E-Paper
Oswal family feud: Apex court sets aside NCLT’s order in favour of petitioner
Pankaj Oswal should have waited for decision of high court, says SC
In yet another twist in the Oswal family feud, the Supreme Court (SC) set aside an National Company Law Tribunal (NCLT) order in favour of Pankaj Oswal, ruling that the company petition filed by him against his mother Aruna Oswal is an ‘afterthought’ and needs to be dropped.
In the order passed on July 6 (copy with HT), the SC held that the proceeding before the NCLT, Chandigarh, should not be entertained because of a pending civil suit, filed by Pankaj, in the Delhi high court (HC). The court noted that the basis of the company petition is a claim of inherence, which cannot be decided by NCLT under the provisions of law.
The NCLT had issued an order in 2018 recognising that Pankaj, the eldest son of industrialist late Abhey Oswal, is entitled to the shares of listed companies that his father promoted-- Oswal Agro Mills Ltd and Oswal Greentech Limited.
Setting aside this order, the SC allowed the appeals filed on behalf of Oswal Agro Mills Limited, Oswal Greentech Limited and Aruna.
The apex court held that filing of the company petition by Pankaj seeking waiver of the minimum eligibility criteria of 10% shareholding under the Companies Act is a “misconceived exercise”. It further held that Pankaj should have waited for the decision of the high court as his entitlement is under cloud of a pending civil suit. The court labelled the attempt by Pankaj Oswal in filing the company petition, after choosing to avail the remedy of civil suit as “nothing but an afterthought”.
The court noted that after the demise of Abhey Kumar Oswal, the shareholding was registered in the name of his widow Aruna on the basis of nomination. The court noted that regarding the said shares, the Delhi HC has passed a status-quo order on February 8, 2017, thus shares have to be held in Aruna’s name till the civil suit is finally decided.
At the NCLT earlier, Pankaj had filed a petition alleging mismanagement, misappropriation and related party transactions happening in his late father’s companies. It was also alleged that after the sudden intestate (not having made a will before death) Abhey’s wife Aruna had arbitrarily taken control of both the companies, on the basis of nominations in her name.
In February 2017, Pankaj had filed a petition in the Delhi HC, claiming absolute properietary rights to the extent of 1/4th undivided share in the estate of his father. In the petition, Pankaj had alleged that the other three heirs, his mother Aruna, younger brother Shailendra and sister Shalu Jindal, were attempting to oust him from the estate of his father.
The HC had issued a stay order against the other legal heirs.
Abhey, 67, had control and held the promoters’ shareholding over both these listed companies (Oswal Agro Mills Ltd and Oswal Greentech Ltd), before he died of heart attack on a business tour to Moscow on March 29, 2016. Abhey Oswal held 5,35,3,960 shares with Agro Mills.