Sub Registrar Pallikonda Sub Registrar Office vs Amier Hamsa Ali Abbas Rawther

In the instant Company Appeal, a very peculiar issue which has been elaborately argued by the Learned Counsel for the Appellant though being beyond the scope of this Appellate Jurisdiction. The issue emanates from an order passed by NCLT, Chennai on the Contempt Petition. The Companies Act, 2013 provides for the power of drawing contempt proceedings under section 425 to the Tribunal, and the Appellate Tribunal, which is in parlance to the powers as granted to the Hon’ble High Court, in the exercise of its powers, under the provisions of section 12/14 of the Contempt of Courts Act, 1971. The provisions of Section 425 of Companies Act is extracted hereunder:-

Thus, by virtue of the provisions contained under section 425, the para materia provisions of the Contempt of Courts Act, have been made applicable to the Tribunals created under the Companies Act. Accordingly, once an order is passed on merits upon an adjudication of contempt under section 425 to be read with section 12/14 of the Contempt of Courts Act, the same would be appealable under section 19 of the Contempt of Courts Act, 1971 to be read with section 61 of I & B Code, herein.

The Appeal provision against a case as against an order of contempt, is available within the ambit of section 425 of the Companies Act, but it would lie against only when there is an order of punishment, no appeal would lie otherwise. The instant Company Appeal is CA (AT) (CH) (Ins) No.192/2024 had been preferred by the Appellant (the Sub Registrar) against the Impugned Order dated 10.05.2024, passed by the National Company Law Tribunal (NCLT), Chennai - I in IA(IBC)/836/2024 in Cont.P/13/2023 in IBA/579/2019. In the said Impugned Order under challenge, the NCLT has it is quite clear that the subject matter of the instant appeal is not the contempt proceedings drawn qua the Sub Registrar, who is the party to the proceedings before the NCLT. It has been specifically observed in the said order, that it had not been issued for non-compliance of the order of the Tribunal dated 08.08.2023, by the appellant, as it would though still remain and the contempt proceedings as against the Sub Registrar would continue, to be considered on merits later.

The logical inference from this observation, as could be drawn would be that the NCLT consciously has not adjudicated on the contempt petition nor it had attached any finality to the contempt proceedings, as against the Sub Registrar (the Appellant) who is before this Court in this appeal, questioning the propriety of the order dated 10.05.2024. In fact, in the Impugned Order, NCLT has directed the IG Registration, Government of Tamil Nadu to file his personal affidavit to explain as to why its orders have not been complied with by him. The relevant observation made in the Impugned Order is extracted hereunder: -

From a careful reading of this order and the observation extracted above, it is clear and apparent that the IG Registration has not personally been called upon to appear before the Tribunal and that he has been only called upon to file a reply by way of an affidavit with regards to the allegations of the non-compliance of the order. There is no immediate cause of action or threat of any contempt as against the IG Registration, who is not before us, and that he has been only called upon to file a reply and subsequent action under section 425 of Companies Act, is yet to be taken. Further, there is no cause of action to invoke the Appellate Jurisdiction, as no punishment has so far been awarded in the contempt proceedings. Given such, the logical conclusion will be that the order sought to be impugned in this Appeal will not be an order which could be made as a subject matter of the Appellate Jurisdiction under section 61 of I & B Code, 1961, to be read along with section 19 of the Contempt of Courts Act. Further, at this stage, the Appeal Petition, even if the same had been preferred by IG Registration, would not lie since being outside the ambit of section 19 of the Contempt of Courts Act, and hence, the Appellate Jurisdiction under section 61 of I & B Code, would not be available to even IG Registration at this stage.

It is no more an issue res integra, that in the proceedings of Contempt, only the person who is called upon in such Contempt Proceedings, would agitate his cause either before the Court itself by filing of a reply as directed by the Impugned Order of 10.05.2024 or appeal against the order of punishment (if any), before the Appellate Jurisdiction. He cannot be represented by a subordinate or by another person to file a reply or, to file an Appeal before the Appellate Jurisdiction. Hence, the instant Appeal filed by the Sub-Registrar projecting the cause of the IG Registration, would not be maintainable before this Tribunal.

