TMI Blog2022 (8) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 18 of 2019 and Company Petition. The Acting President has rightly observed that Bench which has been hearing the Company Petition and Company Application has reserved the Orders on some applications and was fully competent to decide the Company Petition. Order dated 31st May, 2021 passed by the Acting President does not require any interference in exercise of our Appellate Jurisdiction. Company Petition No. 144 of 2016 was an Application alleging oppression and mismanagement. The remedy provided under Section 241 to any Member of a Company is a statutory remedy which has been provided to serve particular Objectives. The Tribunal has been conferred with ample power under Section 242, wide enough which encompasses expression make such order as it thinks fit . Sub-Section 2 of Section 242 as extracted above provides for, without prejudice to the generality of the powers, different orders which can be passed; The power under Section 242 entrusted to the Tribunal by statute are statutory powers which cannot be exercised by any arbitrator which is appointed in pursuance of any agreement between the parties. The question as to which disputes are arbitrable and which disputes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions are issued: a. The Company Petition No. 144 of 2016 be decided by the Adjudicating Authority on merits at an early date preferably within six months of the date on which copy of this order is produced before the Adjudicating Authority. b. Both the parties are retrained from filing any Company Application, Affidavit or Interlocutory Application in the Company Petition No. 144 of 2016 henceforth. c. The Adjudicating Authority shall decide the Company Petition No. 144 of 2016 on the basis of materials already on record. Appeal disposed off. - Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 - - - Dated:- 25-8-2022 - Mr. R. P. Khosla Versus Mr. Vikram Bakshi Mr. R. P. Khosla Versus M/s. Ascot Hotels Resorts Ltd., Mr. Vikram Bakshi, Mr. Wadia Parkash, Mr. Vinod Surha, Mrs. Madhurima Bakshi, Ms. Devika Bakshi (nee Talwar) , Ms. Kanika Bakshi Mr. Vineet Khosla Versus M/s. Ascot Hotels Resorts Ltd., Mr. Vikram Bakshi, Mr. Wadia Parkash, Mr. Vinod Surha, Mrs. Madhurima Bakshi, Ms. Devika Bakshi (nee Talwar), Ms. Kanika Bakshi Mrs. Sonia Khosla Versus Mr. Vikram Bakshi Ors. Mr. Rajinder Pal Khosla Versus Ris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrative expertise. Bakshi Group came forward to provide finance and administrative expertise for the project. An MoU dated 21.12.2005 was entered into between Khosla Group and Bakshi Group where Bakshi Group was to provide for necessary finance and to take charge of administration and managing the entire project. MoU envisaged transfer of shareholding in MRL from Khosla Group to Vikram Bakshi on certain conditions. Pursuance to MoU dated 21.12.2005, Mr. Vinod Surha and Mr. Wadia Parkash as the nominees of Mr. Vikarm Bakshi were appointed as Director of MRL. An Agreement dated 31st March, 2006 was executed for executing proposed project between Ms. Sonia Khosla wife of Mr. Deepak Khosla, Ms. R.P. Khosla, MRL and Mr. Vikram Bakshi. The Agreement recorded that 51 per cent shareholding in the MRL has been transferred to Vikram Bakshi. Due to certain reasons, the project could not proceed. This led filing of a Petition under Section 397, 398 of the Companies Act by Ms. Sonia Khosla against Bakshi Group alleging oppression and mismanagement. Company Petition prayed for various reliefs as contained in paragraph 7 of the Company Petition. Company Petition was filed on 13th August, 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 in Criminal Case No. 03 of 2008 directed for enquiry which Order was also challenged by the Bakshi Group by filing a SLP (Crl.) No. 6873 of 2010. Both SLP (Civil) 23796-23798 of 2010 and Criminal No. 6873 of 2010 filed by the Bakshi Group were heard by the Hon ble Supreme Court and decided by common Judgment dated 08th May, 2014. Hon ble Supreme Court in its Order had noted severe fight between the parties and taken note of different disputes which has arisen between the parties. Hon ble Supreme Court directed the parties to maintain status-quo in the meantime and opined that the CLB will proceed to decide the Company Petition No. 114 of 2007. High Court was directed not to proceed further with the Criminal Misc. (Co.) No. 03 of 2008. It was further observed that question as to whether Mr. R.K. Garg was validly inducted as Director shall be gone into by the Company Law Board the proceedings initiated by Mr. R.K. Garg in the High Court was held to have become otiose. Hon ble Supreme Court disposed of the SLP (Civil) and Criminal and in Paragraph 23 and 24 of the Order, following has been observed: 23. After considering the matter, we are of the opinion that it is not necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lications and