lack powers to pass the directions that it has."

Moreover, there are questions of law arising out of the order of the National Company
Law Appellate Tribunal (NCLAT) that the reinstating as Executive Chairman is unlawful
and violates the provisions which are Section 166, Section 203(3) of The Companies Act,
2013 moreover; it also violates the provision of the Indian Trusts Act, 1882.

The National Company Law Appellate Tribunal (NCLAT) have committed errors in
adjudicating of the matter of the Mr. Nikolas and arose question of law. Hence, the
appeal under Section 423 of The Companies Act, 2013 is maintainable before the
Supreme Court of Indiva.

ISSUE: 2: Whether the removal of the Mr. Nikolasas the “Executive Chairman” of
the Kota Sons Limited was unlawful?
It is submitted that the removal of Mr. Nikolas as the “Executive Chairman” of Kota Sons
Limited was not unlawful.
Mr. Nikolas has been chosen as the “Executive Chairman” of the Kota Sons Limited
through a rigorous selection process based on his qualifications and merits. His
appointment explicitly recognized his significant shareholder status, both as an insider
and outsider, highlighting the connection between his appointment and his role as a
significant shareholder.
However, after some years of quasi partnership business between LPG and Kota Sons
Ltd. There was an unequal distribution of the profit between directors and shareholder of

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the company. These charges and manipulation of funds under gratification were raised by
the Board of Directors and the matter came to light through social media and digital
media and newspapers. All of these mismanagement and embezzlement or illegal
business being carried out under Mr.Nikolas’s supervision.
Moreover, company has found out that Mr. Nikolas had been working on his dream
project without the permission of the board of directors. This conduct of Mr. Nikolas has
violated Section 166 and Section 203(3) of the Companies Act, 2013 and in addition Mr.
Nikolas has violated Section 88 of the Indian Trusts Act, 1882.
Hence, the removal of the Mr. Nikolas as the “Executive Chairman” of the Kota Sons
Limited was unlawful.

ISSUE: 3: Whether the decision of the “Kota Sons limited” to restructure of share
capital by converting existing surplus reserves into rights share for existing share
holder at discounted price leads to oppression and mismanagement in the
company?
The decision of the “Kota Sons limited” to restructure of share capital by converting
existing surplus reserves into rights share for existing share holder at discounted price
does not lead to oppression and mismanagement in the company.
While referring to the paragraph no. 2, 3 and 4 of the facts of the cases, the “Kota Sons
limited” has a long-standing joint venture with the Lalji-Premji Group (LPG) led by Mr.
Nikolas. The two groups have developed trust and confidence through their business
collaborations over the years.
Appellant will bring the light to the facts that Kota Sons Limited holds over 80% of the
shareholding of the company. And the allegations of the Respondent Mr. Nikolas is that
restructuring of the share capital into “Rights Share” for existing shareholder at a
discounted price is not causing any “oppression and Mismanagement” in the company
because Kota Sons Limited already have the majority of the share holding and voting
rights because it hols over 80% share capital of the company. Furthermore, the
restructuring of the “Rights share” has done only for the existing shareholder and Kota
Sons Limited holds over 80% shareholding and 20% of the shareholding holds LPG.
Kota Sons Limited have already majority of the shareholding and voting rights. So, Kota
Sons Limited will not gain any addition benefit after the restructuring of the shareholding
of the company.

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Hence, the restructuring of the share capital at discounted price does not violate Section
241 and Section 242 of The Companies Act, 2013.

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 ARGUMENT ADVANCED
ISSUE: 1
Whether the appeal is maintainable before in Hon’ble Supreme Court under Section
423 of The Companies Act, 2013?
Yes, appeal is maintainable before the Hon’ble Supreme Court under section 423 of the
Companies Act, 2013.
The Appellant in the instant case seeks to invoke the jurisdiction of the Hon'ble Supreme
Court by virtue of Section 423 of The Companies Act, 2013.
2
423. Appeal to Supreme Court.
Any person aggrieved by any order of the Appellate Tribunal may file an appeal to
the Supreme Court within sixty days from the date of receipt of the order of the
Appellate Tribunal to him on any question of law arising out of such order:
Provided that the Supreme Court may, if it is satisfied that the Appellant was
prevented by sufficient cause from filing the appeal within the said period, allow it
to be filed within a further period not exceeding sixty days.
Section 423 of The Companies Act, 2013 provides grounds when National Company Law
Appellant Tribunal have committed errors in adjudicating. Then aggrieved person can
approach The Hon’ble Supreme Court under Section 423 of the Companies Act, 2013.
When the question of law has arose after the judgement or order passed by the NCLAT
then aggrieved party can file an appeal within the 30 days of the said order, in present can
following question of law has arose by the appellant:

I. The entire focus of NCLAT was only on the justification for the removal of
KMP from the post of Executive Chairman of Kota Sons Limited , despite the
fact that the positive case of the complainant companies as well as KMP was that
they were not seeking the reinstatement of KMP;
II. In focusing entirely upon the removal of KMP from Executive Chairmanship of
Kota Sons , NCLAT lost track of the law that such a removal cannot be termed as
oppression or mismanagement;
III. NCLAT went completely out of the way in directing the reinstatement of KMP as
a Director of even the operating companies, the management of affairs of which
were not even the subject matter. The subject matter concerned only the
management of the affairs of Kota Sons and not its Group Companies;

