Company bank account freeze tied to ROC "management dispute" marking-defreezing upheld; former directors and bank lacked standing.

The dominant issue was whether continued freezing of the company's bank accounts could be sustained and whether former directors and the bank had locus to seek recall/clarification of the defreezing order. The HC held that once the ROC, pursuant to MCA directions, unmarked the "management dispute," no fetter could remain; in any event, such ROC marking concerns statutory compliances and cannot justify a bank's operational freeze. The HC further held that, with the NCLT having dismissed the challenge to removal/non-reappointment of the concerned directors and no stay operating despite a pending NCLAT appeal, those persons lacked locus to object to account operations or seek recall, and the bank had no subsisting justification to withhold compliance. The impugned order suspending the parent defreezing order for want of reasons was set aside and the appeal was disposed of.

---

---

1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the order directing that the earlier defreezing direction "shall not be acted upon" and keeping the connected contempt proceeding in abeyance could be sustained when it recorded no reasons or prima facie basis.

(ii) Whether parties could be added as respondents to a writ petition already disposed of, without first allowing the pending recall application and reopening the disposed matter.

(iii) Whether the applications seeking (a) "clarification" from the bank and (b) "recall simpliciter" by third parties were, on the Court's determination for purposes of the appeal, lacking maintainability so as to render the impugned directions unsustainable.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Sustainability of suspending operation of the earlier defreezing order and keeping contempt in abeyance without reasons

Interpretation and reasoning: The Court found that the impugned order effectively suspended the earlier direction to defreeze accounts and consequentially kept the contempt application in abeyance. However, the Single Judge's order merely stated that, upon hearing submissions, the matter "was required to be heard", without recording any reasons, without indicating any prima facie case, and without adverting to a discernible basis for restraining implementation of the earlier order.

Conclusions: Such suspension of the operative direction and keeping contempt in abeyance, in the absence of recorded reasoning, was held unsustainable and could not stand.

Issue (ii): Permissibility of impleading/addition of parties in a disposed writ petition

Interpretation and reasoning: The Court held that once a writ petition is disposed of, the writ court is no longer in seisin of the matter. Therefore, there is no scope to implead or add parties in a "dead" (disposed) writ petition. Such relief could be considered only after, and contingent upon, allowing a recall application (if maintainable) and reopening the disposed proceeding. The impugned order granted, at a premature stage, one of the final reliefs sought in the recall application by directing formal addition of parties, even though the recall application itself was not allowed and was deferred for hearing.

Conclusions: The direction adding parties to a disposed writ petition was contrary to basic procedural tenets and was set aside.

Issue (iii): Effect of the Court's findings on maintainability of the pending recall and clarification applications in assessing validity of the impugned order

Interpretation and reasoning: For purposes of deciding whether the impugned directions could stand, the Court concluded that the recall request, framed as a recall simpliciter of an order passed on merits in a disposed writ petition, did not disclose a case of review and did not furnish any other legal justification warranting recall. The Court further treated the bank's clarification request as lacking substance in the context presented. On that footing, the Court found that no prima facie case was made out to justify the impugned suspension of the earlier order and the consequential directions.

Conclusions: The impugned order, founded on an unreasoned assumption that the matter required hearing and granting consequential restraints and impleadment, was held not sustainable; the appeals were allowed and the impugned order was set aside. The Single Judge was requested to take up the pending applications together by first deciding the recall and clarification applications and thereafter the contempt application, depending on the outcome of the recall application.

---