TaxTMI 
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2021 (3) TMI 1258
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.... amalgamation of companies. The petitioner before the learned Single Judge has stated in the writ petition that the three companies namely M/s. Vidya Investment and Trading Company Private Limited, M/s. Regal Investment and Trading Company Private Limited and M/s. Napean Trading and Investment Company Private Limited were having net surplus assets of Rs. 50,000/- crores and merger of all these companies took place. The petitioner contended before the learned Single Judge that a fraud was played by the respondents in the matter of merger and a PIL was preferred by the petitioner i.e. W.P. No.3635/2020. The PIL was withdrawn by the petitioner on 01.10.2020 and thereafter, a writ petition i.e. W.P. No.172/2021 was filed. It has been stated in the writ appeal that the learned Single Judge has not only dismissed the aforesaid writ petition but has imposed exemplary costs upon the appellant. 3. Sri R. Subramanian, learned Counsel for the appellant appearing in the matter has argued before this Court that in the light of the gross financial irregularities committed by the respondents in the writ petition, the following prayers were made in the writ petition (a) issue a writ of mandamus ....
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....as it was not maintainable and he has got every right to file a fresh writ petition on behalf of the appellant company. The learned Counsel has also argued that the provisions of Code of Civil Procedure (resjudicata) are not at all applicable and the learned Single Judge could not have dismissed the writ petition in the manner and method it has been done. It has been further argued that in the PIL, investigation was sought for by the multi disciplinary investigation team, whereas in the writ petition, a prayer was made to direct the respondents to exercise their powers under the provisions of the Companies Act, 2013. 5. It has also been contended by the learned Counsel that the proceedings in the High Court of Delhi in W.P. (C) No.4905/2017 were substantially on the issue of merger and the order of the High Court of Delhi was only in respect of a direction to respondents to examine the complaints of the petitioner therein and there was no adjudication on merits. He has stated that the reply/order dated 10.11.2017 of respondent No.1 passed pursuant to the direction of the High Court of Delhi passed in W.P (C). No.4905/2017 was issued by the very same person and he is the same perso....
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....(i) Apex Court Judgment in the Case of Khanapuram Gandhaiah Vs Administrative Officer and others Reported as 2010 (2) SCC 2 (j) Apex Court Judgment in the Case of D N Jeevaraj Vs Chief Secretary, State of Karnataka & others Reported as 2016 (2) SCC 653 (k) Apex Court Judgment in the Case of Monnet Ispat and Energy Limited Vs Jan Chetna and Others Reported as 2013 (10) SCC 574 (l) Apex Court Judgment in the Case of Kushum Lata vs Union of India and others Reported as 2006 (6) SCC 180 (m) Apex Court Judgment in the Case of Sheela Barse vs Union of India and others Reported as 1988 (4) SCC 226 (n) Apex Court Judgment in the Case of Indian bank Association Bombay and others Vs Devkala Consultancy Service and others Reported as 2004 (11) SCC 1 (o) Apex Court Judgment in the Case of State of Uttaranchal vs Balwant Singh Chaufal & others Reported as 2010 (3) SCC 402 (p) Apex Court Judgment in the Case of Guruvayoor Devasam Managing Committee and Others Vs C K Rajan and others Reported as 2003 (7) SCC 546 (q) Apex Court Judgment in the Case of S P Anand, Indore Vs H D Devegowda and others Reported as 1996 (6) SCC 734 (r) Apex Court Judgment in the Case of Sheonandhan Pasw....
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....ointment of directors, auditors, and therefore, could not have filed the present writ appeal. (iv) It has been further stated that even a show cause notice was issued by the Government of India to the appellant and to the directors on the ground that they have not been regularized as directors and that they are acting in contravention of the provisions of the Companies Act. A copy of the aforesaid show cause is on record at Annexure-R5. (v) It has also been stated that an appeal has been filed before this Court by one Sri P. Sadanand Goud, who claims to be its volunteer under Section 21 of the Companies Act. The documents or proceedings on behalf of the company can only be signed by any key managerial personnel or an officer or an employee of the company duly authorized by the Board in this behalf. Sri P. Sadanand Goud is not its officer, director key managerial personnel or an employee nor holding any key managerial post. (vi) That the appellant on the multiple proceedings filed by him has raised the same contentions in the present appeal including W.P.No.172/2011. (vii) It has also been argued that by an order dated 26.03.2015, this Court has passed an order sanctioning of am....
