Section 241 of the Companies Act, 2013 ("the Act") confers the right to apply on a "member" of the company. The NCLT Chennai, in Stalin Nova Gnanaraj v. Shalom Garments Pvt Ltd (January 2026), held that oppression must be continuous and ongoing, and that a person who has ceased to be a shareholder cannot file a petition alleging oppression and mismanagement.
The Member at the Date of the Petition
The petitioner must be a member at the date of the petition. A person who transferred his shares before filing the petition is not a member, and the Tribunal has no jurisdiction to entertain the petition. The requirement is not a technicality; it reflects the nature of the oppression remedy, which is concerned with the rights of a member, not with the rights of a former member.
In Stalin Nova Gnanaraj, the petitioner claimed that his shares had been fraudulently transferred and that he had been removed as a director without his knowledge. The Tribunal found that the statutory filings showed that he had not been a shareholder after 2011-12, and that a challenge to the filings after nineteen years was not maintainable.
The Continuity Requirement
Oppression must be continuous and ongoing. A petitioner who complains of conduct that occurred years ago but has since ceased may not be able to obtain relief, because the remedy is designed to bring an end to ongoing oppression, not to compensate for past conduct. The petitioner must show that the oppressive conduct is continuing at the date of the petition.
The Fraudulent Transfer Exception
A petitioner who alleges that the share transfer was fraudulent may be able to challenge the transfer and, if successful, restore his status as a member. But the challenge must be brought within a reasonable time and must be supported by evidence. The Tribunal will not reopen long-settled corporate records without cogent evidence of fraud.
The practical lesson is that a shareholder who discovers an oppressive act must act promptly. Delay can extinguish the remedy, not because the oppression has ceased, but because the petitioner's status as a member has been lost.
Call to Action
Anuj Desai & Associates advises shareholders on the locus and continuity requirements for an oppression petition—from the verification of membership status to the challenge of a fraudulent share transfer and the prompt filing of the petition. If you are concerned about your membership status, we can help you protect your position.
📧 office@anujdesaiassociates.com
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