Case Overview

This order consolidates and disposes of multiple applications (COMP. APPL 39/KB/2016, 59/KB/2021, 131/KB/2021, 28/KB/2022, 109/KB/2022, 135/KB/2021, 154/KB/2024, 61/KB/2021, CONT. A. 6/KB/2022) filed within the main Company Petition No. 11/KB/2016. The petition was filed by the Agarwal Group (Om Prakash Agarwal, Umesh Kumar Agarwal, Ambo Credit Private Limited, Mihir Kumar Dutta, Dhruv Kumar) against Capricorn Oils Limited and the Sarda Group (Ratan Mohan Sarda, Umesh Kumar Sinha, Kusum Sarda, Dinesh Sarda, Smitha Sarda, Supreme Oil Industries Limited) under Sections 210, 213, 216, 241, and 246 of the Companies Act, 2013.

The dispute has a long history, originating from a 2012 Calcutta High Court case and a subsequent Special Leave Petition (SLP (Civil) No. 10578 of 2012) before the Supreme Court. The core allegation was acts of gross oppression and mismanagement by the Sarda Group. The Supreme Court, in orders dating from 2012 to 2014, had attempted to resolve the dispute by directing a valuation by Ernst & Young (completed 7 June 2013) to facilitate a buyout. The valuation determined a total consideration of ₹6,18,10,000 (for shares and loans) to be paid by the Sardas to the Agarwals for a fair exit. The Sarda Group repeatedly failed to make this payment, leading to the dismissal of the SLP on 3 May 2016 and the filing of this NCLT petition.

The NCLT found that the Sarda Group, after failing to buy out the Agarwals, continued to manage the company oppressively. Key findings of oppression and mismanagement included:

  • Conducting rights issues in 2016 and 2019 in violation of a Debts Recovery Tribunal (DRT) order (RC No. 79 of 2005) that had attached Sarda Group shares.
  • Leasing/selling company assets (refinery, warehouse) to Ashian Oils Pvt Ltd and Varun Beverages Ltd without transparency or meaningful participation from the Agarwal Group.
  • Convening an Annual General Meeting (AGM) on 29 September 2021 with only 18 clear days' notice, violating the mandatory 21-day requirement under Section 101 of the Companies Act, 2013.
  • Selling 0.68 acres of company land on 26 October 2021 (registered 28 October 2021) in blatant violation of an NCLT interim order dated 2 June 2021 that restrained such dealings.
  • Attempting to alter the company's business and name without proper disclosure.
  • Transferring shares to related entities Anupam Tie Up Pvt Ltd and Surbhi Dealers Pvt Ltd, effectively consolidating control circumventing the DRT order.

The tribunal concluded that the Sarda Group's actions demonstrated a clear lack of probity, transparency, and fair dealing, constituting oppression under the Companies Act.

Final Outcome

The NCLT allowed most applications filed by the Agarwal Group and dismissed those filed by the Sarda Group. The final ruling and directions are:

1. Appointment of Administrator: Mr. Deep Chandra Joshi (Jaipur, deep.chandrajoshi@gmail.com, 9784900680) is appointed as the Administrator of Capricorn Oils Limited for an initial period of 3 months.

2. Powers of Administrator: The existing Board of Directors will operate under the Administrator's control and supervision. His view prevails in case of differences. He is granted complete immunity from civil/criminal proceedings for acts done in good faith during his tenure.

3. Remuneration: The Administrator will be paid a monthly remuneration of ₹2,00,000 plus applicable taxes, with reimbursement for travel and out-of-pocket expenses.

4. Restrictions: The company, its directors, and the Administrator are prohibited from selling assets, incurring liabilities, distributing funds, entering contracts, changing business, altering share capital, entering related party transactions, or making investments without prior NCLT permission, except in the ordinary course of business.

5. Investigation & Report: The Administrator is tasked with investigating all allegations of oppression, mismanagement, fraud, and siphoning of funds. He must conduct a special/forensic audit and file a composite report on the company's affairs within 3 months.

6. Valuation & Buyout: The Administrator must conduct a fresh valuation of the company's entire assets, including those illegally alienated, and the shares of both groups. Based on this, he will cause an offer to be made for the Agarwal Group to buy out the Sarda Group's shares.

7. Share Specifics: The Sarda Group must take steps to get its attached shares (29.37%) released from DRT attachment (RC No. 79 of 2005) within 3 months and transfer them free of encumbrances. Both groups are restrained from exercising share rights until transfer. The Sarda Group is barred from claiming the 40.76% public shareholding pending in Calcutta High Court (C.S. No. 146 of 2012).

8. Disposal of Applications:

  • Allowed: COMP. APPL 39/KB/2016, 59/KB/2021, 131/KB/2021, I.A. (CA) 28/KB/2022, COMP. APPL 109/KB/2022.
  • Dismissed: COMP. APPL 135/KB/2021, COMP. APPL 61/KB/2021 (as infructuous).
  • Disposed of: IA (CA) 154/KB/2024.

9. Contempt: A rule was issued in CONT. A. 6/KB/2022 against the Respondents for violating the interim order, requiring them to show cause within 14 days.

10. Next Date: The main company petition and contempt application are listed for further consideration on 10 September 2026.

Topics: Shareholder Oppression, Corporate Governance, NCLT Intervention