National Company Law Appellate Tribunal
Asansol Club Limited vs Somnath Biswal And Ors. & Ors on 5 May, 2026
1
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH
NEW DELHI
COMPANY APPEAL (AT) NO.85 OF 2026
In the matter of:
The Asansol Club Limited Appellant
Vs
Somnath Biswal & Ors Respondent
For Appellant: Mr Krishnendu Dutta, Sr Advocate, Mr. Vikram P, Mr
Mukul Katyal, Ms Shruti Swarika, Ms Rashmi S, Ms
Sarvapriya Mukherjee, Ms Alina Merin Mathew, Ms Niharika
Sharma, Advocates.
For Respondent: Mr Joy Saha, Sr Advocate, Ms Manju Bhaturia, Sr
Advocate, Mr Ashish Choudhury, Ms Tanvi Luhariawala, Mr.
Abhishek Arora, Mr Anand Kamal, Ms Shreya Choudhary,
Advocates.
Mr. Gaurav Mitra, Advocate for R1.
Ms Jeol, Advocate for R86.
ORDER
JUSTICE YOGESH KHANNA, MEMBR (JUDICIAL) The present appeal is filed by the Appellant under Section 421 of the Companies Act, 2013 against an order dated 04.02.2026 passed by the Ld. NCLT Kolkata Bench in IA (CA) No.265/KB/2025 in CP(CA) No.183/KB/2025.
2. It is the argument of the learned senior counsel for the appellant while passing an order on waiver application, the Ld. NCLT, without any reason had given final relief to Respondent No.1 herein and the waiver was granted without any reason. It is argued waiver is an exception to filing of a petition under Section 242 of the Companies Act, 2013 and such exception can be allowed only under exceptional circumstances and not otherwise.
23. It is argued the threshold for filing of the petition in a company limited by guarantee is 1/5th of the total number of members; which number in the present case comes out to 150 approximately but whereas the company petition was filed only by 81 members of the Club, out of which 49 have walked away and now company petition is survived only with Respondent No.1 and 35 members and none of the other members, except the Respondent No.1 has a cause. It is argued the Respondent No.1 has since been removed from the membership because of the various charges against him. It is argued not only vide the impugned order the Ld. NCLT had granted waiver to the Respondent No.1 to continue with this company petition but his membership has also been restored. Reference was made to Ld. Col Sandeep Dewan Vs Ootacamund Club and Others CA(AT)CH 38/2024 wherein this Tribunal has held as follows: -
19. Though we are not required to, go into it because we are not dealing with the case under Section 241 or 242, but still for the purposes of getting a constructive interpretation, as to, whether a "waiver" under the proviso to Section 244 could be granted for the purposes of drawing the proceedings under section 241, we would need to outline what act of mismanagement and oppression is. It would literally mean, that, for the purposes of concluding an act as an act of oppression, it would mean to be an act which is exercised in such a manner, which creates a burden, which is harsh, wrongful and contrary to law. All these basic elements for determining an act of oppression for the purposes of proviso to Section 244 have to be specifically satisfied not by way of an intrinsic analysis or on an appreciation of allegations by going into the evidence but only by way of a prima facie interpretation of the set of allegations as to whether at all, the act complained of, is an act of oppression.
20. Particularly in the light of the instant case, if we see the controversy in its entirety of allegations, at the backdrop, it appears as if it is a personal act of vengeance due to discord amongst few members of the club of which the appellant was a 3 member and under the aforesaid backdrop there happens to be some rift with regards to the contest in elections. If at all, these set of allegations could be contended to prevail, to merit proceeding under Section 241, then it should have been an allegation by generality and not by virtue of an individual allegation and that is why the law has provided that for invoking Section 241, the strength of 1/5th of the members is required.
4. Reference was also made to the judgement of Cyrus Investments Pvt. Ltd.
& Anr. Vs Tata Sons Ltd. & Ors. Company Appeals (AT) No.133 & 139 of 2017 wherein this Tribunal held as under: -
151. Normally, the following factors are required to be noticed by the Tribunal before forming its opinion as to whether the application merits 'waiver' of all or one or other requirement as specified in clauses (a) and (b) of sub-section (1) Section 244: -
(i) Whether the applicants are member(s) of the company in question? If the answer is in negative i.e. the applicant(s) are not member(s), the application is to be rejected outright. Otherwise, the Tribunal will look into the next factor.
