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Judgment
O R D E R
14.09.2023: Heard Learned Counsel for the parties.
These two appeals have been filed against the same order dated 18th August, 2023 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court IV) in I.A. No. 3626 of 2023 which was filed by the Liquidator.
By our earlier Order, we directed the Application to be brought on record. Learned Counsel for the Liquidator has filed the copy of the I.A. No. 3626 of 2023 where Applicant has made following prayers:
“(A) AD-INTERIM EX-PARTE RELIEF
(i)To quash the letter dated 12 August 2023 sent by the Respondent No. 1 to the Applicant and direct the Respondent Nos. 1 and 2 not to take any coercive action whatsoever against the Applicant till pendency of this Application.
(ii)To direct the Respondent Nos. 1 and 2 not to issue any further letter/summons, etc. to, or initiate any proceedings against, the Applicant till pendency of this Application.
(iii)To direct the Respondent No. 1 to provide the copy of impugned complaint to the Applicant.
(B) FINAL RELIEF
(iv)This Hon’ble Tribunal may be pleased to admit and allow the present Application to quash all the illegal proceedings initiated by the Respondent Nos. 1 and 3 against the Applicant.
(v)To direct the Respondent Nos 1 and 2 to provide the details of actions taken by them on the complaints dated 13 July 2022 and 8 September, 2022 filed by the erstwhile Resolution Professional against theEx-Directors.
(vi)To direct the Respondent Nos. 1 to 3 to provide the details of actions taken by them on the complaint dated 27 April 2023 filed by the Applicant/Liquidator against the Ex-Directors.
(vii)To initiate the contempt proceedings against the erring officers of Respondent Nos 1 to 2 for creating hurdle in liquidation process of the Corporate Debtor at behest of the Ex-Directors.
(viii)To direct the Respondent No. 3 to initiate the appropriate proceedings against the erring officers of the Respondent Nos. 1 to 2 for their illegal acts.
(ix)To impose the maximum penalty on the erring officers of the Respondent Nos. 1 and 2 under section 235A of the IBC for violating the provisions of the IBC by certain hurdle in liquidation process of the Corporate Debtor under influence of the Ex-Directors.
(x)To direct the Respondent Nos. 4 & 5 to initiate the appropriate proceedings against the erring officers of the Respondent Nos. 1 to 2 for violating the provisions of the IBC.
(xi)To direct the Respondent No. 3 to pay INR 1,00,000 (Indian Rupees One Lakh only) to the Corporate Debtor towards the cost of these proceedings.
(xii)To direct the Respondent No. 3 to pay to the Applicant the compensation of INR 10,00,000 (Indian Rupees Ten Lakhs only) for mental harassment of the Applicant by the Respondent Nos. 1 and 2 with liberty to the Respondent No. 3 to recover the same from its erring officer.
(xiii)To pass such other orders/directions as deemed fit and necessary by this Hon’ble Tribunal in the interest of justice and equity.”
Learned Counsel for the Appellants submits that they were not party to the Application nor any relief was claimed against the Appellants however the Adjudicating Authority by the Order dated 18th August, 2023 directed the jurisdictional SHO to produce the Appellant before the Court. It is submitted that no earlier direction was issued by the Adjudicating Authority for appearance of the Appellants nor any direction was issued with regard to them.
Learned Counsel for the Liquidator submits that there were several applications filed before the Adjudicating Authority and the Directors have not complied the various orders. Learned Counsel for the Liquidator has also brought into notice the Order passed by the Hon’ble Bombay High Court dated 31st August, 2023 in Writ Petition No. 10244 of 2023 filed by the Liquidator.
We have considered the submissions of Learned Counsel for the parties and have perused the record.
The Order dated 18th August, 2023 does not refer to any earlier order of appearance of the Appellants. Direction has been issued to jurisdictional SHO to produce the persons mentioned therein on the next date of hearing. The Adjudicating Authority has ample jurisdiction to issue such direction to any person to present before the Court however there has to be reason recorded in the Order for issuance of any direction to produce persons in spite of summons when they do not appear before the Adjudicating Authority. The Adjudicating Authority has ample jurisdiction to direct to produce by the Police Authority but we do not find any reason in the order for such direction. We thus are of the view that direction in the order directing jurisdictional SHO to produce the persons in the Court is set aside. We make it clear that it shall be open for the Adjudicating Authority to take such further steps as may deem fit in the facts of the present case. In so far as the Order of the Bombay High Court is concerned, the High Court is proceeding in the Writ Petition, in this Appeal we see no reason to say anything more about the said order.
Both the Appeals are partly allowed with the aforesaid.