2024 (12) TMI 1628 - AT - Companies Law

Appeal dismissed as time-barred under Section 421, Companies Act, 2013; contempt motion and delay-condonation denied.

Col. Ashish Khanna (Retd.) Versus Delhi Gymkhana Club & Ors.

NCLAT (Principal Bench) rejected the appeal as barred by limitation under Section 421, Companies Act, 2013, holding that the SC decision relied on was ... Rejection of appeal filed by the Appellant on the ground of being barred by time limitation - Section 421 of the Companies Act, 2013 - HELD THAT:- The Hon’ble Supreme Court in Bhagwan Singh vs. State of U.P. & Ors [2024 (9) TMI 1805 - SUPREME COURT] after entering into the merits of the case directed the matter to be handed over for the investigation to the CBI. The order and direction passed by the Hon’ble Supreme Court in the above case was on the facts of the said case. The question regarding maintainability of the application in an appeal which has been dismissed as barred by time was not the subject matter of the issue, hence, the said judgment which was pronounced on the merits of the case does not come to the aid of the Appellant in any manner in the present application. The allegation of the Appellant is that the reply was filed by Respondent on 12.09.2024 which was served late night. The contention is that the reply was not filed within two weeks as directed by the order dated 12.08.2024. The application was heard on 24.09.2024. The ground that the reply to the Delay Condonation Application IA No. 5502 of 2024 was filed beyond the time allowed by the Court on 12.08.2024 cannot be basis for initiating any proceeding under Section 425 of the Companies Act, 2013 - Thus, the time for filing rejoinder was allowed to the Applicant/ Appellant on the reply received from Respondent. There are no merit in the submission of the Appellant that proceeding for contempt be initiated against the Respondent. Reply to the Delay Condonation Application as well as the Delay Condonation Application was heard and has already been decided by judgment of this Tribunal dated 21.10.2024 - thus, no relief can be granted to the applicant/appellant - application rejected. ISSUES PRESENTED AND CONSIDERED 1. Whether an application filed in an appeal that has been rejected as barred by delay is maintainable before the Tribunal seeking (a) initiation of criminal/proceedings for false affidavit (Sections 448/449 CA, 2013), (b) directions to NCLT to pronounce order in a reserved perjury complaint, (c) action under Section 425 CA, 2013 for alleged breach of the Tribunal's directions, and (d) costs for alleged repeated perjury. 2. Whether the filing of a reply/affidavit by a respondent beyond a timeline set by an earlier procedural order can sustain contempt or proceedings under Section 425 CA, 2013. 3. Whether cited Supreme Court authorities dealing with perjury, abuse of process and suo-motu contempt are applicable to the question of maintainability of an application filed after the underlying appeal has been dismissed as time-barred. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Maintainability of post-dismissal application in an appeal dismissed as barred by time Legal framework: The Tribunal's jurisdiction to entertain applications ancillary to an appeal depends on existence of a live, maintainable appeal (statutory scheme under Section 421 CA, 2013 and ordinary principles of appellate jurisdiction). Precedent treatment: Authorities relied upon by applicant concerning perjury, abuse of process and suo-motu contempt were examined by the Tribunal but were not decisions on the specific question whether an application can be entertained after an appeal has been dismissed as barred by time. Interpretation and reasoning: Where an appeal has been dismissed as not maintainable on account of delay (condonation application refused), the appeal is not before the Tribunal for adjudication on merits. An application filed in the appeal after dismissal (seeking reliefs arising from pleadings in that appeal) cannot be entertained because the appeal itself is not maintainable. Reliance on decisions decided on merits or on different factual matrices does not assist in altering the threshold question of maintainability. Ratio vs. Obiter: Ratio - an application seeking substantive or ancillary relief in an appeal must be filed while the appeal remains maintainable; once appeal is rejected as time-barred, such applications are not maintainable before the Tribunal. Observations distinguishing cited precedents as fact-specific are obiter to the extent they comment on perjury/abuse but do not affect the maintainability rule. Conclusion: The Tribunal held the application not maintainable to the extent it sought reliefs linked to an appeal already dismissed as barred by time; this ground alone supports rejection of the application. Issue 2 - Whether alleged late filing of a reply/affidavit warranted action under Section 425 CA, 2013 or contempt Legal framework: Section 425 CA, 2013 addresses punishment for knowingly making