TaxTMI 
TaxTMI 
2018 (11) TMI 774
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....and Shri Gurcharan Singh, Advocate for Respondent, Shri Kaustubh Sinha, Advocate And Ms. Lucky Palta and Shri Pulkit Deora, Advocate JUDGEMENT A.I.S. Cheema, J. : 1. Respondent No.22 - Original Petitioner (hereinafter referred as "Petitioner") filed CP 24/2016 against Respondents 1 to 12. Later on, taking orders dated 25.01.2017 from National Company Law Tribunal (in short, 'NCLT'), Respondents 13 to 21 were added as creditors in NCLT, New Delhi. Company Petition had come up before the Principal Bench. The Petition was filed under Sections 397 and 398 of the companies Act, 1956 ('old Act', in brief). The Appellant filed CA 211/2016 in the Company Petition for impleadment. However, the NCLT vide Orders dated 04.09.2017 did not allow the impleadment holding the Appellant as neither necessary nor proper party but allowed the Appellant only to intervene. The Appellant being aggrieved by such Order, impugned the same by filing Company Appeal 370/2017. In CA 370/2017, Notice was issued on 07.11.2017 and it was directed that in the meantime, any Order passed by the Tribunal shall be subject to decision of the said Appeal 370 of 2017. 1.1 During the pendency of CA 370/2017 in this Ap....
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....d services on the land which was leased and on 12.07.2007, an agreement for contribution towards equity was signed between the Appellant and BMS as well as Respondent No.2 and other Respondents as arrayed in the OMP. It was later on supplemented by supplementary agreement dated 24th September, 2007. There were disputes and due to Arbitration Clause, the matter was referred to Arbitration. Prior to commencement of arbitration proceedings, in OMP 383/2012 certain orders were passed. 3.2 To understand the grievance of the Appellant, a brief reference needs to be made to the said litigation. The Litigation initiated by Appellant in Delhi High Court 4. The Appellant claims that it had filed OMP 383/2012 in which vide Orders dated 27.04.2012 present Respondent No.1 - Southend Infrastructure was restrained from dealing with its immovable properties. The Order dated 27.04.2012 of the Hon'ble High Court (Annexure A2 - Page 76) reads as under:- "1. Issue notice to the Respondents, returnable on 4th September 2012. 2. Till the next date of hearing, Respondents 2 to 12 are restrained from alienating, selling, transferring, mortgaging, encumbering, disposing of or in any manner dealing....
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....the High Court, giving Wonder Space Development rights in the only property of Southend, namely B-319, Okhla Industrial Area, Phase - I, New Delhi. 4.3 According to the Appellant, Respondent No. 22 (Original Petitioner of CP) who had only 5,000 equity shares (approximately 0.67% in Southend) fraudulently got transferred substantial shares of Southend from DK Gupta (Respondent No.2) in violation of restraint Orders of the High Court. It is claimed that the shares were fraudulently acquired in September, 2013 onwards although Respondent No.2 - DK Gupta was under restraint Orders of the High Court. Appellant claims that the Appellant came to know of the contemptuous conveyance deed dated 10.06.2013, in December, 2013 and filed Contempt Petition (Cont. Cas (C) No. 970/2013) against Southend as well as Wonder Space regarding violation of the High Court Orders. The High Court referred to the earlier Orders dated 27.04.2012 and 04.09.2012 in its Order dated 09.01.2014 (Annexure A-5 Page - 110). It then referred to the submissions and issued Notice as under:- "It is further contended at the bar that whilst the aforesaid interim orders then passed in a matter, in which both Sh. D.K. Gupt....
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....n 9 of the Arbitration and Conciliation Act, 1996 ('Arbitration Act', in short) having Original Miscellaneous Petition No.1197/2014 which was filed by the Appellant as pre-award Petition against present Respondent No.16 and present Respondents 1, 2, 3 18 and Respondent No.9 for HUF. The Appellant claims that in the said Petition, Hon'ble High Court on 30th September, 2014 passed following Order:- "O.M.P. 1197/2014 Issue notice to the respondents via ordinary post and approved courier. Mr. Arora accepts notice on behalf of respondent nos.1, 2, 3 and 12. On steps being taken, notice shall issue to the remaining respondents. Reply, if any, be filed within four weeks of service being effected. Rejoinder thereto, if any, be filed before the next date of hearing. In the meanwhile, respondent nos.2 to 10 shall not deal with shares in respondent nos.1, 11 and 12. The said respondents will file the particulars of their shareholding held in respondent nos.1, 11 and 12. The particulars, inter alia, will include the number of shares held, share certificate numbers as well as the face value of the shares. The sad details will be filed by way of an affidavit. In respect of....