(ii) Whether (proposed) application under Section 241 pertains to 'oppression and mismanagement'? If the Tribunal on perusal of proposed application under Section 241 forms opinion that the application does not relate to 'oppression and mismanagement' of the company or its members and/or is frivolous, it will reject the application for 'waiver'. Otherwise, the Tribunal will proceed to notice the other factors.
(iii) Whether similar allegation of 'oppression and mismanagement', was earlier made by any other member and stand decided and concluded?
(iv) Whether there is an exceptional circumstance made out to grant 'waiver', so as to enable members to file application under Section 241 etc.?
45. Reference was made to para 6.2 of the impugned order whereby the waiver application was decided and it is argued that it lacks of any cogent reason to allow such application. Para 6.2 of the impugned order is as under: -
6.2 That the present Company Petition discloses a prima facie case of continuing and systemic oppression and mismanagement affecting the affairs of the Respondent No. 1 Club, and not a mere individual or personal grievance of Petitioner No. 1. The Petitioners have demonstrated that the impugned actions particularly the termination/suspension of membership, constitution of committees, and disciplinary proceedings have direct bearing on members' rights and the governance of the Club, and that refusal of waiver at this threshold would completely shut the doors of judicial scrutiny into such serious allegations, thereby frustrating the very object of Sections 241 and 242. Being satisfied that denial of waiver would result in manifest injustice and render the statutory remedy illusory, we consider it just and proper to allow the application under Section 244.
6. It was argued by the learned senior counsel for the appellant that 49 out of 80 applicants, who allegedly were with Respondent No.1 had rather moved an application seeking to be deleted from the array of parties and had filed an affidavit that they have never given any authority to Respondent No.1 to file a Company Petition against the Club and they gave their signatures on the sheets believing those would be used by Respondent No.1 in making representation to the new management. Further it was argued waiver cannot be granted if any member is fighting for his own cause.
7. The learned senior counsel for the appellant further argued the exceptional circumstances for grant of waiver must be shown lest the order fails. He referred to Madras Race Club Vs R D Ramasamy & Other, Company Appeal (AT)(CH) No.17/2024 wherein this Tribunal has decided as under: -
5"46. Regarding the "exception circumstances", that has been sought to be carved out by the Ld. Tribunal while passing the Impugned Order for the purposes of grant of waiver, it could be observed that, first of all, there is no definite logical conclusion that has been drawn by the Ld. Tribunal as to what were the exception circumstances, which could have permitted a waiver in relation to an Applicant in the proceedings before Ld. NCLT, who is not a member of the Company and moreover, there is no discussion of the circumstances to establish exception circumstances, which could have necessitated permitting the waiver for initiation of the proceedings under Section 241/242 of Companies Act, 2013.
8. It was also argued if one peruses the Company Petition uptil para 57, the allegations are only against wrongful removal of Respondent No.1 and it is only in para 58 of the petition the Respondent No.1 had given instances of relocation of children park; relocation of the building and outsourcing of catering department and these paras do not make an exceptional circumstance to grant waiver.
9. On the other hand the learned senior counsel for the Respondent has argued the Respondent No.1 is a member of appellant club for the last 30 years and has held the post of President for at least four years and though he was terminated by the new Committee on 01.08.2025 but then he filed a company petition challenging his termination, amongst other allegations, and during the pendency of the petition i.e. on 17.12.2025 the appellant club withdrew his termination but suspended Respondent No.1 w.e.f. 01.08.2025 itself and fixed an EOGM on 17.01.2026, only for the purpose of his termination; there being no other agenda.
610. It was argued the said fact was brought to the knowledge of the Ld. NCLT and hearing was concluded in the Company Petition before Ld. NCLT on 14.01.2026 and the matter was to come up on 16.01.2026 for orders but the order could not be pronounced on that day as Ld. Bench did not assemble.
