2021 (3) TMI 941 - AT - Insolvency and Bankruptcy

Seeking restraining the Respondents from holding Annual General Meeting (AGM) of the Company scheduled to be held on 01.12.2020 wherein the Appellants removal from the Board of Directors has been proposed - HELD THAT - Learned NCLT directed the parties to complete pleadings by filing Replies/Rejoinders. Further the leaned NCLT ordered to maintain status quo till the next date of hearing. The status quo order need to be adhered to by the respective parties with respect to the decision taken in the Board Meeting dated 07.11.2020 and any decision taken in the AGM which was held on 01.12.2020. Further the learned NCLT observed that all the actions taken therein are subject to the outcome of the Company Petitions. The learned NCLT protected the interest of the parties including the Appellants. The learned NCLT rightly observed that when the allegations made by the parties in their Company Petitions are serious in nature and without completing the pleadings it cannot examine the same in detail. Hence the learned NCLT decided to hear the Company Petitions and Company Applications after completing the pleadings. Therefore the reliefs sought by the Appellants in CAs as well as in CP are pending for consideration by the leaned NCLT. The Appeal is premature for the reason that the leaned NCLT is seized of the matter. Further it is on the record that the Appellants filed the Contempt Application under Section 425 of the Companies Act 2013 which is also pending for consideration and the copy of the Company Application is filed before this Tribunal. Appeal dismissed.

Summary

Issues:
- Appeal against order passed by National Company Law Tribunal, Jaipur Bench, Jaipur regarding restraining Respondents from holding Annual General Meeting (AGM) and removal of Appellants from Board of Directors.
- Allegations of oppression and mismanagement by Respondents against Appellants.
- Request for interim reliefs to maintain financial health, goodwill, reputation, and accountability within the Company.
- Contempt application filed against Respondents for violating status quo order.
- Dispute regarding removal of Appellants as Directors and actions taken by Respondents.

Analysis:
1. The appeal arose from an order by the National Company Law Tribunal (NCLT) in response to a plea seeking to restrain the Respondents from conducting an AGM where the removal of Appellants from the Board of Directors was proposed. The NCLT did not stay the AGM but ordered to maintain status quo until final disposal of the case on 18.12.2020.

2. The Appellants, who were Promotors/Directors of the Company, alleged that Respondents systematically ousted them from management with ulterior motives. They filed Company Petitions under Sections 241 and 242 of the Companies Act, 2013, citing oppressive acts by Respondents. Respondents proposed resolutions for Appellants' removal at the AGM, leading to a legal dispute.

3. The Appellants sought interim reliefs to prevent their removal, maintain financial health, and ensure accountability within the Company. Despite the status quo order, Respondents allegedly violated it by removing the Appellants from the Board, prompting a Contempt Application. The Appellants requested restoration of their rights and benefits.

4. Respondents argued that their actions were lawful and in accordance with the law. They contended that the Appellants should have exhausted remedies at the NCLT before approaching the Appellate Tribunal. Respondents filed a Company Petition alleging oppression and mismanagement by the Appellants.

5. The NCLT directed completion of pleadings and maintained status quo until further hearings. The NCLT aimed to protect the interests of all parties by deferring detailed examination until pleadings were complete. The Appellants' requested reliefs were pending consideration at the NCLT.

Conclusion:
The Appellate Tribunal found the appeal premature as the NCLT was actively handling the case. The pending Contempt Application and Company Petitions indicated ongoing legal proceedings. The Appellate Tribunal dismissed the appeal, deeming it devoid of merits, and did not award any costs. The matter was to be further addressed by the NCLT based on completed pleadings and ongoing proceedings.