Lala Karori Mal held 5,35,30,960 equity shares of face value of ₹10 each in Sarvodya Agrotech Ltd., a listed company. The holding amounted to 39.88% of the company. The present market value of the share is ₹368/- per sha

The facts of the given case are similar to the case of Aruna Oswal vs. Pankaj Oswal & Ors. Civil Appeal No. 9340 of 2019 with connected appeals judgement dated 06/07/2020. In this case Supreme Court observed that respondent as pleaded by him, had nothing to do with the affairs of the company and he is not a registered owner. The rights in estate/ shares, if any, of respondent no. 1 are protected in the civil suit. Thus, Supreme Court satisfied that respondent does not represent the body of shareholders holding requisite percentage of shares in the company, necessary in order to maintain such a petition. It is also not disputed that the High Court in the pending civil suit passed an order maintaining the status quo concerning shareholding and other properties. Because of the status quo order, shares have to be held in the name of Mrs. Jamuna Devi until the suit is finally decided. It would not be appropriate, given the order passed by the civil Court to treat the shareholding in the name of Respondent by NCLT before ownership rights are finally decided in the civil suit, and propriety also demands it. The question of right, title, and interest is essentially adjudication of civil rights between the parties, as to the effect of the nomination decision in a civil suit is going to govern the parties' rights. It would not be appropriate to entertain these parallel proceedings and give waiver as claimed under section 244 of the Companies Act, 2013 (the Act) before the civil suit's decision. Respondent had himself chosen to avail the remedy of civil suit, as such filing of an application under sections 241 and 242 the Act after that is nothing but an afterthought. Supreme Court refrain to decide the question finally in these proceedings concerning the effect of nomination, as it being a civil dispute, cannot be decided in these proceedings and the decision may jeopardise parties' rights and interest in the civil suit. With regard to the dispute as to right, title, and interest in the securities, the finding of the civil Court is going to be final and conclusive and binding on parties. The decision of such a question has to be eschewed in instant proceedings. It would not be appropriate, in the facts and circumstances of the case, to grant a waiver to the respondent of the requirement under the proviso to section 244 of the Act, as ordered by the NCLAT. It prima facie does not appear to be a case of oppression and mismanagement. Our attention was drawn by the learned senior counsel appearing for Respondent to certain company transactions. From transactions simpliciter, it cannot be inferred that it is a case of oppression and mismanagement. We are of the opinion that the proceedings before the NCLT filed under sections 241 and 242 of the Act should not be entertained because of the pending civil dispute and considering the minuscule extent of holding of 0.03%, that too, acquired after filing a civil suit in company securities, of respondent no. 1. In the facts and circumstances of the instant case, in order to maintain the proceedings, the respondent should have waited for the decision of the right, title and interest, in the civil suit concerning shares in question. The entitlement of respondent No. 1 is under a cloud of pending civil dispute. We deem it appropriate to direct the dropping of the proceedings filed before the NCLT regarding oppression and mismanagement under sections 241 and 242 of the Act with the liberty to file afresh, on all the questions, in case of necessity, if the suit is decreed in favour of respondent No. 1 and shareholding of Respondent increases to the extent of 10% required under section 244 of the Act. Supreme Court reiterate that we have left all the questions to be decided in the pending civil suit. Impugned orders passed by the NCLT as well as NCLAT are set aside, and the appeals are allowed to the aforesaid extent. Supreme Court request that the civil suit be decided as expeditiously as possible, subject to cooperation by Respondent Parties to bear their costs as incurred.