TMI Blog2020 (12) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... October, 2020 to 6th October, 2020 etc. and none of the Appellant Nos. 2 to 4 were aware of any such hearing on 05.10.2020 and neither in a situation to attend the hearing or nor was in a position to appoint any Advocate for them to attend the hearing, and not withstanding the fact that the name of Appellant Nos. 2 to 4 were wrongly shown in the appearance column of the impugned order as Advocates, this Tribunal without precipitating the matter any further and not delving deep in this regard is of the considered view that a latent and patent error had crept in the appearance column of the impugned order and by mistake the Appellants Nos. 2 to 4 were shown as Advocates and this Tribunal at this juncture is of the earnest view that utmost diligence, care, caution and circumspection are required on the concerned person(s) of the Tribunal while marking / noting the appearance of Learned Advocates / Parties/Representatives and quite in the fitness of things, this Tribunal hope and trust such an inadvertent error will not recur again in the near future. It is to be pointed out that the Tribunal as per Section 241 of the Companies Act, 2013 has wide powers to grant relief in cases of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an aberration of justice and to promote substantial cause of justice the said impugned order dated 05.10.2020 in Company Petition No./133/2020 is set aside by this Tribunal. Further, this Tribunal remits back the matter to the National Company Law Tribunal , New Delhi, Court No.- II for denovo consideration and appreciation of the whole gamut of the controversies centering around the main Company Petition. Appeal allowed. - Company Appeal (AT) No. 182 of 2020 - - - Dated:- 18-12-2020 - [ Justice Venugopal M. ] Member ( Judicial ) And [ Dr. Alok Srivastava ] Member ( Technical ) For the Appellants : Dr. U.K. Choudhary, Sr. Advocate along with Mr. Pradeep Kumar Mittal, Mr. Praveen Kumar Mittal and Mr. Sharad Poddar, Advocates For the Respondents : Rakesh Kumar (Caveator) and Ms. Preeti Kashyap, Advocates for R- 1 to 3. M/s Kamal Kapoor Associates, Advocate for R 4 5. Mr. Virender Ganda, Sr. Advocate along with Mr. Kamal Kapoor and Mr. Aman Nandrajog, Advocates for R- 6 to 8 JUDGMENT Venugopal M. J. Preface The Appellants have preferred the present Company Appeal being dissatisfied with the order dated 05.10.2020 passed by the National C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falsely claiming shareholding to the tune of 49% shares; which includes the shareholder whom are neither related to the Respondent No. 1 to 3 nor party in the Company Petition. Except the Respondent No. 1-3 none of the other proclaimed family members had given their written consent to file the Company Petition nor became co- petitioners along with the Respondent No. 1 to 3. A false claim was made by the Respondent No. 1 to 3 by swearing an Affidavit that they along with relatives hold 49% Paid Up Share Capital of the Appellant No. 1/Company. 5. The Respondent No. 1 to 3, in the main Company Petition had claimed themselves that they are Quasi Shareholder of the Respondents. Under the Companies Act,2013, there is no such term whereby a person can claim himself to be Quasi Shareholder . Therefore, the Respondent No. 1 to 3 do not have any right in Respondent No. 6 to 8. 6. The Learned Counsel for the Appellants contends that the Respondent No. 1 to 3 filed CP/133/2020 before the Tribunal on 14.08.2020 and that the copy was served upon the Appellants on 17.08.2020 and that no action was taken for 50 days, for listing the matter and suddenly the Company Petition got listed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring something by taking unfair advantage of another . Also, on behalf of the Appellants a reference to the judgement of this Appellate Tribunal dated 01.04.2019 in Company Appeal (AT) No. 256 of 2018 is made wherein it is observed that in a matter arising under sections 241 and 242 of the Companies Act read with Rule 11, irrespective of what the parties plead, say or do, the paramount consideration of the Tribunal is to keep in view as to what is in the interest of Company and that the interest of the parties is subservient to the interest of the Company . 10. The Learned Counsel for the Appellants brings to the notice of this Tribunal that the First Respondent made an exit from the First Appellant/Company through his letter of resignation on 01.11.2016, as Director of the First Appellant/Company and that a Statutory Return in Form DIR 12 was filed with the Registrar of Companies. In fact Respondent No. 1 to 3, after November 2016, had not attended the Annual General Meeting of the year 2017,2018 2019 respectively. The fourth Respondent is the real brother of First Respondent but he supports the Appellant No. 1 to 4. 