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TMI Blog2021 (5) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the National Company Law Tribunal, Division Bench - I Chennai. 2. Earlier, the National Company Law Tribunal, Division Bench - I, Chennai while passing the impugned order in CA/06/2021 in CP/393/2019 at paragraph 20 to 27 had observed the following: 20. " Significantly during the course of submissions made by the Learned Senior Counsel for the Applicants/Petitioner it was stressed that the parties before the Tribunal in relation to the main C.P were close relatives, which prompted this Tribunal to suggest for mediation with the parties with a view to resolve the dispute and on consent the Mediator has also been appointed to conduct the mediation who is in the stature of Retired Judge of the Hon'ble High Court of Madras. 21. However, as already stated the delay in the mediation proceedings seems to have led to frustration on the part of the Applicants/Petitioner, which had prompted them to move this Application before this Tribunal, as well as make submissions during the course of arguments in relation to the Committee Meetings proposed to be held on 18.09.2020 as well as on 10.10.2020. 22. However, the submissions of the Learned Counsel for the Respondents to count ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er valued sales by the Respondents? especially in the light of the 'Arbitral Award' dated 18.03.2021 rendered during the pendency of the present 'Appeal'. 4. The Learned Counsel for the 'Appellants' contends that the 'Arbitral Award' dated 18.03.2021 is between the same parties and it finds that the Respondents cannot be entrusted with the management of the properties. Also, that the 'Tribunal' failed to pass any protective orders, by exercising its 'inherent powers' and also failed to urgently hear the 'Company Petition'. 5. It is represented on behalf of the 'Appellants' that the impugned order has caused 'Miscarriage of Justice' not only to the 'Appellants' but equally to the First Respondent/Company. Besides this the impugned order, reposes faith in the wrong doers/respondents by expecting them to 'implicitly obey all the orders passed' and this reinforces the continuous oppression of the 'Appellants' and gross mismanagement of the First Respondent/Company. 6. According to the Learned Counsel for the 'Appellants' that the 'Appellants' are the petitioners in pending Company Petition No. 393/2019 and that they had filed the said petition aggrieved by the egregious and continuo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as merely agreed to the decisions stating that 'The Members of the Committee with the Respondents being 4 in number decide to go ahead with the sale of the property being the subject matter of the Agenda, while the Petitioners representative being one member of the Committee dissent for the same (vide page 191 of the Appeal Type set papers) The observer in respect of Agenda-5 has merely agreed to the decisions stating that "The Members of the Committee with the Respondents being 4 in number decide to go ahead with the prince of Rs. 80 lakhs per ground being fixed for the property which is the subject matter of the Agenda, while the Petitioners representative being one member of the Committee dissent for the same. (vide page 193 of the Appeal Type set Papers) (b) In the Committee meeting held on 18.09.2020, the Respondent being four number decided to sell 17 properties of the 1st Respondent that are worth approximately more than 200 crores. The Observer, despite knowing fully will that the Appellants were not present for the meeting, agreed to sell all the said properties by merely stating that "The members present deliberated and agreed upon the rates to be fixed for each of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Counsel for the 'Appellants' contends that the 'Tribunal' in terms of sections 241 and 242 of the Companies Act, 2013 is to act in the best interest of the Company and in the present case it had failed to act thereby committed a serious error of jurisdiction. Appellants Decisions: 16. The Learned Counsel for the 'Appellants' refers to the decision of Hon'ble Supreme Court, in Tin Plate Dealers Association Private Limited and others V Satish Chandra Sanwalka and others reported in (2016) 10 SCC Page 1 wherein at paragraph 39 it is observed as under: "The question whether a single act of oppression would enable the CLB to intervene or oppression must be the cumulative result of continuous acts should not require any debate in the facts of the present case which demonstrate a series of unacceptable decisions and actions on the part of the part of the