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....ave sufficient security to secure its dues under the Award and therefore the Appeal is pending. 4.9 The Appellant claims that present Respondent No.1 - Southend is the Respondent No.12 in the Supreme Court and Southend has been restrained from creating any kind of third party rights and encumbrance or deal in any manner whatsoever with its share i.e. 47.5% of constructed area in terms of the conveyance deed dated 10.06.2013 with Wonder Space Properties, with regard to B-319, Okhla Industrial Area. 4.10 The above litigation is a matter of record. The directions and Orders bind the parties concerned. Any violation will attract action. The above shows various directions and Orders already in favour of Appellant and the Hon'ble High Court and Supreme Court are considering the reliefs claimed by Appellant to safeguard its interest. 5. According to the Appellant when such litigation was going on, in 2016, Respondent No.22 - Vikrant Puri stepped forward and filed the Company Petition CP 24/2016 which is collusive and fraudulent on the basis of illegal and fraudulently acquired shareholding in Southend. The object of the Petition is to overreach the Orders of the Hon'ble High Court whic....
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....above reasons, the Appellant claimed impleadment in the Company Petition. The learned NCLT, however, after hearing the parties passed Order dated 04.09.2017, the operative part of which reads as under:- "Having heard the learned Counsel for the parties at some length, we are of the view that the presence of the applicant in the proceeding may be required but they are neither necessary party or nor a proper party. The petition filed by one group against the other is for mis-management and oppression. The applicant has neither levelled any allegation of mismanagement or oppression nor it could have and therefore, the applicant is allowed to intervene only. Accordingly, we allow them to intervene and make submissions to assist the Bench in the present case. Application stands disposed of." This is the Impugned Order in CA 370/2017. 6. The Appellant has referred to some other Orders passed by NCLT including the application filed by Respondent No.22 to permit him to represent Respondent - Southend in the Hon'ble Supreme Court which came to be dismissed with costs. The Appellant claims that some unsecured creditors were allowed to be added to the Company Petition as Respondents v....
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....d. The argument is that the Petition was filed so as to obtain collusive Orders from NCLT to overreach the Orders which had been passed by the Hon'ble High Court. It is argued that thus the impleadment of the Appellant in the Company Petition was necessary but only intervention was allowed and when the Company Appeal 370/2017 was filed, in order to make the same infructuous, the Company Petition came to be withdrawn. The argument is that the learned Senior Counsel for the Appellant as appearing in CA 370/2017 happened to be present when the withdrawal Petition came up and sought opportunity to oppose the withdrawal, but the same was declined as only intervention had been allowed and the Impugned Order as above came to be passed. 10. It is argued for the Appellant that for withdrawal of the Company Petition, it was necessary to file the application in Form NCLT - 9 as is required by Rule 82 of the National Company Law Tribunal Rules, 2016 ('Rules' in short) and this was not followed. The application for withdrawal was not properly verified. Notice to the parties had not been given and the Appellant was also not given opportunity to reply to the withdrawal application and its object....
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.... if the concerned Form is kept in view, there was substantial compliance with the provisions and even if it could be said that the pendency of the Appeal was not pointed out, the issue becomes redundant as counsel for the Appellant was present and did make submissions which were not accepted. It has been argued that non-mentioning of the CP 370 of 2017 pending was by oversight and when the counsel attended, there cannot be said to be any prejudice. 12. The counsel for Respondents 6 to 11 is supporting the Respondent No.22. It is argued even if the Petition is restored, no relief can be granted in favour of the Appellant. When the Appellant is not member of the Company, without support of the members of the Company, the Appellant cannot maintain the Company Petition. It is argued that it can be seen from para - 7.45 of CA 57/2018 that the Appellant wants the Company Petition to remain pending merely on apprehensions that the Respondents will deal with issues relating to development of the property of Respondents - Southend. This cannot be sufficient ground to stop the Petitioner from withdrawing. The argument is that if there is any violation of the Orders of the Hon'ble High Court....