false statements in documents filed in company proceedings; contempt or breach proceedings require demonstration of non-compliance with an order and prejudice not cured by subsequent procedural allowance. Precedent treatment: The Tribunal reviewed the procedural orders issued in the appeal (directions to file reply within two weeks, subsequent listing and allowance to file rejoinder) and considered relevant decisions cited by applicant that dealt with perjury and contempt but on different facts. Interpretation and reasoning: The Tribunal examined the order dated 12.08.2024 directing reply within two weeks and the subsequent procedural developments. The Tribunal found that when the matter was taken up on the listed date, time to file rejoinder was granted to the applicant in respect of the reply actually received; thus any alleged late filing by respondent did not amount to contempt or breach warranting action under Section 425. Further, pleadings in the reply were considered part of contested litigation and not established as false statements under oath meriting criminal/perjury proceedings on the record before the Tribunal. Ratio vs. Obiter: Ratio - mere filing of a reply beyond a previously fixed timeline, where the court subsequently proceeds to deal with the matter and allows rejoinder, does not automatically constitute contempt or provide ground for Section 425 proceedings. Obiter - general observations about abuse of process and false affidavits (derived from other authorities) were distinguished as not determinative here. Conclusion: No prima facie basis existed to initiate action under Section 425 CA, 2013 or contempt proceedings based on the alleged late filing; prayer seeking such action was refused. Issue 3 - Allegations of perjury/false affidavit and invocation of Sections 448/449 CA, 2013 and criminal/perjury process Legal framework: Sections 448/449 CA, 2013 (and criminal law/perjury principles) require clear proof of knowingly false statements made on oath in judicial proceedings; courts exercise caution when converting contested pleadings into criminal charges absent compelling proof. Precedent treatment: Applicant relied on Supreme Court decisions condemning false documents and abuse of judicial process. The Tribunal acknowledged the correctness of the propositions condemning false affidavits and abusive litigation but emphasized that those authorities were decided on their own facts and not on whether post-dismissal applications are maintainable. Interpretation and reasoning: The Tribunal analyzed the affidavit/reply dated 12.09.2024 relied upon by the applicant and concluded that the pleaded material did not establish false statements under oath warranting criminal action. Because the appeal had been dismissed as time-barred, the Tribunal saw no basis to entertain a collateral application to institute perjury/criminal proceedings within the appeal file. The Tribunal also noted that orders of other courts cited by the applicant related to distinct situations (e.g., suo-motu contempt, CBI investigation directions) and therefore did not support the present reliefs. Ratio vs. Obiter: Ratio - allegations of perjury in the context of a dismissed appeal cannot be pursued by way of an application in that appeal when no maintainable proceedings remain; further, contested affidavits do not ipso facto constitute false statements warranting criminal prosecution without supporting proof. Observations distinguishing the applicability of cited Supreme Court authorities are explanatory and obiter in context of maintainability. Conclusion: The Tribunal declined to direct initiation of proceedings under Sections 448/449 CA, 2013 or to direct NCLT to pronounce order in the reserved perjury complaint via an application in a dismissed appeal; the perjury allegations were not sustained on the record before the Tribunal. Issue 4 - Prayer for costs arising from alleged perjury Legal framework: Costs in appellate proceedings are discretionary and normally follow the outcome of live proceedings; costs predicated on finding of misconduct require antecedent finding of such misconduct. Precedent treatment and interpretation: Having found the substantive prayers (perjury, contempt, directions) unmeritorious or unmaintainable, the Tribunal held that the ancillary prayer for costs could not be allowed. Ratio vs. Obiter: Ratio - costs predicated on findings of perjury or contempt cannot be awarded where those findings are not made and the substantive applications are rejected. Conclusion: Prayer for costs was rejected. Overall Conclusion The Tribunal rejected the application in its entirety: the application was not maintainable in an appeal dismissed as barred by time; there was no basis to initiate action under Section 425 CA, 2013 or Sections 448/449 CA, 2013 on the material before the Tribunal; cited precedents were distinguished as fact-specific and not determinative of maintainability; and the prayer for costs was accordingly denied. The application was dismissed.