Gupta Group. In the last resort, satisfaction that oppression has been committed has to be reached in the facts of each case." 17. The Learned Counsel for the 'Appellants' cites the decision of the Hon'ble Supreme Court in Dale & Carrington Invt. (P) Ltd and another V P.K.Prathapan and others reported in (2005) 1 SCC Page 212 at sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. The Learned Counsel for the 'Appellant' seeks in aid of the decision of the Hon'ble Supreme Court in Vurimi Pullarao v Vemari Vyankata Radharani reported in 2020 (14) SCC Page 110 at Special Page 113 wherein at Paragraphs 15 to 17, 20, 21 and 24 it is observed and held as under: "The plaintiff who is entitled to assert a claim for relief on the basis of a cause of action must include the whole of the claim. A plaintiff who omits to sue in respect of or intentionally relinquishes any portion of the claim, shall not afterwards be entitled to sue in respect off the portion omitted or relinquished. This is the mandate of Order 2 Rule 2(2). Order 2 Rule 2(3) stipulates that a person who is entitled to OC nan one relief in respect of the same cause of action may sue for all or any of such reliefs. However, a plaintiff who omits to sue for all the reliefs, without the Leave of the court, shall not afterwards sue for any relief so omitted. The leave of the court will obviate the consequence which arises under Order 2 Rule 2(3). In the absence of leave being sought and granted, a plaintiff who has omitted to sue for any of the reliefs to which they were entitled to sue in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale was reserved until 25-10-1996. Notice of performance was issued on 11-10-1996 to which the defendant had replied on 13-10-1996. The cause of action for the suit for specific performance had arisen when the plaintiff had notice of the denial by the defendant to perform the contract. On 30-10-1996, when the suit for injunction was instituted, the plaintiff was entitled to sue for specific performance. There was a complete identity of the cause of action between the earlier suit and the cause of action for the subsequent suit. However, the plaintiff omitted to sue for specific performance. This is a relief for which the plaintiff was entitled to sue when the earlier suit for injunction was instituted. Having omitted the claim for relief without the leave of the court, the bar under Order 2 Rule 2(3) would stand attracted. (Para 20) Virgo Industries (Eng.) (P)Lid. v. Venturetech Solutions (P) Lid. (2013) 1 SCC 625: (2013) 1 SCC (Civ) 679: Pramod Kumar v. Zalak Singh. (2019) 6 SCC 621 (2019) 3 SCC (Civ) 370. relied on But the case of the plaintiff in appeal is that in order that the bar under Order 2 Rule 2 be attracted, it is necessary that the plaint in the earlier suit must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the subject-matter of the second suit is the same as that in the previous suit. Now coming to the case before us in the first suit Dr. Madan Lal was seeking to enforce his right to partition and separate possession. In the present suit, the plaintiff is seeking possession of the suit properties from a trespasser. In the first case, his cause of action arose on the day he got separated from his family. In the present suit the cause of action, namely, the series of transaction which formed the basis of his title to the suit properties, arose on the death of his adoptive father and mother. It is true that both in the previous suit as well as in the present suit the factum and validity of adoption of Dr. Madan Lal came up for decision. But that adoption was not the cause of action in the present suit. It was merely an antecedent even which conferred certain rights on him. Mere identity of some of the issues in the two suits do not bring about an identity of the subject-matter into the two suits. As observed in Rakhma Bai v. Mahadeo Narayan, the expression "subject-matter" in Order XXIII, Rule 1 Code of Civil Procedure, means the series of acts or transaction alleged to exist giving r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amy V B.Francis Jagan 2001(6) SCC at pages 473 & 474 wherein at Paragraphs 8 & 10 it is observed as under: "It is apparent from Section 45 of the Karnataka Rent Act that fresh application under the Rent Act could be summarily rejected only if (i) the proceedings are between the same parties or under whom they or any of them claim, and (ii) substantially the same issues as have been finally decided in a former proceeding under the Act arc raised. Thus, the section as such, i1ncorporates principles of res judicata. In the present case it would have no application as the previous proceedings for