TMI Blog2018 (11) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... ist on independently maintaining the same so as to hear out his grievances against the Petitioner and Respondents claiming that they are in collusion. As argued that under Section 402 of the old Act, NCLT has wide powers to pass any Orders when Petition of oppression and mismanagement is filed. The argument is that in the present matter, there were various earlier Orders of NCLT which showed that things were not being legally conducted in the Company and the NCLT had even passed Orders to appoint Administrator. As argued by the learned counsel for the Appellant that in such situation merely because the withdrawal application was filed, NCLT should not have allowed the withdrawal. It is claimed that withdrawal under Order XXIII Rule 1 of Code of Civil Procedure, 1908 is different as there the Plaintiff has a right to withdraw the suit while the same cannot be said with regard to Rule 82 where the provisions say that an application under Clause A or Clause B of Sub-Section (1) of Section 241 shall not be withdrawn without the leave of the Tribunal. No reason as to why the NCLT should have kept the Petition pending only because the Appellant wanted it to do so. The imple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Kaustubh Sinha, Advocate And Ms. Lucky Palta and Shri Pulkit Deora, Advocate JUDGEMENT A.I.S. Cheema, J. : 1. Respondent No.22 Original Petitioner (hereinafter referred as Petitioner ) filed CP 24/2016 against Respondents 1 to 12. Later on, taking orders dated 25.01.2017 from National Company Law Tribunal (in short, NCLT ), Respondents 13 to 21 were added as creditors in NCLT, New Delhi. Company Petition had come up before the Principal Bench. The Petition was filed under Sections 397 and 398 of the companies Act, 1956 ( old Act , in brief). The Appellant filed CA 211/2016 in the Company Petition for impleadment. However, the NCLT vide Orders dated 04.09.2017 did not allow the impleadment holding the Appellant as neither necessary nor proper party but allowed the Appellant only to intervene. The Appellant being aggrieved by such Order, impugned the same by filing Company Appeal 370/2017. In CA 370/2017, Notice was issued on 07.11.2017 and it was directed that in the meantime, any Order passed by the Tribunal shall be subject to decision of the said Appeal 370 of 2017. 1.1 During the pendency of CA 370/2017 in this Appellate Tribunal, the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. Respondent No.18 Respondent No.11 (7) Southend Infrastructure Pvt. Ltd. Respondent No.1 Respondent No.12 3.1 According to the Appellant, Respondent No.2 with the other Respondents as arrayed in OMP are promoters of Respondent No.16 - BMS IT who sought investment in BMS to co-develop a plot of land measuring 34275 sq. meters situated at Sector 62, NOIDA. BMS was developing IT enabled services on the land which was leased and on 12.07.2007, an agreement for contribution towards equity was signed between the Appellant and BMS as well as Respondent No.2 and other Respondents as arrayed in the OMP. It was later on supplemented by supplementary agreement dated 24th September, 2007. There were disputes and due to Arbitration Clause, the matter was referred to Arbitration. Prior to commencement of arbitration proceedings, in OMP 383/2012 certain orders were passed. 3.2 To understand the grievance of the Appellant, a brief reference needs to be made to the said litigation. The Litigation initiated by Appellant in Delhi High Court 4. The Appellant claims tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture Pvt. Ltd. (hereafter referred as Southend ) and Wonder Space Properties Pvt. Ltd. ( Wonder Space , in short), in collusion with each other entered into arrangement/agreement with reference to the immovable property of Southend, in the teeth of above Orders of the High Court. The Appellant claims that on 10.06.2013 contemptuous, fraudulent and anti-dated conveyance deed dated 10.06.2013 was executed between Southend through Respondent No.2 D.K. Gupta and Wonder Space, in the teeth of the Orders dated 27.04.2012 and 04.09.2012 of the High Court, giving Wonder Space Development rights in the only property of Southend, namely B-319, Okhla Industrial Area, Phase I, New Delhi. 4.3 According to the Appellant, Respondent No. 22 (Original Petitioner of CP) who had only 5,000 equity shares (approximately 0.67% in Southend) fraudulently got transferred substantial shares of Southend from DK Gupta (Respondent No.2) in violation of restraint Orders of the High Court. It is claimed that the shares were fraudulently acquired in September, 2013 onwards although Respondent No.2 - DK Gupta was under restraint Orders of the High Court. Appellant claims that the Appellant came to know of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dified to hold that the Order is not being continued against the Southend as this Respondent Company Southend was not party to the arbitration proceedings, which according to Appellant shows that Southend was aware that when it moved the said IA in 2014, it was knowing that the Order dated 27.04.2012 was operating against it. The Appellant claims that the said IA 10835/2014 was dismissed on 01.09.2014 (Annexure A-8 Page 131) as Southend, which was Respondent in that matter, had reneged on its commitments. 