2025 (9) TMI 683 - AT - Companies Law

Contempt petition unsustainable after earlier order set aside; Bhagwan Singh inapposite (Sec 482 CrPC); no interim relief

Col Ashish Khanna, (Retd.) Versus Delhi Gymkhana Club Ltd. & Anr.

NCLAT held the contempt petition alleging breach of the SC's 13.10.2023 order was unsustainable: the SC had itself decided the related matter and set ... Violation of subsequent order passed by the Hon’ble Supreme Court - all relevant orders passed by this Tribunal and the Hon’ble Supreme Court was handed over to the Court which indicate that nothing is pending in the NCLAT - HELD THAT:- A Contempt Petition was filed alleging violation of subsequent order dated 13.10.2023 passed by the Hon’ble Supreme Court. In the above context, the Hon’ble Supreme Court decided the matter on 30.10.2023. Order of the NCLAT dated 13.10.2023 was also set aside. The order passed by the Hon’ble Supreme Court in the above case was on its own fact and arose out of proceedings which were decided by this Tribunal in Appeal arising out of Section 241-242 of the Companies Act, 2013. The above judgment in no manner helps the Appellant in the facts of the present case. Another judgment which has been relied by Counsel for the Appellant is judgment of the Hon’ble Supreme Court in Bhagwan Singh vs. State of U.P. & Ors. [2024 (9) TMI 1805 - SUPREME COURT]. There can be no dispute to the proposition laid down by the Hon’ble Supreme Court in case of Bhagwan Singh vs. State of U.P. & Ors. However, the order passed in Bhagwan Singh vs. State of U.P. & Ors. was an order which arose from an order of the High Court passed under Section 482 of the CrPC where High Court has quashed the entire proceedings arising out of the case under Sections 363, 367 and 376 of the IPC. The said judgment in no manner comes to the aid of the Appellant in the present case. In the present case, the application which has been filed by the Appellant has not yet been decided finally and are still pending before the NCLT, Principal Bench. The application filed by the Appellant have been adjourned to 09.10.2025 and has not yet been decided by the NCLT, Principal Bench on merits - there are no reason to grant any interim relief as prayed in the Appeal by the Appellant. Appeal disposed off. 1. ISSUES PRESENTED AND CONSIDERED 1. Whether the order of the Tribunal adjourning multiple applications to a future date on account of alleged non-compliance with a costs direction, multiplicity of proceedings instituted by the applicant, and pendency of proceedings before the Appellate Tribunal/NCLAT was justified. 2. Whether the Tribunal erred in treating matters as pending before the Appellate Tribunal/NCLAT when the Appellate Tribunal had earlier finally decided the relevant appeals and only a civil appeal to the Supreme Court remained pending. 3. Whether decisions of higher courts relied on by the appellant (construed examples of Orbit Electricals and Bhagwan Singh) were applicable to challenge the adjournment or to seek immediate relief. 4. Whether interim reliefs sought (including directions under Section 242 and directions for implementation of an earlier NCLT order) should be granted pending determination of applications before the NCLT. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of adjournment based on non-compliance with costs order, multiple proceedings, and pendency of other proceedings Legal framework: Tribunals possess judicial discretion to adjourn matters for reasons including non-compliance with directions, multiplicity of litigations, and to avoid piecemeal or premature adjudication; orders imposing costs may be enforced by consequential directions. Precedent treatment: The Court reviewed the Tribunal's recitals of earlier orders (15.12.2023, 05.04.2024, 10.09.2024) as the factual basis for adjournment; where earlier orders are not in the record before this Court, their correctness could not be re-examined on the appeal from the adjournment order. Interpretation and reasoning: The Appellate Tribunal found the NCLT had recorded non-compliance of the costs order and had other reasons (multiple proceedings initiated by the applicant) recorded in earlier orders; absent those earlier orders on record, the appellate forum limited itself to observing that reasons were given and that the NCLT was entitled to adjourn. The Tribunal emphasized that an adjournment for stated reasons is within judicial discretion and permissible where reasons are articulated. Ratio vs. Obiter: Ratio - An adjournment supported by articulated reasons (non-compliance, multiplicity of proceedings) is not per se impermissible; appellate interference is constrained where antecedent orders/reasons are not before the Court. Obiter - No general rule was laid down on the temporal limits of adjournment in such circumstances. Conclusion: The adjournment to 09.10.2025 was not set aside on the ground that the NCLT had provided reasons; the appellate forum declined to disturb the exercise of discretion in the absence of record negating those reasons. Issue 2: Whether the NCLT erred by noting matters pending before the Appellate Tribunal/NCLAT Legal framework: A court's decision to defer hearing due to pendency of related appeals before higher fora is legitimate if such pendency materially impacts adjudication; correctness depends on the actual pendency and relation of those proceedings to the matters before the adjudicator. Precedent treatment: The Appellate Tribunal examined the record and found that the earlier Company Appeals before it had been finally decided by this Tribunal, and post-decision only a civil appeal to the Supreme Court remained pending; additional interlocutory applications brought by a respondent were dismissed subsequently, leaving no pending matters