Sri. Veera Bhoga Vasanta Rayalu Sabbavarapu vs Sunray Green Space Private Limited

(Hybrid Mode)

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

In the instant Company Appeal (AT) (CH) No. 35 / 2026, we would be exclusively dealing with the instances of judicial and procedural impropriety and none of the observations to be made by us, would be touching the merits of the case of either of the parties to the proceedings.

The facts, which could be culled out from the records itself are that, a proceedings by way of CP No. 3 / 241 / AMR / 2023 stood instituted before the Ld. NCLT, Amaravati Bench, by filing of the same on 19.01.2023.

Those proceedings of the Company Petition was ultimately disposed of by a Judgment of 24.01.2023, on the basis that Respondents No. 4 & 5 therein had made a proposal extending certain terms and conditions which was accepted by Petitioners No.1 & 3, and therefore the aforesaid Company Petition be closed as there was no cause surviving in the said Company Petition. Relevant part of the Judgment is extracted hereunder:-

``After arguing at length, the Counsel for R4 & R5 makes a proposal which is to the effect that Petitioners No. 1 & 3 and R2 & R5 shall jointly operate all the bank accounts which are till now being operated by Petitioner No. 1 & R2 and they shall also have joint power to execute the sale deeds pertaining to the properties of the Company.’’

This order dated 24.01.2023, of closing the Company Petition, on the basis of the understanding arrived at between the parties, which has been referred to in the order, has attained finality and it has not been questioned by any of the parties to the proceedings. Subsequently, seeking its enforcement, a Contempt Petition was filed being Contempt Petition No. 1 / 2024, by instituting the same before the Ld. Tribunal on 22.07.2024. We need not to go into the details on this Contempt Petition on the merits, for the reason being that, it was closed by an order passed by the Ld. Tribunal on 19.06.2025, observing thereof, that no proceedings remain as on date which could be requiring for enforcement of an order of 24.01.2023. However, we note that the Contempt Petition was dismissed on a very peculiar ground which is that, the Ld. Tribunal on one hand, observes that, owing to the apologies tendered, the Contempt Petition was closed and simultaneously holds that the Contempt Petition is not maintainable.

The above two observations are self-contradictory. Either the Contempt Petition would be not maintainable or it was maintainable, but still, was closed on the basis of an apology tendered, but, the use of both the expressions cannot go simultaneously together.

We are conscious of the fact that, the Company Petition stood closed by the Judgment of 24.01.2023, and the said disposal of Company Petition has not been questioned in the procedure known to law, by preferring of an Appeal. But, for the reasons best known to themselves, the Petitioners / Respondents herein, filed IA No. 42 / 2025 by filing the same before the Ld. Tribunal on 13.10.2025, seeking a modification of the consent order dated 24.01.2023. The IA No. 42 / 2025, was not prima facie maintainable, as there cannot be any review of a consent order under the guise of modification, which was aimed at interfering in a Company Petition decided on merits.

When the proceedings of the said IA No. 42 / 2025 was taken before the Ld. Tribunal, the Ld. Tribunal vide its order of 27.11.2025, proceeded to observe, that, since the Tribunal is not vested with the powers of review, they cannot venture into to decide the IA No. 42 / 2025 where the Petitioner / Respondent herein, have sought a modification of the consent order dated 24.01.2023 and accordingly closed the said application by the order of 27.11.2025, with the following observations:

`` ORDER IA (Companies Act)/42/2025:

This application has been filed by the Petitioner under Section 241, 242 of Companies Act, 2013 r/w. Rule 11 of NCLT Rules, seeking a) declare the actions of the Respondent as illegal, arbitrary and detrimental to the interest of the Applicant No.1 Company; b) Remove the Respondent as a joint signatory from all bank accounts of the applicant No.1 Company and c) to permit the Applicant No.1 company to change bank account operation authorisation in accordance with resolution of its Board of Directors.

Both the parties Senior Advocates present and advanced their arguments at length. During the course of hearing, the Counsel for the Applicants intends to withdraw the IA. Permission granted. Accordingly IA (Companies Act)/42/2025 is dismissed as withdrawn.’’

Accordingly, the Ld. Tribunal closed the aforesaid Interlocutory Application on the ground that the same is being sought to be dismissed as withdrawn by the Applicant / Respondent. However, the Respondents herein for the reasons best known to them have preferred IA No. 48 / 2025 by filing the same on 17.12.2025. In the said IA, that was preferred, the Respondents had sought a relief of the following nature:

``In view of the facts and circumstances of the case, as mentioned hereinabove, it is humbly prayed to this Hon’ble Tribunal:

It is clearly apparent from the nature of the relief sought in the aforesaid application that it was an attempt to revisit the Company Petition decided with consent vide order dated 24.01.2023.

Thus, the Interlocutory Application, which was preferred, being IA No. 48 / 2025 by the Respondents, was in the shape of seeking a review of the order dated 24.01.2023, which is surprising given that the Respondents / Applicants must have been conscious of the fact that an earlier application IA No. 42 / 2025 seeking to modify the consent order had already been dismissed as withdrawn, by an order of 27.11.2025.

Be that as it may. The controversy, which has now been placed before us, is surprising because for the reasons best known the Respondents herein, who were the Applicants to IA No. 48 / 2025, appeared in the proceedings held before the Ld. Tribunal on 12.02.2026 and sought the permission to withdraw the said Application.

The said prayer was accepted by the Ld. Tribunal and accordingly, the Ld. Tribunal proceeded to pass an order of dismissing the IA No. 48 / 2025 as withdrawn.

However, in the said Order, the Ld. Tribunal has made certain observations which is sought to be challenged in the instant Appeal. The said observations are reproduced below:-

``The Applicants are at liberty to run the Applicant Company as per the law. Both the Parties are also at liberty to file the CP under Section 241 of Companies Act, 2013, if they have any grievance by the act of the other Party."

The question that emerges for consideration before us is, that when the Tribunal was already conscious of its orders of 24.01.2023, 19.06.2025 and 27.11.2025, whether it could have made the aforesaid observations touching the basic fabric of rights of the parties, which was not even prayed for, particularly when an inter se adjudication of the controversy between the parties has already been settled based on the compromise.

In fact, the effect of the observations made in the order would be, that it has resulted into re-activating the process, which otherwise has and was found to have met its judicial death by passing of the orders of the withdrawal of the applications preferred by the Respondents themselves, as prayed by the Respondents / Applicants.

We are of the view that the Tribunal need not have identified itself with either of the parties to the proceedings by making such an observation on its own, beyond the prayer sought for, which rather does a judicial overreach by granting a relief that was not even claimed in the application, which otherwise has been sought to be dismissed as withdrawn.

Therefore, the observations made by the Ld. Tribunal in the impugned order of 12.02.2026 as extracted in Para 10 of this order, would hereby stand quashed. The Company Appeal being Company Appeal (AT) (CH) No. 35 / 2026, would stand allowed partially to that effect.

However, the partial quashing of the order in relation to the observations made by the Ld. Tribunal beyond the actual controversy, which was before it, would be without prejudice to the parties to the proceedings to resort to any other recourse, which is available to them in accordance with law.