TMI Blog2023 (10) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal , but they are guided by the Principles of Natural Justice . The power to grant permission to withdraw a suit with Liberty to file a fresh suit , is to be used very cautiously. Also that withdrawal of a suit , as plaintiff , wants to file fresh suit on a new cause of action , Leave of the court, is not required - A Court of Law , cannot exercise its discretionary jurisdiction de-hors, the Statutory Law and in fact, its discretion must be exercised in terms of the existing statute . It cannot be brushed aside, that the grant of such a relief , in the light of express provisions of the statute , to the contrary, is not permissible . After all, Equity must yield to Law , as opined by this Tribunal . More importantly, this Tribunal, points out that a Civil Court , does not Grant Leave , to file another suit . If the Law , permits, the plaintiff , may file another suit , but not on the basis of observations made by a superior court . This Tribunal , significantly, points out that a Petitioner , has no right to withdraw his Application / Petition filed before the Tribunal , unless, he is granted Leave , to withdr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the Appellants, that the Respondents had not argued as to what / how, they will be prejudiced, if Liberty is granted to the Appellants, and that the Respondents, objections , in present Appeals, which prove the fact, that they do not want, the allegations of Oppression and Mismanagement, being made against them to be decided. 4. The Learned Counsel for the Appellants, (in all Appeals) contends that the CP No. 75 to 78 of 2013 were firstly, Heard before the then, Company Law Board , on 31.10.2013. As a matter of fact, the Appellants, points out that even at the time of the Petition was moved on 31.10.2013, a Settlement was mooted and the parties were advised, to be present before the Company Law Board but, the Settlement had not fructified and the pleadings were completed. 5. The Learned Counsel for the Appellants, bring to the notice of this Tribunal , that a Mediator , was appointed, by means of an order dated 13.12.2018, passed by the Tribunal and Mr. S. Balasubramanian was appointed as the Mediator (Former Chairman of the Company Law Board). That apart, the Mediation failed, despite the best efforts of the Mediator and a Final R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the withdrawal , with Liberty and indeed, Section 424 of the Companies Act, 2013, enjoins that the Principles of Natural Justice would apply. 11. The version of the Appellants is that when the Companies Act, 2013 and NCLT Rules, 216 are silent, in regard to the powers of the Tribunal , to accord or refuse to grant Liberty when a Litigant seeks to withdraw a Litigation , as per Section 241/242 of the Companies Act, 2013, then, the Principles of Natural Justice , would require that the Petitioners / Appellants cannot be placed in a worse position than what they were, when they sought to withdraw with Liberty . 12. The Learned Counsel for the Appellants points out that the Respondents, in their counter in paragraph 12, had specifically, sought that the Tribunal should only permit withdrawal without Liberty . 13. The Learned Counsel for the Appellants contends that the provisions of Civil Procedure Code, 1908 are made inapplicable to the proceedings, before the Tribunal , completely, and further that the Tribunal should have taken note of the fact that the provisions of Civil Procedure Code , were made specifically applicable to a number of proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to file a fresh suit about the same subject matter into two parts. 16. The Learned Counsel for the Appellants, refers to the order dated 22.04.2023 of the Company Law Board, Chennai Bench, in the matter of N. Venkateshwar Rao and Ors. Vs. Sharvani Energy P. Ltd. reported in MANU/CL/0002/2013, wherein it is held, that the principles analogous to the Civil Procedure Code can be adopted for proper and effective adjudication and to prevent the abuse of process of this Bench, in Company Matters . 17. The Learned Counsel for the Appellants, cites the decision in Mr. Mario Shaw vs. Mr. Martin Fernandez Anr. (Civil Revision Application No. 630/1995) reported in MANU/MH/0024/1996, wherein it is observed that it is well settled that if an application is made for withdrawal of the suit with Liberty to file a suit, it is not open to the Court, to grant permission only for withdrawal without Liberty , to institute the proceedings , though it is open, for the Court, to reject such Application . 18. The Learned Counsel for the Appellant falls back upon the decision of the Hon ble Supreme Court in Kandapazha Nadar and Ors. Vs. Chitraganiammal Ors., reported in (2007) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat was in any way affected . 