The National Company Law Tribunal (NCLT), Bengaluru, delivered a detailed order on 11-11-2025 in C.P. No. 111/BB/2023, dismissing a petition filed under Sections 241–242 of the Companies Act, 2013. The petitioner, Shri Ramaswamy Ramanujam, alleged oppression and mismanagement by Evenforce Technologies Private Limited and its promoters.
The Tribunal addressed the maintainability of the petition as a preliminary issue, ultimately holding that the petitioner did not possess the statutory locus standi required to maintain proceedings under Section 241.
Background of the Dispute
The petitioner joined Evenforce Technologies Pvt. Ltd. in August 2019 as Director – Marketing and was formally inducted onto the company’s Board in January 2020.
The core of the petitioner’s claims revolved around:
1. Alleged Share Entitlement
The petitioner relied on a draft Memorandum of Understanding (MOU) shared by Respondent No. 3 via email, asserting that:
He was entitled to 4% shareholding (400 shares) for every year of service, starting 31 July 2020.
A Share Transfer Form (SH-4) was allegedly executed for 400 shares.
He claimed that a total of 800 shares (8%) were due to him.
2. Claims of Oppression & Mismanagement
The petitioner alleged:
Non-transfer of the promised shares.
Failure to issue notices for board meetings.
Blocking inspection of company documents.
Incorrect reporting of meeting attendance in statutory filings (MGT-7A).
Unresponsive and non-cooperative conduct by promoters.
Respondents’ Stand
Evenforce Technologies and its promoters opposed the petition primarily on the ground of non-maintainability, arguing:
1. Petitioner Is Not a Shareholder
The petitioner was not recorded as a member in the Register of Members.
The MOU was only a draft, unsigned and non-binding.
The SH-4 form was not properly executed, unstamped, and not accompanied by the original share certificate.
Without shareholding, the petitioner could not satisfy the threshold of Section 244, which requires:
Minimum 10% shareholding, or
Eligibility as a “member” under Section 2(55).
2. Doctrine of Promissory Estoppel Not Applicable
The Tribunal cannot grant relief based on promissory estoppel in a Section 241 petition.
Disputes regarding contractual rights must be adjudicated by a civil court.
3. No Acts Amounting to Oppression
Non-issuance of shares (which were never allotted) cannot constitute oppression.
Directorial disputes are outside the scope of Sections 241–242.
Petitioner’s Arguments in Rejoinder
The petitioner argued:
The draft MOU, though unsigned, should be treated as valid based on Sections 11, 12, and 13 of the Information Technology Act, 2000, concerning attribution and receipt of electronic records.
The SH-4 form proves a concluded share transfer.
Promissory estoppel applies because he continued service relying on the share promise.
The company acted oppressively by:
Falsifying his presence in meetings.
Withholding documents.
Failing to honour commitments.
Tribunal’s Findings
After hearing both sides and reviewing submissions, the NCLT made the following observations:
1. Draft MOU Cannot Be Treated as a Final Agreement
The email clearly stated the MOU was a draft.
Sections 11–13 of the IT Act deal with attribution and receipt of electronic records, not execution of contracts.
A valid contract requires signatures of both parties.
2. No Evidence of Share Allotment or Transfer
The draft proposal mentioned issuance of shares by the company, not transfer from existing shareholders.
No process of share allotment occurred.
The SH-4 form relied on by the petitioner did not satisfy statutory requirements under the Companies Act and Stamp Act.
3. Petitioner is Not a Member Under Section 2(55)
The Tribunal held that the petitioner:
Was not a shareholder,
Was not listed in the Register of Members, and
Therefore lacked the locus standi to maintain a petition under Section 241.
4. Mandatory Threshold of Section 244 Not Met
Even if 400 or 800 shares were considered, the petitioner would still fall short of 10% shareholding.
5. Director-Related Disputes Cannot Be Raised Under Section 241–242
Such disputes must be pursued separately, not via oppression and mismanagement proceedings.
Final Decision
The Tribunal held that:
The petition was not maintainable due to failure to satisfy the mandatory threshold for filing a Section 241 petition.
Consequently, the petition was dismissed, without adjudicating the substantive allegations.
No order as to costs was passed.
The Tribunal clarified that any directorial grievances may be pursued via appropriate legal remedies but not under Sections 241–242.
Conclusion
This order reaffirms a well-established principle in corporate litigation:
Only a “member” with the requisite statutory shareholding can invoke the extraordinary jurisdiction of the NCLT under Sections 241–242.
The NCLT’s decision highlights:
Draft documents or email correspondences cannot substitute a formal share allotment or transfer.
Promissory estoppel cannot override explicit requirements of company law.
Director-level disputes do not automatically qualify as oppression and mismanagement.
The ruling underscores the importance of proper documentation, statutory compliance, and clearly established shareholder rights before approaching the Tribunal.