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 IV. NCLAT failed to see that the “just and equitable clause” is triggered only in two
situations namely: (a) wherever there was a functional deadlock; and (b)
wherever there was a corporate quasi partnership in which there was a breakdown
of trust and confidence. In the case on hand there was no pre-existing partnership
between Kota Sons and the LPG. LPG became shareholders only after years of
the incorporation of Kota Sons and they did not even hold any directorial position
until the partnership. Therefore LPG never had any right of management nor a
right that could emanate from a pre-existing relationship of trust and confidence,
before the incorporation of the company;
V. NCLAT has failed to observe that the decision of the “Kota Sons limited” to
restructure of share capital by converting existing surplus reserves into rights
share for existing share holder at discounted price do not lead to oppression and
mismanagement in the company.

“In the case of 3Tata Consultancy Services Ltd. v. Cyrus Investments (P) Ltd.,
(2021) 9 SCC 449 Supreme Court has observed Section 423 of The Companies
Act, 2013 as the members and the interests of the company 16.8 NCLAT, being
an Appellate Tribunal, conferred with the power under subsection (4) of Section
421 to confirm, modify or set aside the order of NCLT, can be taken to be a final
court of fact. An appeal from the Order of the NCLAT to this Court
under Section 423 is only on a question of law. Considering the nature of the
jurisdiction conferred upon NCLAT, it is clear that the findings of the NCLT,
not specifically modified or set aside by NCLAT should be taken to have
reached finality, unless the parties aggrieved by such non-interference by
NCLAT have approached this Court, raising this as an issue. Though SP group
has also filed an appeal in C.A. No. 1802 of 2020, the grievance aired therein, as
seen from Para 3 of the memorandum of appeal, is limited to the failure of
NCLAT to grant certain reliefs. The failure of NCLAT to specifically
overturn the findings of fact recorded by NCLT is not assailed in the SP group’s
appeal. Therefore, we have no hesitation in holding that the allegations relating
to (i) transactions with Siva and Sterling Group of Companies;
(ii) Air Asia;
(iii) Transactions with Mehli Mistry;

3
(2021) 9 SCC 449
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 (iv) the losses suffered by Tata Motors in Nano car project
(v) the acquisition of Corus
Reached finality the findings recorded by NCLAT for the grant of reliefs, revolved
primarily around the removal of KMP, the affirmative voting rights, interference by
nominee Directors and the conversion of Tata Sons into a private company. In other
words, these are the 4 areas in which NCLAT can be taken to have undertaken a scrutiny
and reversed the findings of NCLT. Therefore, for answering the first question of law, we
need to focus mainly on these issues on which NCLAT expressly overruled NCLT.
The facts of the above cited has been similar to the present case and the Hon’ble Supreme
Court in the above cited case had entertained the appeal made against the order of
NCLAT.
Hence, the appeal is maintainable before the Supreme Court on the grounds that NCLAT
has caused miscarriage of justice while deciding the matter at and that the appeal herein
contains question of law that need to be addressed by this Hon’ble Court.

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ISSUE: 2:Whether the removal of Mr. Nikolasas the “Executive Chairman” of the
Kota Sons Limited was unlawful?
The removal of Mr. Nikolas as the “Executive Chairman” of the Kota Sons Limited was
not unlawful and was in accordance with the principles of law.
The Appellant company has removed Mr. Nikolas as the “Executive Chairman” because
the allegations have been made against him and charges for the mismanagement and
embezzlement of funds under his supervision, which is in contravention of Section 166 of
The Companies Act, 2013 along with Section 203(3) of The Companies At, 2013 and
also against Section 88 of The Indian Trusts Act, 1882.
4
Section 166 Duties of Directors of the Companies Act, 2013
(1) Subject to the provisions of this Act, a director of a company shall act in
accordance with the articles of the company.
(2) A director of a company shall act in good faith in order to promote the objects of
the company for the benefit of its members as a whole, and in the best interests of the
company, its employees, the shareholders, the community and for the protection of
environment.
(3) A director of a company shall exercise his duties with due and reasonable care,
skill and diligence and shall exercise independent judgment.
(4) A director of a company shall not involve in a situation in which he may have a
direct or indirect interest that conflicts, or possibly may conflict, with the interest of
the company.
(5) A director of a company shall not achieve or attempt to achieve any undue gain or
advantage either to himself or to his relatives, partners, or associates and if such
director is found guilty of making any undue gain, he shall be liable to pay an amount
equal to that gain to the company.
(6) A director of a company shall not assign his office and any assignment so made
shall be void.
(7) If a director of the company contravenes the provisions of this section such
director shall be punishable with fine which shall not be less than one lakh rupees but
which may extend to five lakh rupees.

