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Judgment
ORDER
06.07.2023: Heard Mr Vijay K Gupta, learned counsel for the Appellant and Mr. Dhruv Dewan, learned counsel for Respondent. The present appeal has been preferred under Section 421 of the Companies Act, 2013 against an order dated 07.03.2023 passed by the National Company Law Tribunal, New Delhi Court IV (hereinafter referred to as ‘NCLT’). In the Memo of Appeal the following relief has been sought for:-
The impugned order dated 07.03.2023 passed in CP/86/ND/2022 by Hon’ble NCLT-IV may kindly be set aside;
Hon’ble NCLT may kindly be directed to decide the maintainability of CP/86/ND/2022 as filed by the Respondent before proceeding further in the matter.
Pass any such order(s) as the Hon’ble Court may deem fit in the facts of the present case.
It is better to reproduce the impugned order as follows:
“Contempt Petition /2/ND/2023
We have heard the submissions made by the Ld. Counsel for the Petitioner/Applicant. The reply by the Respondents is not available on the e-portal of the Tribunal. Therefore, the Respondents/their Counsels are directed to ensure that reply is reflected on the e-portal of the Tribunal and they also make themselves present before this Adjudicating Authority on the next date of hearing and show cause as to why the Contempt Application should not be allowed. It is made clear that no further opportunity will be given to the Respondents in this matter. Court-Officer may serve e-notice of this order to the Respondents as well as the Counsel for the Respondents. Petitioner may also serve a private notice/today’s order to the Respondents with a specific direction to note the same and present on the next date of hearing.
IA/313/ND/2022
We have heard the submissions made by the learned counsel for the Applicant. No reply is filed by the Respondents in this matter. Therefore, the Respondents are directed to file the reply. Further, the Respondents Company No.1 is directed to file the reply. Further the Respondents Company No.1 is directed to provide the Bank Account Statements from 2022 onwards to till date to the Applicant and shall invariably provide to the Applicant the Bank Account of Respondent No.1 Company on fortnightly basis.
All other reliefs prayed in the present application will be considered after hearing of the parties on merits. Earlier interim order passed in this matter shall continue till the next date of hearing.
Let the matter be fixed for hearing on 25.304.2023.”
Mr. Vijay K Gupta, learned counsel for the appellant at the very outset submitted that it is true that in the relief portion a prayer has been made for setting aside the order dated 07.03.2023 but the fact remains that he is assailing the order only in respect of IA.No.313/2022. The order has been assailed primarily on the ground that the Learned NCLT has not recorded anything as to whether any prima facie case in favour of the respondent was made or not. He further emphasised that before passing the order the appellant had already filed reply in company petition raising issue of locus of applicant before NCLT who is sole respondent before this Tribunal. He has further argued that in a proceeding there was no reason to entertain subsequent prayer for grant of interim relief. At the time of arguments he has placed heavy reliance on an order dated 27.05.2022 to elaborate that maintainability issue was also raised and it remained pending. In sum and substance it has been argued that without fulfilment of three requirements for passing order, interim relief has been granted. It was argued that before passing interim order the learned NCLT was to record that there was prima facie case, balance of convenience and no irreparable loss. However, it has been argued that no reason for the same has been recorded and on this ground interim order is required to be set aside. He further submits that while petition for interim relief was already pending there was no reason to pass any subsequent order in favour of the respondents. Accordingly he submits that the impugned order is liable to be set aside.
Mr. Dhruv Dewan, learned counsel for the Respondent opposing the appeal submits that the appeal is liable to be rejected on the sole ground that the order impugned is an innocuous order. He submits that by the impugned order the learned NCLT has only directed the appellant herein only to provide the bank statement to the applicant who is respondent herein. He further submits that the Respondent herein had filed an application under Section 241, 242 for oppression and mismanagement in the appellant company and during pendency of the said application with the consent of the parties a Mediator was appointed. However, subsequently mediation failed. He further submits that earlier Respondent was provided bank statement. However, after an order was passed by the NCLT on 12.07.2022 the Respondent was prevented to access to bank statement and was stopped and this was the reason that the Respondent was constrained to filed an IA which was number as IA No.313/2022 with a prayer to direct the appellant herein to provide bank statement. On such request learned NCLT has passed part of the impugned order. He submits that IA i.e. IA No.313/2022 was filed on 22.11.2022 after serving advance copy on appellant and thereafter on 16.01.20233 notice was issued for filing reply. Since no reply was filed by the appellant herein before the NCLT, the NCLT was left with no option but in the meanwhile an interim order was passed directing the appellant herein to provide bank statement to the respondent herein.
Mr. Dhruv Dewan, learned counsel for the Respondent has also drawn our attention to running page 240 to 244 of the Memo of Appeal which is part of IA No.313/2022. Accordingly it has been argued that by way of passing such interim order the learned NCLT has not committed any error. He has further argued that appellant is raising a plea that the company petition was not maintainable in view of Section 244 but fact remain that the Respondent was having more than 11% shareholding which has not been disputed. However, the Respondent herein was claiming shareholding upto 39.60%. According to Mr. Dhruv Dewan, learned counsel for the Respondent there is no reason to interfere with the impugned order.