directed the NCLT to complete the hearing in Company Petition No. 114 of 2007. Certain Orders passed by the NCLT were also upheld by this Tribunal vide Order dated 12th April, 2017, this Tribunal directed the completion of Company Petition expeditiously and preferably within a period of one month. After the Order dated 12th April, 2017, Mr. R.P. Khosla filed an I.A. No. 189 of 2017 in the disposed of the Appeal praying for recall of the Order and for fresh hearing in the Appeal. The said Application was disposed of by this Tribunal vide Order dated 02.11.2018. This Tribunal again directed the NCLT to hear the Company Petition on priority basis. The Tribunal noticed that Company Petition No. 114 of 2007 has not proceeded due to issues raised by one or other parties. 6. During pendency of Company Petition No. 114 of 2007 Khosla Group filed another Company Petition being Company Petition No. 144 of 2016 through Company MRL under Section 241 and 242 of the Companies Act, 2013 alleging oppression and mismanagement on similar grounds as was pleaded in Company Petition No. 114 of 2007. Certain additional grounds were also raised in Company Petition No. 144 of 2016. NCLT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such other short date this Hon ble Tribunal deems fit. In the alternative: 2. Re-assign the petition to a Division Bench that has the logistical capability to not only decide CA No. 18 of 2019 within the time-lines laid down by the Hon ble NCLAT vide its order dated 16.03.2020, but also complete adjudication of the petition within the time lines laid down in Section 422 of the Companies Act, 2013. In conjunction to (1) or (2) (prayer intended for Regular Bench): 3. If grant of interim relief be opposed, dispose off (ex parte) CA No. 23 of 2020 (interrorgatories) and CA No. 24 of 2020 (document s production) to facilitate disposal of CA No. 18 of 2019, by directing the concerned Respondent to answer the relevant interrogatory and/or produce the specified document within the statutorily-stipulated period of 10 days, or such other short period this Hon ble Tribunal deems fit. 4. Pass ex parte orders as prayed for above. 5. And pass such other order or further order or orders as this Hon ble Tribunal may deem fit and proper under the circumstances of the case. 9. In Transfer Petition, the Applicant has made reference to CA No. 18 of 2019 by which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are going to be pronounced on 31st May, 2021 could not be in the knowledge of the Acting President unless there is a nexus between the Acting President and Bench of Court No. IV. 12. The submissions of Learned Counsel for the Appellant has been refuted by Learned Counsel appearing for the Respondent and it is submitted that Company Petition No. 144 of 2016 were being heard by Bench consisting of Dr. Deepti Mukesh and Mr. Hemant Kumar Sarangi from September, 2019. Several Applications were filed, in some Orders were reserved and some were decided. The filing of Transfer Application by Khosla Group was abuse of process of the Court and was only with an intent to delay the disposal of Company Petition No. 144 of 2016. Learned Acting President has rightly rejected the Transfer Petition filed by the Appellant. 13. We have considered the submissions of Learned Counsel for the parties and have perused the record. 14. The Appellant itself in the Appeal has brought on record the copy of the Order dated 18.09.2019 passed by the Principal Bench consisting of Hon ble President and Shree S.K. Mohapatra where Principal Bench passed following Order: We have heard Mr. Deepak Kho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Petition from respective Bench to some other Bench. It is also further held that the Bench comprising Dr. Deepti Mukesh, Hon ble Judicial Member Shri Hemant Kumar Sarangi, Hon ble Member (Technical) is competent to hear the matter and it will keep hearing the respective Company Petitions as a Special Bench comprising Dr. Deepti Mukesh, Hon ble Judicial Member Shri Hemant Kumar Sarangi, Hon ble Member Technical. It is further clarified that the Bench is competent to pass orders in the applications already held, therefore this order shall not be construed as an order directing the Special Bench for re-hearing the applications already heard. 