5
Section 203 Appointment of key managerial personnel. of the Companies Act, 2013

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 (1) Every company belonging to such class or classes of companies as may be
prescribed shall have the following whole-time key managerial personnel,--
(i) managing director, or Chief Executive Officer or manager and in their absence, a
whole-time director;
(ii) company secretary; and
(iii) Chief Financial Officer
Provided that an individual shall not be appointed or reappointed as the chairperson
of the company, in pursuance of the articles of the company, as well as the managing
director or Chief Executive Officer of the company at the same time after the date of
commencement of this Act unless,--
(a) the articles of such a company provide otherwise; or
(b) the company does not carry multiple businesses:
Provided further that nothing contained in the first proviso shall apply to such class of
companies engaged in multiple businesses and which has appointed one or more Chief
Executive Officers for each such business as may be notified by the Central
Government.
(2) Every whole-time key managerial personnel of a company shall be appointed by
means of a resolution of the Board containing the terms and conditions of the
appointment including the remuneration.
(3) A whole-time key managerial personnel shall not hold office in more than one
company except in its subsidiary company at the same time:
Provided that nothing contained in this sub-section shall disentitle a key managerial
personnel from being a director of any company with the permission of the Board
Provided further that whole-time key managerial personnel holding office in more
than one company at the same time on the date of commencement of this Act, shall,
within a period of six months from such commencement, choose one company, in
which he wishes to continue to hold the office of key managerial personnel:
Provided also that a company may appoint or employ a person as its managing
director, if he is the managing director or manager of one, and of not more than one,
other company and such appointment or employment is made or approved by a
resolution passed at a meeting of the Board with the consent of all the directors

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 present at the meeting and of which meeting, and of the resolution to be moved
thereat, specific notice has been given to all the directors then in India.
(4) If the office of any whole-time key managerial personnel is vacated, the resulting
vacancy shall be filled-up by the Board at a meeting of the Board within a period of
six months from the date of such vacancy.
1
[(5) If any company makes any default in complying with the provisions of this
section, such company shall be liable to a penalty of five lakh rupees and every
director and key managerial personnel of the company who is in default shall be liable
to a penalty of fifty thousand rupees and where the default is a continuing one, with a
further penalty of one thousand rupees for each day after the first during which such
default continues but not exceeding five lakh rupees.]

6
Section 88 of the Indian Trusts Act, 1882

Advantage gained by fiduciary.—Where a trustee, executor, partner, agent, director of

a company, legal adviser, or other person bound in a fiduciary character to protect
the interests of another person, by availing himself of his character, gains for himself
any pecuniary advantage, or where any person so bound enters into any dealings
under circumstances in which his own interests are, or may be, adverse to those of
such other person, and thereby gains for himself a pecuniary advantage, he must hold
for the benefit of such other person the advantage so gained.

In present case, Mr. Nikolas has violated clause (4) and (5) of Section 166 of the
Companies Act, 2013 in addition to Section 203(3) of the Companies Act, 2013.
While interpreting Section 166(4) of the Companies Act, 2013, it provides that the
director of the company shall not involve in a situation in which he may have a direct or
indirect interest that conflicts, or possibly may conflict, with the interest of the company.
However, in present case Mr. Nikolas had been working on his dream project even before
the employment as the “executive Chairman” of the Kota Sons Limited in addition he has
not disclose that he had been working on his dream project even before the employment,
Mr. Nikolas has been chosen as the “Executive Chairman” of the Kota Sons Limited
through a rigorous selection process based on his qualifications and merits. His
appointment explicitly recognized his significant shareholder status, both as an insider

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and outsider, highlighting the connection between his appointment and his role as a
significant shareholder. Hence, he has gained interest against the company by engaging
his personal project which might be competing company of the Kota Sons Ltd and due to
that company might face serious losses or other mismanagement due to the conduct of the
Mr. Nikolaus.

While interpreting the section 166 sub clause (5) of the Companies Act, 2013, it provides
that a Director of a company shall not achieve or attempt to achieve any undue gain or
advantage either to himself or to his relatives, partners, or associates and if such director
is found guilty of making any undue gain, he shall be liable to pay an amount equal to
that gain to the company. In present case Mr. Nikolas has started the business or his
project and company found out that. And just before that there were unequal distribution
of the profit between the directors and the shareholder of the company in addition to that
company started to think about the mismanagement and embezzlement under Mr. Nikolas
supervision as the executive chairman. Hence, company and shareholder of the company
lost trust in Mr. Nikolas and due to that company has removed due to loss of trust in Mr.
Nikolas.

While interpreting the section 88 of the Indian Trusts Act, 1882 it provides that,
advantage gained by fiduciary, in present case director of the company has gained
advantage from the company and he is in fiduciary relation of the parent company, the
advantages gained for his own/personal interest by the director and the conduct will
amount to the violation of the said provision.
Foster Bryant's case (supra), in paragraph 8 of the judgment the Court has discussed
about the Director's Fiduciary Duties and it was held that a Director has a Fiduciary
Duty towards the Company and must deal with loyalty and good faith and avoidance
of conflict of duty and self-interest. He is precluded from obtaining any property or
business advantage that is in conflict with the business of the Company. A mere
exception is carved out that while the employment as a director subsists, a director
can take steps 'preparatory to competition'. However, it has never laid down that
under the similar circumstances as in the present case, a director can start a
competing business while remaining a Director. In fact, if overall judgment is read,
the said judgment supports the case of the plaintiff. The findings and observations do
not help the case of defendant No.1.

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 Appellant has relied on following judgement of the Supreme Court as well of the High
Courts in interpretation of the clause of the provision of the act.

