Sindhu Santhosh & Ors. vs Bhoomika Digital Cable Services Pvt. Ltd. & Ors.

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

The Appellants herein have invoked the appellate provision of Section 421 of the Companies Act, 2013, thereby putting a challenge to the order of 28.05.2024, by virtue of which IA(C/Act)/43/KOB/2024, as it was preferred in CP(C/Act)/08/KOB/2023 being the proceedings drawn under Section 242(4) of the Companies Act, has been rejected. Primarily, the Appellants while putting a question to the said Impugned Order and in accordance to the modulation of their relief, pray for quashing of the order of 28.05.2024 as well as for expunging the observations which had been made in Para 21, 23 & 24 of the Impugned Order under challenge, as it is likely to prejudice the proceedings under Section 242, which is yet to be adjudicated on merits. The Learned Counsel for the Appellants submits that the observations which had been made in Para 21, 23 & 24, may have an adverse bearing at the stage when the Application under Section 242(4) is to be taken up on merits by the Learned Adjudicating Authority. The observations which has been made in the Impugned Order in Para 21 are to the effect that the Appellant, had engaged herself in misusing the process of NCLT and it was the case of forum shopping. Para 21 is extracted hereunder: -

Similarly, the observations which has been made in Para 23, was to the effect that the Appellant should rather have filed an Amendment Application, and instead of the same, she is filing an Interlocutory Application with an intention to delay the disposal of CP(C/Act)/08/KOB/2023.

What is more scathing are the observations made in Para 24 of the Impugned Order. The Learned Adjudicating Authority in the said para has observed, that the Appellants while facing the proceedings under Section 242(4) had not approached the bench with clean hands and hence, it has held that they are not entitled for any Interim relief, since they had kept the Interim Relief in parlance to be an equitable relief under law. As far as the aforesaid principle are concerned there cannot be any doubt, that one who comes to proceedings before the Tribunal will have to approach the court with clean hands, but then taking the said aspect as to be an obstacle for entertaining an Interlocutory Application for all the principal proceeding itself and before the Learned Adjudicating Authority may be little too harsh. The said aspect can be recorded if a question or an allegation pertaining to the Appellant not coming with clean hands as observed in Para 24, is raised with the Tribunal, and the tribunal is expected to record his findings based on the factual material as to how much of the allegation of not having approached the court with clean hands can be attributed to the Appellant. The Learned Counsel for the Respondents has also contended that the said lacuna as it has been observed by us, that is, no basis has been assigned by the Learned Tribunal while making observation in Para 24 with regards to the Appellant having not approached the Tribunal with clean hands, as could be extracted from Para 24 of the said Judgment. The relevant part which has been referred to by the Respondent Counsel, has been extracted below:-

In an auction proceeding, the observation which has been made with regards to the act of misconduct is to the effect that the 13^th Respondent had to obtain a no-objection letter from the 12^th Respondent before making any assignment. As far as this aspect is concerned, not obtaining of an appropriate no objection may be an irregularity in the process, but it may not be taken up to be labelled as to be that the Appellant approached before the Tribunal with unclean hands. Apart from it since the Application itself as preferred under Section 242(4) is yet to be decided on merits, apprehension has been expressed by the Appellant that the observations made in Para 21, 23 & 24 that may create obstruction as such in getting a fair decision to the Application preferred under Section 242(4) of the Companies Act.

In order to balance the equities and to have a fair adjudication on the Application preferred by the Appellant under Section 242(4) of the Companies Act, it is hoped and trusted that the observations made in the Impugned Order by the Learned Adjudicating Authority in Para 21, 23 & 24 would be excluded to be taken as to be the reason creating an impediment from independently considering the IA(C/Act)/43/KOB/2024 and it should not be a detriment for the purposes of the proceedings of CP(C/Act)/08/KOB/2023. When an adjudication or an evaluation are left to be made by the courts, there has had to be an adjudication which should be apparently and independently based upon the material and its appreciation in accordance with law. There is nothing on record as such which could be culled out from the Impugned Judgment to substantiate that the observations made in Para 21, 23 & 24 could effect the proceedings.

Hence, while denying to venture into with Relief-I, as prayed for, that is, to set aside the Impugned Order rejecting the Interim Application (IA) (C/Act)/43/KOB/2024, the said prayer would stand rejected. The Relief-II, so far it relates to expunging the observations made in Para 21, 23 & 24 the same would stand allowed to be expunged from the order and the same would not be creating any embargo as such against the Appellant for an adjudication of CP(C/Act)/08/KOB/2023 on its own merits. Subject to the aforesaid, the Company Appeal (AT) (CH) No. 46 / 2024, would stand disposed of and the Impugned Order, would stand modified.