Mr. Gupta in rejoinder submits that the statement of non-disputing 11% of the shareholding is completely incorrect and he reiterated that the Respondent is not shareholder of the company in question.
Besides hearing learned counsel for the parties we have perused the material available on record particularly the impugned order. In the relief portion there is no specific prayer as to appellant is assailing which order of NCLT passed on 7.3.2023. Learned NCLT has passed two orders; one in a contempt petition 2/ND/2023 and another on an application i.e. IA No.313/2022 which was filed by the Respondent for interim relief. Normally without specific pleading no relief can be granted. However, during arguments Mr. Gupta argued that he was confining his relief against order passed in IA No.313/2022. During course of hearing learned counsel for both the parties had taken us to order passed by NCLT which are order dated 27.05.2022 and order dated 12.07.2022. Both the orders are reproduced hereinbelow:
“27.05.2022: Part arguments have been heard. At this stage, during the course of arguments, the parties are inclined to have mediation in between the parties, because this company pertains to a family member.
In the meanwhile, it is being stated by ld. Sr. Counsels Shri Arun Kathpalia for the respondent that there will no General Meeting, no change of share capital and no alienation of any property of the company in any manner.
As the parties want to have mediation, therefore, with the mutual consent of Ld. Sr. Counsels Shri Krishnendu Dutta and Shri Arun Kathpalia for both the parties, a common Sr. Mediator will be appointed, who will try to mediate between the rival parties. Accordingly, parties are referred to Ld. Mediator. Let the matter be taken up for part hearing on the point of interim relief on 12.07.2022 as part arguments have already been heard.”
“12.07.2022- Learned counsel for the parties, in view of the previous order sheet, have hereby agreed that Mr. P Nagesh, Sr. Counsel be appointed as “Mediator” in the present matter to mediate between the petitioner and respondent, (who are closely related, being between the father and sons).
Accordingly, Mr. P Nagesh, Senior Advocate is appointed as “Mediator’. He would file brief report within three weeks.
Earlier interim order dated 27.05.2022 shall continue till the next date of hearing. If the parties do not come to any settlement during mediation, then the respondent shall file the reply positively on or before the next date of hearing.
Further it is directed that in the meantime none of the parties shall purchase any items from the Company’s funds for their personal use.
Let the matter be fixed for 2308.2022.”
Of course, at the time argument, Mr. Gupta has emphasised that he had filed an application raising locus of the Respondent and the same was heard orally and the issue of maintainability was raised, however, he was unable to satisfy by both the orders that the issue of maintainability was argued or not. After going through the aforesaid orders it is evident that the issue of maintainability was not discussed by learned NCLT. This fact is further demolished on the basis of reply filed by the Appellant before the NCLT which was filed on 21.11.2022 i.e. much much after the aforesaid two orders were passed. It is true that objection of locus has been raised.
Before further proceeding we would like to reproduce para 11(a) and para 13 of the application which was filed on 22.11.2022 as follows:
“11(a) Until about 21.08.2022, the Applicant had internet and mobile access to the bank account of the Respondent No.1 with Axis Bank which is the main account of Respondent No.1. It was for this reason that in the course of the hearing on 12.07.2022 the Applicant could show to this Hon’ble Tribunal how the funds of Respondent No.1 company were being directed for the personal expenses of Respondent No.2. Realizing that continued access of the Applicant to the Bank statement of Respondent No.1 company with Axis Bank would expose the Respondents continued acts of siphoning and embezzlement, the Applicant’s access to the bank accounts of the Respondent No.1 has been stopped from on or around 21.08.2022. This has resulted in a situation where the Applicant has no visibility on any financial transaction concerning the Respondent No.1 company. A snapshot retrieved from the mobile banking application of Axis Bank showing that the Applicant’s access to the account has been disabled is annexed herewith and marked as Annexure-6.”
“13.It is submitted that because of all the above, the Applicant today is in complete dark about the affairs and conduct of business of Respondent No.1 company. Thus, the Applicant is not in a position to know whether the affairs of Respondent No.1 company are being conducted in a lawful manner and whether even the Order dated 12.07.2022 passed by this Hon’ble Tribunal directing that no personal purchases will be made from the funds of the Respondent No.1 company is being complied with. IN other words, it is impossible to even discern the compliances of the order dated 12.07.2022 passed by this Hon’ble Tribunal.”
In view of the stand taken in the application for Interim relief we are of the opinion that learned NCLT in the impugned order has committed no error in asking the appellant to provide bank statement. Moreover the order impugned particularly order passed in IA No.313/2022 appears to be innocuous order on which there was no reasons to raise any issue by the appellant. So far as the claim of the Respondent that they were having 39% shareholding or the objection raised by the appellant that the applicant before NCLT was not having locus to maintain application, we are unable to record any observation due to the reason that the issue of maintainability is still pending before the NCLT.
In view of the above observation and discussions we find no ground to interfere with the impugned order. The appeal stands dismissed.