17. The judicial order of the Principal Bench dated 18.09.2019 has been noted above; The grounds taken by the Appellant himself is that the matter was assigned to Bench presided by Dr. Deepti Mukesh, Hon ble Judicial Member. Dr. Deepti Mukesh being in the Bench heard the various applications filed by the Appellant from September, 2019 consistently, the copy of the proceedings have been bought on record where several orders were passed by the Court No. IV consisting of Dr. Deepti Mukesh, Hon ble Judicial Member and Mr. Hemant Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench headed by Mr. Deepti Mukesh. When several Applications in Company Petition No. 144 of 2016 were filed which were heard and part-heard by the same Bench and same bench was continuing to hear the Company Petition and all other applications, no exception can be taken to hearing by such bench when the same Bench is continuing to hear from September, 2019. Other submission made by Mr. Khosla is that the Acting President was in communication with the members of the Bench otherwise how he would have been known that matter which is reserved is coming for pronouncement on 31st May, 2021. Firstly, the Impugned Order does not mention of any pronouncement on 31st May, 2021 only observation made in paragraph 5 is that some application was heard and orders reserved which is a fact reflected from the proceedings of the court. The Acting President has rightly observed that the Bench which has been hearing is competent to decide the Company Petition and there is no occasion for asking for re-assignment of the Petition to a Division Bench that has logistical capability to decide CA-18 of 2019 and complete Company Petition. The bench was fully competent and hence no orders were required to be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the rights duties or liabilities of the parties under, or by virtue of it, or otherwise, or any other matter in any way connected with or arising out of the subject matter of this Agreement, the parties shall in the first instance try and amicably resolve them by mutual negotiations. In the event such disputes or difference are not resolved amicably, they shall be referred to a single arbitrator to be agreed upon by the parties or, in default of such agreement, by three arbitrators, one to be nominated by each party and the third (acting as President of the Tribunal) to be nominated by the two parties nominated as arbitrators. The arbitration shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment of it for the time being in force. Where the dispute involves multiple parties, whether as claimant or as respondent, the multiple claimants, jointly, and the multiple respondents, jointly, shall nominate an arbitrator each. In this agreement, Khosla family are one party, VB and the Company are the other party. In the absence of such joint nomination and where all parties are unable to agree to a method for the constitutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021 before this Tribunal, under Section 421 of the Companies Act. It is stated in the written-submissions that challenge to such order is not confined merely to the Supreme Court under Article 136 of the Constitution of India and the same can be challenged before this Tribunal also. Additional Submissions advanced in the Written-Submissions is that even if the Order is not nullity, the Appeal under Section 421 of the Companies Act is very much maintainable against an Order allowing Section 8 Application. He submits that even if sans-jurisdiction bench has jurisdiction, the order is not sustainable on merits. Allegations of bias and repeated perversity has also been made. The submission which has been pressed by Mr. Khosla both in his oral submissions and written-submissions is that Section 8 Application does not lie in a Company Petition alleging oppression and mismanagement which seeks statutory relief. Allowing Section 8 Application tantamount to rejecting the Company Petition. Application under Section 8 arise out of contract between the parties and in the Arbitration only contractual reliefs can be granted. Arbitrator is not competent to grant any statutory reliefs hence Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment dated 31st March, 2006 executed between the Khosla and Bakshi Group provided specifically Arbitration Clause i.e. Clause 29. It is pleaded that earlier Section 11 Application was filed by Mr. Vikram Bakshi and Company for appointment of Arbitrator before the Delhi High Court and Arbitrator Tribunal was constituted by Order dated 29.02.2008 of the High Court however due to obstructive conduct from Mr. Deepak Khosla, all members of the tribunal resigned. It is submitted that the submissions of Learned Counsel for the Appellant that this Appellate Tribunal in its Judgment dated 12th April, 2017 has restrained filing of Section 8 Application, hence Section 8 Application was not maintainable, is incorrect. This Tribunal in its Order dated 12th April, 2017 noted that earlier Section 8 Application filed before the Company Law Board has become infructuous due to constitution of arbitral tribunal by Order of the Delhi High Court which Order in no manner preclude Respondents to file Section 8 Application. The Order dated 31st May, 2021 being non-appealable order, the present Appeal is not maintainable and to be dismissed. It is further submitted that Khosla Group also challenged the Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court. 