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TMI Blog2020 (12) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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 Company Law Tribunal, New Delhi, Court No.- II, in CP/133/2020. 2. The National Company Law Tribunal, New Delhi, Court No.- II while passing the impugned order dated 05.10.2020, had observed the following: - "Counsel for the Petitioner is present. The Registry is directed to issue notice to the Respondents. Counsel for Petitioner is permitted to issue private notice to the Respondents by all modes and file proof of service along with an Affidavit on or before the next date of hearing. Counsel for the Petitioners submitted that they are the shareholders in the first Respondent company and together they are holding 37% of shares of the issued capital. It is submitted by the Counsel for the Petitioners that Respondents are selling property and taking the consideration in their accounts. In other words, the Respondents are misappropriating the property of the first Respondent company and in case the property is sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 the hearing on 05.10.2020 without informing by way of any e - mail, notice or letter - mobile no. of Appellant No. 2 and 3 were got included in WhatsApp chat group but no link was provided for attending virtual hearing on 05.10.2020 and that an ex-parte ad- interim order came to be passed by the Tribunal. 7. The Learned Counsel for the Appellants submits that the concerned Bench of the Tribunal sat only around 3.40 P.M. on 05.10.2020, the mobile no. of Appellant No. 2 and 3 was added in the WhatsApp group and the Appellant No. 2 and 3 noticed the WhatsApp group around 3.40 P.M. and since they had no clue as to the purpose and intent of the said group, the Appellant No. 2 and 3 quit the said group around 3.55 P.M. As a matter of fact, the Appellant No. 4 never joined even the WhatsApp group. 8. The Learned Counsel for the Appellants point out that in the order sheet dated 05.10.2020 of the Tribunal against the names of Appellant No. 2 to 4, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded 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 to submit that the First Appellant during March 2017, had decided to completely quit the First Appellant/Company and signed the Settlement Deed dated 19.04.2017, which was concealed by the first Respondent in the Company Petition. The First Respondent, before resigning his position as 'Director' of the First Appellant/Company use to look after the day- today affairs and with a view to siphon off the funds, instructed the suppliers to raise invoice on a higher price than the market price and the amount is to take back as kickback in cash and that the suppliers had given Affidavits. 12. It is the version of the Appellants that the First Respondent made false complaints with the Company's Banker Punjab & Sind Bank for freezing the banking operations to jeopardize the operations of the First Appellant/Company. However, the Bank had not freezed the banking operations because of the fact all 'Equal Monthly Instalments' were paid in time. 13. The Learned Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 executed and the balance plots are also in the process of being sold. Also, that the First Appellant/Company had no role to play in the sale of industrial plots of M/s. Durga Enterprises Pvt. Ltd. (the 6th Respondent) which had separate business operations. 20. The Learned Counsel for the Appellants takes a plea that the First Respondent levelled vague allegations qua 66 acres of land in the main company petition and portrayed as if the said chunk of land is owned by the First Appellant/Company and in fact, the same is owned by 8th Respondent. Besides this, the obligation / liabilities paid back by the First Appellant/Company relates to the period prior to the resignation of the First Respondent. In respect of the outstanding amount to the Punjab and Sind Bank out of the total availed credit facility of 173.46 crores, now only Rs. 68.37 crores are outstanding. 21. The Learned Counsel for the Appellants 1 to 4 points out that the Appellants No. 1 to 4 had made dedicated efforts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Learned Counsel for the Respondent No. 1 to 3 takes an emphatic stand that the Appellants were part of the 'WhatsApp Group' throughout the day and the matter was listed at 2.30 P.M. before the Tribunal in the cause list and that the Appellants were there in the group till the hearing of the petition and they left the group after the petition was heard. 26. The Learned Counsel for the Respondent No. 1 to 3 comes out with a plea that not only the copy of the Petition was already served upon the Appellant on 14.08.2020, they should have engaged Learned Counsels to appear on their behalf. According to the Respondent No. 1 to 3, the Appellants were added in the morning at 10 A.M. - 11 A.M. and they could have informed their Learned Counsels to be present and seek for a date. However, the Appellants were under the impression that nothing would happen and only when ad-interim order was passed by the Tribunal, they woke up and instead of approaching the Tribunal, they directly approach this Tribunal. 27. The Learned Counsel for R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the Properties, they are selling of the First Respondent Company and of the eighth Respondent Company, the answering Respondent wrote a detailed Letter dated 05.03.2020, to the Appellants seeking the relevant financial information of the first Respondent and Respondent No. 8. 