 ESTABLISHING TRUST

 5 YEARS RELATIONSHIP

 EK DOOSRE KE BUSINESS MEIN EQUITY

 NOTHING HAPPENED IN DETRIMENT

 It is humbly submitted that there was no breach of implied trust and confidence on
account of the actions of the Respondent. TSL and KGL had known each other for the
past 5 decades1 and had en. This subsequently resulted in the development of trust and
confidence amongst themselves. They realized that their relationship was bearing fruit for
their business, thus, bringing their families close in and outside business.

 In this environment of mutual interdependence, each other’s influence brought about a

positive change on their businesses, thus providing the families with the chance to deepen
their bond. They decided to venture jointly in projects and businesses, as well as
investing a part of equity into each other’s company.

 It is presented that Mr Vivekananda, the head of KGL group, succeeded Mr Raju Tobo, as
the chief executive of TSL. He was subject to a professional selection process and was
awardedly this title solely based on merit.

 Once appointed, Mr Vivekananda made sure that he availed the advice of Mr Raju tobo
on the decisions taken by the former, from time to time. These decisions ranged from the
discussing the conventional activities to the matters involving the question of the
historical legacy of the company. He respected him and valued his input.

 Mr raju created this company and was fully dedicated towards its flourishment. Mr
Vivekananda knew very well that the decisions take he takes must not undermine the
image of the company, that Mr Raju had once dreamt to be.
1
 It is also submitted that Mr Vivekananda deeply cared about the company and wanted
nothing but the best for the company. He did not leave a single stone untouched and
worked with pure dedication to contribute towards its betterment. Throughout his tenure,
there had been instances, where he had to go out of his ways to protect the legacy of the
company.

 Fueled by the idea of enhancement of his business, Mr Vivekananda took vital decisions
to cut and the losses and restructure the business to protect its interests. These decisions
received much praise from the shareholders as well as the employees of the company
ultimately resulting in tremendous growth of the market value of the company.

 Hence, we can clearly see that Mr Vivekananda dedicated himself towards the
improvement of the company and would never do anything that would harm its interests
as well as the interests of its shareholders.

 It is most humby submitted that upon the allotment of ‘Rights shares’ to the common
members of both the groups (i.e. TSL and KGL), Mr. Vivekananda was suddenly
removed as the ‘Executive Chairman’ from the TSL, without being given any substantial
reasons for the same. Mr Raju tobo, himself, conducted a Board meeting with his own
supporters and passed the resolution of removing Mr Vivekananda from his post. The
latter was not given the appropriate opportunity to defend himself or plead his case to the
members of the boards meeting.

 This was, in a way, prejudicial

1. The KLG group having stake in tobo sons ltd has had joint ventures/ joint businesses with
tobo sons ltd. For over five decades which developed trust and confidence amongst them,
and the resultant business operations were smooth and progressive.

2. The business relations of these two groups had impact on the family relations and
members of both families became further close in and outside businesses.

3. This relation started having a positive impact on the businesses and the families started
venturing jointly and investing equity in each other’s company.

4. Mr. Vivekananda used to avail the advice of Mr raju tobo from time to time. These
included matters of transition and historical legacy.

5. Mr Vivekananda during his tenure took vital decisions to cut losses and to restructure the
company so as to look after its interest.

6. Mr Vivekananda throught his tenure dedicated himself completely for the benefit of the
companyand sometimes also went out of the way to protects its legacy.

7. He was hailed for his decisions which resulted in increase in the market value of the
company multi-folds.

8. Mr Vivekananda was not given any opportunity to defend himself or plead his case

A member may apply for the relief against oppression and mismanagement on two
grounds. First, if the affairs of the company have been or are being conducted in a
manner prejudicial to the interests of any members or the interests of the company.
Second, if by reason of a material change in the management of the company, or the
ownership of its shares it is likely that the affairs of the company will be conducted in a
manner prejudicial to its interests or member’s interests. No ground for granting relief
shall lie if the respondent fails to allege facts capable of establishing that the company's
affairs are being conducted in such an oppressive manner

No Oppression in a case of Personal Grievance

In the present case, it is submitted that the appellants have neither carried out any
mismanagement nor any oppression on the minority shareholders. The action brought by
the respondent, has been motivated by his removal from the position from Executive
Chairman after the company lost confidence in him due to the argued reasons, he had no
right to continue on the said position. Furthermore, the matter pertains to restitution of a
right in personam, i.e., reinstatement of Mr. Vivekananada to the position of Executive
Chairman of Tobo Sons Ltd., but a case under s.241, as is here, could not be carried out
for personal grievance of the party.

In fact, in the Elder case, cited by the Hon’ble Supreme Court in the S.P.Jain case, the
House of Lords decided that the complaining member must show that he is suffering
from oppression in his capacity as a member and not in any other capacity. In the present
case, the suit was brought by the respondent in response to the alleged arbitrary removal
as an employee of the appellant company and not as a shareholder. Even if it is assumed
that this matter is about one shareholder against another, in the same case, it was held that
mere loss of confidence between shareholders per se could not be the reason to bring
about a suit for oppression.

Essentials are not met

The House of Lords in Scottish Co-op laid down the requirements for proving the
oppression and management by the majority. This was approved in the S.P.Jain case. The
requirements are: First, it has to be a continuous conduct which is burdensome, harsh and
wrongful to the minority shareholder. There has to be an active intention to oppress the
minority. Isolated acts of illegality or acts which are merely inefficient will not be
oppressive. Second, such oppressive conduct must oppress the members qua shareholders
and not any other capacity. Third, such conduct must relate to the manner in which the
affairs of the company are being conducted.
It is humbly submitted that there could not be held any action of oppression and
mismanagement the part of appellants as the decisions alleged to be oppressive do not
comply with the essentials laid down in the Scottish case; First, there is no continuous
conduct to show, which is necessary. Second, no action suppresses any shareholder in his
capacity as a shareholder, which is a key prerequisite to hold maintainability. Third, the
decision alleged to be oppressive is not in relation to interests and affairs of the company.

Ashoka Betelnut Company P. Ltd. v. M.K. Chandrakanth --1997-1-L.W. 616- to show

that both conditions in Clause (a) or Clause (b) of Sub-section (2) of Section 397 must
exist before the court can entertain an application under that section.

Maharashtra Power Development Corporation Ltd. v. Dabhol Power Co. - 2003 (vol.117)
CC 506 - to show that it is not always necessary that there should be a pre-existing family
business or partnership for applying the principles of quasi-partnership to a company but,
the pre-existence of a partnership or family business is certainly a factor which would be
taken into consideration while considering the real nature of the company.

The law relating to prevention of oppression & mismanagement is enshrined under

chapter XVI of the Companies Act, 2013 Section 241 of the Act confers upon the
members of a company a right to enforce strict actions on the company, its management
and/or its majority members, in situations of oppression & mismanagement. The similar
provisions were already in existence u/s 397 & 398 of the Companies Act, 1956.