7
(i) Vijay Narayan Thatte and Ors. v. State of Maharashtra & Ors. - 2009 (9) SCC 92 -
at pg. 98, Para "22. In our opinion, when the language of the statute is plain and
clear then the literal rule of interpretation has to be applied and there is ordinarily
no scope for consideration of equity, public interest or seeking the intention of the
legislature. It is only when the language of the statute is not clear or ambiguous or
there is some conflict, etc. or the plain language leads to some absurdity that one
can depart from the literal rule of interpretation. A perusal of the proviso to Section
6 shows that the language of the proviso is clear. Hence the literal rule of
interpretation must be applied to it. When there is a conflict between the law and
equity it is the law which must prevail. As stated in the Latin maxim dura lex sed
lex which means "the law is hard but it is the law."
8
(ii) Dr. T.A. Qureshi v. Commissioner of Income Tax, Bhopal, 2007 (2) SCC 759 - at
pg. 763, para 16 "16. In our opinion, the High Court has adopted an emotional and
moral approach rather than a legal approach. We fully agree with the High Court
that the assessee was committing a highly immoral act in illegally manufacturing
and selling heroin. However, cases are to be decided by the court on legal principles
and not on one's own moral views. Law is different from morality, as the positivist
jurists Bentham and Austin pointed out."
9
(iii) Case of Sangramsinh P. Gaekwad and others v.Shantadevi P. Gaekwad (Dead)
through LRs. And others, (2005) 11 SCC 314, in para 39, it was held as under:-
"39. By reason of Section 88 of the Indian Trusts Act, a person bound in fiduciary
character is required to protect the interests of other persons but the heart and soul
thereof is that as between two persons if one is bound to protect the interests of the
other and if the former availing of that relationship makes a pecuniary gain for
himself, Section 88 would be attracted. What is sought to be prevented by a person
holding such fiduciary benefit is unjust enrichment or unjust benefit derived from
another, which is against conscience that he should keep. When a person makes a
pecuniary gain by reason of a transaction, the cestui qui trust created thereunder
must be restored back."

7
2009 (9) SCC 92
8
2007 (2) SCC 759
9
(2005) 11 SCC 314
Page 20 of 33
 10
(iv) Rajeev Saumitra v. Neetu Singh, 2016 SCC OnLine Del 512
By virtue of Section 166 of the Companies Act 2013, which came into effect from
1st April 2014, a hitherto prohibition in common law was translated into a statutory
prohibition providing, inter-alia, that a Director could not and cannot enter into a
competing business with the Company of which he is a Director or gain any
advantage either to himself or to his relatives and further that if he is found guilty of
violating the said provision, he shall be liable to pay an amount equal to that gain to
the company. Additionally, Section 88 of the Indian Trusts Act also provides that a
Director/Partner who in violation of his fiduciary character gains for himself any
pecuniary advantage or enters into any dealing in which his own interest is adverse
to the interest of the Company and thereby gains a pecuniary advantage to himself,
he will hold such advantage gained for the benefit of the Company.
It appears that the prayer sought in the present suit and in the Rohini suit is not the
same. The mark Paramount in Rohini Court was used by the defendant No.1 in
relation to publication materials. However, the main relief sought in the present suit
against the defendant No.1 and 2 to compete the business of defendant No.3, as the
defendant No.1 has failed to do her fiduciary duties as a Director and she is in
violation of the mandatory provision of Section 166 of the Act, 2013.

Thereafter Mr. Nikolas has also violated the Section 203 (3) appointment of the KMP of
the Companies Act, 2013, section 203 (3) the Act states that, A whole-time key
managerial personnel shall not hold office in more than one company except in its
subsidiary company at the same time. In present case Mr. Nikolas has chosen as a whole
time key managerial personnel of the Kota Sons Ltd. by rigorous selection process has
been done according to the provision 203.
We note that 11section 2(51) and section 6 of the Companies Act, 2013
stipulates as follows:-
“2. Definitions.— In this Act, unless the context otherwise requires,—
xx xx xx xx
(51) ―key managerial personnel, in relation to a company, means—
(i) the Chief Executive Officer or the managing director or the manager;
(ii) the company secretary;

10
2016 SCC OnLine Del 512
11
India Code http://www.indiacode.nic.in/( 22/08/2023)

Page 21 of 33
(iii) the whole-time director;
(iv) the Chief Financial Officer; and
(v) such other officer as may be prescribed.”
However, after years of business and position of the executive chairman of Mr. Nikolaus,
Kota Sons has found out that he has started his own project, which might be company
because he has worked as a executive chairman of the company then his own project
would be company in addition to that no KMP shall hold more than one office as a KMP,
and Mr. Nikolas has violated the condition mentioned under section 203 (3) of the
Companies Act, 2013.
In this matter the Appellant has relied on 12National company law appellate tribunal, new
delhi company appeal (at) no. 77 of 2022 the hamlin trust and ors versus LSFIO rose
investments s.a.r.i and ors following mentioned judgement:
The Learned Senior Counsel for Appellants has submitted that the role and
responsibilities of CFO should be such that they allow the person to work
independently, full-time in the company and provide services in an unbiased manner
as a whole – time KMP and this is envisaged in rule 8 of the Companies (Appointment
and Remuneration of the Managerial Personnel) Rules, 2014 which shall apply to a
company which voluntarily appoints CFO, like the R-2 Company, since the CFO has
to work as a KMP. He has contended that the consent order dated 10.6.2021, while
directing parties to appoint a CFO in accordance with the Article 140 of AoA, did not
imply that R-1 had absolute and unfettered right to nominate an ineligible and invalid
candidate for appointment as CFO. Moreover, he has submitted, the CFO being a Key
Managerial Personnel (KMP) as per section 2(51) of the Companies Act, 2013
We are, therefore, of the view that all the suggested candidates should satisfy the basic
conditions of eligibility as required under section 203 of the Companies Act, 2013 so
that the Appellants can exercise their right of selecting the most appropriate and
suitable candidate in the true letter and spirit of the article 140 of the AoA. We,
therefore, conclude that the NCLT has committed error in inferring that provision in
article 140 of the AoA ‘does not contemplate that a person’s nomination can be
considered to be valid or invalid for any particular reason’.
Unsuitable to hold office as CFO of the Company. Such a situation could only
exacerbate the situation of mismanagement in the company that is already beset with