28. Perusal of Section 37(1)(a) indicates that an Order refusing to refer the parties under Section 8 has been made appealable whereas the Order allowing Section 8 Application has not been made appealable. The above provision thus indicates that under Arbitration and Conciliation Act, 1996 no Appeal is provided against an Order allowing Section 8 Application. It was due to above reasons that Deepak Khosla during the course of submissions submitted that against the Order dated 31st May, 2021 he has remedy before the Supreme Court under Article 136 of the Constitution of India which liberty may be reserved. Despite the above submissions, Mr. Khosla during the oral submissions has challenged the Order dated 31st May, 2021 on various grounds as has been noticed above. 29. Now we need to notice the provisions of Companies Act, 2013 to find out as to whether the Order dated 31st May, 2021 passed by the NCLT is appealable under the Companies Act, 2013 despite their being no Appeal provided under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenge to said order, the Hon ble Supreme Court has observed that against the Order passed by NCLT, Appellant ought to have availed remedy before NCLAT as provided under Section 61 of the Code. The submissions that the Order passed under Arbitration and Conciliation Act allowing such application is not appealable hence remedy before the NCLAT was not available was rejected. In paragraph 13 of the Judgment, following has been laid down: 13. Before adverting to the contentions in this regard, it is to be taken note that against the order dated 09.06.2020 assailed in the special leave petition, Kotak India Venture in the normal course if aggrieved, ought to have availed the remedy of appeal by filing an appeal in the NCLAT as provided under Section 61 of IB Code. Having not done so, in a normal circumstance we would have chosen to relegate Kotak India Venture to avail the alternate remedy of appeal. The contention on behalf of Kotak India Venture that they do not have the remedy of appeal as it is an order disposing an application filed under Act, 1996 and not an order under the part as provided in Section 61 of IB Code is noted only to be rejected. The order dated 09.06.2020 is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members or any class of members. May apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this chapter. 35. Section 242 enumerates the powers of the Tribunal which can be exercised in an Application under Section 241. Section 241(1) and Section 242(2) are as follows: 241. (1) Any member of a company who complains that- (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or (b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company s shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal may direct; (l) imposition of costs as may be deemed fit by the Tribunal; (m) any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision should be made. 36. Company Petition No. 144 of 2016 was an Application alleging oppression and mismanagement. The remedy provided under Section 241 to any Member of a Company is a statutory remedy which has been provided to serve particular Objectives. The Tribunal has been conferred with ample power under Section 242, wide enough which encompasses expression make such order as it thinks fit . Sub-Section 2 of Section 242 as extracted above provides for, without prejudice to the generality of the powers, different orders which can be passed; The power under Section 242 entrusted to the Tribunal by statute are statutory powers which cannot be exercised by any arbitrator which is appointed in pursuance of any agreement between the parties. 37. The question as to which disputes are arbitrable and which disputes are not arbitrable has come up for consideration before the Hon ble Supreme Court in large number of cases. A two Member Bench Judgment of Hon ble Supreme Court in [(2011) 5 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial decision making is that arbitration is essentially a voluntary assumption of an obligation by contracting parties to resolve their disputes through a private tribunal. In paragraph 35 and 36, following was held: 35. Ordinarily every civil or commercial dispute whether based on contract or otherwise which is capable of being decided by a civil court is in principle capable of being adjudicated upon and resolved by arbitration subject to the dispute being governed by the arbitration agreement unless the jurisdiction of the Arbitral Tribunal is excluded either expressly or by necessary implication. In Booz-Allen and Hamilton Inc. v. SBI Home Finance Ltd.