Noohu Sarfraz, Suspended Director Of M/s. Fossil Logistics Private Limited vs Radhakrishnan Dharmarajan

(Hybrid Mode)

Oral Judgment: Justice Sharad Kumar Sharma, Member (Judicial):

The instant Company Appeal is governed under its own peculiar facts and circumstances, and we are procedurally bound to take the view as we are going to express in the context of the law governing the field of an Appellate Jurisdiction.

The provisions of the Appeal under I&B Code, as contemplated under Section 61 of I&B Code and the said provision are wide enough, to confer the right to any person aggrieved to invoke the Appellate Jurisdiction, if he is aggrieved by the order passed by the Adjudicating Authority. The provisions of Section 61 of the Code does not restrict any party from approaching the Appellate forum, if he finds, that any of his rights are infringed by orders passed by the Learned NCLT, in any of the proceedings contemplated, herein in the Code. Be that as it may. In the instant Company Appeal, the Appellant puts a challenge to the impugned order of 12.11.2025, as passed on IA/IBC (LIQ)/10 (CHE)/2024 as rendered in CP(IBC)/140 (CHE)/2022, under Section 33(1) to be read with Section 34 of I&B Code, by virtue of which the Corporate Debtor M/s. Fossil Logistics Pvt Ltd. has been placed in liquidation.

It will not be out of context herein, to refer that, earlier an order of CIRP was passed as against the Corporate Debtor on 15.06.2023 by NCLT, and the same had been affirmed by NCLAT vide order dated 18.04.2024. Subsequently the Appellant had invoked the proceedings under Section 62 of the Code, by filing Civil Appeal No. 7231/2024 before the Hon'ble Apex Court, challenging the orders of this Appellate Tribunal, confirming the commencement of the CIRP proceedings against the Corporate Debtor. It is informed that the Hon'ble Apex Court, is seized with the said proceedings, the arguments have been concluded and the matter is pending consideration. It is also informed that Hon'ble Apex Court in the said proceedings had passed an order on 29.11.2024, that the ongoing proceeding before the NCLT would be subject to further orders to be passed in the case, by the Apex Court.

In the meantime, the Appellant had filed an IA before the NCLT, being IA(IBC)/1647(CHE)/2024 on 31.07.2024, where he had simpliciter prayed for, to pass an appropriate order of the stay, on the proceedings of the application filed under Section 33, seeking liquidation of the Corporate Debtor owing to the pending Civil Appeal proceedings before the Hon'ble Apex Court. The relief has sought for in the said IA is extracted here under:

Hence, taking into consideration of the aforesaid facts and circumstances, the Applicant herein prays for the following reliefs:

This IA was laid to rest by the Learned NCLT by passing of an order on 04.03.2025, observing that since the Hon'ble Apex Court has already observed that the liquidation proceedings can continue, nothing much in relation to the relief sought by the Appellant by filing IA No. 1647/2024, as extracted above, was left to be decided on merits, and then proceeding to close the said application as having been rendered infructuous. We may be reminded at this juncture, that this order of 04.03.2025, passed on the IA by Learned NCLT, where the Appellant had endeavoured to bring the factum of pendency of the proceedings, of a challenge given to the CIRP before the Hon'ble Apex Court has attained finality. Even otherwise also, no fruitful purpose could have been obtained by the Appellant, by putting a challenge to the order of 04.03.2025, because it was a simpliciter closure of IA(IBC)/1647/2024, where the Appellant has sought a stay of the proceedings of the liquidation, which was contrary to the intention that was expressed by the Hon'ble Apex Court in its order passed on 29.11.2024.

During the intervening period, after the order had been rendered on IA No. 1647/2024 on 04.03.2025, the Appellant had filed yet another Intervention Petition (IBC)/4(CHE)/2025, in IA(IBC)(Liq)/10 (CHE)/2024, which was an IA praying for passing of an order of liquidation under Section 33. In the said IA, the Appellant had prayed for the following reliefs:

"In view of the facts mentioned above, the Applicant prays for the following reliefs":

If we take the said relief as it was prayed for in Intervention Petition (IBC)/4(CHE)/2025, by the Appellant into consideration context of the entire factual backdrop of the controversy, the Appellant had, by projecting the summary of his rights and as to how he will be affected by passing of any order of liquidation, had prayed for that he may be permitted to intervene in the proceedings. However, the second relief, which was prayed therein, may not have a much bearing so far as his rights pertaining to the intervention is concerned, because intervention was a relief, which was proceeded to be decided before the second relief could have been granted to the Appellant.

The Learned Tribunal by an order passed on 07.07.2025, had proceeded to dispose of the said Intervention Petition (IBC)/4(CHE)/2025, which sought to bring to the Tribunal's notice, the order of the Hon'ble Supreme Court dated 15.07.2024, as well as, the order of 29.11.2024 on the subject of maintainability of Section 7 proceedings as against the principal borrower and its impact on the Corporate Guarantor's liability. The word "disposed of", which has been assigned to Intervention Petition (IBC)/4(CHE)/2025, by the order of 07.07.2025, passed by the NCLT, will be falling for consideration, as to what implication would it have. Upon the instant proceedings at the hands of the present Appellant, where he puts challenge to the order of liquidation of the Corporate Debtor. If we scrutinise the order dated 07.07.2025, the intervention has not been closed on the sole pretext that, the copy of orders, which were sought to be placed on record, were declined to be accepted. It is observed that, the implications of Section 7 proceedings as against the principal borrower, as well as, the pursuing "Corporate Guarantors liability" vide CA No. 7231 of 2024, were taken into consideration by the Tribunal while passing of the order dated 07.07.2025, while disposing of the intervention application.

