TMI Blog2022 (12) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... of being heard and they were denied two weeks period to file objection to report of Shri Ravish Kumar- Inspector appointed by the Tribunal , this Appellate Tribunal note form the Impugned Order that the Respondents therein/ Appellants herein have availed many adjournments in the matter under one pretext or other - this Appellate Tribunal do not find any error in the Impugned Order with reference to this aspect especially keeping in view that this is only interim measure subject to final CP which is yet to be disposed by the Tribunal along with I.A filed by the Appellant on maintainability issue. As regards the plea that the existence of the Company will be at `Stake since the Tribunal by the Impugned Order , has prohibited from withdrawal of any money from revenue collection. This `Appellate Tribunal will like to take this fact in to consideration that without regular cash flow available, it would be difficult for the concerned Company to pay Salary and other Operational Expenses. However, looking to various averments made and keeping in mind the Report of independent Inspector appointed by the Tribunal as per Companies Act, 2013 who has pointed out several irr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Board of the 9th Respondent convened a Board Meeting wherein one of Directors, the 1st Respondent herein was deputed to institute petition before the Tribunal . Simultaneously another Director, the 18th Respondent instituted Arbitration proceedings. Consequently CP/2l/KOB/2022 and AR/15/2021 were instituted and are pending before the Tribunal and before the Hon'ble Justice Udayabhanu, appointed by the High Court of Kerala for Companies Act, 2013, Case and Arbitration Case, respectively. 4. The Respondents in the meantime, filed an Application for appointment of an Inspector and after appointment of the Inspector by the Tribunal , the said Inspector filed a Report . During hearing, the Tribunal relying on the Report of the Inspector , passed the Impugned Order dated 06.06.2022 and directed the Appellants to: deposit the daily collection of the Respondent Companies in a separate Bank account/ Escrow Account from 7/6/2022 and that the said collection should not be utilised till further orders from this Tribunal 5. It has been alleged that the Impugned Order was in violation of the principles of natural justice and was passed in the course of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim reliefs to the Respondents. The Learned Counsel for the Appellants further stated that the provisions under Chapter XIV of the Companies Act, 2013 makes it clear that the Tribunal does not have any powers to appoint an Inspector rather it can only direct the Central Government to appoint Inspector to investigate into the affairs of the Company. 12. The Learned Counsel for the Appellants also pointed out that the Tribunal has failed to note that the order passed by the Arbitral Tribunal dated 11.04.2022 is prior to the Impugned Order dated 06.06.2022 and the said Arbitral Award protects the interest of the Respondents sufficiently and the daily collections of Appellant 5 are under the direct supervision of Arbitral Tribunal. The operative portion of the Arbitral award as under :- 39. As to the reliefs sought for, it has to be noted admittedly the respondent is in possession of the project and is operating the same also since the date of termination and opening of the project after the government permitted all such destinations to open after substantial decrease in Covid-19 pandemic. As already mentioned any order that stalls the functioning of the project w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any. The prayer to permit the staf of the respondents to take care of the assets and to see that no person enter without a legal entry ticket is not required at this juncture as it will result in needless interference in the operation of the project. The I.A is disposed of with the above directions 13. The Learned Counsel for the Appellants stated that the subject of termination of a commercial contract is outside the purview of the Tribunal , hence the application before the Tribunal itself was not maintainable. Hence, the Appellants had requested the Tribunal to hear first the maintainability issue as a preliminary issue, however the Tribunal clubbed maintainability issue along with the main company petition. Aggrieved by this, the Appellants filed W.P(C) 22116/2022 before the Hon'ble High Court of Kerala under Article 227 of the Constitution of India and vide order dated 11.7.2022 the Hon'ble High Court of Kerala directed the Tribunal to dispose of the petitions challenging maintainability. 14. The Learned Counsel for the Appellants pointed out that the Tribunal wrongly recorded that the Appellants have availed many adjournments in the matter, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of oppression and mismanagement has been raised only against the 9thRespondent herein in the main CP/21/KOB/2020 although, admittedly, other companies have been added as Respondents therein, and therefore the Tribunal erred in directing all the Respondent companies therein to deposit their Daily collections in a separate Bank Account/ Escrow Account. 