23. The Learned Counsel for the Respondents, refers to Rule 82(1) of the NCLT Rules, 2016, that prohibits the withdrawal of such an Application , without the Leave , of the Tribunal . However, in ordinary civil proceedings, for a person , to withdraw a proceeding , that was commenced , by him, the Law , does not envisage , any such Application, being made, to seek Leave , to withdraw . 24. The Learned Counsel for the Respondents, comes out with a plea that the Appellants /Petitioners had not specified as to the nature of events that required to be agitated , by seeking Liberty, to file a Fresh Petition . Also that, the Tribunal , had permitted the withdrawal , but had not granted any Liberty , except if the Appellant finds any future actions that would affect his rights and further that the exercise of discretion by the Tribunal, as per Rule 82 of NCLT Rules, 2016 is a flawless one. 25. According to the Respondents, the Companies in the four petitions were kept embroiled in a litigation for more than a decade, thereby affecting many stakeholders, including creditors , suppliers , employees, workmen and distributo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. From the facts and circumstance of the case as emanating from the judgements of the trial court and the first appellate court it is clear that the plaintiffs realised the weakness in the claim of exclusive right of user over the property and in order to get over the findings against them by the first appellate court they took recourse to Order XXIII Rule 1(3) CPC and filed the application for withdrawal of the suit with leave to file a fresh suit It is the duty of the court to feel satisfied that there exist proper grounds/reasons for granting permission for withdrawal of the suit with leave to file fresh suit by the plaintiffs and in such a matter the statutory mandate is not complied with by merely stating that grant of permission will not prejudice the defendants. 29. The Learned Counsel for the Respondents cites the decision of the Hon ble High Court of Madras in Duraikannu and Ors. V. Malaiyammal, 2003 3 Mad LD 551 to the proposition that failure of the petitioner to prove his own case, is never sufficient grounds to withdraw the suit with liberty. Also that the Appellant / Petitioner seeking to withdraw a petition, with liberty, on account of other sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, it was mentioned that the Appellant, being a minority, who was guilty of oppressing majority and in fact, when the Mediation failed and when the matter was right for Final Arguments , and when the Respondents were pressing and pushing for Final Hearing of arguments of the main Company Petitions , the Appellant filed a one paragraph affidavit dated 03.01.2023 to withdraw the Company Petition with Liberty . 36. It is projected on the side of the Respondents, (R6 and R4) that the Affidavit filed by the Appellant mentioned that the alleged subsequent developments , as the sole ground for withdrawal and for seeking Liberty. As a matter of fact, the Affidavit, had not explained as to the Nature of Liberty sought for, and what were the subsequent events. Further, why after ten years of prosecuting and at Final Hearing stage the Appellant was shying away, from inviting Final Orders from the Tribunal, since his conduct was absolutely blame worthy. 37. After hearing, the Respondent, had stated that he has no objection if the withdrawal was permitted without liberty so that, the Respondent would least be not being vexed with another litigation at this di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of Section 241 of the Act shall not be withdrawn without the leave of the Tribunal. 22. It is true that compared with the Code of Civil Procedure, the power of NCLT is broader when Rule 82 of the Rules is perused. NCLT would have absolute discretion regarding the withdrawal and the Petition cannot be withdrawn unless the NCLT grants leave. The discretion to grant permission or refuse cannot be exercised arbitrarily. In the present matter, it was stated before the NCLT that the contesting parties had settled their disputes between them and the Petitioner was seeking withdrawal. In such circumstances, only because the Appellant - Intervener had objections and wanted NCLT to keep the Petition pending, if the NCLT thought it fit to let the withdrawal take place, we do not think that the discretion exercised was arbitrary. 