4.5 The Appellant has then referred to Petition under Section 9 of the Arbitration and Conciliation Act, 1996 ( Arbitration Act , in short) having Original Miscellaneous Petition No.1197/2014 which was filed by the Appellant as pre-award Petition against present Respondent No.16 and present Respondents 1, 2, 3 18 and Respondent No.9 for HUF. The Appellant claims that in the said Petition, Hon ble High Court on 30th September, 2014 passed following Order:- O.M.P. 1197/2014 Issue notice to the respondents via ordinary post and approved courier. Mr. Arora accepts notice on behalf of respondent nos.1, 2, 3 and 12. On steps being taken, notice shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank guarantee to satisfaction of the Petitioner is furnished, Restrain Respondent No.12 from creating any kind of third party rights or encumbrances or dealing in any manner whatsoever with its share (i.e. 47.5% of constructed area in terms of the Conveyance Deed dated 10.6.2013 with Wonder Space Properties Pvt. Ltd., B-319, Okhla Industrial Area Phase I, New Delhi 110020 and appoint a Court Receiver for the said share of Southend under the Conveyance Deed dated 10.06.2013 pending the execution of the award dated 2.3.2015. Interim relief, as above, is granted until further orders. Appellant claims it does not have sufficient security to secure its dues under the Award and therefore the Appeal is pending. 4.9 The Appellant claims that present Respondent No.1 Southend is the Respondent No.12 in the Supreme Court and Southend has been restrained from creating any kind of third party rights and encumbrance or deal in any manner whatsoever with its share i.e. 47.5% of constructed area in terms of the conveyance deed dated 10.06.2013 with Wonder Space Properties, with regard to B-319, Okhla Industrial Area. 4.10 The above litigation is a matter of record. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and previous orders of the Hon ble High Court. 6. In the aforesaid circumstances, the Applicant is filing the present application seeking its impleadment. In the event that the Applicant is not impleaded, there is every likelihood of the Petitioners and Respondents concealing the material facts or seeking indulgence of this Hon ble Board in the face of various orders passed by the Hon ble High Court of Delhi. The Respondent No.1 company (of which the Petitioner allegedly claims to be having controlling stake) was always a party/Respondent in the proceedings before the Hon ble Court and was always represented by its Counsels. 5.1 For above reasons, the Appellant claimed impleadment in the Company Petition. The learned NCLT, however, after hearing the parties passed Order dated 04.09.2017, the operative part of which reads as under:- Having heard the learned Counsel for the parties at some length, we are of the view that the presence of the applicant in the proceeding may be required but they are neither necessary party or nor a proper party. The petition filed by one group against the other is for mis-management and oppression. The applicant has neither levelled a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thdrawn in terms of the aforesaid statement. Application stands disposed of. 9. At the time of arguments, the learned counsel for the Appellants in both these Appeals have argued with reference to the above litigation to submit that Respondent No.2 Dinesh Kumar Gupta and some of the other Respondents in the Company Petition had Orders passed by the Hon ble High Court operating against them and while the Orders were operating against them, surreptitiously Dinesh Gupta transferred his shares to Respondent No.22 Vikrant Puri who suddenly stepped forward to file collusive Petition in 2016 to claim that he was holding major stakes in the Respondent Company Southend. The argument is that the Petition was filed so as to obtain collusive Orders from NCLT to overreach the Orders which had been passed by the Hon ble High Court. It is argued that thus the impleadment of the Appellant in the Company Petition was necessary but only intervention was allowed and when the Company Appeal 370/2017 was filed, in order to make the same infructuous, the Company Petition came to be withdrawn. The argument is that the learned Senior Counsel for the Appellant as appearing in CA 370/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was not maintainable and when the Company Petition has been withdrawn, the Appellant itself is opposing and cannot be heard saying that the withdrawal affects the Appellant. Referring to the synopsis in Company Petition 370 of 2017, the counsel for Respondent No.22 argued that the Appellant claimed that the Company Petition was infructuous and was collusive etc. and was kept pending in order to obtain consent orders. If keeping the Company Petition pending was harming the Appellant, the same Appellant wanted the Company Petition not to be withdrawn. It is argued that the Appeal does not claim as a ground that the application for withdrawal was defective. The submission is that if the concerned Form is kept in view, there was substantial compliance with the provisions and even if it could be said that the pendency of the Appeal was not pointed out, the issue becomes redundant as counsel for the Appellant was present and did make submissions which were not accepted. It has been argued that non-mentioning of the CP 370 of 2017 pending was by oversight and when the counsel attended, there cannot be said to be any prejudice. 