20. The Learned Counsel for the Appellant also briefed this Appellate Tribunal that the debt claimed by Respondents 1 to 8 of Rs.3 Crores is secured by the residential house belonging to the 1stAppellant, for which SARFAESI proceedings have been already initiated and hence there was no need for present Impugned Order . 21. The Learned Counsel for the Appellants concluded stating that the Impugned Order dated 06.06.2022 was passed without considering ground realities without opportunity to the Appellants of being heard and without considering the ill-effect on the entire project. The Learned Counsel for the Appellants also stated that the 5th Appellant is in precarious financial conditions and finding difficult to pay the salaries of the employees and for the daily upkeep of the project. 22. The Learned Counsel for the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal to identify and appoint an inspector from its own panel. Based on the contentions of Respondent Nos. 1 to 8 in CA/36/KOB/2021in IA/198/KOB/2021 and after hearing both sides and perusing the whole records, the Tribunal appointed Ravish Kumar, an independent Chartered Accountant, as Inspector to identify the usage of assets and to list out the assets of Respondent no. 9 installed at Jatayupara Project and report the variation of the same with the list of assets reflected in the latest Audited Financial Statement. 28. The Tribunal passed the Impugned Order dated 06.06.2022 based on the contents of the Inspector's Report and also based on the prayers of the IA/198/KOB/2022 in CP/21/KOB/2020. The Learned Counsel for the Respondents pleaded strongly that the Impugned Order dated 06.06.2022 is purely in nature of temporarily measure to prevent siphoning of money before final Company Petition is decided by the Tribunal . 29. The Learned Counsel for the Respondents brought out that the Tribunal was compelled to pass an interim orders dated 07.03.2022, 22.04.2022 and 25.05.2022 giving directions to the Appellants to cooperate with the Inspector for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire assets of 9th Respondent Company were created and raised by the hard-earned investments of 150 investors, including Respondents No.1-8, at various stages. 9th Respondent Company had, under the signature of 1st Appellant, availed a Term loan from Dhanlaxmi Bank Limited, Chadayamangalam Branch, Kollam, Kerala of Rs. 3 Crore by mortgaging the assets of Respondent No 9 for investing in its own business activities and for meeting day to day expenditure. The Audited financial statements of clearly depict the details of the assets owned by their respective companies. However, Appellants are continuously raising the contention that the assets created in the Jatayu Project belong to 5th Appellant. The Learned Counsel for the Respondents stated that the form CHG-I filed by 9th Respondent under the signature of Appellant No. 1 for availing the loan by collateralising the assets of Respondent No 9 in Jatayu Project and hence, it is evident that the assets in the Jatayu Project belong to 9th Respondent. 37. The Learned Counsel for the Respondents also stated that the1stAppellant had availed a loan of Rupees Three crores from M/s Dhanlaxmi Bank Ltd, Chadayamangalam Branch , which turned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring it has been brought to notice of this Tribunal that vide Impugned Order , the existence of the project is in jeopardy as Appellants are not allowed to withdraw from the Revenue Collection being deposited in nominated account and therefore, it is extremely difficult for the Appellants to make the salary payments and to meet daily operational expenses. 44. From the averment made during hearing as well as from the records available following important orders of the Tribunal having brought to the notice of this Appellate Tribunal. It will be worthwhile to look into these orders before examining the issues raised in the present appeal. Some of the significant orders are as under:- (a) It has been brought to the notice of this Tribunal that the appointment of the Inspector was made on 12.12.2021, pursuant to an order in CA/36/KOB/2021, the Inspector allegedly got non-cooperation from the Appellants evident from the following observations made by the Tribunal in daily orders. In the daily order dated 07.03.2022, the Tribunal had stated the following. Shri Ravish Kumar submitted that the information furnished during his inspection and on examination of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners Shri Bijoy P. Pulipra appeared through VC. Learned counsel for R1 Smt. Sabeela CB, learned counsel for R2, R7, R9 amp; R10 Shri A Ajakumar, learned counsel for RB amp; R16 Shri Saji Varghese, learned counsel R11, R18 to R20 Shri Vinod V Luka, learned counsel for R12 and R13 Shri Arun Chandy, and learned counsel for R17, R21 and R23 Shri Mohan Pulickkal appeared through VC. None appeared for