11. The Learned Counsel for the Appellants proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant/Company being the only source to generate funds to bear administrative expenses etc. Furthermore, the First Respondent had levelled totally wild, baseless, absurd allegations against the Appellant no. 2 to 4 of making money in every possible way out of the sale of flats of J.M.Florence Project. 18. According to the Appellants, the ad-interim exparte order dated 05.10.2020 of the Tribunal is very much detrimental to the very survival and existence of the First Appellant/Company. Added further, one Mr. Rajkumar Goel was given the possession of flat and his matter was settled and already the petition was withdrawn in 2018 itself. In respect of Aggarwal Finance Company and Tilak Raj, the First Appellant / Company had already offered possession of their respective flats to them as per the judgement of this Appellate Tribunal and, therefore, their petitions are not maintainable. 19. The Learned Counsel for the Appellants submits that the eighth Respondent is now in the advance stage of development of industrial park and is offering industrial plots in the said industrial park to the interested parties and majority of the said plots were allotted and sale deeds were execu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to get cuts from these persons. 23. The Appellants take a stand that the investment of the Respondents remains ₹ 2.34 crores against ₹ 11.78 crores of the Appellants and Respondents and for such a small investment, no order can be passed prejudicial to the interest of the First Appellant / Company. Furthermore, even for misappropriation restraint order is not the remedy. Contentions of Respondent Nos. 1 to 3 24. The Learned Counsel for the Respondent No. 1 to 3 submits that it is the admission on the part of the Appellants that the Petition was served upon them on 14.08.2020, and that they ought to be vigilant of the listing of the said Petition before the Tribunal. Further, after removing the objections raised in the matter, the main Company Petition was listed before the Tribunal on 05.10.2020, and in fact, the Appellants were very well aware of filing of the said Petition and definitely putting a surveillance on its listing and in fact, when the matter was listed on 05.10.2020, the WhatsApp Group was created by the Bench Officer of the Tribunal and in the said WhatsApp Group the three Appellants were added by the answering Respondents. 25. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the First Respondent and the eighth Respondent. 31. It is stated on behalf of the Respondent No. 1 to 3 that the answering Respondents e-mail dated 20.03.2020, was not answered by the Appellants and even further the Respondent No. 1 to 3 came to know that the Appellants were selling the properties of Respondent No. 1 and Respondent No. 8 and misappropriating the funds, the letters were sent to the Appellants as well as to the Other concerned. 32. The categorical stand of the Respondent No. 1 to 3 is that the Appellants wanted to conceal the facts and to run the Affairs of the First Respondent at their own whims and fancies and to misappropriate the funds unto themselves. Only under these circumstances, the restraint order was passed by the Tribunal protecting the interest of the answering Respondent relating to the properties of the First Respondent and the eighth Respondent. 33. The Learned Counsel for the Respondent No. 1 to 3 points out that when the Appellants were not entertaining the concern of the Respondent No. 1 to 3 in regard to the Properties, they are selling of the First Respondent Company and of the eighth Respondent Company, the answering Respondent wrote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Respondent Nos. 1 to 3 points out that the First Appellant / Company and the 7th Respondent together have 50-50% equity shareholding in the 6th Respondent and that the 8th Respondent is wholly owned subsidiary of the 6th Respondent. In fact, the First Appellant/Company s investment of ₹ 42 crores is lying with Respondent No. 8 through Respondent No. 6. 40. The Learned Counsel for the Respondent Nos. 1 to 3 contends that the Company SPR Agrogtech Pvt. Ltd. is controlled by the Appellants and that the Appellant No. 2 is the bank signatory of the Company and that the employees of the First Appellant/Company are the Directors of the said Company and that the 8th Respondent had transferred ₹ 40- 50 crores to the said Company. Besides this, one more Company Cross River Construction and Developers P. Ltd. belongs to the Appellants and a sum of ₹ 6 crores were transferred from the 8th Respondent to the said Company. Moreover, the properties of the 8th Respondent are being sold secretly and funds are diverted to the related company of the Appellants. 