TaxTMI 
TaxTMI 
2021 (5) TMI 733
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....: R3 - Shadab S. Jan, Advocate R4 - Ashish Kamat, Advocate R5 - Amey Kulkarni, Advocate ORDER Per : Janab Mohammed Ajmal, Member (Judicial) These Applications detailed infra based on interlinked facts were heard together and shall abide by this common order. 2. The facts leading to the filing of the Applications are as under. a. The Company Petitioners are 138 of the 993 shareholders of R1 Company (hereinafter called the Company) initially formed by R2, R3, R5 and R7 to R10, the subscribers to the Memorandum of Association. It was incorporated on 10.05.2013 under the Companies Act, 1956. The authorised and issued share capital of the Company was Rs.. 50,00,000 divided into 5,00,000 equity shares of Rs.. 10 each. The paid-up share capital of the Company is Rs..47,77,350/- divided into 4,77,735 equity shares of Rs.. 10/- each. R2, R3 and R4 were the first Directors of the Company. b. The Company allotted shares to the owners of the shops in the Mall namely 'Dreams The Mall' (hereinafter the Mall) and to some others. Between them the Petitioners jointly hold 27,519 shares of the Company. The object of incorporation of the Company was to carry on and manag....
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....resultant chaos in the Mall. The Petitioners, who are mostly small shop owners, have been facing serious problems affecting their existence and have not been in a position to carry on the business/trade. Many of the shop owners had to close down their shops due to these problems and have not been able to carry on their businesses in the Mall. The Petitioners alleging their oppression and mismanagement of the Company at the hands of the Respondents filed Company Petition on 04.07.2017 under sections 241-242 read with 244 of the Companies Act, 2013 (the Act) seeking various reliefs. 3. The Company (R1); R3, R5, R6 & R9 and R8 filed their respective replies to the Company Petition raising various contentions. A preliminary objection was taken as to the maintainability of the Petition under sections 241 & 242 of the Act. Meanwhile, this Bench on 23.04.2018 after hearing both the sides appointed Advocate Ruturaj V Banker as Commissioner to visit the Mall to ascertain as to whether common facilities as mentioned in the Articles of Association have been provided or not; to check whether payments to the respective departments have been made by R1; and whether the Petitioners have been r....
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....the Mall so as not to let any hazards come upon the people working there and public coming there. 7. The Administrator appointed in this case is limited to carry on the functions of the common areas maintenance of the Mall, not in relation to the affairs of the Company." 4. The Administrator has been filing periodical progress reports with the Tribunal. This Tribunal by order dated 10.12.2018 directed thus: "By the report of the Administrator, we at this moment direct the respondents to handover list of all the owners owing shop/offices/units in the Mall and list of shareholders of the Respondent Company, updated as on date within seven days from today to the Administrator to realise common area maintenance, i.e. Rs.. 15 per sq. ft. of carpet area per month starting from 01.09.2018, on an immediate basis, failing which Administrator is directed to take necessary legal measures. It is further prayed that direction be issued to police to remove illegal occupants of the Mall and car, rickshaws; vehicles parked unattended and in unauthorised manner. Administrator is directed to take police help. Administrator is further directed to submit....
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....management and irresponsibility exhibited by the Respondents in maintaining the Mall properly directly affected not only the shop owners but also the visitors to the Mall. He also did not receive any cooperation from the public authorities viz. The MCGM and the Insolvency Professional of the Housing Development and Infrastructure Limited (HDIL, R8 in the CP) who is the developer of the Mall as well as M/s Car Shine, the parking contractor. 8. The lead shareholders [PMC Bank, (Respondent No. 5 in CA 1069 of 2020) and the Privilege Health Care Private Limited (R9 in the CP)] have not been cooperating with the Administrator and have put unauthorised constructions in the Mall premises. The vehicles have been parked in an unauthorised and unattended manner in the Mall premises. M/s Car Shine, the parking contractor has not been cooperating with the Applicant (Administrator) for amelioration of the situation. The Applicant (Administrator) has no record with regard to such vehicles. The Security arrangement and water and electricity connection in the Mall has been in complete shambles. As the shop owners, mostly the major area occupiers, are not paying the dues despite the order of the....
