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2022 (5) TMI 719 - AT - Companies LawOppression and Mismanagement - Violation of the Status quo order - seeking direction to the Respondents therein (Appellants herein) to pass a direction to the Respondents therein to maintain status quo in all aspects while managing the affairs of the Company, and revoke all Approvals, Resolutions etc. with respect to raising of any additional debt - HELD THAT:- The Respondents 1 to 4 herein have filed the Company Petition bearing No. CP 02 of 2020 before the National Company Law Tribunal, Kochi Bench under various provisions of the Companies Act, 2013 including alleging oppression and mismanagement in the affairs of the Appellant No.1 Company and sought various main and interim reliefs in the CP. It is contended that relief viii of the interim reliefs in the main CP, inter alia the Respondents herein have sought a direction restraining the Appellants 2 to 8 herein from in any manner alienating, mortgaging, selling or encumbering any of the movable or immovable properties of the company. It is seen that the NCLT made absolute the status quo order dated 17.01.2020, further by making it clear that the approvals/resolutions with respect to raising of any additional debt shall be kept in abeyance and the same will be subject to the outcome in the main Company Petition - This Tribunal is of the view that the NCLT while passing the interim order of status quo on 17.01.2020 simply stated that the parties are directed to maintain status quo in all aspects as on today until further orders, has not specifically made out whether status quo to be maintained with respect to management, shareholding and immovable assets of the Company. This Tribunal is of the view that the status quo order is in wider amplitude. It is an admitted fact that the Appellant No.1 Company is into the business of automobile sector and there are 6000 workers in the Company. As per the MOA, the main objects are to carry on the business of motor dealers of cars, motor vehicles etc. and the company has to perform its functions as per its objectives. The NCLT ought to have specified the status quo order with regard to its either shareholding, management and immovable properties etc. In the present case the Respondents herein have alleged that the Appellants have violated the orders of the status quo dated 17.01.2020 by availing ECLGS i.e. Emergency Credit Line Guarantee Scheme offered by the Govt. of India and the Appellant Company in it 245th Board meeting dated 10.02.2021 taken a decision by majority of Board of Directors to avail ECLGS during subsistence of status quo order dated 17.01.2020 - This Tribunal is of the view that the Appellants have not violated the orders of the Tribunal dated 17.01.2020 by making it clear that the Company has to function through the Board of Directors and there is no stay with regard convening and holding of the Board meetings to take a timely decision on the basis of the business of the Company. It is made clear that the interest of the Company is paramount. This Tribunal comes to a resultant conclusion that while passing of status quo order it should be specific with respect to subject matters more particularly in the matters of Oppression and mismanagement, on the basis of the facts of each case and if such status quo is warranted to protect the interest of the Applicants/ Petitioners therein - this Tribunal find that the impugned order dated 18.06.2021 para 11 third sentence onwards namely “making it clear that the approvals/resolutions etc. with respect to raising of any additional debt shall be kept in abeyance and the same will be subject to the outcome in the main Company Petition.” is hereby quashed and set aside. Accordingly, the issue is answered.
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