12
National company law appellate tribunal, new delhi company appeal (at) no. 77 of 2022
Page 22 of 33
issues of mismanagement of its operations. Such a situation could prove to be
detrimental for the company’s management and should not be allowed to happen.
Hence, after the conduct of Mr. Nikolas as a “executive chairman” of the Kota Sons
Ltd. Has violated the provisions of the Companies Act, 2013 as well as the provision
of the Indian Trusts Act, 1882. Which are Section 166 sub clause (4) as well as
Section 166 sub clause (5) of the Companies Act, 2013. Moreover he has also violated
the section 88 of the India Trusts Act, 1882. Due to the allegation made against Kota
Sons Ltd. Has made losses thereafter, Kota Sons Ltd. Also has lost reputation in the
business because of the unequal distribution of profit to the shareholder under Mr.
Nikolas’s supervision in addition charges of mismanagement and embezzlement Kota
Sons Ltd has lost confidence and trust in Mr. Nikolas and due to that shareholder
passed a general resolution in the meeting of the shareholder on April 1, 2019.
Hence, the removal of Mr. Nikolas as a “executive chairman” of the Kota Sons Ltd
was not unlawful. The removal has conducted with accordance with the law.

Page 23 of 33
ISSUE: 3:Whether the decision of the “Kota Sons limited” to restructure of share
capital by converting existing surplus reserves into rights share for existing share
holder at discounted price leads to oppression and mismanagement in the
company?
No, the decision of the “Kota Sons limited” to restructure of share capital by converting
existing surplus reserves into rights share for existing share holder at discounted price
does not lead to oppression and mismanagement in the company.
The Respondent Mr. Nikolas has made allegation against the Kota Sons Limited that the
conversion of the surplus into rights share has led to oppression and mismanagement in
the company.
Section 241 and the Section 242 of the Companies Act, 2013 deal with the oppression
and mismanagement.
Section 241 Application to Tribunal for relief in cases of oppression, etc. of the
Companies Act, 2013 states that.
(1) Any member of a company who complains that--
(a) the affairs of the company have been or are being conducted in a manner prejudicial
to public interest or in a manner prejudicial or oppressive to him or any other member or
members or in a manner prejudicial to the interests of the company; or

(b) the material change, not being a change brought about by, or in the interests of, any
creditors, including debenture holders or any class of shareholders of the company, has
taken place in the management or control of the company, whether by an alteration in the
Board of Directors, or manager, or in the ownership of the companys shares, or if it has
no share capital, in its membership, or in any other manner whatsoever, and that by
reason of such change, it is likely that the affairs of the company will be conducted in a
manner prejudicial to its interests or its members or any class of members,

may apply to the Tribunal, provided such member has a right to apply under section 244,
for an order under this Chapter.

(2) The Central Government, if it is of the opinion that the affairs of the company are
being conducted in a manner prejudicial to public interest, it may itself apply to the
Tribunal for an order under this Chapter
1
[Provided that the applicants under this sub-section, in respect of such company or class
of companies, as may be prescribed, shall be made before the Principal Bench of the
Tribunal which shall be dealt with by such Bench.]

Page 24 of 33
1
[(3) Where in the opinion of the Central Government there exist circumstances
suggesting that--

(a) any person concerned in the conduct and management of the affairs of a company is
or has been in connection therewith guilty of fraud, misfeasance, persistent negligence or
default in carrying out his obligations and functions under the law or of breach of trust;

(b) the business of a company is not or has not been conducted and managed by such
person in accordance with sound business principle or prudent commercial practices;

(c) a company is or has been conducted and managed by such person in a manner which
likely to cause, or has caused, serious injury or damage to the interest of the trade,
industry or business to which such company pertains; or

(d) the business of a company is or has been conducted and managed by such person with
intent to default its creditors, members or any other person or otherwise for a fraudulent
or unlawful purpose or in a manner prejudicial to public interest,

the Central Government may intiate a case against such person and refer the same to the
Tribunal with a request that the Tribunal may inquire into the case and record a decision
as to whether or not such person is a fit and proper person to hold the officer of director
or any other office connected with the conduct and management of any company.

(4) The person against whom a case is referred to the Tribunal under sub-section (3),
shall be jointed as a respondent to the applicantion.

(5) Every application under sub-section (3)--

(a) shall contain a concise statement of such circumstances and materials as the Central
Government may consider necessary for the purpose of the inquiry; and

(b) shall be signed and verified in the manner laid down in the Code of Civil Procedure
(5 of 1908), for the signature and verification of a plaint in a suit by the Central
Government.]

