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Judgment
ORDER
Heard Ld. Counsel for the parties in each of these company appeals. As they engage consideration of common question of fact and law, the same for the purposes of brevity, are being decided together.
The challenge in the company appeals as given are detailed hereunder: -
In Company Appeal (AT) (CH) (Ins) No.369/2025, the challenge is to the impugned order of 10.03.2025, that was passed in IA(IBC)/935/2025 in C.P. (IB)/155/95/HYD/2023.
In Company Appeal (AT) (CH) (Ins) No.370/2025, the challenge is to the impugned order of 10.06.2025, which has been passed in IA(IBC)/933/2025 in C.P. (IB)/168/7/HDB/2023.
In Company Appeal (AT) (CH) (Ins) No.372/2025, yet again the challenge given by the Appellant is to the impugned order of 10.06.2025, that was passed in IA (IBC)/934/2025 in C.P. (IB)/ 166/7/HDB/2023.
In Company Appeal (AT) (CH) (Ins) No.373/2025, challenge is to the impugned order of 12.06.2025 which was passed in IA (IBC)/942/2025 in C.P. (IB)/ 151/95/HDB/2023.
Lastly, in Company Appeal (AT) (CH) (Ins) No.374/2025, the challenge is given by the Appellant, is to the impugned order of 12.06.2025, as it was passed in IA(IBC)/943/2025 IN C.P. (IB)/ 153/95/HDB/2023.
Ultimately, the consequential effect of the impugned order, had been that the Appellant's opportunity to file a Counter Affidavit has been withdrawn and closed.
The Ld. Tribunal has observed in the order that, as reflected from the order sheet and from the records of the respective company petitions, the proceedings of the respective company petitions show that several opportunities were granted to the Appellants to file the Counter Affidavit, but the same was not availed of, and owing to that, the Ld. Tribunal was constrained to pass an order, curtailing the opportunity to file the Counter Affidavit by withdrawing the opportunity to file counter and the recall applications, thus preferred in each of the respective company appeals were rejected on merits.
The prayer has sought for each of these company appeals has been vehemently opposed by the Ld. Counsel for the Repondent on the ground that,
The nature of IA, which was respectively preferred by the Appellants in each of the company appeals will amount to be, recalling of an order, which has been passed by the Ld. Tribunal, which could only be recalled subject to the condition that, it has been established that, it was an order obtained by playing fraud or misrepresentation, otherwise, there is no scope available with the Ld. NCLT having passed the orders on merits, for recalling the earlier orders closing the opportunity of the Appellants from filing Counter Affidavits.
He submits that in the earlier proceedings, which was held on 10.03.2025, there was a forfeiture of the Appellants opportunity to file Counter Affidavit, and the said order, despite of lapse of time period prescribed under law, has not been put to challenge and hence the order of forfeiture would attain finality. Thus, the order dated 10.03.2025, would always create a bar against the Appellant, from putting a challenge to the impugned order, involving the consideration of the question of stoppage of an opportunity of the Appellant to file Counter Affidavit.
Lastly, he submits that the proceedings were undertaken by the Appellants with blatant lack of diligence, because as many as 14 opportunities were granted, but still the appellants did not avail the same to file the Counter Affidavit, within a reasonable time period.
To deal with the aforesaid arguments, certain established principles of law are required to be referred to, that is,
When the challenge is being given to a particular impugned order in a judicial proceeding, the opposite party cannot avail an opportunity to expand the horizon of argument, than to what has been observed and taken as the basis of passing of the impugned order.
None of the arguments as raised by the Ld. Counsel for the Respondent, on the impact and scope of recall, qua the closure of the opportunity by an order of 10.03.2025, qua the effect of non-challenging of the order of 10.03.2025, had been raised by the Respondents, before Ld. NCLT at any point of time, nor the same has been described to be as the reason for passing the impugned order.
Even otherwise, also, it is settled down by the Hon’ble Apex Court in the judgment rendered in AIR 1977 SCC Online SC 323, Mohinder Singh Gill & Another V The Chief Election Commissioner, New Delhi & Others, that an opposite party to the proceedings cannot, during the course of argument or by way of a pleading in the shape of counter, can, develop a case which has been not taken into consideration by a Tribunal, while deciding an issue and which was not the ground for deciding the matter. The opposite party to the proceedings will have to confine his argument to the findings which has already been recorded and cannot go beyond it or carve out a new case at an Appellate stage. Relevant para 8 is extracted hereunder: -
8.The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji [Commr. of Police, Bombay v. Gordhandas Bhanji, 1951 SCC 1088 : AIR 1952 SC 16] : “Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.”
Orders are not like old wine becoming better as they grow older.
Even otherwise also, so far as the fixing of a time frame for the purposes of filing of a Counter Affidavit, owing to the implications of the amendment carried in CPC by Act No. 22 of 2002, with effect from 01.07.2002, is concerned, the same has been diluted by the subsequent judgments rendered by the Hon’ble Apex Court, particularly that in the matter of Salem Advocate Bar Association, Tamil Nadu V Union of India, it has been laid down that a rigid stand with respect to adherence to a rigid time frame to file Counter Affidavit may not be taken in order to facilitate and meet the ends of justice.
Though we cannot rule out lapses on part of the Appellant, as such, which has been recorded in the order, it is not required to be ventured into by this Appellate Tribunal in the exercise of its Appellate jurisdiction. Hence, we do not intend to disturb the findings recorded in the impugned order. But simultaneously, we will have to be conscious of the fact that, we while exercising an Appellate jurisdiction, have to be conscious of the basic objective of law that the procedures are handmaidens of justice, and they are not to be adopted to be used as a weapon to curtail opportunity of the litigant to mount an effective defence in judicial proceedings.
In view of having answered the arguments raised by the Ld. Counsel for the Respondent, accordingly, we denounce the conduct of the Appellant for not effectively participating in the proceedings. But exclusively in order to balance the equities, we feel it is apt to provide an effective opportunity of hearing to the Appellants, irrespective of the facts, and circumstances of the case that may have been present.
According, the Appellants are granted 10 days time by way of last opportunity to file Counter Affidavits, failing which the consequences of the impugned order will take its own recourse. Subject to the above, all the ‘Company Appeals’ would stand ‘disposed of’.
It is hoped and trusted, by way of a request, that the Ld. Tribunal will make an earnest effort, to decide the proceeding as expeditiously as possible.
All pending interlocutory application will be treated as closed.