[13], this Court held that adjudication of certain categories of proceedings is reserved by the legislature exclusively for public fora as a matter of public policy. Certain other categories of cases, though not exclusively reserved for adjudication by courts and tribunals may by necessary implication stand excluded from the purview of private fora. This Court set down certain examples of non-arbitrable disputes such as: (i) Disputes relating to rights and liabilities which give rise to or arise out of criminal off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sider the applicability of Section 8 Application in the context of Section 7 IBC. In paragraph 29 of the Judgment, following has been laid down: 27. Therefore, to sum up the procedure, it is clarified that in any proceeding which is pending before the Adjudicating Authority under Section 7 of IB Code, if such petition is admitted upon the Adjudicating Authority recording the satisfaction with regard to the default and the debt being due from the corporate debtor, any application under Section 8 of the Act, 1996 made thereafter will not be maintainable. In a situation where the petition under Section 7 of IB Code is yet to be admitted and, in such proceedings, if an application under Section 8 of the Act, 1996 is filed, the Adjudicating Authority is duty bound to first decide the application under Section 7 of the IB Code by recording a satisfaction with regard to there being default or not, even if the application under Section 8 of Act, 1996 is kept along for consideration. In such event, the natural consequence of the consideration made therein on Section 7 of IB Code application would befall on the application under Section 8 of the Act, 1996. 40. Another Judgment whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by law, the right of election to choose arbitration in preference to the courts or public forum is either completely denied or could be curtailed. In paragraph 55 and 58 of the Judgment following has been laid down: 55. Doctrine of election to select arbitration as a dispute resolution mechanism by mutual agreement is available only if the law accepts existence of arbitration as an alternative remedy and freedom to choose is available. There should not be any inconsistency or repugnancy between the provisions of the mandatory law and arbitration as an alternative. Conversely and in a given case when there is repugnancy and inconsistency, the right of choice and election to arbitrate is denied. This requires examining the text of the statute, the legislative history, and inherent conflict between arbitration and the statute s underlying purpose with reference to the nature and type of special rights conferred and power and authority given to the courts or public forum to effectuate and enforce these rights and the orders passed. When arbitration cannot enforce and apply such rights or the award cannot be implemented and enforced in the manner as provided and mandated by law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to be exercised by the Civil Court in respect of any matter which the Tribunal is empowered to determine under the Companies Act, the bar is implicit to the arbitration proceeding on the subject which is covered under Section 241 and 242. The view which we are taking is fully supported by pronouncement by the Hon ble Supreme Court in [(2021) 4 SCC 379] M/s. N.N. Global Mercantile Pvt. Ltd. Vs. M/s. Indo Unique Flame Ltd. Ors. Hon ble Supreme Court had occasion to consider the provisions of Arbitration and Conciliation Act, 1996 and the issue of Arbitrability of dispute. While considering above question, Hon ble Supreme Court specifically referred the proceedings arising out of oppression and mismanagement etc. in paragraph 41 to 43 held as follows: 41. Traditionally, disputes relating to rights in rem are required to be adjudicated by courts and / or statutory tribunals. A right in rem is a right exercisable against the world at large. Actions in rem refer to actions which create a legal status such as citizenship, divorce, testamentary and probate issues, etc. A lis in rem is not arbitrable by a private tribunal constituted by the consent of parties. Actions in perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 45. Submissions of Learned Counsel for the Appellant that memo of parties was sent by the Respondent No. 1 at 02:38 PM and on the same day, Order was pronounced at 03:00 pm indicates that there was nexus with the Respondent No. 2 and the Member of the Bench who passed the order also deserved to be rejected. Learned Counsel for the Respondent has admitted that by email at 02:38 pm the memo of parties in C.A. No. 553 of 2020 was sent by Learned Counsel for the Respondent before the pronouncement of the Order. Filing of copy of the Memo of Parties in Application or Petition is required for convenience of court, and cannot be regarded as anything strange or non-permissible. The fact that in the memo of parties sent by Respondent No.1 there are same mistake as contained in Company Petition is also irrelevant and has no bearing. In view of the discussion, we are of the view that order dated 31st May, 2021 passed in Company Appeal No. 553 of 2020 is unsustainable. 