Vinod Bajaj vs Vetril Systems Private Limited & Ors.

[Per: Justice Sharad Kumar Sharma; Member (Judicial)]:

These are three Company Appeals which engage consideration of a common question of fact. Hence for the purposes of brevity, they are being decided together.

In the CA (AT) (CH) No. 49/2024, the challenge has been given by the Appellant, is to the Impugned Order dated 29.05.2024, passed by the NCLT, Bengaluru Bench, in CA No. 102/2022, as preferred in CP No. 11/BB/2022, whereby the virtue of the Impugned Order under challenge, the earlier Interim Order dated 18.02.2022, granted by the Learned Adjudicating Authority, while exercising its powers under Rule 11 of the NCLT Rules, 2016 had been vacated. The instant Company Application in question that is, CA No. 102/2022, engaged consideration of the question, as to whether the Company Petition itself is maintainable in terms of Section 244 of the Companies Act, 2016, owing to the fact that the Petitioner/Respondent No. 1, therein was holding 7.69 percent of shares, which is below the required threshold 10 percent, which is required so as to invoke the Tribunal’s discretionary jurisdiction under Section 241 of the Act. The Learned Adjudicating Authority while considering the CA No. 102/2022, in the aforesaid Company Petition had allowed the application and as a consequence thereto has vacated the Interim Order which stood granted on 18.02.2022. Hence, the instant Company Appeal.

In the Company Appeal (AT) No. 75/2024, the order which is under challenge is dated 29.05.2024, as it was passed in CA No. 103/2022 in CP No. 12/BB/2022, which too were the proceedings, which too engaged consideration as to whether at all the proceedings under the main Company Petition CP No. 11/BB/2022, will be maintainable under Section 244 of the Companies Act, owing to the non-availability of the requisite percentage of the shareholdings for the purposes of initiating proceedings under Section 241 of the Companies Act, 2016, because Section 244 stipulates that, a member of a company shall have the right to initiate the proceedings under Section 241 of the Companies Act, provided he holds not less than 10% of the issued share capital of the company. The Learned Adjudicating Authority had initially granted an Interim Order on 18.02.2022 which has been vacated by the Impugned Order dated 29.05.2024, as it has been passed in CA No. 103/2022.

Company Appeal (AT) (CH) No. 76/2024, once again engages consideration of the similar issue; In this Company Appeal, the Appellant challenges the Impugned Order dated 29.05.2024, which was passed in CA No. 104/2022, as preferred in CP No. 13/BB/2022, by virtue of which the Interim Order granted on 18.02.2022 was vacated on the grounds of non-satisfying of the conditions contained under Section 244 of the Companies Act, that is, not having the requisite percentage of share-holding to initiate the proceedings under Section 241.

These three Appeals have been argued by the Learned Counsel for the Appellant at length, laying down grounds as to why the impugned orders should be set aside.

The Respondent has opposed the Appeals, contending thereof that the Impugned Orders dated 29.05.2024, as respectively passed in each of the Company Appeals are merely orders of vacation of stay granted to the Appellant in the exercise of discretionary power under Rule 11 of the NCLT Rules, 2016, and hence will not fall to be an order which could be treated as deciding the case finally, having the effect of affecting the rights of the parties which could alone sustain the Appeals under Section 421 of the Companies Act. The Learned Counsel for the Appellant has contended the same by submitting that the Learned Adjudicating Authority, has not recorded any reasons while vacating the stay order and the grounds, which have been raised in the impugned order taking it as to be the basis for vacating the stay are not sustainable. Further, the Respondents while supporting the Impugned Order dated 29.05.2024, have contended that since the Appellant, has shown to be not interested to continue with the company, he may not be having any effective right to be granted permission under Section 244 of the Companies Act, to pursue the proceedings under Section 241 to be read with Section 242 of the Companies Act, 2013.

It is also a fact, which has come on record that after filing of this Appeal the Appellants have filed yet another stay application, before the Learned Adjudicating Authority and the same is pending consideration.

Be that as it may, the respective counsels after arguing for a quite at length, have ultimately submitted that when these company appeals were heard by this Appellate Tribunal on 25.11.2024, an observation was made by way of a request to the NCLT, Bengaluru Bench, to make all efforts to decide the company petitions itself on its own merits, as expeditiously as possible.

The Learned Counsel for the Appellant ultimately has also volunteered to submit that if the Appeals are closed and disposed of with a direction to the Learned Adjudicating Authority, to decide the Company Petitions expeditiously, that involved consideration, in each of the instant Company Appeals, he may not have any grievances. He has further prayed for that certain time frame may be fixed for the Adjudicating Authority to decide the Appeals.

Framing of a time frame requesting the adjudicating authority to decide the Appeals within a specified time, may not be the scope, which could be exercised by this Appellate Tribunal, as law does not contemplate or vest a right or even power with the superior Appellate Forum, to regulate the roster of the Learned Adjudicating Authority in a time bound manner. But owing to the fact that since the Learned Counsel for the Appellant has stated that, the direction which has been issued earlier in form of a request to the NCLT, to decide the aforesaid Company Petitions itself along with all the pending Interlocutory Applications, as expeditiously as possible, if that is reiterated, it will suffice the purpose.

Owing to the aforesaid statement made by the Learned Counsel for the Appellant, these Company Appeals will stand disposed of, with a request to the Learned Adjudicating Authority to make all efforts to decide the aforesaid company petitions as expeditiously as possible, according to its work load in the roster. It is made clear that this Appellate Tribunal has not expressed any opinion on the merits of the matter nor it intends to regulate the roster of the learned Adjudicating Authority. It is only a request made by the Learned Adjudicating Authority, as prayed for by the Counsel for the Appellant. Hence the Appeals would stand disposed of with a request to the Learned Adjudicating Authority to made efforts to decide the Company Petitions as expeditiously as possible.

Subject to the above, the Appeals would stand closed. All pending Interlocutory Applications if any would stand disposed of.