other respondents. Shri Ajakumar sought two weeks time to file Objection to the Report of Shri Ravish Kumar, Inspector appointed by this Tribunal. Shri Bijoy Pulipra submitted that the respondents are enjoying the revenue income of around Rs.2,50,000/- per day generated through the Investments made by the Petitioners and that is why respondents are deliberately dragging the matter unnecessarily. It appears from records that the respondents have availed many adjournments in this matter under one pretext or other. On hearing both sides and on thorough perusal of the whole case records including the report of the Inspector appointed by this Tribunal, this Tribunal hereby directs the Respondents to deposit the Daily Collection of the Respondent Companies in a sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) the business of the company is being conducted with intent to defraud its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose; (ii) persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members; or (iii) the members of the company have not been given all the information with respect to its affairs which they might reasonably expect, including information relating to the calculation of the commission payable to a managing or other director, or the manager, of the company, order, after giving a reasonable opportunity of being heard to the parties concerned, that the affairs of the company ought to be investigated by an inspector or inspectors appointed by the Central Government and where such an order is passed, the Central Government shall appoint one or more competent persons as inspectors to investigate into the affairs of the company in respect of such matters and to repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company, subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares; (b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members: Provided that the Tribunal may, on an application made to it in this behalf, waive all or any of the requirements specified in clause (a) or clause (b) so as to enable the members to apply under section 241. Explanation.-For the purposes of this sub-section, where any share or shares are held by two or more persons jointly, they shall be counted only as one member. (2) Where any members of a company are entitled to make an application under subsection (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them. CHAPTER XXVII NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL 426. The Tribunal or the Appellate Tribunal may, by general or special order, direct, subject to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Tribunal note form the Impugned Order that the Respondents therein/ Appellants herein have availed many adjournments in the matter under one pretext or other. We have also noted from the averments made by the Respondents that the Appellants were collecting revenue in cash and which remain unaccounted for even after the Tribunal order dated 06.06.2022 to deposit in dedicated bank/ Escrow Account and to collect revenue through online mode the same has not been done in letter and spirit. Therefore, this Appellate Tribunal do not find any error in the Impugned Order with reference to this aspect especially keeping in view that this is only interim measure subject to final CP which is yet to be disposed by the Tribunal along with I.A filed by the Appellant on maintainability issue. 52. This Appellate Tribunal noted from averments made before us that in response to the Impugned Order dated 06.06.2022, an Affidavit was filed by the Appellants with the Tribunal stating that the Appellants have complied with the Tribunal's order dated 06.06.2022 and have opened a Treasury Savings Bank Account with the Government Treasury, Chadayamangalam Branch bearing Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he wilful acts of the Appellants had resulted in the breach of the essence of the Interim Order dated 06.06.2022 passed by the Tribunal in CP/21/KOB/2020 and thereby, the Appellants had committed civil contempt on the Tribunal as provided under section 11 and 12 of the Contempt Court Act,1971 read with Section 425 of the Companies Act, 2013 and being aggrieved by the contempt actions of the Appellants, Respondents1to 8 had filed a contempt petition before the Tribunal . 56. Incidentally, it is seen that the `Arbitral Tribunal had passed an interim order dated 11.04.2022 directing the `Appellants to collect the money through online modes and deposit the daily collection to a separate Bank Account, however, the Appellants made an appeal against the order of the Arbitral Tribunal and the same is now pending before the Commercial Court. 57. This `Tribunal notes from the averments made before though the pleadings on CP/21/KOB/2020 was complete and the Tribunal , was ready to commence the final arguments on required of the Appellants the Tribunal vide dailyorderdated05.08.2022permitted the Appellants to file the additional documents. The Appellants allegedly some new ..... X X X X Extracts X X X X X X X X Extracts X X X X
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