Whatsoever the logical reason might have been assigned by the Tribunal while closing the intervention application by its disposal, we need not to venture into and scrutinise the same, for the reason being that, the ultimate legal consequences of the same would be that, the Appellant's prayer for intervention stood denied by the said order of 07.07.2025. Even otherwise also it is settled principle, that if an applicant to the proceedings prays for number of reliefs and the order passed on the same, is silent on one of the reliefs, it would be deemed that, the relief prayed for has been denied. Hence, the order of 07.07.2025, would be treated to be a denial of his plea to intervene in the proceedings of liquidation.

The orders dated 07.07.2025, admittedly has not been put to challenge and thus has attained finality.

Learned Counsel for the Appellant has canvassed before us, that the order passed on 07.07.2025 on his intervention application will not create any impediment as such for him to contest the proceedings of liquidation. He has based his contention on following grounds:-

The order of 07.07.2025 may not be taken as to be an order on merits of his intervention application. Further, even if it is considered that the intervention application has been closed on merits, then too in the light of the provisions contained under Section 61 governing the Appellate Jurisdiction, since it prescribes for "any aggrieved person", to approach the Appellate Tribunal, as against an order passed under I&B Code, he would still have the right to put a challenge to the impugned order of liquidation, by preferring the instant Company Appeal.

Because his material right is being prejudiced, he will have the right to put a challenge to the said order of liquidation.

There can not be any doubt as such, with regards to the first limb of argument as extended by the Counsel for the Appellant in the context of the expression given under Section 61 of Code, that any aggrieved person as described in the Appellate provision under Section 61 has a right of approaching the Appellate forum, being aggrieved as against any orders passed by the Adjudicating Authority. The question would be that who that the aggrieved person would be. In context hereto and the factual backdrop under which, the instant Company Appeal has arisen, we are of the view that, when the Appellant's intervention application has resulted into a determination, rightly or wrongly by the Tribunal, while passing of an order on 07.07.2025, rejecting it by way of disposal in form of closure of the application, it would amount to that the Intervention Petition (IBC)/4(CHE)/2025, was considered on merits and then has been closed. In that eventuality, it will be presumed that the Tribunal has applied its mind, to the plea of the necessity of the Appellant concerned to be impleaded as a party to the proceedings of liquidation. In that eventuality, the Appellant will now not be taken to be falling within the definition of "person aggrieved", because he himself has invoked the jurisdiction of the Tribunal, by filing of an application of intervention, that has been disposed of by the Tribunal, by the order of 07.07.2025 denying his intervention. We are of the view that, when the Appellant himself has voluntarily sought himself to intervene in the proceedings before the NCLT, and if that was decided by the Tribunal against him, he ought to have sought redressal of his grievances, as against the rejection of his intervention application by invoking the Appellate Jurisdiction, because that would have been an appropriate stage, where the aspect of whether the Appellant is a person aggrieved, could have been considered by this Tribunal. In other words, the Appellant should have given a challenge to the order of 07.07.2025, rejecting his intervention application. Having not done so, the Appellant would be bound by the order dated 07.07.2025.

The contents of the Intervention Petition (IBC)/4(CHE)/2025, preferred by the Appellant for seeking his intervention are basically narration of facts seeking to justify as to, why the Appellant should be a necessary party to be permitted to intervene in the proceedings before the Learned Tribunal. In these conditions once the said application has been taken up for consideration and has been closed as 'disposed of', the logical inference that could be drawn is, that the Tribunal had consciously declined to permit his intervention after taking into consideration, the grounds pleaded for permitting him to intervene. In that view of the matter, once the intervention petition was disposed of, with the Appellant having been determined to be not 'a necessary party' to the proceedings, he will automatically be precluded from being an aggrieved person, who could take the liberty of filing of an Appeal under Section 61, because for the purposes of an aggrieved person under Section 61. In other words, since the Appellant has been determined to be non-suited, he cannot by virtue of filing of an Appeal, introduce himself to the proceedings, overriding the order dated 07.07.2025, rejecting his intervention application.

So far as the second argument extended by the Learned Counsel for the Appellant is concerned, though marginally we have already dealt with in the preceding paragraphs, as to what would be the effect of the term used as "disposal" in the order of 07.07.2025, we are of the view that, no matter how the term "disposal" is interpreted, ultimately the consequential and the legal effect will be that, the Intervention Petition (IBC)/4(CHE)/2025, where the Appellant has sought his intervention, has been brought to an end and it no more subsists on the records of the NCLT, to be decided on merits. When there is a cessation of an interlocutory proceedings of an application, by an order of 07.07.2025, by its disposal, it will amount to that whatsoever the pleading and the relief that was claimed by the Appellant in Intervention Petition (IBC)/4(CHE)/2025, has been laid to rest, by an order passed on 07.07.2025 and the said disposal will tantamount to a determination of the rights of the Appellant in the context of the pleadings of his application, of being a necessary party to intervene. The said order of Learned Tribunal dated 07.07.2025 could have been scrutinised, subject to the conditions that the Appellant had put a challenge to it. Having not done so, at this stage, we are of the view that, so far as the Appellant's right to put a challenge to the liquidation order in the instant Company Appeal is concerned, owing to the orders passed by Learned NCLT on 04.03.2025 and 07.07.2025 in the proceedings which had already been judicially concluded and the orders have attained finality, in the absence of the challenge being given to it, the Appellant would not be falling within the ambit of the definition of an aggrieved person as of now, to bring him within the ambit of the Appellate Jurisdiction under Section

Thus, the Company Appeal lacks merit and the same is accordingly dismissed. All pending Interlocutory Applications would stand closed.