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.... The Administrator is directed to submit the list of defaulters on 30.01.2020. List the matter for further consideration on 30.01.2020". 11. Taking into account the overall conduct of the large shop owners and the poor maintenance of the Mall and lack of cooperation from the major shop owners in the Mall, the Administrator has filed CA No. 1069 of 2020 for the following reliefs: 1) That this Hon'ble Tribunal be pleased to direct the Respondent No. 1 and Respondent No. 2 to comply with the earlier order of this Hon'ble Tribunal and provide assistance to the Administrator to recover the unpaid CAM charges and to take immediate action for removal of vehicles parked in an unauthorised and unattended manner in the parking area of the Dreams Mall to implement the orders of this Hon'ble Tribunal effectively. 2) That this Hon'ble Tribunal be pleased to pass an order directing Respondent No. 3, Respondent No. 4 and Respondent No. 5 (anchor shareholders of Dreams The Mall Company Limited) to make payment towards outstanding Common Area Maintenance (CAM) charges, with an immediate effect. 3) That this Hon'ble Tribunal be pleased to pass an order empowe....
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....07 with HDIL (R3). They have filed separate replies objecting to the averments and prayers made in the Application. 14. It is contended by R3 that pursuant to the order of CIRP a public notice was issued inviting claims from the creditors of HDIL. The Applicant herein i.e. (Administrator of the Mall) submitted the claim under Form-B dated 05.09.2019 for Rs.. 2,60,29,965/-. For want of adequate particulars the Resolution Professional (RP) of HDIL opined that in fact sum of Rs.. 9,39,570/- was due from the Applicant. Therefore, he did not admit the claim submitted under Form-B. It is further submitted that in view of the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (the Code), no auction for the recovery of the CAM charges would presently lie. It would only be recoverable as an operational debt under the Code. The parking space in the Mall and all incidental rights thereto belong to HDIL and it had leased the parking space to an entity called Somerset. The RP of HDIL has also impugned such transaction. It is accordingly contended that no action, executory or otherwise, can be taken against the HDIL (R3) in the present proceeding. 15. R4 in its reply s....
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....Oils Ltd v. Additional Commissioner: 2010 (4) SCC 728 wherein the Hon'ble Supreme Court has held that, a party suppressing material fact is not entitled for any reliefs. Shree Ram Urban Infrastructure Limited vs. Shri R. K. Dhall & others: Company Appeal No. 45 of 2009 decided on 11.09.2009 wherein the Hon'ble Bombay High Court has clearly opined that, the matters which were not part of the petition cannot be taken into account for considering the interim application. 19. In reply to the Application, it is submitted by R5 that it has filed CA No. 688 of 2020 inter alia claiming that the CAM charges raised by the Applicant were not payable by it. R5 states that by an Agreement for Sale dated 27.12.2007 entered into between HDIL and R5, the latter acquired from HDIL on ownership basis office Nos. 4 & 5 on the 3rd Floor admeasuring 3641.76 sq. mtrs. of area in the Mall on terms and conditions mentioned therein. Further by an Agreement for Sale dated 29.09.2010 between the same parties, R5 purchased from HDIL carpet area admeasuring 118.70 sq. ft. adjoining office No. 5 on such terms and conditions mentioned in the Agreement. HDIL had also granted 25 four-wheeler parking an....