41. The Learned Counsel for the Respondent Nos. 1 to 3 contends that the Appellants may be permitted to sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent No. 6/Company. Hence, the Respondent No. 1 to 3 have no cause of action against Respondent No. 6. The Respondent No. 1 to 3 have no locus standi to file the Company Petition Under Section 241 and 242 of the Companies Act. 45. The Respondent No. 1 to 3 have admitted that they are not the shareholders of the Sixth Respondent/Company. The Respondent No. 6 is neither proper party or a necessary party to the present list. The Company Petition is nothing more than an attempt to discredit the sixth Respondent and obtain confidential records of the company to which they are in no way entitled to get by way of indulging in fishing expedition. Pleas of the Respondent No. 7 46. The Company Petition filed by Respondent No. 1 to 3 contains no cause of action against the Seventh Respondent and in fact, the company Petition alleges no mismanagement or oppression of the Respondent No. 7. In short, the Respondent No. 7 is wrongly arrayed as one of the Respondents to the main Company Petition. The Respondent No. 7 is neither a necessary nor proper party to the present lis. Stand of the Respondent No. 8 47. The Respondent No. 1 to 3 have no cause of action again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal on 05.10.2020 and in the appearance column their names were wrongly mentioned as Advocates appearing for Appellants No. 2 to 4 and in fact there was mis-representation and misconception which had resulted in the impugned order adversely being passed by the Tribunal. 52. The contra stand of the Respondents No. 1 to 3 is that because of the inadvertent mistake committed by the staff of the Tribunal the appearance of Appellants name in the impugned order was shown and in fact the Respondent Nos. 1 to 3 had added all the three Appellants in the WhatsApp group created by the Bench Officer of the Tribunal on 05.10.2020 and apart from that the Appellants were added in the morning at 10.00 a.m. 11.00 a.m. on 05.10.2020 and the Appellants could have informed the Learned Counsel to represent them and seek the date. Apart from this, the copy of the main petition since it was already served on the Appellants on 14.08.2020 they should have engaged some counsel by the time when the matter got listed on 05.10.2020. 53. In the instant case, although the Appellants have come out with the plea that the Appellant No. 2, his wife and both children were tested positive for COVID 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an act is an oppressive one or not is basically a question of fact. 56. Undoubtedly, the Tribunal has power to decide whether a particular transaction is a bonafide one entered into in the ordinary course of business without notice of any internal squabbles of the Directors of a Company. In a petition u/s 241 of the Companies Act, 2013 (i) materials ought to be supplied (ii) figures are to be furnished (iii) the allegations are to be proved. 57. Be it noted, that every illegal act may not be oppressive, some illegal acts can be considered oppressive depending upon the facts of the case. The Companies Act provides a remedy to the minority shareholders against oppression by majority shareholders by their continuous acts. The legality or illegality of an act has nothing to do with an oppressive or non-oppressive act and, therefore, the Tribunal must examine the facts of each case. 58. The plea of limitation is a mixed question of Law. The power of the Tribunal is to correct oppressive conduct and the said power under section 241-242 of the Companies Act, 2013 is a statutory one. 59. Section 420(1) of the Companies Act, 2013 enjoins that the Tribunal may, after giving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal can regulate its own procedure. Glimpses of NCLT Rules, 2016 65. Rule 37 of the NCLT Rules (part IV General Procedure) speaks of notice to opposite party in and by which the Tribunal shall issue notice to the Respondent to show-cause against the application or petition on a date of hearing to be specified in the Notice etc. Rule 38 of the Rules deals with service of notices and processes . Rule 39 deals with production of evidence by affidavit . Rules 40 relates to production of additional evidence before the Bench . 66. In fact, Rule 41 of NCLT Rules, 2016 pertains to Filing of reply and other documents by the Respondents . Rule 42 is concerned with Filing of rejoinder . Rule 43 relates to Power of the Bench to call for further information or evidence . Rule 44 mentions about Hearing of petition or applications . Rule 45 pertains to Rights of a party to appear before the Tribunal . Rule 46 deals with Registration of authorised representatives interns . Rule 48 enjoins Consequence of nonappearance of the Applicant . 67. In the present case the Appellants have come out with a plea that the impugned order of the Tribunal has paralysed, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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