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Judgment
ORDER
22.09.2022: Heard Mr. Swapnil Gupta, learned counsel for the Appellant and Mr. Sameer Jain, learned counsel who has appeared on behalf of the sole Respondent. The present appeal under Section 421 of the Companies Act, 2013 has been filed against an order dated 5th July, 2022 passed by the National Company Law Tribunal, Court V (Special Bench), New Delhi in IA /141/2022 filed in CP No.145/241-242/ND/2021.
By the said order while dismissing the application IA-141/2022 the Learned NCLT directed the Respondents to conduct business of the organization in accordance with the Articles of Association and strictly adhere to the Articles of Association read in consultation with Memorandum of Association.
Learned counsel for the appellant assailing the order submits that once the NCLT was persuaded to pass an order of dismissal as the petition had become infructuous, there was no reason available to pass such an order. He submits that it is not only the case that the NCLT has passed a simple direction, but the direction which has been given by the NCLT in relation to the prayer made by Respondent/applicant before the NCLT i.e. Relief No.(d) of the petition. It has been argued that if this order is not interfered with, there is every possibility that again and again the applicant/Respondent herein may approach the Tribunal with a view to harass the appellant on allegation of violation of direction which has been issued in the impugned order.
Learned counsel for the Respondent has opposed the appeal on the ground that there is no special direction passed by the Tribunal. It is only a direction to conduct business of the organization in accordance with the Articles of Association and strictly adhere to the Articles of Association read in consultation with Memorandum of Association. There is no reason for assailing the impugned order. We have heard both the parties and perused the material available on record particularly the petition which was filed before the NCLT. It is true that same relief was sought which was granted by the Tribunal but in the application besides prayer (d), other reliefs were also sought, which are as under:-
a)Allow the present application and grant an ex parte ad interim stay on passing resolution in the board meeting dated 30.06.2022, leasing out the company premises in violation to the AoA of the Company, till the present application is finally adjudicated by this Hon’ble Tribunal;
b)Allow the present application restraining the Respondents for passing resolution for leasing out the company’s immovable property, in violation to the byelaw i.e. Memorandum of Association and Article of Association of the Respondent company.
c)Allow the present application, directing Respondents to provide the mandatory information to the Applicant as mentioned in para 3 of the present application, in a time bound manner, in accordance with the AoA of the Company;
d)Direct the Respondents to strictly comply with the provisions of Companies Act and the byelaws of the Respondent Company, in conducting and managing the affairs of the company.
e)Direct the Respondents to act strictly in conformity with Clause 111-A “Reserve Matters” of the AoA and refrain from taking any action envisaged under Clause 111A “Reserve Matters” in the byelaws of the company without the express written consent of the Applicant forthwith.
f)Pass any order or direction, which this Hon’ble Tribunal may deem fit, in the interest of justice and equity and to redress the injustice caused to the Applicant by the Respondent.
It was not disputed during the hearing of this Appeal that submission was advanced on behalf of the appellant, who was Respondent before the NCLT that the petition filed by the Respondent herein had become infructuous. It is true that by the impugned order the Learned NCLT while accepting the request of the appellant herein dismissed the application as the same had become infructuous. However, further direction was given to conduct the business of the organization in accordance with the Articles of Association and strictly adhere to the Articles of Association read in consultation with Memorandum of Association.
Even if in the petition filed before the NCLT, had there been no such prayer we are of the opinion that while dismissing the petition the NCLT having inherent jurisdiction has not committed any error in passing such observation.
In view of aforesaid fact we find no ground in the appeal to interfere with the impugned order. It is simply a direction to conduct business of the organization in accordance with the Articles of Association and strictly adhere to the Articles of Association read in consultation with Memorandum of Association.
We find no merit in the appeal. The appeal stands dismissed.