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....s that it has been operating amidst the Pandemic as it comes under essential services. It was imperative for R5 to urgently shift its vault from its Central Office to Carnac Bunder Branch but, use of labour for such task would have violated the social distancing norms and therefore it was necessary for R5 to use Forklift Truck for the purpose. R5 had requested the Applicant by two letters dated 30.06.2020, for permission to shift the cash vault. However, R5 did not receive any response from the Applicant. The work of shifting cash vaults is extremely sensitive and any compromise on the aforesaid arrangement would mean compromising on the cash and other valuables of R5. Besides very few shops were open and fewer people were around at the time due to the Lockdown. No damage to any person and premises was caused due to the use of Forklift truck. The Applicant has also not replied to its letter dated 09.07.2020 informing the above facts and nor has the Applicant gave any particulars of damage caused because of use of such Forklift truck. Under the above-mentioned circumstances levy of CAM charges at the rate of Rs.. 15 per sq. ft. per month would not only mean that R5 would be paying t....
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....ts of Section 244 of the Act. It is contended that the Company Petition has been filed by one Mr. Nitin Bangera as a representative of the Petitioners. The records would reveal that the Petitioners did not accord informed consent for filing of the Petition. b. In order to maintain the Petition under Sections 241 & 242 of the Act, the Petitioners have to either hold 10% or more shares of the subscribed capital or the Petitioners should at least be 100 in number. If the consent given by the Petitioners (138 in number) is without Application of mind and is not an informed consent, the Petition has no legal validity and cannot be entertained. In this connection the Authority given to Mr. Nitin Bangera appended to the Company Petition is highlighted to show that the consent could not have been a proper authorisation for filing of the Company Petition. c. The genesis of the Company Petition being without authority, the Petition needs to be dismissed at the threshold. d. It is contended that the consent obtained in sub-section (2) has been complied in the breach of the requirements. There has been no application of mind and the so-called consent cannot be accept....
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.... the trial. Therefore, as we have already pointed out, even in cases where the issue as to maintainability or lack of jurisdiction involves a mixed question of law and fact, they can also be decided as a preliminary issue, depending upon the facts and circumstances of each case." 27. It is accordingly argued that the authorisation annexed to the Company Petition is invalid and the basis for the Company Petition being devoid of any authority, the Petition cannot stand and deserves to be dismissed as not maintainable. 28. Mr. Nitin Bangera, the Company Petitioner No. 1 has filed reply to the Application on behalf of all the Company Petitioners. It is submitted that the averments made in the Petition cannot be considered at this stage and is required to be considered taking into account the facts as well as law, at the final hearing. The objections raised are totally misconceived and without substance. The Company Petition has been duly filed in accordance with the provisions of Section 244 of the Act and the representation of Mr. Nitin Bangera on behalf of all the Company Petitioners cannot be faulted. The Application being devoid of any merits is liable to be rejected. 29. ....
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....orisation runs as follows: "To, National Company Law Tribunal, Mumbai Bench. Sub: LETTER OF AUTHORITY IN THE MATTER OF COMPANY PETITION U/SECTIONS 241, 242 AND 244 OF THE COMPANIES ACT, 2013 AND OTHER APPLICABLE PROVISIONS OF COMPANIES ACT, 2013 Dear Sir, We hereby authorize Mr. Nithin Bangera, reside of 1/C, 605 DREAMS COMPLEX L.B.S. ROAD BHANDUP, WEST, MUMBAI - 400 078 to sign and execute company petition as mentioned above and necessary Reply(ies), Rejoinder(s), Application(s), thereto to be filed before the Hon'ble National Company Law Tribunal, Mumbai Bench, Mumbai and also before any of the Bench of the National Company Law Tribunal filed against / by us and also to represent us in any proceedings connected to the said Company Petition filed against us in connection with the Company Petition and also to make written or oral submission and to do all acts and deeds, things as deem necessary for and on our behalf in the said Company Petition. I accept Mr. Nithin Bangera, reside of 1/C, 605 DREAMS COMPLEX L.B.S. ROAD BHANDUP, WEST, MUMBAI - 400 078." 32. Basing on this authorisation Mr. Nitin Bangera has s....