42. The Learned Counsel for R6 4, seeks in aid of the order dated 18.06.2022 of the Hon ble Karnataka High Court (vide Civil Revn. Petn. No. 2256/2000) in Siddagangappa Vs. Thimmanna (2002 SCC OnLine Kar 334), wherein at paragraph 3 4, it is observed as under: 3. Thereafter I. A. XII was filed. The trial Court found that the technical defect so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that he has no objection as to withdrawal of petition by the Petitioner. In the affidavit, the petitioner has clearly stated that because of the subsequent developments which have been taken place after filing of the petition, he may be permitted to withdraw the petition. Having gone through the affidavit, submissions made and no-objection given by Ld. Sr. Counsel for the Respondent, we permit the petitioner to withdraw the petition no. TCP/129/2016, with no liberty. The petitioner may however file petition if any cause of action arises in future. and with the aforesaid observations , dismissed the TCP/129/2016 as withdrawn and also dismissed the subsequent Applications , arising out of TCP/129/2016. 44. Before the Tribunal , in TCP/129/2016, the Appellant / Petitioner had filed an affidavit dated 03.01.2023, (solemnly affirmed at Coimbatore), wherein at para 2 3, it is averred as under: 2. I further state that various subsequent developments have taken place which necessitate me to withdraw the instant Petition with Liberty. I further state that no prejudice would be cause to any of the Respondents. 3. Hence, I most Humbly Pray that I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade applicable, specifically, to a number of procedure followed. 51. However, the plea of the Respondents No.1 to 5 8, (in Comp. App. (AT)(CH) 62 of 2023), Respondents No.1 to 3 6 (in Comp. App. (AT)(CH) 63 of 2023), Respondents No.1 to 3 6 (in Comp. App. (AT)(CH) 64 of 2023) and Respondents No.1 to 3, 6, 7 9 (in Comp. App. (AT)(CH) 65 of 2023), is that the very continuance of the Company Petitions proceedings for over 10 years was an act of oppression by the Appellant(s) and is against the public interest and the Appellants had not specified what or all the nature of events, that required to be agitated, by seeking Liberty , to file a Fresh Petition. Moreover, it is also contended by the Respondents, that Rule 82(1) of NCLT Rules, 2016, prohibits the withdrawal of such an Application, without the Leave of the Tribunal and also that the law does not prescribed any such applications being made to seek Leave to withdraw . 52. The Learned Counsel for the 6th Respondent and 4th Respondent, (vide Comp. App. (AT)(CH) Nos. 62, 63, 64 and 65/2023 (in Four Appeals), is that the NCLT Rules, 2016, are very different from the Civil Procedure Code and Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion 1941 Mad 46. Also that withdrawal of a suit , as plaintiff , wants to file fresh suit on a new cause of action , Leave of the court, is not required as per decision of the Hon ble High Court of Bombay in Mahadkar Agency and Anr. vs Padmakar Achanna Shetty, reported in AIR 2003 Bom 136 141. 60. It is the duty of court, to get satisfied, that there, exists proper grounds / reasons , for granting permission, to withdraw a suit , with Liberty to file a fresh suit, as per judgment of the Hon ble Supreme Court (vide Appeal (Civil) No.3287 of 2000) in K.S. Bhoopathy and Ors vs Kokila AIR 2000 SC 2132. 61. If a prejudice or deprivation of any right , which has become vested with the Respondent , by a finding recorded by a Trial Court, the permission should be refused , as per decision in Shri Guru Maharaj Anandpur Ashram vs Chander Parkash and Ors. AIR 1986 P H 399. 62. In reality, permission , cannot be claimed by a plaintiff , as a matter of right, and a permission for withdrawal of suit , to file fresh suit should not be granted, merely because the grant of permission , will not prejudice the defendant . 63. A Court of Law , cannot exercise its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he considered opinion of this Tribunal . 69. As far as the present Cases on hand before this Tribunal , are concerned the Companies , in the ( Four Company Petitions ) (before the National Company Law Tribunal , Chennai) were entangled , in Legal proceedings for more than a Decade and only noticing the objections , filed by the Respondents in respect of application(s) for withdrawal, the Tribunal had not granted Liberty . 70. Even the Mediator s earnest endeavour in Looking out, for a Settlement being arrived at, between the parties, had failed and a Failure Report , was submitted by the Learned Mediator , on 25.12.2022. Also, it cannot be ignored, that the Company Petitions filed earlier, before the Erstwhile Company Law Board , got transferred to the National Company Law Tribunal Chennai, after the Notification , of the National Company Law Tribunal , in terms of the Companies Act, 2013. 71. It is not out of place for this Tribunal, to relevantly point out that in the judgment of the Hon ble Calcutta High Court in Jalpaiguri Cinema Co. Ltd. and ... v. Promotha Nath Mukherjee and Ors. (Decided on 13 May, 1974) reported in India Kanoon (vide 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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