2022 (9) TMI 1218 - AT - Companies Law

Tribunal Allows Withdrawal and Filing of New Waiver Application, Clarifies Procedural Rules

The Tribunal allowed the withdrawal of the first waiver application to address technical defects and permitted the filing of a new waiver application. It ... Oppression and Mismanagement - requisite shareholding to maintain the Petition, present or not - waiver of the shareholding requirements mentioned in Section 244 (1) (a) of the Companies Act, 2013 - Section 241 and 242 of the Companies Act, 2013 - seeking withdrawal of second waiver application - HELD THAT:- Admittedly, before passing of the impugned order, an opportunity of Hearing was given to the Appellants. In this connection, a cursory perusal of the ingredients of Rule 111 (1) of the NCLT Rules, 2016, Filing of objections by Respondent, Form and Consequences, unerringly points out that the Respondent, if so directed, shall file Objections or Counter within the time allowed by the Tribunal. In effect, the Tribunal has an inherent power while exercising its discretion not to direct the Respondent to file a Counter / Reply / Response in regard to the First Waiver Application, as opined by this Tribunal. In the case on hand, under Section 241 of the Companies Act, 2013, there are no pending Proceedings before the Tribunal. Therefore, this Tribunal, safely, securely and in a cocksure fashion holds that the Appellant(s) cannot seek the aid / invocation of Rule 82 of the NCLT Rules, 2016. There is no negation of the principles of natural justice, in as much as the impugned order was to allow a filing of Fresh Petition, as per the ingredients of Section 244 of the Companies Act, 2013, pertaining to the affairs of the Appellant’ (in Comp. App (AT) (CH) No. 54 of 2021) / ₹ 1st Respondent(Ambadi Investments Limited). It cannot be brushed aside that at the time of passing the impugned order, the First Waiver Application Viz. CP/29/CHE/2021 was pending and the Petition (filed under Section 241 of the Companies Act, 2013) was not to be numbered, till the time the Tribunal, permitted the CP/29/CHE/2021 (the First Waiver Application, under Section 244 of the Companies Act, 2013) - It cannot be gainsaid that the Prospective Company Petition of the Respondent Nos. 1 and 2 filed with the First Waiver Application (CP/29/CHE/2021) in the eye of Law, cannot be construed to be a Petition filed under Section 241 of the Companies Act, 2013 / or under the NCLT Rules, 2016, because of the Rule 29 of the NCLT Rules, 2016, which categorically enjoins that on admission of Appeal or Petition or Caveat Application, the same shall be numbered and registered in the appropriate Register maintained in this behalf and its number shall be entered therein. There is no gain saying of the pivotal fact that Law does not coerce / force any Litigant to pursue the Litigation. In fact, in a Civil Suit / Civil Proceeding, a Plaintiff/ Petitioner is a Dominus Litis. This Tribunal considering the divergent contentions advanced on either side, keeping in mind the facts and circumstances of the present case and also on going through the impugned order dated 29.09.2021 in MA(Comp. Act)/79/CHE/2021 in CP/29/CHE/2021, comes to a consequent conclusion that the views arrived at by the National Company Law Tribunal, Division Bench-I, Chennai, in permitting the Withdrawal of CP/29/CHE/2021 (First Waiver Application) on its file, dismissing the same as Withdrawn and taking the CP/95/CHE/2021 (Second Waiver Application) on its file, to take up the objections, if any, in relation to the Second Waiver Application at an appropriate stage, etc. are free from any legal flaws. Appeal dismissed. Issues Involved:1. Validity of the withdrawal of the first waiver application (CP/29/CHE/2021).2. Compliance with procedural rules under the NCLT Rules, 2016.3. Allegations of perjury and procedural lapses.4. Applicability of Rule 44 and Rule 82 of the NCLT Rules, 2016.5. Impact of the death of one of the respondents on the proceedings.6. The legality of filing a second waiver application (CP/95/CHE/2021) during the pendency of the first waiver application.7. The principle of natural justice and the opportunity to be heard.Detailed Analysis:1. Validity of the Withdrawal of the First Waiver Application (CP/29/CHE/2021):The Tribunal allowed the withdrawal of the first waiver application (CP/29/CHE/2021) based on the petitioners' request to address technical defects and bring on record new material facts. The Tribunal found that the withdrawal was justified and permitted the petitioners to file and proceed with a new waiver application (CP/95/CHE/2021).2. Compliance with Procedural Rules under the NCLT Rules, 2016:The Tribunal examined the compliance with Rule 44 and Rule 82 of the NCLT Rules, 2016. It concluded that Rule 44(2) allows withdrawal of an application before the hearing stage and does not mandatorily require hearing the opposite party. The Tribunal found that the first waiver application had not reached the hearing stage, and thus, Rule 44 was applicable.3. Allegations of Perjury and Procedural Lapses:The appellants alleged that the respondents committed perjury by filing affidavits with incorrect dates and not following the required procedures. However, the Tribunal noted that these allegations were not substantiated with sufficient evidence, and the procedural lapses did not impact the merits of the case.4. Applicability of Rule 44 and Rule 82 of the NCLT Rules, 2016:The Tribunal clarified that Rule 82 applies to the withdrawal of applications filed under Section 241 of the Companies Act, 2013, and not to waiver applications under Section 244. Since the first waiver application was not yet heard, Rule 44(2) was applicable, allowing the withdrawal.5. Impact of the Death of One of the Respondents on the Proceedings:The Tribunal acknowledged the death of one of the respondents (Mrs. M.V. Valli Murugappan) and noted that the offence of perjury abates on the death of the accused, as per Section 394(2) of the Criminal Procedure Code. Therefore, the allegations of perjury against the deceased respondent did not survive.6. The Legality of Filing a Second Waiver Application (CP/95/CHE/2021) During the Pendency of the First Waiver Application:The Tribunal found that the filing of the second waiver application (CP/95/CHE/2021) was permissible as the first waiver application (CP/29/CHE/2021) was withdrawn to address technical defects. The Tribunal allowed the second waiver application to be taken on record and directed that any objections to it be considered at an appropriate stage.7. The Principle of Natural Justice and the Opportunity to be Heard:The Tribunal provided a reasonable opportunity for the parties to present their arguments. It noted that the appellants were given time to file their submissions and were heard before the impugned order was passed. The Tribunal found no violation of the principles of natural justice.Disposition:The appeals (Comp. App (AT) (CH) No. 54 of 2021, Comp. App (AT) (CH) No. 4 of 2022, and Comp. App (AT) (CH) No. 6 of 2022) were dismissed, and the impugned order dated 29.09.2021 was upheld. The connected interim applications for stay were also closed.