CJI : But if the complaint is that Ratan Tata is running affairs in such a manner that the investment of Tata Sons is being jeopardized by other projects, why can't these allegations be made?
Salve : The complaint must refer to 'The' Company, i.e Tata Sons. But there is a litany of allegations against downstream company, Tata Motors, Tata Steels etc.
Salve : The complaint is under Section 241(a) of Companies Act. Carefully read, this provision can only mean 'oppressive' to the shareholder.
CJI : Mr. Salve, you were arguing that the statutory scheme of Companies Act is such that the Tribunal must arrive at a conclusion that it is just and reasonable to wind up the company but in the interest of shareholders Section 241 order is passed instead.
Salve agrees.
CJI : We will resume at 2.15 PM.
The bench rises. Arguments will resume at 2.15 PM.
Salve : The Tribunal said because of the acts of oppression, it is just and equitable to wind up. This is circular reasoning.
CJI : So the Tribunal must find that it is just and equitable to wind up the company but we would rather not do it in the interest of shareholders and instead pass other directions.
Salve : Yes.
Salve : The Tribunal must find that it is 'otherwise just and equitable' to wind up the company to exercise the powers under Sections 241/242 Companies Act.
Salve : The power under Section 241 Companies Act 2013 is an alternative power to be exercised only if it is found that the company is liable to be wound up.