Immediately Respondent No.1 wrote a letter to the appellant club that they should not proceed with the EOGM dated 17.01.2026 but the new Committee of the appellant club did not listen and ultimately on 17.01.2026 the EOGM was held and the Respondent No.1 was illegally terminated without any enquiry.
11. Qua the walking away of the 49 members, who have initially joined Respondent No.1 in this company petition, the Ld. Senior Counsel for the Respondent referred to a WhatsApp message issued by the Club to its members stating inter alia any form of dissent by the members shall undermine the club's interest and will be viewed seriously as per the articles of association and the members may involve themselves to face disciplinary action as per club rules and bye laws. It is argued it was only because of this WhatsApp message the members became concerned and 49 of them withdrew the allegations against the appellant club.
12. Further it was that four show-cause notices were issued to the erstwhile office bearers of the Committee of the Club of which Respondent No.1 was the President. These four office bearers were sent exactly same show cause notices, inch by inch and though all four members gave their explanations, including Respondent No.1, (though denied by appellant); but other three erstwhile office 7 bearers of the Committee were exonerated but the Respondent No.1 was terminated on the ground he did not offer any explanation, which otherwise is false. Respondent No.1 even referred to agenda of the Meeting dated 21.09.2024 to say though concerns were raised on the expenses incurred and the manipulation of accounts etc. by members and though the investigation was ordered but the procedure as is given in the articles of association was never followed. He referred to the Articles of Association as under: -
"35. The management of the affairs and concerns of the club shall be vested in the committee which shall consist of President, Vice-President, Honorary Secretary, Honorary Treasurer and ten members."
91. The business of an Annual General Meeting shall be to consider the committee report, and auditors report, to approve and pass the balance sheet as at end of 31st March of preceding financial year, accounts for the proceeding financial year which shall be held to run from 1st of April, to 31st March, to appoint auditors, to elect President, Vice-President, Honorary Secretary, Honorary Treasurer and other office bearers, and to consider or transact any other business which under these Articles sought to be Transacted at general meeting and shall be deemed special business but no such special business shall be brought forward unless a notice thereof has been given to the Honorary Secretary at least fourteen days before the date of such meeting.
105. At every Annual General Meeting the committee shall lay before the company audited income and expenditure account and audited balance sheet made up to the preceding 31st day of March. Copies of such audited balance sheet and income and expenditure account shall be put up on club notice board and sent to each member who has registered with the company his address in India at least twenty-one days before the date of the annual general meeting."
13. It was argued the accounts were to be put up on the notice board as well as copies were to be given to each of the members 21 days prior to the EOGM 8 and if there exists any discrepancy, 14 days' notice needs to be given to the Committee to explain it; which was never done in the present case.
14. It was argued the test per Cyrus Investment Pvt. Ltd. (Supra) stands satisfied as Respondent No.1 was a member at the time of filing of company petition; the petition was for oppression and mismanagement; such allegations were never decided earlier and exceptional circumstances were made out to grant waiver.
15. Qua the circumstances for waiver he referred to para 58 of the company petition as under: -
58. Furthermore, after the newly elected Executive Committee including Mr. Shovan Narayan Basu assumed office, the said members began taking undue advantage of their position and misusing their authority for their own personal gain and interest, rather than acting in the interest of the Club and its members. Several instances of such mismanagement, which came to the notice of the Petitioners, are inter alia as follows: -
i. The present Committee has demolished the Children's Park that had been constructed only two years' prior at a cost of approximately Rs. 12 lakhs. The demolition of a newly developed facility was arbitrary and against the interest of the Club and its members. Photographs evidencing the same are annexed hereto and marked with the letter "Z".
