Mr. Malakondaiah Pavuluri & Ors. vs M/s. Aarush Building Materials Private Limited & Ors.

This company appeal has been preferred by the Appellant being aggrieved as against the impugned order that, was rendered by the Ld. NCLT Hyderabad Bench in CP/135/241/HDB/2018, being the proceedings, which were carried under Section 241 and 242, 213, and 119 of the Companies Act, 2013, to be read with Rules 11, 23, and 43 of the NCLT Rules of 2016.

In the proceedings, which were drawn by the Respondent No. 2, herein, Dr. Srinivas Sunkavally, the Ld. Tribunal, the impugned order of 10.03.2025 has partly allowed the company petition with certain directions that were contained in Para 52 of the impugned order, thereby declaring Respondent No. 2 to 5 of the company petition to be engaging themselves in an act of oppression and mismanagement, which was held to be prejudicial to the interests of the Respondent No. 1 company.

The Appellant, while putting challenge to the impugned order, has primarily argued the company appeal on the ground that, the impugned order happens to be in violation of principle of natural justice, for the reason being that, an effective opportunity of hearing was not accorded to the Appellant to enable him to establish his case, and hence it cannot be said to be an effective adjudication of his rights, which were likely to be affected by the impugned order which allowed the company petition. Besides that, there were number of other issues, which were also raised by the Ld. Counsel for the Appellant, out of which one of them was pertaining to the aspect of limitation.

When the matter was taken up today, the Ld. Counsel for the Respondents had submitted that, they agree with the argument of the Appellant, that he was not provided with an effective opportunity of hearing by the Ld. Tribunal while rendering the impugned order of 10.03.2025, and that they will not have any objection as such if the impugned order is quashed and the matter is remitted back to the Ld. Tribunal to re-decide the matter, that is, the CP No. 135/241/HDB/2018 on its own merits.

Owing to the aforesaid submission of the Ld. Counsel for the Respondents, and owing to the argument extended by the Ld. Counsel for the Appellant of not having been provided with an effective opportunity of hearing, which is accepted by the Respondents, exclusively for the aforesaid reason, the impugned order of 10.03.2025, as passed in CP No. 135/241/HDB/2018, is hereby quashed. The matter is remitted back to the Ld. NCLT Hyderabad Bench to re-decide the CP No. 135/241/HDB/2018 in the matters of Dr. Srinivas Sunkavally v. M/s. Aarush Building Material Private Limited and Others, exclusively on its own merits, based on material already on record.

It is made clear that we have not made any observations with regards to the merits of the matter; all the issues are left open to be decided by the Ld. Tribunal, based upon the respective contentions to be raised by the parties to the proceedings based upon the material, which has already been placed on record before the Ld. NCLT, Hyderabad Bench.

Subject to the aforesaid the 'company appeal' is 'allowed'. The 'impugned order' would stand 'quashed'.

This company appeal has been preferred by the Appellant being aggrieved as against the impugned order that, was rendered by the Ld. NCLT Hyderabad Bench in CP/135/241/HDB/2018, being the proceedings, which were carried under Section 241 and 242, 213, and 119 of the Companies Act, 2013, to be read with Rules 11, 23, and 43 of the NCLT Rules of 2016.

In the proceedings, which were drawn by the Respondent No. 2, herein, Dr. Srinivas Sunkavally, the Ld. Tribunal by the impugned order of 10.03.2025 has partly allowed the company petition with certain directions that were contained in Para 52 of the impugned order, thereby declaring Respondent No. 2 to 5 of the company petition to be engaging themselves in an act of oppression and mismanagement, which was held to be prejudicial to the interests of the Respondent No. 1 company.

The Appellant, while putting challenge to the impugned order, has primarily argued the company appeal on the ground that, the impugned order happens to be in violation of principle of natural justice, for the reason being that, an effective opportunity of hearing was not accorded to him to enable to establish his case, and hence it cannot be said to be an effective adjudication of his rights, which were likely to be affected by the impugned order which allowed the company petition. Besides that, there were number of other issues, which were also raised by the Ld. Counsel for the Appellant, out of which one of them was pertaining to the aspect of limitation.

When the matter was taken up today, the Ld. Counsel for the Respondents had submitted that, they agree with the argument of the Appellant, that he was not provided with an effective opportunity of hearing by the Ld. Tribunal, while rendering the impugned order of 10.03.2025, and that they will not have any objection as such if the impugned order is quashed and the matter is remitted back to the Ld. Tribunal to re-decide the matter, that is, the CP No. 135/241/HDB/2018 on its own merits.

Owing to the aforesaid submission of the Ld. Counsel for the Respondents, and owing to the argument extended by the Ld. Counsel for the Appellant of not having been provided with an effective opportunity of hearing which is accepted by the Respondents, exclusively for the aforesaid reason, the impugned order of 10.03.2025, as passed in CP No. 135/241/HDB/2018, is hereby quashed. The matter is remitted back to the Ld. NCLT Hyderabad Bench to re-decide the CP No. 135/241/HDB/2018 in the matters of Dr. Srinivas Sunkavally v. M/s. Aarush Building Material Private Limited and Others, exclusively on its own merits, based on material already on record.

It is made clear that we have not made any observations with regards to the merits of the matter; all the issues are left open to be decided by the Ld. Tribunal, based upon the respective contentions to be raised by the parties to the proceedings based upon the material, which has already been placed on record before the Ld. NCLT, Hyderabad Bench.

Subject to the aforesaid the 'company appeal' is 'allowed'. The 'impugned order' would stand 'quashed'.