Section 242 of the Companies Act, 2013, Powers of Tribunal in the case of oppression
and mismanagement. Provides that:

13
(1) If, on any application made under section 241, the Tribunal is of the opinion--

13
India Code http://www.indiacode.nic.in/( 22/08/2023)
Page 25 of 33
(a) that the company's affairs have been or are being conducted in a manner
prejudicial or oppressive to any member or members or prejudicial to public interest
or in a manner prejudicial to the interests of the company; and

(b) that to wind up the company would unfairly prejudice such member or members,
but that otherwise the facts would justify the making of a winding-up order on the
ground that it was just and equitable that the company should be wound up,

the Tribunal may, with a view to bringing to an end the matters complained of, make
such order as it thinks fit.

(2) Without prejudice to the generality of the powers under sub-section (1), an order
under that subsection may provide for--

(a) the regulation of conduct of affairs of the company in future;

(b) the purchase of shares or interests of any members of the company by other
members thereof or by the company;

(c) in the case of a purchase of its shares by the company as aforesaid, the consequent
reduction of its share capital;

(d) restrictions on the transfer or allotment of the shares of the company;

(e) the termination, setting aside or modification, of any agreement, howsoever

arrived at, between the company and the managing director, any other director or
manager, upon such terms and conditions as may, in the opinion of the Tribunal, be
just and equitable in the circumstances of the case;

(f) the termination, setting aside or modification of any agreement between the
company and any person other than those referred to in clause (e):

Provided that no such agreement shall be terminated, set aside or modified except
after due notice and after obtaining the consent of the party concerned;

(g) the setting aside of any transfer, delivery of goods, payment, execution or other act
relating to property made or done by or against the company within three months
before the date of the application under this section, which would, if made or done by
or against an individual, be deemed in his insolvency to be a fraudulent preference;

(h) removal of the managing director, manager or any of the directors of the
company;

(i) recovery of undue gains made by any managing director, manager or director
during the period of his appointment as such and the manner of utilisation of the
Page 26 of 33
recovery including transfer to Investor Education and Protection Fund or repayment
to identifiable victims;

(j) the manner in which the managing director or manager of the company may be
appointed subsequent to an order removing the existing managing director or
manager of the company made under clause (h);

(k) appointment of such number of persons as directors, who may be required by the
Tribunal to report to the Tribunal on such matters as the Tribunal may direct;

(l) imposition of costs as may be deemed fit by the Tribunal;

(m) any other matter for which, in the opinion of the Tribunal, it is just and equitable
that provision should be made.

(3) A certified copy of the order of the Tribunal under sub-section (1) shall be filed by
the company with the Registrar within thirty days of the order of the Tribunal.

(4) The Tribunal may, on the application of any party to the proceeding, make any
interim order which it thinks fit for regulating the conduct of the company's affairs
upon such terms and conditions as appear to it to be just and equitable.
1
[(4A) At the conclusion of the hearing of the case in respect of sub-section (3) of
section 241, the Tribunal shall record its decision stating therein specifically as to
whether or not respondent is a fit and proper person to hold the officer of director or
any other officer connected with the conduct and management of any company.]

(5) Where an order of the Tribunal under sub-section (1) makes any alteration in the
memorandum or articles of a company, then, notwithstanding any other provision of
this Act, the company shall not have power, except to the extent, if any, permitted in
the order, to make, without the leave of the Tribunal, any alteration whatsoever which
is inconsistent with the order, either in the memorandum or in the articles.

(6) Subject to the provisions of sub-section (1), the alterations made by the order in
the memorandum or articles of a company shall, in all respects, have the same effect
as if they had been duly made by the company in accordance with the provisions of
this Act and the said provisions shall apply accordingly to the memorandum or
articles so altered.

(7) A certified copy of every order altering, or giving leave to alter, a company's
memorandum or articles, shall within thirty days after the making thereof, be filed by
the company with the Registrar who shall register the same.

Page 27 of 33
 (8) If a company contravenes the provisions of sub-section (5), the company shall be
punishable with fine which shall not be less than one lakh rupees but which may
extend to twenty-five lakh rupees and every officer of the company who is in default
shall be punishable 2*** with fine which shall not be less than twenty-five thousand
rupees but which may extend to 3[one lakh rupees].

In present case Kota Sons Limited has restructure its share capital by converting existing
surplus reserve into right share for existing shareholder at a discounted price have not
conducted oppression and mismanagement in the company.

The Kota Sons Ltd. is a holding company with controlling interests in various companies
operating globally comprising of “Kota Trusts” which is a private Trust situated at
Mombay, Parashtra. It has had a long-standing joint venture with the Lalji-Premji Group
(LPG) led by Mr. Nikolas. The two groups have developed trust and confidence through
their business collaborations over the years.
The composition of shareholding in the Kota Sons Limited.

Kota Sons Limited 80% of the company’s total

shareholding

Lalji-Premji Group (LPG) 20% of the company’s total

shareholdings

The decisions of the Kota Sons Ltd that they wanted to restructure its shareholding by
issuing rights share at discounted price has not conducted offence of, oppression and
mismanagement under section 241 and section 242 of the Companies Act, 2013. On
reason behind that, even before the conversion of the surplus profit into right share for
existing share holders of the company, Kota sons Ltd has the majority in the share
holdings as well as voting rights in the company. Thereafter, the LPG also had the
minority in the holdings of the company.