ii. Even more alarming is the decision of the present Committee to shift the newly constructed multi-storeyed Club building, which had been completed merely two years earlier at a cost of nearly Rs. 2 crores, with the help of a novel technology. Such shifting technology is untested in India and is inherently risky. The present Committee incurred an additional expenditure of Rs. 12.50 lakhs solely for shifting the structure, and expert opinion from civil engineers indicates that such movement has depreciated the building's structural value by nearly .40%, resulting in an estimated financial loss 9 of Rs. 92.50 lakhs to the Club. The decision to shift a structurally sound newly constructed building, without any technical justification, feasibility, or member approval, amounts to gross mismanagement. iii. It has come to the notice of the petitioners that the present Committee has outsourced the entire catering department to Padmini Caterers, M.C. Road, Dalpatty More, Raniganj, Asansol - 713347. The circumstances of this arrangement raise strong suspicion that certain Committee members are deriving personal commission or benefits from the contractor.
iv. As a direct result of this outsourcing, the price of catering and restaurant items has sharply increased, burdening members without any improvement in quality. This is in contrast to the Petitioner's tenure, during which all food items were prepared internally in the Club's own kitchen, ensuring better quality control and cost effectiveness.
16. He also referred to various paras of the impugned order to say sufficient reasoning is given for grant of waiver viz: -
3.6 Petitioner No. 1 then received a show-cause notice dated 10.03.2025 from persons claiming to be the Disciplinary Committee, alleging financial/administrative irregularities.
Petitioners say no valid AGM resolution ever authorised such investigation, and the committees were illegally constituted.
3.9 After the Company Petition was filed, Respondents issued a letter dated 17.12.2025 withdrawing termination and instead suspending Petitioner No. 1 (stated to operate from 01.08.2025) and issued a notice dated 26.12.2025 calling an EOGM (fixed for 17.01.2026) to consider expulsion.
4.3 It is contended that the Club's allegation that several petitioners did not authorise the petition is a product of threats and intimidation, including a mass WhatsApp message circulated to the membership threatening disciplinary action against dissenters, which created coercion and pressure.
4.6 It is submitted that no valid resolution was passed in the AGM on 21.09.2024 authorising investigation; the agenda on annual accounts was only adjourned, and therefore the alleged resolution relied upon is manufactured.
106.2 That the present Company Petition discloses a prima facie case of continuing and systemic oppression and mismanagement affecting the affairs of the Respondent No. 1 Club, and not a mere individual or personal grievance of Petitioner No. 1. The Petitioners have demonstrated that the impugned actions particularly the termination/suspension of membership, constitution of committees, and disciplinary proceedings have direct bearing on members' rights and the governance of the Club, and that refusal of waiver at this threshold would completely shut the doors of judicial scrutiny into such serious allegations, thereby frustrating the very object of Sections 241 and 242. Being satisfied that denial of waiver would result in manifest injustice and render the statutory remedy illusory, we consider it just and proper to allow the application under Section 244.
6.3 On a prima facie examination of the materials, it appears that the application arises out of continuing disputes concerning the affairs of the Respondent No. 1 Club, which are already the subject matter of the main Company Petition under Sections 241 and 242 of the Companies Act, 2013. The actions complained of, particularly those affecting the membership rights of Petitioner No.1 and 65, are not isolated but are alleged to be part of a larger course of conduct impugned in the Company Petition.
6.9 It is further noted that on 14.01.2026, I.A. No. 265/KB/2025 was heard at length and orders were reserved by this Adjudicating Authority. The supplementary affidavit placing subsequent events on record, including the suspension dated 17.12.2025 and the notice convening the EOGM dated 26.12.2025, was also taken on record and formed part of the proceedings.
6.10 On 17.01.2026, EOGM was held the sole agenda of which was termination of the membership of Petitioner No. 1. The Petitioners have placed on record additional written notes demonstrating that prior objections were raised by email on the very date of the EOGM, calling upon the Respondents to refrain from holding the meeting in view of the pendency of proceedings before this Tribunal.
6.11 At this stage, we are not expressing any final opinion on the legality or validity of the EOGM dated 17.01.2026 or any resolution allegedly passed therein. However, the sequence of events clearly demonstrates urgency on the part of the Respondents that is not explained by any compelling necessity, 11 particularly when the matter stood reserved for orders and the very same issues were sub judice.
