Mr. Jithendra Parlapalli vs M/s. Wirecard India Private Ltd. & ors
Company Appeal (AT) 127 of 2022
Facts:
1.Appellant’, was appointed as the1st Respondent / Company’s Managing Director’, on 01.05.2015, as per Contract of Employment’ dated 01.04.2015. Later, he was appointed as an Additional Director’, in the Board of Directors’, in the1st Respondent / Company’, as per Board Resolution’, dated 15.07.2015. Although, the Appellant’, was appointed as the Managing Director’, of the1st Respondent / Company’, and a Director’, in the Board of Directors’ of the `Company’.
2.Appellant’, while working at the 1st Respondent / Company’, noticed that the Company’, had entered into contracts with M/s. Positive Moves (India) Consulting Pvt. Ltd. and M/s. In Tandem Advisors LLP through some of the Directors’ in the Board of Directors’ of the Company’, including the6th Respondent’. The Appellant’, came to know that under these Contracts’, despite, huge monies were paid to the abovementioned Entities’, no services were availed from them and this created suspicion in the mind of the Appellant’.
3.Appellant, when working as the Managing Director’ of the 1st Respondent / Company’, came to know that the Company’, was endeavouring to evade payment of taxes on numerous occasions, without his knowledge. One such instance which took place, was in relation to a Project’ with Citibank N.A.’, which was internally called as Project ASLAN.
4.A Purchase Price Reallocation Agreement’ (PPRA’), was executed among the Subsidiaries of the 3rd Respondent. The Appellant’, at the time of execution of this Agreement’, was kept under the belief that the Balance Sum of USD 16,225,511, would be paid to Citibank, through the 1st Respondent, after receiving funds from numerous Subsidiaries of the 3rd Respondent, but, the Balance Sum of USD 16,225,511 was paid through the Subsidiaries of the 3rd Respondent, situated outside India, directly to Citibank.
5.1 st Respondent / Company’, had entered into aService Agreement’ dated 01.10.2018, with one of the Subsidiaries’ of the 3rd Respondent at Singapore, referred to as Wirecard Singapore, for receiving certain services at the cost EUROS 5,000,000. But, this Agreement’, was then cancelled through execution of an undated Cancellation of Intercompany Service Agreement’.
6.When he realized he began to question superior, and the 3rd Respondent, regarding the same, he was demoted as a Director’, in the1 st Respondent / Company’, through a `Board Resolution’ dated 14.05.2019, and thereafter he was unlawfully, terminated from that position on 22.10.2019. In the interregnum, Wirecard Singapore, was being investigated by the Authorities at Singapore, suspecting the several illegal activities being carried on through the said Company. Subsequently, the 3rd Respondent, came under an Independent Special Investigation’, by an Auditing Firm – KPMG’, and that, the 3rd Respondent, had admitted that sum of EURO 1.9 Billion, alleged to exist in the `3 rd Respondent’s Trust Accounts’, did not exist.
7.Even after the Appellant’s Termination’, from the Employment of the 1st Respondent / Company’, he continued to act as a Director’, in the Board of Directors’ of the Company. He realised, that the 1st Respondent / Company, would continue to operate through illegal methods and he filed a Petition, under Section 241 and 242 of the Companies, Act, 2013.
Issue: Whether the appeal is liable to be admitted?
Arguments:
Appellant:
1.Counsel for the Appellant comes out with an argument that a Director’ of the Company’, carries all the characters /trappings of a Member’, of a Company’ and he is barred’ as Director’, to file a `Suit’, in regard to the matters that fall within the domain of Section 241 and 242 of the Companies Act, 2013. Counsel submitted that Tribunal’, had failed to take into account of the continuous, illegal acts, committed by the 1 st Respondent / Company’, in breach of the Laws of the Land’, causing huge losses to the Exchequer’ of the Country.
2.Counsel for the Appellant emphatically points out the Right’ of the Appellant’, to pray for Reliefs’, before the Civil Courts’, are similar to the one’s provided, under Section 241 and 242 of the Companies Act, 2013, is barred, and that no person can be left without remedies’, and an Application’, the main Petition’, preferred by the Appellant’, under Sections 241, 242 and 244 of the Companies Act, 2013, are perfectly maintainable’ inLaw’.
Decision: NCLAT dismissed the appeal.
Rationale:
1.Hon’ble NCLAT held that An Individual’, whose name, does not appear’, on the Register of Members’, is not a Member’, and has no Locus’, to Prefer’ a Petition’, under Section 244 of the Companies Act, 2013. To put it differently, if a person’, is not a Member’ of a Company’, the question of his alleging Oppression’, does notarise’.
2.It held that At this juncture, it is not out of place for this Tribunal’, to make a pertinent mention that the fundamental eligibility criteria, laid down in Section 244 of the Companies Act, 2013, a Complainant’, must be a Member’ of a Company’, in relation to which, the Petition’, is to be filed. Therefore, it is latently and patently evident that, only a Member’ of a Company’, can prefer a Petition’, in relation to the `Company’.
Order:
