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Judgment
O R D E R
This Company Appeal is being heard finally. Primarily the challenge as given by the Appellant, is as against the Interlocutory Order dated 24.09.2024, which has been passed on IA (CA/175/CHE/2024) In Company Petition/46/(CHE-2023) by NCLT Bench Chennai.
By virtue of the Impugned Order which is under challenge, the Learned NCLT by way of an interim arrangement, had directed that the resolutions which were passed in the Board’s meeting, which was stated to have been held on 04.09.2024, be kept in abeyance by way of interim measure, till the matter is adjudicated finally by it. The Learned Counsel for the Appellant agitates his grievance as against the impugned Order contending thereof that one of the resolutions taken in the said Board meeting was to hold the AGM to and fix the date for it, that holding of AGM on or before 30.09.20234 is mandated by statute and that holding of AGM is his statutory right which has been put on hold by the Impugned Order. He contends that not holding AGM on or before 30.09.2024 will be a violation of relevant provisions of the Companies Act. He contents further that, the Impugned Order has been passed in utter derogation to the principle of the natural justice, because his contentions as were alleged to have been raised were not considered by the Learned Adjudicating authority while passing the impugned order and therefore the Impugned Order may be set aside.
On the contrary, the Respondent’s counsel submits that, the entire proceedings of the meeting of the Board of Directors meeting held on 04.09.2024 are malafide for the reason being that, in the proceedings which was conducted before the Tribunal on 09.08.2024, it was agreed between the parties that, the parties, after failing to explore the possibility of settlement, amongst the family members will get the matter adjudicated before NCLT and accordingly NCLT fixed the next date of hearing as 24.09.2024 and this being the position, he contends that the Appellant herein, contrary to the position taken before NCLT on 09.08.2024, has proceeded to issue a notice dated 28.08.2024, for the purposes of holding the meeting of the Board of Directors on 04.09.2024, that, and the Agenda for the said meeting as circulated by the Appellants runs contrary to the controversy which is still to be principally decided by the Tribunal, particularly in relation to the agenda items relating to changes in composition of Board by appointing New Directors and change of name of the Company. In addition, after completing the said Board Meeting, the Appellant issued Notice on 09.09.2024 of the Annual General Meeting (AGM) of the Company, proposing to hold it on 30.09.2024 with 5 items of business, (page 129 of Appeal Memo) out of which 4 items of business relating to appointment of new directors and to the proposed change of name of the Company runs counter to the stand taken before NCLT that he will abide by the adjudication by NCLT, Chennai. The Learned Counsel for the Appellant in response submits that, holding of the AGM is his statutory rights and that has been curtailed by the interim order. which is under challenge, and that, not holding the AGM and getting the Annual Accounts approved before 30.09.2024 will be contravention of the provisions of Companies Act.
At this stage, we do not wish to dwell into the factual intricacies for the reason being that we are conscious of the proceeding held on 09.08.2024, where the parties have unanimously resolved, to explore whether the matter could be settled between the parties and failing in such, thereafter agreed to abide by the Adjudication by NCLT, and it was thereafter, only that the notice dated 28.08.2024 was circulated by the appellant to hold the meeting of Board of Directors with agenda items which ran contrary to his stated stand. The contention has been raised by the Learned Senior counsel for the appellants in the context that, they were not provided with an opportunity of hearing, he, for the said purposes, has referred to the ground No. (d), (e) and (f) as taken in the memorandum of appeal. These grounds may not inspire much confidence, as far as the said argument of the appellant counsel is concerned, for the reason being that, apart from the fact that the impugned order reflects that, the opponent party,(Appellants herein in this appeal) were heard on the application, the grounds which has been referred to being ground No. (d), (e) and (f)in the Appeal Memo are not established, in the light of the argument extended by the counsel for the Appellant that, the before the Tribunal the Learned instructing counsel has requested for a passover before the Tribunal and that, it was declined and the matter was heard on the Interlocutory Application and it was decided by the impugned Order in question. Hence, there is no question of sufficient opportunities not provided as alleged by the Appellants. As far as, the impugned order is concerned it is only an arrangement, which has been made by the Learned tribunal qua the proceedings of AGM, which is scheduled to be held on 30.09.2024, though the principle interim application preferred by the respondent being IA (CA No.175/2024) in CP/46/CHE/2023, is yet to be considered on its own merit on the next date fixed, that is, 18.10.2024.
In order to settle the controversy, the Counsel for the Appellants proposes that, the AGM which is scheduled to be held today, that is, 30.09.2024, for which the items of Business has already been floated as on 09.09.2024, that may be permitted to be held for the purposes of the ‘First Item of Business’ only and the decision taken thereof would be subject to the final decision of the Company Petition itself. The same is permitted. At the same time, is made clear that as far as the items of Business No. 2, 3 and 4 and 5 are concerned they would not constitute as to the subject matter of consideration in the proposed AGM and would remain suspended from the items of Business to be Carried out in the AGM which is scheduled to be held today i.e., 30.09.2024.
Having said so this appeal would stand disposed of with a request to the Learned Adjudicating Authority, to take a final call on IA (CA/175/CHE/2024) and decide the same exclusively on its on own merit within a period of 3 weeks from today. Subject to the aforesaid the company appeal would stand closed.