34. It is stated on behalf of the Respondent No. 1 to 3 that their 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. 35. 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 Respondent No. 8. 36. The Respondent No. 1 to 3 had never signed any documents for 8 flats in J.M. Florence Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants. 41. The Learned Counsel for the Respondent Nos. 1 to 3 contends that the Appellants may be permitted to sell the properties provided that they file the affidavit and undertakings which run as under:- (i) The details of the properties so far being sold by the First Appellant and the Respondent No. 8, the amount released from the such properties, the amount deployed after releasing the sale consideration of such properties and the production of the documents of selling such properties be submitted before the 'National Company Law Tribunal'. (ii) The details of unsold inventory as on today in the First Appellant/Company and Respondent No. 8 be filed before the Tribunal. (iii) The unsold inventory in Appellant No. 1 and Respondent No. 8 may be sold only with the permission of the Tribunal and with the participation of the contesting Respondents. (iv) The amount realized from the selling of the properties should be deposited in the designated bank and the amount ought to be withdrawn after giving intimation to the Respondent No. 1 to 3 and the Tribunal. Furthermore, the utilization of the sale proceeds must be strictly monitored with an involvement of Respondent No. 1 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No. 8 47. The Respondent No. 1 to 3 have no cause of action against the Respondent No. 8. The Respondent No. 1 to 3 are neither Directors nor Shareholders nor Connected with the day-to-day affairs of the Respondent No. 8/Company. The Respondent No. 8 is neither a necessary nor proper party to the present lis and it is wrongly arrayed as one of the Respondents in the present Appeal. Appraisal 48. At the outset, this Tribunal pertinently points out that the Respondents 1 to 3 / Petitioners in Company Petition No. /133/2020(filed u/s 241-242 of the Companies Act) against the Appellants and others, before the Tribunal had sought the reliefs of oppression and mismanagement, appointment of an investigator to investigate into the affairs of the First Appellant / First Respondent Company for the diversion of funds in favour of third parties viz. subsidiary companies / associate companies and other parties, to find out the mis-appropriation and siphoning of the funds by selling the plots of the 7th Respondent Company at market price but looking the books of the First Appellant / First Respondent Company on a lesser price etc. 49. The 'National Company Law Tribunal', New Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is wife and both children were tested positive for COVID 19 and were self-home-quarantine on 05.10.2020 and that the Appellant No. 3 and 4 were out of station along with their family and friends for excursion during the weekend of 2nd 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 thing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njoins that the Tribunal may, after giving the parties to any proceeding before it, a reasonable opportunity of being heard, pass such orders thereon as it thinks fit. The settled legal proposition is that the rules of justice are to supplement the law and not to supplant the same. The term natural justice relates to the quality of fairness to be adopted and the term 'Natural Justice' is another name for common justice. Audi Alteram Partem 60. The 'audi alteram partem' rule is that no one ought to be condemned unheard. Assigning of reasons for a decision to be arrived at in an administrative but also a judicial of order is the basic hallmark of an order, passed by the Competent Authority / Court of Law / Tribunal. 61. As a matter of fact, the rule of 'just and proper opportunity of hearing' connotes that no order should be passed against a party without providing him a reasonable opportunity of being heard as per decision of Hon'ble Supreme Court 'Swadeshi Cotton Mills Company Ltd.' V. 'Union of India' reported in (1981) 51 Comp. Cases 210 255 (SC). 62. The term 'Natural Justice' is incapable of precise definition. The rules of 'Natural Justice' are not the edicts of a statute. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has paralysed, jeopardized and completely affected the operations of the First Appellant/Company in a grave manner thereby affecting the 'Allottees' 'Bankers' and 'Creditors'. 68. As far as the present case is concerned, ongoing through the impugned order dated 05.10.2020 in Company Petition No. /133/2020 passed by the National Company Law Tribunal, New Delhi, Court No.- II, it is latently and patently evident that it is an exparte ad-interim order wherein the registry of the Tribunal was directed to issue notice to the Respondents (Appellants and others). In fact, the Respondents No. 2 to 7 in the main Company Petition by the impugned order were restrained from selling the property of the Respondent No. 1 (Appellant No. 1) till further orders etc. and a copy of the order was directed to be obtained by the Counsel for the petitioners (Respondent Nos. 1 to 3 in Appeal) for sending to the Appellants and other Respondents for information and compliance. 69. Be that as it may, in the light of foregoing discussions, on a careful consideration of the contentions advanced on respective sides, this Tribunal, based on the surrounding facts and circumstances of the instant case i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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