Tribunal's Cost Award for Unnecessary Involvement Upheld, Dismissing Appeal on Deleting Respondents' Names in Company Petition.

The NCLT Ahmadabad Bench's decision to delete the names of certain respondents from a petition under Sections 241-243 of the Companies Act, 2013, was upheld. The Tribunal imposed a cost of Rs. 5,00,000/- on the appellant for the respondents' alleged losses. The appellant's challenge to this cost was dismissed, with the Court affirming that the respondents were unnecessarily involved in the litigation, justifying the awarded amount. The appeal was dismissed without any order as to costs, reinforcing the Tribunal's original decision.

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Issues involved:
The judgment involves issues related to an appeal against an order passed by the National Company Law Tribunal, Ahmadabad Bench, regarding deletion of names of respondents from the array of parties in a main petition under Section 241, 242, and 243 of the Companies Act, 2013, and the imposition of a cost of Rs. 5,00,000/- on the appellant for the respondents' alleged losses.

Details of the Judgment:

Issue 1: Deletion of Names of Respondents
The Appellant filed CP No. 46 of 2017 against 'Gangotri Infrastructure Pvt. Ltd.' and Respondent No. 2 to 13 under Section 241, 242, and 243 of the Companies Act, 2013. The order of stay against Respondent No. 4 to 8 and 13 was vacated on 18.12.2019. An application was filed to delete their names from the main petition, which was allowed by the Tribunal. The Tribunal directed the Appellant to file an amended company petition after deletion of names of Respondents No. 4 to 8 and 13 and pay a token amount of Rs. 5,00,000/- to be distributed to them equally. The Appellant challenged the direction to pay the amount, arguing that the respondents were unnecessarily dragged into the litigation and their names were deleted to avoid legal complications. The Court held that the respondents were rightly awarded the amount as they had suffered losses due to being involved in the main petition unnecessarily.

Issue 2: Imposition of Cost
The Tribunal directed the Appellant to pay a token amount of Rs. 5,00,000/- to Respondents No. 4 to 8 and 13 for their alleged losses in business and reputation. The Appellant contended that the imposition of cost was unwarranted as the respondents were initially impleaded in the main petition but later their names were deleted to avoid legal objections. The Court observed that the respondents were unnecessarily involved in the litigation and had to contest the application for two years until the stay was vacated. The Court upheld the Tribunal's decision to award the amount to the respondents, considering the circumstances of the case and dismissed the appeal without any order as to costs.

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