46. Company Appeal (AT) No. 33 of 2022 This Appeal has been filed by Mr. Vineet Khosla challenging the Order dated 11th February, 2021 passed by the NCLT, Special Bench, New Delhi, rejecting Company Applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vi) as under: 8. Knowing the background of the petition filed in the year 2007 and another petition filed in the year 2016, both filed by the petitioner, we observe as under: i. The present petition is filed in the year 2016 and today almost after four years, the application is to add one party claiming to be shareholder/director as petition, without any justification or reasons to show that how without adding the name of the applicant in the petition filed by the company along with its shareholders/Directors under Section 241-242 of the Companies Act for the acts of oppression and mismanagement, the prejudice will be caused if, the applicant is not allowed to be impleaded or it is necessary for proper adjudicating of the petition. ii. Further, there is no evidence or documents placed on record to support or prove that non-inclusion of name of the present applicant will prejudice the adjudication of petition filed under Section 241-242 of the Companies Act. . iv. The necessity of joining the applicant as Petitioner no. 7 on the ground only that he is a member/director is not acceptable, specially in the proceedings under Section 241-242 of the Companies A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon ble Apex Court and Hon ble National Company Law Appellate Tribunal will be taken serious note of and no further applications will be filed which may compel us to put heavy cost. 50. The Order passed by NCLT dated 11th February, 2021 gives ample reason for rejection of impleadment application filed by the Appellant in the Company Petition No. 144 of 2016. The Application for impleadment was filed after about four years from filing of Company Petition. The claim of the Vineet Khosla Director is a contentious issue between the parties which is yet to be decided in Company Petition No. 144 of 2016. The Board Meeting in which Vineet Khosla was inducted as Director is valid or not is yet to be adjudicated. No error has been committed by the Adjudicating Authority in rejecting the impleadment application. Further as observed by NCLT, non impleadment of Appellant as Petitioner No. 7, there is no prejudice in prosecuting application under Section 241 and 242. Observations of the Adjudicating Authority in paragraph 8 as noted above give sufficient reason for rejecting the Application. 51. We do not find any infirmity in the Order dated 11th February, 2021 rejecting the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders in terms of prayer (i) above; and (iii) pass such other and further orders as this Hon ble Board may deem fit and proper in the facts and circumstances of the present case. 56. Averments in Para 7 of the application have been specifically pointed out, which reads as follows:- 7. The application filed under instructions of the Petitioner is on the premise that the Respondents No. 2 to 4 have been disqualified from acting as directors of the company. While reserving right to submit a detailed reply to the assertions made in this regard by and on behalf of the Petitioner, it is submitted that Respondents No. 3 and 4 have been validly appointed as directors of the company and their appointment as director s was validly affirmed and confirmed at the annual general meeting held on 30th September, 2006. The notice convening the AGM also reflected the said confirmation of appointment as an agenda item. The minutes however inadvertently do not record the approval/election as directors. However, it is an accepted fact that Respondents No. 3 and 4 have been acting as directors of the Company and have been discharging functions as such and the said fact is known and appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Counsels appearing for the Bakshi Group immediately agreed with the aforesaid course of action suggested by Mr. Cama. We are happy that at least there is an agreement between both the parties on the procedural course of action, to give quietus to the matters before us as well. In view of the aforesaid consensus, about the course of action to be adopted in deciding the disputes between the parties, we direct the Company Law Board to decide Company Petition No. 114 of 2007 filed before it by Ms. Sonia Khosla within a period of six months from the date of receiving a copy of this order. Since, it is the CLB which will be deciding the application under Section 340 Cr. PC filed by Ms. Sonia Khosla in the CLB, High Court need not proceed further with the Criminal Misc. (Co.). No. 3 of 2008. Likewise the question whether Mr. R.K. Garg was validly inducted as a Director or not would be gone into by the CLB, the proceedings in Co. Appeal No. (SB) 23 of 2009 filed by Mr. R.K. Garg in the High Court, also become otiose. 58. We have also noticed that Company Petition No. 114 of 2007 was subsequently withdrawn by the Khosla Group on 07.02.2020 with liberty to refile within three days. