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Judgment
Justice Anant Bijay Singh;
The instant Appeal under Section 421 of the Companies Act, 2013, has been filed by the Appellants against the impugned order dated 31.05.2022 passed by the National Company Law Tribunal (New Delhi Court IV) in New IA-116/ND/2022 in CP-88/ND/2021. By which, the Tribunal dismissed the application filed by the Appellants seeking issuance of summons to one Mr. Moolchand Surana, resident of 227D, Prakash Mohalla, East of Kailash, New Delhi 110065 and to examine him on oath.
The facts giving rise to this Appeal are as follows:
The Appellants filed petition before the Tribunal in light of gross acts of oppression and mismanagement by the Respondents in the affairs of Respondent No. 1 – Chaman Products Pvt. Ltd. The Appellants, who were the Petitioners before NCLT, belong to the Rajan Goel group. Mr. Rajan Goel is the head of this group as well as the head of the Goel family. He is also the promoter and founder of Chaman Products Pvt. Ltd. ('Company'). He is a Chartered Accountant by profession and enjoys tremendous stature and goodwill in the society. Mr. Rachit Goel and Mr. San Chit Goel are his sons and constitute the Rajan Goel group alongwith Mr. Rajan Goel and his wife Ms. Anita Goel.
ii) The Rajan Goel group collectively held 54% shares of the Company and even today collectively holds about 35.8% shares of the Company. The facts leading to the subject petition filed before NCLT for oppression and mismanagement are not being repeated herein for the sake of brevity, but essentially the captioned petition came to be filed since Respondent Nos. 2 and 3 arbitrarily and completely illegally halved the shareholding of the Rajan Goel group (from 35.8% to 17.9%) in the space of merely 3-4 months. Mr. Vikas Goel, who is Respondent No. 2 herein, is the head of the Vikas Goel group. He is the younger brother of Mr. Rajan Goel and was encouraged to join the Company by Mr. Rajan Goel himself. The Vikas Goel group comprises of his wife Ms. Ritu Goel and his son Mr. Akash Goel (Respondent No.3) herein. The Vikas Goel group, while reducing the shareholding of Rajan Goel group as indicated above, have within the space of the same 3-4 months, increased own shareholding from 2.3% to 80.65%.
iii) The subject petition accordingly narrated the several acts of oppression and mismanagement at the hands of Respondent Nos. 2 and 3 and sought various prayers including restoration of the shareholding of the Rajan Goel group. The Vikas Goel group belatedly filed a reply to the subject petition wherein various false and baseless pleas were taken. One of the pleas taken by the Vikas Goel group in its reply was that the Rajan Goel group has already transferred its shares in the Company to the Vikas Goel group. In support of this false allegation, the Vikas Goel group filed certain share transfer forms wherein one Mr. Moolchand Surana had stood and signed as a witness.
iv) The Appellants filed a rejoinder in the subject petition pointing out the patent falsity of the stand taken by the Respondents. It was averred that the share transfer forms were of no value since they were not accompanied by share transfer certificates. Further, the share transfer forms had been signed at a time when the parties were considering an overall settlement of the assets of various family businesses. These share transfer forms were never handed over to the Respondents but placed in the custody of Mr. Moolchand Surana who was made a witness to the transaction precisely for this reason. The Appellants, immediately after filing the above rejoinder, also filed the subject application seeking that Mr. Moolchand Surana be summoned and examined on oath with respect to the facts and circumstances in which the share transfer forms came to be signed by the Appellants. This was for the reason that Mr. Moolchand Surana, being a witness to the discussion, had special knowledge about the facts in which the documents came to be signed. Further, the NCL T admittedly has powers to summon witnesses and examine them on oath under Section 424 of the Companies Act, 2013, thereafter, after hearing the parties, the Tribunal dismissed the said application which led to filing of this Appeal.