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....affairs by an Inspector appointed by the Central Government. The aforesaid petition is still pending before the NCLAT on the preliminary issue of maintainability itself. Thereafter, the appellant has filed private complaint case bearing Nos.745/2017 to 751/2017 against the directors of the Azim Premji Group of Companies and also against the persons who had rendered professional services in discharge of the statutory functions. These petitions were dismissed by the trial Court as 'not maintainable' and out of three revision petitions filed, the revisional Court has allowed two petitions and the third petition is reserved for orders and this Court has passed an order on 18.01.2021 setting aside the said two orders passed by the Sessions Court. Not being satisfied with the aforesaid private complaints, other private complaints were filed i.e. PCR Nos.2/2018, 3/2018 and 4/2018 before the XXIII Additional City Civil and Sessions Judge, Special Judge, Bengaluru Urban District, Bengaluru against respondent Nos.2 to 5 as well as the Registrar of Companies and the official of the RBI, who had issued no objection certificate in the matter of amalgamation. The trial Court by an order dated 27....
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....rused the record. 11. The appellant before this Court projecting as not for profit company has filed the writ petition for issuance of writ or order or direction directing the Union of India to authorize it under Section 439(2) of the Companies Act, 2013 to prosecute respondent Nos.2 to 5 for the offences under the provisions of the Companies Act, 2013. It has been stated that respondent Nos.2 to 5 have committed the offences under Sections 447, 448 and 449 of the Companies Act, 2013 and therefore, stringent action should be taken against them. The facts reflected in the record reveal that the genesis of the present PIL is the scheme of amalgamation which was approved by this Court vide order dated 26.03.2015 in Company Petition No.182/2014 and this Court has approved the scheme of merger in respect of three companies namely M/s. Vidya Investment and Trading Company Private Limited, M/s. Regal Investment and Trading Company Private Limited and M/s. Napean Trading and Investment Company Private limited. The present appellant who does not have any interest in the aforesaid companies and having an oblique idea and motive, has taken the large number of steps to challenge the scheme of....
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....a and others decided on January 18, 2020). In all these three cases, this Court has followed the principle laid down in Sarguja Transport Service Vs. State Transport Appellate Tribunal, M.P.Gwalior and others [(1987) 1 SCC 5]. 14. Shri.Ganesh, learned Senior Advocate has relied upon two authorities. Adverting to Udyami Evam Khadi Gramodyog Welfare Sanstha and another Vs. State of Uttar Pradesh and others (2017)5 SCC 262), he argued that repeated filing of writ petitions amounts to criminal contempt. Adverting to paragraph No.153 in Union of India and others Vs. Cipla Limited and another (2017)5 SCC 262), he submitted that the Apex Court has held that one of the category of forum shopping is approaching different Courts for the same relief by making minor changes in the prayer clause of the petition. 15. It is also relevant to note that the orders dismissing the three writ petitions filed by the petitioner after withdrawal of the PIL, were available well before hearing began in this case. This Court specifically brought this aspect to petitioner's notice. However, petitioner sought to argue the writ petition as if it was a stand alone writ petition and sought to make repeate....
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....ing to the Memorandum. Accordingly, a private company can be incorporated and also owned by the stipulated number of companies registered under the subsisting Company Law. 3. At the time of consideration of the scheme, the transferee company (i.e M/s Hasham Investment and Trading Company Private Limited) was having the following shareholders: a) Azim Premzi:-40,05,010 equity shares b) Yasmeen Premzi:- 5010 equity shares The scheme provided for merger of the three transferor companies to M/s. Hasham Investment and Trading Company Private Limited which was fully owned by Mr.Azim Premzi and Yasmeen Premzi. This fact was reported by the ROC, Bangalore in his report to the Regional Director on 27.08.2014. Thus, no private trust was holding any shares of M/s.Hasham Investment and Trading Company Private Limited at that point of time. 4. The brief for the ROC in respect of such scheme is to report to Regional Director if the companies under the scheme are facing any complaints, inspection, investigation and like as well as to provide observations if any, on the proposed schemes. In the instance case, the scheme is a Vanilla scheme with merger of assets and liabilities of transfe....