12. The counsel for Respondents 6 to 11 is supporting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application. 16. The counsel for Respondents countered the submissions by stating that defect of Form has not been made ground in the Appeal. When the Appellant started making grievances on these counts, the learned counsel for Respondent No.22 and original Petitioner took time from us and on adjourned date filed certified copy of the application and its Annexures. The same was filed at Diary No.5134. 17. Rule 82 of the Rules, 2016 applicable to NCLT reads as under:- 82. Withdrawal of Application filed under section 241.- ( 1) An application under clause (a) or clause (b) of sub-section (1) of section 241 of the Act, shall not be withdrawn without the leave of the Tribunal. ( 2) An Application for withdrawal under sub-rule (1) shall be filed in the Form NCLT-9. Parties have pointed out copy of the Form No. NCLT 9. If Form NCLT - 9 is seen, it is a common Form in the context of Rules 72, 76, 82, 88 and 154 and is also general Form for all purposes, if no specific Form is prescribed under these Rules and Forms. Rule 82 deals with withdrawal of applications under Section 241. Rule 72 relates to Appeals against the Order of Government under Section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f withdrawal and had an opportunity to address the NCLT and it cannot be said that the NCLT was not aware of the pending Appeal when the withdrawal was permitted. Thus the Advocate for the Respondent No.22 original Petitioner not mentioning in the application for withdrawal regarding pendency of the Appeal of Intervener cannot be said to be fatal and in the facts of the matter, merely on such technicality, the withdrawal as permitted by NCLT need not be interfered with. Under Section 424 of the Companies Act, 2013, NCLT while disposing the proceeding which was in front of NCLT, accepted the application for withdrawal in the face of objection raised by the learned Senior Counsel for the Appellant. In the Impugned Order, NCLT did not note the submissions made by the learned counsel for the Appellant, may be due to the view it was taking that even if the Appellant had been permitted to intervene for the purposes of the Company Petition, hearing Appellant was not necessary for the purpose of withdrawal of the Company Petition which was a matter between the Petitioner and the party Respondents. 18. The Appellant is claiming referring to the litigation as mentioned above that the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 27.4.2012 and 4.9.2012. That Further Board Meetings are held details of which the Appellant is unware of. The above is against the interest of the Appellant and therefore its impleadment is necessary in the given peculiar facts of the case. 19. It is quite clear that the Appellant is labouring under apprehensions as to what the original Petitioner and Respondents shareholder/Directors of the Company were up to. At the time of arguments, the Appellant has tried to show that the Company Petition was collusive between the Appellant and Respondents and it was being pursued to obtain collusive Orders from NCLT so as to overreach the Orders passed by the Hon ble High Court and now the Hon ble the Supreme Court. Although such stand is taken at the same time, the Appellant has opposed the withdrawal and the argument made by learned counsel for Appellant is that the right of the Appellant of hearing was taken away because of the withdrawal. The prayer of this Appeal CA 57/2018 seeks setting aside of the Impugned Order and seeks direction to NCLT to hear the Appellant and pass speaking order on its objections to the Company Petition wherein serious allegatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he NCLT that the contesting parties had settled their disputes between them and the Petitioner was seeking withdrawal. In such circumstances, only because the Appellant - Intervener had objections and wanted NCLT to keep the Petition pending, if the NCLT thought it fit to let the withdrawal take place, we do not think that the discretion exercised was arbitrary. The Appellant may be having a good case for which it has moved Hon ble High Court and has indeed Orders passed by the Hon ble High Court in his favour which are operating against the Respondent Company as well as some of the shareholders of the Company, but that does not mean that the forum of NCLT should remain available to a non-member of the Company to keep watch on the Directors and shareholders of the Company. The rights of the Appellant are apparently being looked into and protected by the Hon ble High Court and now there are Orders even of the Hon ble Supreme Court. If the Respondents or any of them violate any of the directions or Orders of the Hon ble High Court or Hon ble Supreme Court, they will face the consequences. Thus, we find no reason as to why the NCLT should have kept the Petition pending only because th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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