taking possession of the premises were not pressed and stood disposed of without deciding any issue. (Para 8) Rule 1, sub-rule (4) of Order 23 CPC would have no application in a proceeding initiated for recovering the suit premises on the ground of bona fide requirement which is a recurring cause. Order 23 Rule 1(4)(b) precludes the plaintiff from instituting any fresh suit in respect of such subject-matter or such part of the claim which the plaintiff has withdrawn. In a suit for eviction of a tenant under the Rent Act on the ground of bona fide requirement even though the premises remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent Nos. 1to 5 comes out with a plea that the 'Appellants' submissions were limited to seek an 'injunction' on the sale of the First Respondent/Company's properties and the said attempt not only fails to have any correlation with the ambit of 'Appeal' but it is also covered by the consent of the 'Tribunal' dated 16.04.2019, which had attained 'Finality'. 28. The Learned Counsel for the Respondents No. 1 to 5 contends that in the consent order a Five member 'Committee' was constituted in proportion to the shareholding of the family/parties, the said Committee is to discuss and decide the minimum price of the lands to be sold, based on the prevailing market rates, any differences in opinion in respect of 'ERP' rates is to be resolved by the 'Observer' amicably, for the plots books and sold, the 'Sale Reports ' are to be submitted to the 'Committee' on a periodical basis. In short, the 'mechanism' spelt out in the 'consent order' was followed and complied with scrupulously by the parties. 29. The Learned Counsel for the Respondents forcefully submits that the 'Price Fixation' was decided unanimously and as such, the 'issue' of 'Observer' resolving any dispute does not arise. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction on the sale of properties and to lend support to the contentions, the Learned Counsel for the Respondent 1 to 5 relies on the decision of Hon'ble Supreme Court in Tata Consultancy Services v Sirus Mistry reported in (2021) SCC online SC 2 (vide paragraphs 17.9 and 17.15) wherein when the relief is not even sought before the 'Tribunal' such a reliefs cannot not be granted by the 'Appellate Tribunal'. 34. The Learned Counsel for Respondents No. 1 to 5 submits that for the first time the 'Appellants' have raised the concerns pertaining to the conduct of the 'Observer' and in fact, they are made to make out a case for the grant of interim reliefs. As matter of fact, no such allegations were raised against the 'Observer' before the 'Tribunal' although it took charge on 12.06.2019. In reality, paragraph 18 of the impugned order rightly observes that the 'Appellants' were given adequate opportunities to provide bonafide purchasers in respect of the properties being sold by the First Respondent/Company. In short, it is the version of the Respondents No. 1 to 5 that without providing an opportunity to address the allegations against the 'Observer', no aspertions can be caused against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ially because of effect of Covid 19 pandemic. 40. The Learned Counsel for the First Respondent projects a plea that pending adjudication on 'serious issues of maintainability' no interim reliefs of the like claimed by the 'Appellants' in the instant appeal can be granted and in this regard, places reliance on the judgment of this Tribunal in Solitaire Capital India and another Vs Vipul SEZ Developers Private Limited & ors, Comp App (AT) No. 268 /2019 (vide para no. 8). 8th Respondent's Submissions: 41. The Learned Counsel for the 8th Respondent contends that the submissions of the 'Appellants' on the merits of the Company Petition and seeking for 'interim orders' were negative by the 'Tribunal' and indeed, the 'scope' of the present 'Appeal' is limited to the extend that the validity of the order in dismissing the application filed for advancing the Hearing. 42. The Learned Counsel for the 8th the Respondents points out that no submission can be advances on merits by the 'Appellants', in the light of the fact that the 'maintainability' has been raised and a 'Mediator' was appointed on the 'Consent of the Parties' and the 'Report' is awaited. 