before this Tribunal arising from the NCLT order of 01.04.2022. Interpretation and reasoning: The Court held that insofar as the NCLT relied on matters pending before the Appellate Tribunal as a reason for adjournment, that reliance was misplaced because the Appellate Tribunal had already disposed of the appeals related to the NCLT order and no appeals remained before it; therefore, pendency before this Appellate Tribunal could not be a reason to defer the NCLT from proceeding. However, the existence of a civil appeal pending in the Supreme Court was acknowledged as separate and did not prevent the Appellate Tribunal from observing that the NCLT should proceed where nothing remains pending before the Appellate Tribunal. Ratio vs. Obiter: Ratio - The NCLT should not postpone proceedings on the basis that matters are pending before the Appellate Tribunal when, in fact, no such appeals or interlocutory matters are pending. Obiter - The existence of a further appeal to the Supreme Court does not automatically justify adjournment by the NCLT where nothing relevant is pending before the intermediate appellate forum. Conclusion: The Court concluded that nothing remained pending before the Appellate Tribunal arising out of the NCLT order dated 01.04.2022 and directed that the NCLT Principal Bench may proceed to consider the applications in accordance with law. Issue 3: Applicability of cited Supreme Court authorities (Orbit Electricals; Bhagwan Singh) Legal framework: Reliance on precedent requires factual parity or applicable legal principle; appellate courts assess whether prior judgments are on point or distinguishable on facts. Precedent treatment: The Court analysed the two relied upon authorities and found both to be fact-specific and distinguishable: (a) Orbit Electricals arose from orders concerning declaration of AGM results and NCLAT directions and involved setting aside an NCLAT order and contempt proceedings - facts materially different from the present dispute; (b) Bhagwan Singh related to criminal proceedings and abuse of process and did not address the maintainability of applications in civil/tribunal appeals dismissed as time-barred; that decision addressed different procedural and substantive contexts. Interpretation and reasoning: The Court accepted the legal propositions in those judgments (for example, that judicial process must not be used as instrument of fraud), but held that the facts and core issues in those cases do not advance the appellant's position in relation to an adjournment grounded on non-compliance and multiplicity of proceedings; further, where an appeal has been finally decided by this Tribunal, the cited precedents did not mandate immediate intervention in the NCLT's exercise of discretion. Ratio vs. Obiter: Ratio - Authorities relied upon were distinguished and held not to be applicable to justify setting aside the adjournment or to obtain the reliefs sought. Obiter - Affirmation that principles against abuse of process remain good law but were inapposite on the instant facts. Conclusion: The cited precedents did not assist the appellant; they were distinguished on facts and legal scope and did not require interference with the impugned adjournment order. Issue 4: Appropriateness of granting interim reliefs sought (directions under Section 242; implementation of an earlier NCLT order) Legal framework: Interim relief in appellate proceedings requires prima facie entitlement and urgency; tribunals will not grant interim directions that would preclude the proper adjudication of pending applications or substitute for substantive applications properly instituted in the competent forum. Precedent treatment: The Appellate Tribunal considered the nature of the prayers and observed that the substantive applications for the reliefs either remained pending before the NCLT or were matters that required separate substantive applications before the appropriate forum; the appellate court declined to convert the present appeal into a vehicle for interim grant of substantive reliefs without adjudication by the NCLT or a properly constituted application before the Appellate Tribunal. Interpretation and reasoning: Prayer (a) - request for a direction under Section 242 to the Union to remove an office-bearer was characterized as a substantive relief that must be sought by an appropriately constituted application before the Appellate Tribunal; it could not be treated as an interim direction in this appeal. Prayer (b) - direction to implement an earlier NCLT order was rejected as an interim remedy because the appellant had already pursued such applications before the NCLT which remain pending, and such relief cannot be granted by way of interim order in the present proceedings. Ratio vs. Obiter: Ratio - Interim reliefs that are substantive in nature and properly the subject of pending applications before the NCLT will not be granted by the Appellate Tribunal in the absence of demonstrated urgency and cogent legal basis. Obiter - Guidance that appellants may pursue substantive applications in the appropriate forum instead of seeking reliefs by interim measures on appeal. Conclusion: No interim relief was granted; the appellant was directed to pursue substantive reliefs by appropriate applications and the Appellate Tribunal declined to entertain interim directions sought in the appeal. Final Disposition (operative conclusion derived from reasoning) The appeal was disposed of with the observation that nothing is pending before this Appellate Tribunal arising out of the NCLT order dated 01.04.2022 and that the NCLT Principal Bench may proceed to consider the applications in accordance with law; no interim relief was granted and the adjournment order was not interfered with on the present record.