Aiko Builders Pvt Ltd. vs Aloukik City LLP

This appeal is filed by the appellant against an impugned order dated 22.10.2024, passed in CA No.545/2022 in Company Petition No.1693/2019 which was dismissed in default on 24.10.2019, directing its restoration. It is the submission of the appellant that the Company Petition No.1693/2019 filed before the Ld. NCLT by the Respondent herein alleging oppression and mismanagement was dismissed in default on 24.10.2019 for non-prosecution. 2.The first restoration application was filed bearing MA No.3954/2019 but then the applicant did not appear and hence Ld. NCLT had dismissed the application for non-appearance on 19.12.2019. Thereafter second restoration application viz CA No.874/2020 was filed seeking the restoration of 1^st restoration application as well as Company Petition, but it was also dismissed for non-prosecution on 02.11.2021. Hence, the third restoration application bearing CA No.545/2022 seeking setting aside of the dismissal of the second restoration application and restoration of the Company Petition was allowed.

The impugned order was passed on 22.10.2024 allowing the restoration of the main company petition, subject to payment of cost of Rs.1.5 lakh to Bharat Kosh and Rs.40000/- to the appellant.

This order dated 22.10.2024 has been challenged before us stating inter alia if the Ld. NCLT was to allow the third restoration application it ought to have set aside the order dated 02.11.2021 whereby the second restoration application was dismissed. It was argued in a third restoration application, the Ld. NCLT ought not to have jumped the queue to allow restoration of the Company Petition when the 1^st and 2^nd application for restoration in respect of orders dated 19.12.2019 and 02.11.2021 were still pending, more specifically when the impugned order itself take notes of the callous attitude of the petitioner as well as of his counsel but then simply went to note the Respondent was 50% shareholder but due to the acts of the appellant herein was reduced to the minuscule shareholding of 0.51% and if the company petition is not restored, the respondent shall suffer miscarriage of justice.

If one peruses the impugned order it takes note of an affidavit dated 09.02.2023 filed on record by the Respondent herein alongwith his medical reports and of his daughter wherein various medical certificates were issued by Shree Krishna Day Care Center showing respondent was suffering from hypertension, vomitting etc on various dates and was under treatment of Dr Shyam Jha and in the year 2018 and his daughter was also admitted to Joslok Hospital but then the Ld. NCLT held it was not satisfied as to the genuineness of reasons for non-prosecuting the present matter. Thus where Ld. NCLT was itself not satisfied with the reasons given than as a matter of right all the three restoration applications ought not to have been allowed on merits and if at all an application was to be restored; it could have been only the second restoration application, dismissed on 02.11.2024.

The learned senior counsel for the Respondent submits the appellants have been duly compensated and hence they need not have any grievance and further that the substantive justice need to be done and that in all the three restorations applications, the restoration of the company petition was already prayed for and hence there was no illegality in restoring the company petition.

We disagree to the submission made by the respondent as the question is where the court itself is finding no cogent reasons for non-appearance, will the cost suffice the purpose. To our mind the answer would be ‘No’.

In the circumstances we note if at all the Court was inclined to give some relief to respondent it ought to have allowed the 3rd restoration application to restore the 2^nd application which was dismissed on 02.11.2021 and then could have examined the reasoning given for dismissal for the 1^st and 2^nd restoration application and the company petition or at least ought to have taken all these issues separately in the same order as issues of limitation were also raised.

Thus where the Ld. NCLT itself being not satisfied with the reasons given for non-appearance, ought not to have allowed the restoration of the company petition, dismissed in default 5 years before, that is, in the year 2024.

Thus we modify the order of the Ld. NCLT to say only the restoration application is allowed and that the reasons for allowing the earlier restoration applications, alongwith the restoration of company petition be dealt with separately. We, however, set aside the cost as imposed, though Ld. NCLT will be at liberty to levy cost in case the company petition is restored.

With these observations, we remand the matter to the Ld. NCLT for fresh consideration on first and second restoration applications.

Appeal is partly allowed.

Pending IAs No.8544 and 8545 of 2024 are disposed of.