Dismissal of Order VII Rule 11(d) Challenge; NCLT Orders Forensic Audit

The revisions challenging the dismissal of applications seeking rejection of plaints under Order VII Rule 11(d) CPC were dismissed. The suits involving declaration of invalid sale deeds and oppression/mismanagement under the Companies Act, 2013 were not barred by law. The National Company Law Tribunal granted reliefs and ordered a forensic audit due to prima facie findings of oppression and mismanagement. The Tribunal lacked exclusive power to set aside the sale deeds beyond three months, and the bar under Section 430 did not extend to the pending suits before the Civil Court. The contentions raised were found to lack merit, leading to the dismissal of the revisions.

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Issues:
Challenging dismissal under Order VII Rule 11(d) CPC for suits seeking declaration of invalid sale deeds and oppression/mismanagement in Companies Act, 2013.

Analysis:
1. The petitioners filed revisions challenging the dismissal of their applications under Order VII Rule 11(d) of the CPC, seeking rejection of plaints due to the suits being barred by law.
2. The suits sought a declaration of invalidity of certain sale deeds and complained of oppression and mismanagement involving the company's properties and directors.
3. Proceedings were transferred to the National Company Law Tribunal, which granted reliefs and ordered a forensic audit due to prima facie findings of oppression and mismanagement.
4. The petitioners argued that the suits were barred under Section 430 of the Companies Act, 2013, as the reliefs could be granted by the Tribunal under Sections 241 and 242, which deal with oppression and mismanagement.
5. The bar under Section 430 applies when the Tribunal has exclusive power over a matter subject to a civil suit, as clarified in previous judgments regarding the scope of such bars under the law.
6. To invoke the bar under Section 430, it must be shown that the Tribunal had the exclusive power to set aside the sale deeds, as per the provisions of Section 242(2) of the Companies Act.
7. The Tribunal's powers under Section 242(2) do not allow for setting aside transactions beyond three months, which does not cover the sales in question from 2013 and 2014.
8. Previous judgments highlighted the limitations on the Company Law Board's power to set aside sales, supporting the conclusion that the Tribunal lacks the authority to decide on the validity of the sale deeds in this case.
9. The bar under Section 430 of the Companies Act does not extend to the pending suits before the Civil Court due to the Tribunal's lack of empowerment to decide on the validity of the sale deeds.
10. Another contention raised relates to the principle that a non-party to a sale deed can seek a declaration that the sale is not binding without seeking to set aside the sale, as established in previous case law.
11. Both contentions raised in support of rejecting the plaint were found to lack merit, leading to the dismissal of the revisions.
12. The appeal against the National Company Law Tribunal's orders is pending before the National Company Law Appellate Tribunal, with a directive to decide without influence from the current order.

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