The Ld. Counsel for the Appellants during the course of argument and in his memo of Appeal submitted that the Tribunal has completely failed to appreciate that it possesses powers under Section 242 of the Companies Act, 2013 to issue summons to individuals and examine them on oath in appropriate cases. The Appellant prayed before the Tribunal to issue summons because the witness viz. Mr. Moolchand Surana possessed special knowledge on the issue of the execution of share transfer forms since he stood and signed as a witness to the same and hence his evidence was necessary in the matter.
It is further submitted that the Tribunal has clearly erred in observing that documentary evidence and affidavits filed by the parties will in all cases be sufficient to adjudicate the disputes of oppression and mismanagement of a company. The Tribunal neither considered nor appreciated the grounds urged in the subject application which clearly set out the precise and specific reason which necessitated that Mr. Moolchand Surana be summoned and examined on oath in the matter. Based on these submissions the impugned order is fit to be set aside and the Appeal be allowed.
The Ld. Counsel for the Respondents during the course of argument and in his Reply Affidavit submitted that no question of law or otherwise on fact arises to seek interference of this Tribunal in the impugned order challenged herein. A bare perusal of the impugned order shows that the Appellants failed to bring provide sufficient reasons and further failed to bring on record any material documents necessary for examination Mr. Moolchand Surana on oath. Further, shows that the Tribunal for the reasons recorded above rightly held that there is no need to examine any witness especially when the matter has reached at an advance stage and in ripe for arguments. The Appellants have admitted the issues raised in the reply to the petition and have also filed rejoinder along with the affidavit wherein the Appellants have nowhere in the petition and rejoinder been able to prove that the shares were deposited in the custody of Mr. Moolchand Surana and that his examination is necessary for adjudication of the proceedings. Thus, the Appellants had no locus to demand examination subsequently by way of the application.
It is further submitted that it is an established principle that the proceedings before the Tribunal are of summary nature. It has been held in plethora of judgments that the Tribunal should allow examination of witness on oath only in special circumstances or when the petitioner is able to prove with irrefutable evidence that grave injustice will be caused if the examination is not allowed. In the present matter, the Appellants herein have utterly failed to satisfy any of the fundamental conditions as specified above. Further, it is a settled principle of law that the party who wants to prove anything as made out in the pleadings has to give evidence in support of the same, which was absent in the application and is also absent in the instant Appeal.
It is further submitted that as per Section 56 of the Companies Act, 2013, a company upon receipt of duly executed, stamped and signed copy of the Instrument of Transfer of shares along with share certificates has to register such transfer. The Appellants herein executed 2 different Form SH-4, first on 27.12.2019 executed by Appellant No. 1 in which Mr. Moolchand Surana was not made a witness and second on 02.12.2020 executed by Appellant No. 2 transferring 2500 shares in which only Mr. Moolchand Surana was a witness, had there been any objection with respect to the transfer of shares by the Appellants the same should have been raised with the company within a period of 60 days from the date of execution of the above forms. But the Appellants deliberately avoided to take any action on the said transfer and subsequently, on 26.05.2022 while filing the rejoinder in petition made a failed attempt to challenge the transfer without adducing any material evidence and without explaining the reasons necessitating examination of witness with sole intent to impede the adjudication of the petition. Based on the above submissions, the instant Appeal is liable to be dismissed.
After hearing the parties and going through the pleadings made on behalf of the parties, we have noticed from the impugned order that the Tribunal has examined those documents which have been filed by the parties and the main matter is ripe for arguments, therefore, in the facts and circumstance of the case aforenoted, there is no illegality in the impugned order. Therefore, we do not find any merit in the instant Appeal. The impugned order dated 31.05.2022 passed by the National Company Law Tribunal (New Delhi Court IV) in New IA-116/ND/2022 in CP-88/ND/2021 is hereby affirmed. Accordingly, the instant Appeal is hereby dismissed devoid of merit. No order as to costs. I.A, if any, stands disposed of.
Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the National Company Law Tribunal (New Delhi Court IV), forthwith.