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....s Act, 2013 to prosecute respondents No. 2 to 5. 19. But, to a pointed question by this Court as to when the alleged offences have taken place, Shri. Subramanian replied that they have taken place between 2010 and 2016-17. 20. Prayer Clause (a) in this writ petition is for a mandamus against Ministry of Corporate Affairs to act on the information in its representation/complaint dated March 14, 2017, January 30, 2020 and November 9, 2020 furnished by the petitioner. 21. In paragraph No.1 of its complaint dated March 14, 2017, petitioner has stated that three Companies namely Vidya Investment and Trading Company Pvt. Ltd., Regal Investment and Trading Company Pvt. Ltd., and Napean Trading and Investment Company Pvt. Ltd., have net worth in excess of Rs. 40,000 Crores even though their Capital was small. 22. In paragraph No.5 of its complaint dated January 30, 2020, petitioner has stated that the said three Companies together with 100% owned subsidiaries are worth Rs. 50,000 Crores; that the three Companies were set out as part of promoter group of Wipro Ltd.; and neither Mr. Azim Premji or his family members had any equity in these Companies. 23. In paragraph No.1 of its co....
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....he chose to argue this writ petition as a stand- alone petition wasting the valuable time of this Court to deal with such frivolous cases. Therefore, imposition of punitive cost is necessary. 29. In view of the above, the preliminary objection raised by Shri. S. Ganesh and Shri. C.V. Nagesh are sustained and this writ petition is dismissed with cost of Rs. 10,00,000/- (Rupees Ten lakhs) payable by petitioner to the Registrar General, High Court of Karnataka, Bengaluru within four weeks from today. Registry shall report compliance after expiry of four weeks. 30. In view of dismissal of this petition, I.A. No.1/2021 does not survive for consideration and the same is disposed of." 13. It has been informed by Sri Ganesh, learned Senior Counsel appearing for caveator respondent No.4 that the appellant initially had four shareholders promoted and controlled by Sri R. Subramanian, who has argued the matter today on behalf of the appellant. Out of four shareholders, three shareholders have been struck off by the MCA by an order passed by the Madras High Court in Crl. O.P. No.21449/2015 and even the sole surviving shareholder is active/non-compliant and has not filed the financials ....
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....as preferred before the NCLAT and the NCLAT in Company appeal (AT) No.362/2012 has passed an order dated 07.02.2018 dismissing the appeal with costs of Rs. 2.00 lakhs. 15. Learned Counsel for respondent Nos.2 to 5 have contended that in spite of repeated imposition of costs, valuable time of this Court has been wasted by the present appellant. A large number of people, who are in jail and who have filed criminal appeals, are not being heard for paucity of time and several attempts have been made by the present appellant before this Court in wasting the precious time of this Court. Therefore, the learned Single Judge was justified in dismissing the writ petition with costs of Rs. 10.00 lakhs. 16. In case of KRISHNA LAL CHAWLA & OTHERS Vs. STATE OF U.P. & ANOTHER (CRL. A. No.283/2021), the Hon'ble Supreme Court has noted that the vastmass of frivolous litigation instituted year after year by litigants with an intent to use the Courts of justice for their own mischievous ends has been a significant factor in this backlog. Hence, curtailing such vexatious litigation is a crucial step towards a more effective justice system. In case of SUBRATA ROY SAHARA Vs. UNION OF INDIA reported in....
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....elay. Unfortunately, as the present case exemplifies, the process of dispensing justice is misused by the unscrupulous to the detriment of the legitimate. The present case is an illustration of how a simple issue has occupied the time of the courts and of how successive applications have been filed to prolong the inevitable. The person in whose favour the balance of justice lies has in the process been left in the lurch by repeated attempts to revive a stale issue. This tendency can be curbed only if courts across the system adopt an institutional approach which penalizes such behavior. Liberal access to justice does not mean access to chaos and indiscipline. A strong message must be conveyed that courts of justice will not be allowed to be disrupted by litigative strategies designed to profit from the delays of the law. Unless remedial action is taken by all courts here and now our society will breed a legal culture based on evasion instead of abidance. It is the duty of every court to firmly deal with such situations. The imposition of exemplary costs is a necessary instrument which has to be deployed to weed out, as well as to prevent the filing of frivolous cases. It is only th....