The Counsel for the Appellant has referred to the principles as enunciated by the Hon’ble Apex Court in the proceedings as reported in 2006 Volume 1 in SCC Page 163 Huda Vs B.K. Sood; 2024 LiveLaw SC/ Parties Page 3 Para 42, 43 & 45 as well as in the full bench Judgment of the Hon’ble Madras High Court. With all humility at our command, we disagree with the substance of the argument of the Learned Counsel for the Appellant as raised, as all these Judgments only proceed to determine as to under what circumstances a Government Official should be summoned by a Court to appear in person for the purposes of answering the Contempt Proceedings. The vital principle herein is that the summoning of a Government Official to the Court should not be done as a matter of routine as this may cause any undue harassment and often will be at the cost of the performance of public duty. The Hon’ble Apex Court has held that summoning of Government officials should not be done in a routine manner, until or unless, the circumstances of the particular case demand for an officer to appear in person to explain the reason of the apparent non-compliance of the order passed by the Court. These issues do not seem to be present in the instant appeal, because the Appellant by the Impugned Order dated 10.05.2024 has not been summoned to be present before the court and that, rather he has been only called upon to file a reply. It goes without saying, that the reply can be filed through the counsel representing him, though under his personal affidavit. Therefore, the Impugned Order should not be misunderstood, as if it is an order of summon which would then come under scrutiny under the judicial precedence referred to herein above as relied by the Learned Counsel for the Appellant.

Further, the Learned Counsel for the Appellant has endeavoured to widen the scope of arguing the Contempt Petition, and the Appeal too, as against the order of 10.05.2024, as if it is an Appeal arising from an order passed under section 47A of Indian Stamp Act pertaining to the quantification of the Stamp Duty, which was required to be paid on the instrument. With all due reverence at my command this may not be a subject, which is open to be argued by the Appellant Counsel, because it would altogether be a different subject matter to be raised in a separate proceeding where the Appellant, against whom the order of deficiency of stamps has been determined, will have to prefer the Appeal as per the Provisions of the Stamp Act. Further, quantification of the deficiency of the Stamp duty is not a matter which could be judicially scrutinized by this Tribunal in the exercise of an Appellate Jurisdiction under section 61 of I & B Code, which in the instant case could at all be read with the Provisions under section 19 of the Contempt of Courts Act, because the said ambit of exercise of powers will fall for consideration exclusively in an independent jurisdiction and proceedings under the Stamp Act.

In fact, the Appellant has attempted to portray, as if the Impugned Order of 10.05.2024, is an order calling IG Registration to appear in person. This may not be the case for the reason being that the Appellant has been summoned by the NCLT by altogether a different order i.e., dated 05.01.2024, as well as, the order of 08.08.2023, whereby the IG Registration was directed to be impleaded as a party in the proceedings before the NCLT. The Appellant has already preferred an appeal before this Tribunal against the aforesaid order allowing impleadment application and same is pending consideration. This has got no nexus so far as the instant order dated 10.05.2024 is concerned. We are of the view that the issue could be summarized in the following manner: -

The Company Appeal preferred by the Sub Registrar against the Impugned Order would not be maintainable, as he has been not called upon to file a reply and the Contempt against him is still pending consideration, not being decided finally.

The Sub Registrar cannot act as a shield for the IG Registration who had been called upon by NCLT to file a reply which is yet to be complied.

The issue may not be misunderstood, as if the order of 10.05.2024 was an order of directing appearance, which may attract the judicial precedents relied by the counsel for the Appellant, because it was simply an order calling upon to file a reply under the personal affidavit, which quite obviously can be done through the counsel representing the cause before the NCLT.

It is absolutely a futile exercise to venture into the implications of the Stamp Act, which will require proceedings under an independent Act, with self-contained provisions for redressal of the grievances emanating from the provision of the Stamps Act itself, and it cannot be intermixed with the implications of the Proceedings of Contempt by the Appellant.

The Impugned Order of 10.05.2024 would not be an appealable order under section 19 of the Contempt of Courts Act, to be read with section 61 of I & B Code, 2016, since it is not attaching any finality to the contempt proceedings by imposition of any punishment either against the Appellant herein i.e., Sub Registrar or even the IG Registration. Thus, the Appeal itself would be premature, not maintainable under section 61 of I & B Code, to be read with section 19 of the Contempt of Courts Act.

Direction to implead IG Registration by the NCLT is not required to be dealt with by this Tribunal in this proceedings because after the order of Impleadment of IG Registration by NCLT the Appeal preferred by IG Registration against such order is already pending consideration before this Tribunal, which is to be independently decided, as to whether at all it is necessary for IG Registration to be impleaded in the proceedings before the NCLT.

Hence, we are of the view that since the Impugned Order is not an order directing personal appearance and the simpliciter order of calling for a reply under the personal affidavit of IG Registration is not an order of punishment and since the IG Registration has been only called to file a reply before NCLT, the instant Appeal at the behest of the Sub Registrar would not be maintainable and the same is accordingly dismissed.