2019 (4) TMI 2006 - Tri - Insolvency and Bankruptcy

Tribunal Upholds Orders, Appoints Auditor, Rejects Objections, and Disposes Case

K.J. PAUL & 2 OTHERS Versus SEAQUEEN BUILDERS PVT LTD

The Tribunal emphasized compliance with previous orders, maintaining the Board's composition during processes, appointing an Independent Auditor for share ... Removal of Managing Director from the position of Managing Director - permission granted to him to perform the duties as Director of Rl Company - HELD THAT:- The communication clearly reveals that Mr. Kiran C.Mathew is appointed as new Manager (Administration) which directly violates the Order of this Bench dated 07.12.2017 - Mr. Kiran C.Mathew is hereby restrained from acting Manager (Administration) or Managing Director or new Managing Director of the Company with the direction to Applicant No.1 viz., Mr. K.J.Paul and R2 viz., Mr. P.M.Johny to make compliance with the Order dated 07.12.2017 read with Hon’ble NCLAT Order dated 13.12.2018. It appears that the Hon’ble High Court of Kerala has been pleased to take note of the urgency of the matters and permitted the parties in the said matter to approach this Bench for seeking appropriate reliefs. It is also made clear that till date the Kochi Bench is not functioning and all the matters are being dealt with by the NCLT Chennai. However, in relation to the interim Application on hand this Bench is already seized of the matter. Therefore, the objection raised by the Counsel for the Respondents stands rejected. Application disposed off. Issues:1. Compliance with the Order dated 07.12.2017 regarding the removal of the Managing Director.2. Appointment of an Independent Auditor for valuation of shares.3. Alleged violation of the Order dated 07.12.2017 by appointing a new Manager (Administration).4. Disagreement between the parties on the appointment of an Independent Auditor.5. Jurisdictional issue raised by the Respondents regarding the authority of the Tribunal.6. Reference made by the High Court of Kerala to the NCLT Chennai for consideration.7. Disposition of the Application.Compliance with the Order dated 07.12.2017 regarding the removal of the Managing Director:The Tribunal noted that the Managing Director of the concerned company was removed from the position but was allowed to perform duties as a Director. The Order emphasized the importance of compliance with the directives issued in the previous Order, ensuring that the composition of the Board remains unchanged until the specified processes are completed.Appointment of an Independent Auditor for valuation of shares:In line with the previous Order, the Tribunal reiterated the appointment of an Independent Auditor to determine the value of the company's shares, considering financial data from specific years. Despite disagreements between the parties on the selection of the Auditor, the Tribunal appointed a specific firm to carry out the valuation and submit the report within a stipulated timeframe.Alleged violation of the Order dated 07.12.2017 by appointing a new Manager (Administration):The Tribunal addressed concerns raised by the Applicants regarding the appointment of a new Manager (Administration) which was seen as a violation of the previous Order. The Tribunal restrained the individual from acting in the specified managerial roles and directed compliance with the previous Orders.Disagreement between the parties on the appointment of an Independent Auditor:The Tribunal acknowledged the disagreement between the parties on the selection of the Independent Auditor. To resolve this issue, the Tribunal exercised its authority to appoint a specific firm to conduct the valuation, emphasizing the importance of timely compliance with the directives.Jurisdictional issue raised by the Respondents regarding the authority of the Tribunal:Respondents raised a jurisdictional issue, claiming that the matter falls under the jurisdiction of a different Bench. However, the Tribunal rejected this objection, citing a reference made by the High Court of Kerala to the NCLT Chennai for consideration, establishing the authority of the current Bench to handle the matter.Reference made by the High Court of Kerala to the NCLT Chennai for consideration:The Tribunal highlighted a reference made by the High Court of Kerala to the NCLT Chennai, allowing parties to seek reliefs from the current Bench due to the non-functioning of the Kochi Bench. The Tribunal clarified its jurisdiction over the interim application and proceeded with the case accordingly.Disposition of the Application:After addressing all the issues and ensuring compliance with the previous Orders, the Tribunal disposed of the Application, instructing the Applicants to provide a certified copy of the Order to the Chartered Accountants for information and compliance, allowing the Accountants to determine their remuneration to be paid by the company.This detailed analysis of the judgment covers all the issues involved comprehensively, providing insights into the Tribunal's decisions and directives in each aspect of the case.