Authority: National Company Law Tribunal, Mumbai Bench-I

Order Date: 18 June 2026

Case Overview

The petition was filed by Fine Handling & Automotive Pvt Ltd under Sections 241-242 of the Companies Act, 2013, alleging oppression and mismanagement by EEPOS GMBH (Respondent No. 2) in the affairs of EEPOS Fine Rail Systems India Pvt Ltd (Respondent Company). The Respondent Company, incorporated in 2002, was a 50:50 joint venture between the petitioner and the German entity, established to manufacture and design lifting equipment. Each party appointed one Managing Director to the board.

The petitioner alleged that from 2011 to 2017, EEPOS GMBH and its nominee, Mr. Timo Koch, abandoned their fiduciary duties, failed to attend board meetings, and did not cooperate in management. A critical allegation was that EEPOS GMBH appointed another entity, Techxellency Jendamark India, to sell identical products in India, directly poaching the Respondent Company's clients and causing financial and goodwill loss. Furthermore, EEPOS GMBH incorporated a new company, EEPOS India Private Limited, on 19 December 2016 with a similar name and objects, leading to a civil suit for breach of fiduciary duty and trademark infringement filed in February 2017, which remains pending.

The company failed to complete statutory compliances under the Companies Act since 2017, resulting in notices from the Registrar of Companies, Pune, including a Form STK-1 notice for removal of the company's name from the register in March 2017. The Tribunal noted that the company had conducted no business since 2017 and its only remaining asset was the disputed trade name 'EEPOS'.

The Tribunal analyzed the situation through the legal principles of 'functional deadlock' and 'breakdown of trust and confidence' as established in Supreme Court precedents like Hind Overseas Pvt. Ltd. and Tata Consultancy Services Limited vs Cyrus Investments Pvt Ltd. It concluded that a complete functional deadlock existed due to the equal shareholding and board representation, coupled with an irretrievable breakdown in trust, constituting a 'just and equitable' ground for intervention.

Final Outcome

The Tribunal disposed of the petition by ordering Respondent No. 2 (EEPOS GMBH) to buy out the petitioner's 50% shareholding in the Respondent Company for a consideration of ₹10 lakhs. This amount was based on an offer previously made by the petitioner itself and reflects the company's negative net worth of ₹23.06 lakhs when the disputed 'EEPOS' brand value (₹9.31 crore as per unaudited statements) is excluded.

The payment must be made within 30 days from the order date (by 18 July 2026). Upon receipt, the petitioner must execute share transfer deeds. If the petitioner fails to do so within 15 days of payment, EEPOS GMBH is authorized to transfer the shares unilaterally. The petitioner's nominee director must resign upon share transfer, and the company must reconstitute its board.

The order clarifies that the valuation expressly excludes the 'EEPOS' trademark, whose ownership is sub-judice in a civil suit before the District Judge, Pune. The final outcome of that suit will trigger a separate valuation process. If the Respondent Company is ultimately granted trademark rights, EEPOS GMBH must value the trademark and pay the petitioner its 50% proportionate share of that value within 30 days of the valuation. If the company loses the trademark suit, no further payment is due.

The order also disposes of two related applications: MA 402 of 2018 and CA 1187 of 2020.

Topics: Shareholder Dispute, Corporate Deadlock, Trademark Litigation