Moreover, the rights share has issued to all the existing share holder of the company
(80% of the Kota sons and 20% of the LPG) in addition Kota Sons Ltd has not gained
any additional voting rights over minority shareholder because Kota Sons Ltd already
having the majority holding and the voting rights in the companies matter. Thereafter, the
conversion of the surplus profit has not violated the provision of the Companies Act,
2013 and has not caused oppression and mismanagement in the company. The conversion
has done on the Just and equitable reason for the company.

Page 28 of 33
The Appellant has relied on land mark judgment of the 14Tata Consultancy Services Ltd.
v. Cyrus Investments (P) Ltd., (2021) 9 SCC 449 the following cited judgements have
been referred in the above cited case were: 15Shanti Prasad Jain v. Kalinga Tubes Ltd.,
16
(1965) 2 SCR 720 along with Rajahmundry Electric Supply Corpn. Ltd. v. A.
17
Nageshwara Rao, (1955) 2 SCR 1066 along with Needle Industries (India) Ltd. v.
Needle Industries Newey (India) Holding Ltd., (1981) 3 SCC 333 and held that:

“It is an irony that the very same person who represents shareholders owning just
18.37% of the total paid up share capital and yet identified as the successor to the empire,
has chosen to accuse the very same Board, of conduct, oppressive and unfairly prejudicial
to the interests of the minorities. In support of such allegation, the complainant
companies have pointed out certain business decisions taken during the period of more
than 10 years immediately preceding the date of removal of KMP. That failed business
decisions and the removal of a person from Directorship can never be projected as acts
oppressive or prejudicial to the interests of the minorities, is too well settled. In fact it
may be concede today by Tata sons that one important decision that the Board took on
16.03.2012 certainly turned out to be a wrong decision of a life time.”

Relying on the Para no. 239 and 240 of the said judgement “for invocation of just and
equitable clause, there must be a justifiable lack of confidence on the conduct of the
directors, mere lack of confidence between the majority shareholder and minority
shareholder would not be sufficient.

Coming to the Indian cases, this court held in Rajahmundry Electric Supply Corpn. Ltd.
v. Nageshwara Rao13 that for the invocation of just and equitable clause, there must be a
justifiable lack of confidence on the conduct of the directors, as held. A mere lack of
confidence between the majority shareholders and minority shareholders would not be
sufficient, as pointed out in S.P. Jain v. Kalinga Tubes Ltd.14 12 The advantage that the
English courts have is that irretrievable breakdown of relationship is recognised as a
ground for separation both in a matrimonial relationship and in commercial relationship,
while it is not so in India. 13 (1955) 2 SCR 1066 14 AIR 1965 SC 1535 16.53 It was
contended repeatedly that lack of probity in the conduct of the directors is a sufficient
cause to invoke just and equitable clause. Drawing our attention to the landmark decision

14
(2021) 9 SCC 449
15
(1965) 2 SCR 720
16
(1955) 2 SCR 1066
17
(1981) 3 SCC 333

Page 29 of 33
in Needle Industries (India) Ltd. and Ors. v. Needle Industries Newey (India) Ltd. and
ors.15, it was contended that even the profitability of the company has no bearing if just
and equitable standard is fulfilled and that the test is not whether an act is lawful or not
but whether it is oppressive or not.

Issue: 3.1:Whether the removal of Mr. Nikolasas the “executive chairman” leads
to oppression and mismanagement to some members of the company?

No, the removal of the Mr. Nikolas as the “executive chairman” does not lead to
oppression and mismanagement to some member of the company.

The justification of the removal has already mentioned in the issue no. 2 of the memorial.
However, if we consider respondents claim that the removal has caused oppression and
mismanagement in the company under section 241 and 242 of the Companies Act, 2013.
And to reinstatement the position of Mr. Nikolas as “Executive Chairman”.

Moreover the removal does not violate section 241 and 242 of the Companies Act, 2013.
On reason behind that the removal of Mr. Nikolas has done in a proper accordance with
the law. And the grounds of removal were violation of the Section 166 and the Section
203(3) as well as section 88 of the Indian Trust Act, 1882.

The Appellant has relied on the judgment of 18Tata Consultancy Services Ltd. v. Cyrus
Investments (P) Ltd., (2021) 9 SCC 449 along with following cited judgement were
referred in the said judgement 19Central Bank of India Ltd. V. Hartford Fire Insurance
Co. Ltd., AIR 1965 SC 1288 second judgement has referred 20M.I. Builders (p) Ltd. V.
Radhe shyam Sahu, (1999) 6 SCC 464, third one was 21Nelson v. James Nelson & Sons
Ltd., (1914) 2 KB 770 (CA), referred to on the removal of the KMP does not lead
oppressive and mismanagement to some members of the company.

“That in a petition under Section 241, the Tribunal cannot ask the question whether the
removal of a Director was legally valid and/or justified or not. The question to be asked is
whether such a removal tantamount to a conduct oppressive or prejudicial to some
members. Even in cases where the Tribunal finds that the removal of a Director was not
in accordance with law or was not justified on facts, the Tribunal cannot grant a relief
under Section 242 unless the removal was oppressive or prejudicial.

