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Judgment
ORDER
09.08.2023: Heard Mr. Gaurav Mitra, learned counsel assisted by Mr. Anshul Gupta, learned counsel for the appellant and Mr. Mayank Wadhwa, learned counsel who has appeared on advance notice on behalf of Respondent.
The present appeal has been preferred under Section 421 of the Companies Act, 2013 against an innocuous order dated 25.07.2023 passed by National Company Law Tribunal, New Delhi. For better appreciation it is apt to reproduce the same as under:
“Heard the submissions made by Learned counsels for both the parties. The respondents are permitted to conduct EOGM. However, the decision on agenda item regarding the removal of petitioner from the directorship, if any, shall not be given effect till the outcome of the Company Petition. It is made clear that not only removal but also filing of DIR-12 are prohibited until the matter is disposed of. It is made clear that if the petitioner submits any response with regard to notice in the agenda item within 24 hours from now, respondent may consider the same in EOGM. Let the matter be posted to 01.08.2023.”
Learned counsel for the appellant assailing the impugned order has argued that law is settled to the point that the decision of the Board of Directors of a company may not be looked into by the NCLT. In support of his submission he has drawn our attention to notice dated 03.07.2023 which is at running page 97 to 104. Learned counsel for the appellant has also drawn our attention of 3rd para at page 98 which is reproduced hereinbelow:-
“Further it is stated in the requisition letter and special notice that Refpay Media Pvt Ltd is incorporated on October 10, 2018 having registered office at Delhi, Mr. Mukesh Kumar is a one of the Director on the board of Refpay Media Pvt Ltd. However, Mr. Mukesh Kumar has not been taking active participation in the functioning of Refpay Media Pvt Ltd hindering the growth of the company due to which many employees have raised objections against him. Mr. Mukesh Kumar being on board of Refpay Media Pvt Ltd has created the conflict of interest as he is already director in other companies due to which vendors are not willing to engage in work with Refpay Media Pvt Ltd, thus causing financial loss and hindering the growth of the company. Mr. Mukesh Kumar is working against the interest of the company and has been doing frivolous litigation against Refpay Media Pvt Ltd. Mr. Mukesh Kumar as director of Refpay Media Pvt Ltd is neither tenable not suitable and hence, the holding company having lost its confidence in Mr. Mukesh Kumar seeks his removal from the directorship of Refpay Media Pvt Ltd. Further his removal is necessary for future growth of the company. Consequently, the Board of Directors of Refpay Media Pvt Ltd by its resolution dated 3rd July, 2023 has resolved to propose the removal Mr. Mukesh Kumar as Director of Refpay Media Pvt Ltd.”
He submits that the order impugned is contrary to the law settled by Hon’ble Supreme Court in Life Insurance Corporation Vs Escorts Ltd (1986) 1 SCC 264 and Ravinder Sabharwal & Anr Vs XAD Inc. & Ors; CS(Comm):1057/2018 as well as without any reason such impugned order has been passed. Accordingly the order impugned is liable to be set aside.
Learned counsel for the Respondent orally submitted that the appeal is required to be reject primarily on the ground that the appellant had not brought on record the order dated 03.07.2023 whereby the appellant was restrained from implementing the decision taken in the Board Meeting. He submits that such order was passed on 03.07.2023 and in continuation of the earlier order the present impugned order has been passed. As per order impugned the matter was posted to 1.8.2023. However, on instructions he submits that on 1.8.2023 the matter was simply adjourned and next date is 29.08.2023.
Besides hearing learned counsel for the parties we have cursorily perused the material available on record. On perusal of the Memo of Appeal it is evident that on 10.04.2023 the Respondent had filed an application under Section 241-242 of the Companies Act, 2013 alleging oppression and mismanagement bearing CP No.83/2023. After the said petition was filed it appears that the appellant sent requisition letter for conveying EOGM which was to be conducted on 26.06.20123. It appears that after the issuance of requisition for EOGM for Board Meeting to be held on 26.06.2023 the Respondent on 23.06.2023 filed an IA vide CA No.215/2023 with a prayer to stay the Board Meeting which was scheduled to be held on 26.06.2023. However, subsequently the date of the Board Meeting which was scheduled to held on 26.06.2023 was postponed and deferred to 03.07.2023. The stay petition CA No.215/2023 was got listed on 03.07.2023 for urgent hearing. On 03.07.2023 learned NCLT was informed as if Board Meeting dated 03.07.2023 was already held. Thereafter as per pleading in the present appeal on the same date i.e. 03.07.2023 learned NCLT passed a restraint order restraining the appellant from implementing the decisions taken in the Board Meeting. However, in the present appeal to the reasons best known to the appellant neither the order dated 03.07.2023 has been assailed nor same has been brought on record and the appeal has been preferred against order dated 25.07.2023 which appears to be an order in continuation of earlier order with certain modifications. Moreover it appears that CA No.215/2023 is still pending before the NCLT. Since he has not assailed the earlier order dated 03.07.2023 without assailing earlier order we are of the opinion that there is no reason to interfere with the impugned order particularly in view of the fact the order impugned prima facie appears to be innocuous order and in continuation of the earlier which has not been assailed. Accordingly there is no reason to interfere with the impugned order. The appellant if so advised may raise the issue before NCLT itself.
The appeal stands dismissed.