Shri. Mr. Sivaraman vs Punarjani Securities Ltd

(Hybrid Mode)

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

Looking into the nature of the controversy, as engaged consideration, in the instant Company Appeal, which exclusively confines to the issue of imposition of cost on account of the dereliction on part of the Counsel for not diligently conducting the proceedings before the Learned Adjudicating Authority, we proceed to decide the Company Appeal while accepting the oral arguments extended by the Respondent’s Counsel.

In a nutshell, the consequential effect of the impugned order dated 17.02.2026, as it has been rendered in a proceeding under Section 241 and Section 242 of the Companies Act, 2013, by the Learned NCLT, Kochi Bench, was that the Petitioner/Appellant has been saddled with a cost of Rs. 2 lakhs, exclusively on account of certain unintentional dereliction on part of the Counsel, in taking up the proceedings, in the manner in which it was expected by the Learned Tribunal, to have been conducted by the representative of the Petitioner/Appellant, before the Learned NCLT.

The reason which has been assigned by the Learned Tribunal, and rightly so, that after the conclusion of arguments of the proceedings of the Company Petition, an application for placing additional documents was sought to be placed on record by the Petitioner/Appellant. It was permitted but thereafter, even when the proceedings were taken up. The said application, which was sought for placing additional documents on record was not pressed by the Learned Counsel for the Appellant nor it was brought to the knowledge of the Learned Tribunal, and the Petitioner/Appellant through his Counsel, consciously proceeded to participate in the proceedings and consequence of which the Learned Tribunal got annoyed, and observed that despite sufficient time has lapsed and the proceedings were not being taken up by the Petitioner/Appellant, in the manner it was expected by the Learned Tribunal, by pressing upon the earlier pending applications and then only ought to have proceeded to argue the Company Petition itself on its merit. It is because of the professional imperfection on part of the Counsel, the Learned Tribunal has imposed a cost of Rs. 2 lakhs on the Petitioner/Appellant.

If we scrutinise the impugned order, nothing can be attributed for lack of diligence, as against the Petitioner/Appellant, for not having diligently participated in the proceedings. It is a settled principle of law that, a litigant should not be made to suffer because of there being some slackness or dereliction on part of the Counsel representing his cause before the Court. If the Appellant’s Counsel has not been able to chronologically argue on the documents, which was already placed on record or after consumption of sufficient time, that in itself cannot be a reason to impose a cost and that too, particularly when it has to befall upon the Appellant, without assigning any reason as to how the determination of cost of Rs. 2 lakhs, have been made by the Learned Tribunal.

Exclusively, on a humanitarian ground and that the litigant should not be made to suffer on account of the Appellant Counsel’s mistake, the impugned order would stand quashed, so far it relates to the imposition of cost on the Appellant.

During the course of hearing of the Company Appeal, the Learned Counsel for the Appellant submits that, as a consequence of the order passed by the Learned Tribunal on 17.02.2026, the matter was directed to be taken up on 25.02.2026 and the same is shown to be listed on the said date, it shows that there are about six or seven Interlocutory Applications pending consideration. The Learned Counsel for the Appellant who represents the cause of the Petitioner/Appellant submits that, if those applications are taken on merits and decided by the Learned Tribunal, he may not be having any grievances as such. Considering the aforesaid peculiar facts and exclusively because of the implication of the imposition of cost, the impugned order dated 17.02.2026 would stand quashed to the extent of imposition of cost, as made by the impugned order. But owing to the undertaking given by the Appellant, that he would be diligently participating in the proceedings, the Company Petition is requested to be considered and disposed of as expeditiously as possible but not later than 6 weeks from the date of production of the certified copy of this order, for which the Appellant would diligently assist the Learned Tribunal.

All pending Interlocutory Applications would stand ‘closed’.