43. The Learned Counsel for the 8th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties to the Company Petition and the Appellants/Applicants and the Respondents were to meet in the presence of an observer viz., Mr.Om Prakash Ellanty, (Learned Senior Counsel), to discuss among other things and finalise the rates for the properties to be sold and the said Committee is functioning in accordance with the order dated 16.04.2019 ever since, including in respect of the committee meetings that took place on 18.09.2020 and 10.10.2020 respectively. As a matter of fact, the Appellants/ Applicants were given notice of the meetings dated 18.09.2020 and 1 0.10.2020, but they had not attended the same. In short, the Appellants/Applicants were aware of the decisions in respect of the properties being sold considering the fact that they were the subject of committee meetings, which they had not chosen to attend. 47. That apart, in the Counter the Respondents No.1 to 4 had stated that earlier observer Mr.Sankaranarayanan (Learned Senior Counsel) had stepped down because of baseless and false accusations levelled against him by the 2nd Appellant/Applicant, again, the Appellants have resorted to casting baseless aspersions against the present observer with a view to stall the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1956. It is to be pointed out that allegations of oppression and mismanagement concerning mixed question of law and fact could not be decided at the Interim Stage. 51. The term 'Oppression' is any act exercised in a manner harsh, wrongful and burdensome manner. The 'Phrase' 'Affairs of Company' are being conducted 'points out a continuous wrong', the proceedings are meant to be in public interest of the Company or in the commercial interest of the company. The Tribunal can take preventive and a curative action for regulating the conduct of the Company's affairs in future and to bring to an end the matters complained of. It is to be pointed out that unfair utilisation of powers and impairment of confidence in probity with which the company's affairs have to be conducted, (in contra distinction) as distinguished from just resentment on the minority's part are the vital facts that are to be kept in mind by the 'Tribunal'. 52. In so far as, the 'consent order' is concerned, the 'consent' is given by the parties after great deal of deliberations and securing the legal advice to an order of a 'Tribunal' which has been completed and perfected, etc. As such, the 'consent order' ought n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 58. On behalf of the 'Appellants' a reference is made to an 'Arbitral Award' dated 18.03.2021 in regard to the resolving of the parties dispute concerning the dissolution of partnership firms and for consequent division of all the assets held inter se the parties viz. M/s.V.G.P. Panneerdas & Company, M/s. VGP Investments and VGP Beach Housing arising out of Partnership Deeds dated 27.08.1993 and 01.01.1994 respectively. 59. According to the 'Appellants', the Arbitral Tribunal in its award held that "the Respondents 1 to 4 have full control over all the resources which they enjoy without sharing with others. They have falsely denied all the books of accounts as having been lost and the data in computers computed. They cannot be trusted with management of properties during the process of liquidation of assets and before distribution and appointed a receiver to take possession of assets of partnerships." and that observations were made about the 'malicious intent' and 'mismanagement' done by the Respondents 2 to 5. Therefore, the 'Arbitral Award' is to be taken on record by this 'Tribunal'. 60. Conversely, it is the submission of Learned Counsels for the Respondents 1 to 5 that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.04.2019 in main Company Petition No.393/2019 to the effect that keeping in view the interest of the R1 Company both the parties had agreed for setting up of 'five member committee' headed by one 'Observer' and constituted a 'five member committee' comprising three representatives being appointed by the Respondent Nos.2, 3 and 4, one by the Respondent Nos.5 and 6 ; one by the 1st Petitioner and Mr.R. Shankaranarayanan, Senior Advocate was appointed as an 'Observer' and further it was mentioned that the Committee shall have the mandate to decide ERP rates as per the market value, prevailing in the area where the properties are situated, etc. 66. Also the 'Tribunal' in the Interim Order dated 16.04.2019 in the main Company Petition No.393/2019 had proceeded to observe that in case, any issue arises with regard to fixing ERP rates on which there is difference of opinion among the members, the same will be resolved by the 'Observer' amicably and it was made clear that all the pending booking shall also be subject to the ERP rates fixed by the 'Committee' and procedure mentioned. Disposition On a careful consideration of contentions projected on either side, this 'Tribunal' on goi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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