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.... affect the validity and propriety of the consent. 36. It is trite that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred and the courts may in the larger interests of administration of justice may excuse or overlook a mere irregularity or a trivial breach of law for doing real and substantial justice to the parties and pass orders which will serve the interest of justice best. (see Laxmibai (Dead) thru Lrs. & anr vs. Bhagwanthbuva (Dead) thru Lrs. & Ors Civil Appeal No. 2058 of 2003 decided on 29 January, 2013). In this connection the reference may also be made to the observation of The Hon'ble Apex Court in Sardar Amarjit Singh Kalra (dead) by Lrs. And Ors. V. Pramod Gupta (Smt.) (dead) by LRs. And Ors.: (2003) 3 SCC 272, as follows: "Laws of procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice and not to foreclose even an adjudication on merits of substantial rights of citizen under personal, property and other laws. Procedure has always been viewed as the handmaid of justice and not meant to hamper the cause of justice ....
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....s available on record clearly indicate that the Petitioners, a motley group of shop-owners had come together to raise concerns regarding the running of the Mall to their detriment. The 'common cause' had brought them in to unison itself is indicative of the fact that their sole intention was redressal of their grouses and they were themselves aware what they wanted to do by authorising Mr. Nitin to take up cudgels on their behalf. They were conscious of the import and intent of the authorization. The principle laid down in Duraiswamy (supra) is amply satisfied by the conduct of the Petitioners and the materials borne of the record. Considering the facts of the case and the law thus settled it can be safely be held that the consent by the Petitioners given to Mr. Nitin Bangera to present the Petition would accordingly be not susceptible to any misgivings nor can be invalidated. The citations referred to by the Applicant are distinguishable on facts and would not come in aid of the Applicant. There being no other objection to the maintainability of the Company Petition, the Company Application at the instance of the Respondent cannot be sustained. The fact that instead of allaying th....
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....ld not be applicable to the Applicant, cannot be accepted. The Applicant in CA No. 688 of 2020 is bound by these orders regarding CAM charges as any other constituents and members of the Mall. It would be a misnomer to say that the Applicant is not using any common area facility of the Mall, despite being in possession of portion of the Mall. The administrative guidelines issued by the RBI would not override the orders passed by this Tribunal in respect of payment of CAM charges. Therefore, the plea taken in CA No. 688 of 2020 by the Applicant does not hold water and cannot be accepted. The Application bears no merits whatsoever and is liable to be dismissed. 40. R4 is a hospital running on the 3rd floor of the Mall. R3 as the promoter of the Company sold 4100 sq. mtrs. of area on the 3rd floor of the Mall to R4 under his registered agreement to sale dated 09.02.2012. Under registered agreement for sale dated 18.10.2013, R3 sold an additional 2778.42 sq. mtrs. of carpet area on the same floor of the Mall to R4. The parties by supplementary agreement dated 05.03.2014 agreed to certain terms and conditions in respect of the earlier agreements for sale. Some of the terms are as und....
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....ntly and would only pay Rs.. 1.5 per sq. ft of carpet area per month from the date of actual possession for the portion for hospital activities. It is admitted by R4 that the MCGM has furnished the provisional occupancy certificate w.e.f. 06.05.2020 for the treatment of patients affected by Covid-19. The maintenance and security arrangements of the area occupied by R4 have also been left to it. Therefore, R4 would be liable to pay Rs.. 1.5 per sq. ft. of carpet area under its occupation per mensem from 06.05.2020. These facts were not brought to the notice of the Tribunal when the orders dated 10.12.2018 were passed requiring the occupants to pay Rs.. 15 per sq. ft. of carpet area under their occupation. Therefore, the order dated 10.12.2018 with regard to the payment of CAM charges at the rate of Rs.. 15 per sq. ft can be modified as Rs.. 1.5 per sq. ft as far as R4 is concerned w.e.f 06.05.2020. R4 accordingly shall pay the amount to the Administrator until further orders. 41. Admittedly, the Constituents / Members / Shop-owners of the Mall have not been regular in paying the CAM charges fixed by the Tribunal as per order dated 10.12.2018. Therefore, for the better maintenance....