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....pplication for withdrawal under sub-rule (1) shall be filed in the Form NCLT-9." Parties have pointed out copy of the Form No. NCLT 9. If Form NCLT - 9 is seen, it is a common Form in the context of Rules - 72, 76, 82, 88 and 154 and is also general Form for all purposes, if no specific Form is prescribed under these Rules and Forms. Rule 82 deals with withdrawal of applications under Section 241. Rule 72 relates to Appeals against the Order of Government under Section 62(4); Rule 76 deals with inspection of minute books of General Meeting in Company refused to give inspection to member; Rule 88 relates to seeking permission to opt out class action under Section 245 and Rule 154 is for application for rectification of Order. It is apparent that common Form is prescribed for various acts like may be Appeal, or may be seeking permissions or may be application - same Form 9 is to be used. Naturally, the Form is to be used and applied with suitable modifications and columns as applicable would have to be referred to. From the Form - NCLT 9, the Appellant has raised grievances with regard to Column - 10 which requires submitting index containing details of documents to be relied on. W....
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....rder, NCLT did not note the submissions made by the learned counsel for the Appellant, may be due to the view it was taking that even if the Appellant had been permitted to intervene for the purposes of the Company Petition, hearing Appellant was not necessary for the purpose of withdrawal of the Company Petition which was a matter between the Petitioner and the party Respondents. 18. The Appellant is claiming referring to the litigation as mentioned above that the Appellant had a right not only of impleadment in the Company Petition but also had a right to be heard at the time of withdrawal of the Company Petition. Reference to the litigation shows that there were Orders passed against some of the Respondents in the Company Petition who were party in the litigation before High Court as well as Respondent - Southend. There were initial Orders regarding immovable property and subsequently on 30.09.2014, orders came to be passed even regarding these Respondents' shareholding of the Company by the Hon'ble High Court. When the Company Petition came to be filed in 2016 with Respondent No.22 stepping forward as a Petitioner and he trying to show that he had the controlling shares, the A....
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.... Court. Although such stand is taken at the same time, the Appellant has opposed the withdrawal and the argument made by learned counsel for Appellant is that the right of the Appellant of hearing was taken away because of the withdrawal. The prayer of this Appeal CA 57/2018 seeks setting aside of the Impugned Order and seeks direction to NCLT "to hear the Appellant and pass speaking order on its objections to the Company Petition wherein serious allegation of fraud and misfeasance have ben pointed out." The paragraphs reproduced by us from the CA 211/2016 which was filed for impleadment show the Appellant wanted to be impleaded in view of his apprehensions not trusting the parties, so as to safeguard his interest. If the original Petitioner decided to withdraw the Company Petition, we find it difficult as to how the Appellant could insist on pendency of the Company Petition to hear out grievances Appellant was making. The Appellant is not a member or shareholder. The Company Petition filed under Section 397 and 398 of the old Act cannot be continued at the behest of an Intervener seeking impleadment when he is not a shareholder or member of the Company. It is settled position that....
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....tors and shareholders of the Company. The rights of the Appellant are apparently being looked into and protected by the Hon'ble High Court and now there are Orders even of the Hon'ble Supreme Court. If the Respondents or any of them violate any of the directions or Orders of the Hon'ble High Court or Hon'ble Supreme Court, they will face the consequences. Thus, we find no reason as to why the NCLT should have kept the Petition pending only because the Appellant wanted it to do so. The impleadment of the Appellant had been refused and he had been permitted only to intervene when the Company Petition was taken up for hearing so that he could point out wrong, if any. That by itself did not create such a vested right that the Appellant could claim that Company Petition should not be allowed to be withdrawn. 21.1 No doubt powers of NCLT in a petition complaining oppression and mismanagement are very wide to safeguard the interest of the Company. But it would still be matter of discretion to permit withdrawal of the Petition in the given set of facts. When a claim of settlement between the warring group is stated and simple withdrawal is asked, NCLT cannot be asked to continue with the ....