18
(2021) 9 SCC 449
19
AIR 1965 SC 1288
20
(1999) 6 SCC 464
21
(1914) 2 KB 770 (CA)
Page 30 of 33
16.29 There may be cases where the removal of a Director might have been carried out
perfectly in accordance with law and yet may be part of a larger design to oppress or
prejudice the interests of some members. It is only in such cases that the Tribunal can
grant a relief under Section 242. The Company Tribunal is not a labour Court or an
administrative Tribunal to focus entirely on the manner of removal of a person from
Directorship.

In any event the removal of a person from the post of Executive Chairman cannot be
termed as oppressive or prejudicial. The original cause of action for the complainant
companies to approach NCLT was the removal of KMP from the post of Executive
Chairman. Though the complainant companies padded up their actual grievance with
various historical facts to make a deceptive appearance, the causa proxima for the
complaint was the removal of KMP from the office of Executive Chairman. His removal
from Directorship happened subsequent to the filing of the original complaint and that too
for valid and justifiable reasons and hence NCLAT could not have laboured so much on
the removal of KMP, for granting relief under Sections 241 and 242. Invocation of just
and equitable clause 16.43 Interestingly, NCLAT has recorded a finding, though not
based upon any factual foundation, that the facts otherwise justify the making of a
winding up order on just and equitable ground. But as held by the Privy Council in Loch
v. John Blackwood6, “there must lie a justifiable lack of confidence in the conduct and
management of the company’s affairs, at the foundation of applications for winding up.”
More importantly, “the lack of confidence must spring not from dissatisfaction at being
outvoted on the business affairs or on what is called the domestic policy of the
company”.

While focusing on the order to reinstatement of Mr. Nikolasas executive chairman, the
Appellant has relied on judgment of the Tata Consultancy Services Ltd. v. Cyrus
Investments (P) Ltd., (2021) 9 SCC 449 along with the judgement refereed in the said
case are : 22S. Dutt v. University of Delhi, 1959 SCR 1236 : AIR 1958 SC 1050 relied on,
23
Vaish Degree College v. Lakshmi Narain , (1976) 2 SCC 58 : 1976 SCC (L&S) 176,
relied on in the question of reinstatement:

““the Tribunal may, with a view to bringing to an end the matters complained of, make
such order as it thinks fit” cannot be interpreted as conferring on the Tribunal any implied
power of 18 1959 SCR 1236 directing reinstatement of a director or other officer of the

22
1959 SCR 1236 : AIR 1958 SC 1050
23
(1976) 2 SCC 58 : 1976 SCC (L&S) 176
Page 31 of 33
company who has been removed from such office. These words can only be interpreted to
mean as conferring the power to make such order as the Tribunal thinks fit, where the
power to make such an order is not specifically conferred but is found necessary to
remove any doubts and give effect to an order for which the power is specifically
conferred. For instance, subsection (2) of Section 242 confers the power to make an order
directing several actions. The words by which subsection (1) of Section 242 ends, supra
can be held to mean the power to make such orders to bring an end, matters for which
directions are given under subsection (2) of Section 242. 17.19 The architecture
of Sections 241 and 242 does not permit the Tribunal to read into the Sections, a power to
make an order (for reinstatement) which is barred by law vide Section 14 of the Specific
Relief Act, 1963 with or without the amendment in 2018. Tribunal cannot make an order
enforcing a contract which is dependent on personal qualifications such as those
mentioned in Section 149(6) of the Companies Act, 2013. Moreover, it has been held in
the case of Vaish Degree College (supra) that the general rule is that a contract of
personal services is not specifically enforceable unless a person who is removed from
service is (a) a public servant who has been dismissed from service in contravention of
provisions of Article 311 of the Constitution of India; (b) dismissed under Industrial Law
seeking reinstatement by Labour or Industrial Tribunal; and (c) terminated in breach of a
mandatory obligation imposed by statute by a statutory body. The Court observed: “17.
On a consideration of the authorities mentioned above, it is, therefore, clear that a
contract of personal service cannot ordinarily be specifically enforced and a court
normally would not give a declaration that the contract subsists and the employee, even
after having been removed from service can be deemed to be in service against the will
and consent of the employer.

Page 32 of 33
 PRAYER

In light of issues raised, arguments advanced and authorities cited, the counsel for the
Appellant humbly prays before this Hon’ble Supreme Court of Indiva to adjudicate, hold
and declare the following:

1. To declare that the appeal is maintainable before the Supreme Court of Indiva
under section 423 of the Companies Act, 2013.
2. To declare that removal of Mr. Nikolas was not unlawful and the removal has
been done on loss of confidence and trust in Mr. Nikolas by the shareholders due
to, violation of provision 166(4) and 166(5), and provision 203(3) of the Indian
Trusts Act, 1882.
3. To declare that the restructure of the surplus profit into “Rights Share” at
discounted price for existing shareholder has not violated provisions 241 and 242
of the Companies Act, 2013. In addition it has not caused offence of “Oppression
and Mismanagement” in the Company.
4. And any other relief that the Hon’ble Supreme Court may be pleased to grant in
the interest of Justice, equity and the good conscience.

All of which is humbly submitted, and for this act of kindness of your Lordship the
Appellant shall as duty bound every prayer.

IN RESPECT SUBMISSION BEFORE SUPREME COURT OF INDIVA

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