6.12 We also take note of the specific contention raised in the additional written notes that no minutes of the alleged EOGM have been furnished to the Petitioners till date, and that the disciplinary process culminating in the alleged termination continues to be founded on show cause notices and committee proceedings whose legality is directly under challenge in the main Company Petition.
6.13 In such circumstances, permitting the Respondents to give effect to the alleged termination or to proceed further against Petitioner No. 1 during the pendency of the Company Petition would not only cause irreparable prejudice, but would also render the proceedings under Sections 241 and 242 nugatory. 6.14 We are therefore of the considered view that Petitioner No. 1 and Petitioner No. 65 cannot be removed, expelled, or deprived of membership rights till final adjudication of C.P. No. 183/KB/2025, and any action taken in the interregnum, including the alleged EOGM dated 17.01.2026 and the letter dated 18.01.2026, shall remain subject to the outcome of the main Company Petition.
6.15 This protection is necessary to preserve the subject matter of the dispute, to prevent overreaching of the judicial process, and to ensure that the statutory remedy available to the Petitioners is not rendered illusory.
6.16 Accordingly, I.A. (Companies Act) No. 265/KB/2025 is allowed and stands disposed of. In view of the prima facie case of continuing oppression and mismanagement disclosed on record, coupled with the likelihood of irreparable prejudice to the Petitioners and the necessity to preserve the subject matter of the main Company Petition, we deem it just and proper to allow the present Interlocutory Application seeking waiver under Section 244 of the Companies Act, 2013. The Respondents are directed to file their reply to the main Company Petition 183/KB/2025 within a period of two weeks, and the Petitioners shall file their rejoinder, if any, within two weeks thereafter. List the matter on 12.03.2026 for further hearing of the main CP.
17. Moreso we have also noted the facts which led to the illegal termination of the Respondent No.1 during the pendency of the petition despite the Ld. NCLT 12 had cautioned the appellant to go slow. In the petition, EOGM dated 17.01.2026 has since been challenged on the ground it was not held in accordance with the provisions of Articles of Association, more specifically per Articles 91 and 105 (supra). It is submitted AGM is to be called to consider the committee's report, auditors report, balance sheet, appointment of auditors, election of office bearers and to transact any other business under the Articles and for this 14 days' notice is to be given and in every AGM, the committee is to lay before the Company, the audited income and expenditure account, audited balance sheet made up preceding 31st day of March and at least 21 days' notice has to be given to the members but whereas in the EOGM dated 17.01.2026 had only agenda of removal of Respondent No.1 and was not held in accordance with the provisions of Articles of Association and the violation of articles, definitely, is an exception circumstance. In Lt. Col. Sandeep Dewan Vs Ootacamund Club, Company Appeal (AT)(CH) No.38/2024 the Tribunal has held as under: -
"19. xxxxxxxxxxx All these basic elements for determining an act of oppression for the purposes of proviso to Section 244 have to be specifically satisfied not by way of an intrinsic analysis or on an appreciation of allegations by going into the evidence but only by way of a prima facie interpretation of the set of allegations as to whether at all, the act complained of, is an act of oppression."
18. Now coming to the withdrawal of 49 members, who initially were with the petitioner, could be the effect of WhatsApp message given by new committee and secondly though 49 members say they only signed a representation, but if one peruse the case of Harbinder Singh, he rather signed the authorization and was 13 also a signatory to the list of 49 members, hence it can prima facie be said it could be due to reasons of WhatsApp message.
19. In any case the impugned order does prima facie shows the grounds for grant of waiver were considered by the Ld. NCLT. It is not expected of it to give copious reasons in various paragraphs or pages. Suffice is to say the Ld. NCLT noted the conduct of the affairs of the club, illegal termination of Respondent No.1 herein, violation of Articles and instances in para 58 of petition and found it prima facie sufficient to grant waiver. Thus the impugned order suffers from no legal infirmity.
20. Appeal is thus dismissed. Pending applications, if any, are also disposed of.
(Justice Yogesh Khanna) Member (Judicial) (Mr. Ajai Das Mehrotra) Member (Technical) Dated:05-05-2026 BM