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... davit dated 20.02.2017 has been sworn by Mr. Vinod Surha, who was Respondent No. 3 in Company Petition No. 114 of 2007. The affidavit again is reiteration of the claim and case set up by the Respondent Bakshi Group. As observed above, various contentious issues between the parties being yet to be resolved in the Company Petition which is pending consideration before the NCLT, no grounds have been made out to initiate any proceedings under Section 340(2) of the CRPC or contempt proceedings under Section 425 of the Companies Act, 2013. 61. The case set up by the Khosla Group in its petition under Section 241-242 of the Companies Act, 2013 is yet to be adjudicated by the NCLT to find out truth of allegations. The attempt of Khosla Group to initiate criminal proceeding only on the basis of pleadings and averments made by Bakshi Group in their affidavit cannot be accepted, which according to us appears to be an attempt to side track the main dispute between the parties and to unnecessarily engage the Respondents in litigation. We, thus, are of the view that no grounds have been made out to accept Contempt Case (AT) No. 05 of 2019. Contempt Case (AT) No. 05 of 2019 is rejected. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 425 of the Companies Act, 2013 alleging deliberately violating the directions in the order dated 12.04.2017 r/w order dated 22.12.2016 passed by the Appellate Tribunal. 67. We may first notice the contents of orders dated 22.12.2016 and 12.04.2017 contempt of which is alleged by the applicant. Order dated 22.12.2016 passed by this Tribunal in Company Appeal (AT) No. 36 of 2016 is to the following effect:- ORDER 22.12.2016 Issue Notice. Requisites if any, if not filed be filed in the course of the day along with requisite fee for Speed Post. Ensure that the Notice on the respondent is issued by tomorrow. Also sent notice through e-mail address, if available. Post the matter on 5th January, 2017. In the meantime, the NCLT, New Delhi Bench (Tribunal) shall not hear or decide the Petition under Section 8 of the Arbitration and Conciliation Act, 1996 filed by the respondent. However, it will be open to the Tribunal to expedite the hearing of the Company Petitions and other applications, if any, pending before it and may decide on merit. 68. It is relevant to notice that the order dated 22.12.2016 was an interim order which culminated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has also made parties, Respondent No. 2 and 3, who appeared as advocates for the Respondent before the NCLT. The order dated 22.12.2016 and 12.04.2017 passed by this Tribunal did not contain any directions to the Respondent restraining filing of application under Section 8 of the Arbitration and Conciliation Act, 1996. Application under Section 8 has been filed being CA No. 553 of 2020 by the Respondent subsequent to passing of the aforesaid order and subsequent to Company Petition No. 114 of 2007 having been withdrawn by the Khosla Group in February, 2020. Observations made by the Appellate Tribunal in order dated 12.04.2017 with regard to Section 8 application filed in the year 2007 in Company Petition No. 114 of 2007 were to the effect to the said application has become infructuous. This Appellate Tribunal did not issue any directions restraining the Respondent from filing any Section 8 application in Company Petition No. 144 of 2016. A party can be held guilty of contempt of court when he willfully violates any order passed by the Court. 71. This Tribunal under Section 425 of the Companies Act is to exercise powers under the provisions of the Contempt of Courts Act, 1971 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 31.05.2022 is unsustainable. The order dated 31.05.2022 needs to be set aside and the Adjudicating Authority to be directed to decide the Company Petition No. 144 of 2016 on merits. However, we are of the view that the decision in Company Petition on merits shall not be possible unless the parties are restrained from filing any further affidavits, company applications and interlocutory application in the Company Petition No. 144 of 2016. The Adjudicating Authority has to decide the Company Petition No. 144 of 2016 on merits on the basis of materials already on the record. No fresh affidavit, application or any other materials by permitted to brought before the Adjudicating Authority by the parties. 74. In view of the foregoing discussion and our reasons and conclusions, we dispose off Company Appeal (AT) No. 31 of 2022, 32 of 2022 and 33 of 2022 and Contempt Case (AT) No. 05 of 2019, 12 of 2019 and 08 of 2021 in following manner:- (i) The Company Appeal (AT) No. 31 of 2022 and Company Appeal (AT) No. 33 of 2022 are dismissed. (ii) The Company Appeal (AT) No. 32 of 2022 is allowed. The order dated 31.05.2022 allowing application under Section 8 of the Arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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