TaxTMI 
TaxTMI 
2022 (10) TMI 208
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....k, Advocates for R4. Mr. Krishnendu Dutta, Sr. Advocate for R7, Ms. Ashika Baga, Advocate for R10 ORDER ( Per Hon'ble Mr. Justice M. Satyanarayana Murthy ) Aggrieved by the order dated September, 20, 2022 passed by the 'National Company Law Tribunal, Kolkata' (hereinafter will be referred as NCLT) in I.A. No. 86/KB/2022 in CP No. 895/KB/2019, the Respondent is in Interlocutory Application and Petitioner in main Company Petition, filed an appeal under Section 421 of the Companies Act, 2013 (hereinafter will be referred as 'Act'). For convenience, the parties to this appeal will be hereinafter be referred as Appellants and Respondents. 2. The Appellants filed 'Company Application' in the month of June 2019, challenging various acts of oppression committed by the Respondent, which are in brief are as follows: i. Board Resolution dated 24th April, 2019 by which the Respondent had attempted to illegally and unjustly sideline Appellant No.1 from his role as 'Head' of the 'Digital Division'; ii. Illegal transfer of 20% shares by the Respondent No.10 to the Respondent No.2 without offering the same to the Appellants, contrary to 'Family Settlement Agreement' d....
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....ent to implement the purported resolution regarding digital division and business, passed in the Board Meeting held on 24th April,2019 on the sole ground that in Settlement talks failed is erroneous. vii. It is also further contended that no relief was sought for vacating the interim order passed by the Tribunal, but passed impugned order without taking into consideration of subsequent developments etc; viii. Turning to the application filed by Respondent, the Respondent claimed the following reliefs: I. The Impugned Order dated September 20, 2022 passed by the National Company Tribunal, Kolkata Bench in I.A. No. 86/KB/2022 in connection with C.P. No. 895/KB/2019, be set aside; II. The notice issued by the CEO of the Company on September 21, 2022 changing the whole hierarchy of the Digital Division, being Annexure "10" herein, be set aside; III. Stay of operation of the Impugned Order till disposal of the Company Petition being CP No. 895/KB/2019; IV. Stay of operation of the notice issued by the CEO of the Company on September 21, 2022 changing the whole hierarchy of the Digital Division, (Annexure -10 herein) till disposal of ....
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....t to the control of Board of Directors of the Company. In this regard, certain mails exchanged between the petitioner No. 1 i.e. Mr. Aveek Sarkar and the Managing Director Ms. DD Purkayasth have also been annexed in the petition which bring out a corporate feud between petitioner No. 1 and the Management of ABP represented by its Managing Director in the said mails. The Petitioner no. 1 has pleaded that since the settlement talks had failed and still the interim order which meant that the undertaking still held the ground, there was nothing that could prompt an annulment of the joint undertaking." No reply was filed to the Interlocutory application. 4. During hearing both Ld Sr. counsel supported the contentions in detail: a) The impugned order is now challenged on various grounds as referred above. The main grounds urged during argument by Mr. Kapil Sibal, Ld Sr. counsel for the Appellant are that: i. No opportunity was afforded to rebut the allegation made in the Interlocutory Application by filing reply/counter, when the Respondents sought vacation of earlier order dated 26th June, 2019. ii. The order is bereft of any reason on the other hand, th....
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....rder under challenge, drawing attention of this Tribunal to Section 241 and 242 of the Act, to contend that neither there is any oppression nor mismanagement proved. On the other hand, the act of the Appellant No.1 is prejudicial to the interest of the company. 9. Whereas appearing for R4, Mr.Mukul Rohatgi, learned Sr. Counsel and Mr. Abhijeet Sinha, learned counsel demonstrated that the acts of Appellant No.1 i.e. Publication of name of victim in a rape case in news, resulted in registration of crime against the Chief Editor counsel also adopted the argument of Mr. A.M.Singhvi, ld Sr. counsel. 10. Mr. Krishnendu Datta, ld sr. Counsel for the Respondent No.7 argued the same lines of other senior counsel, but drawn the attention of this Tribunal to Section 166 of the Act to contend that the Appellants did not discharge the duties prescribed therein. 11. Considering rival contentions, perusing the impugned order, the points need to be answered are as follows: 1) Whether failure to afford an opportunity to Appellant to file counter or reply to IA No. 86/KB/2022 is an legality which vitiates the impugned order? 2) Whether the order impugned in the Appeal is i....
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....2018-19; j. this Tribunal be pleased to restrain the Respondents from in any manner whatsoever, directly or indirectly, alienating or disposing of or encumbering or creating any third party right(s) in the property, assets and investments of the company as well of any of its subsidiaries; k. This Tribunal be pleased to direct company to ensure that it remains a neutral party and provides all assistance of this Tribunal to meet the ends of justice. l. Injunction restraining the Respondents from interfering with the Petitioner no. l's role in managing and conducting the affairs of the digital division of the Respondent no. 1 Company; m. Appointment of a Special Officer for taking inventory of all the statutory books of the Company and who shall affix his signature on all the pages of all such books; n. Appropriate reliefs be passed in accordance with Sections 241 and 242 of the Companies Act, 2013; o. Appropriate directions be given so that there is equal representation in the board of directors of the Company to Petitioner no. 1 and his group comprising the Petitioners and to Respondent No. 2's group comprising of Respond....
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....n and in any event till the next date of hearing, i.e. till 26 August, 2019. In the event settlement cannot be reached, the parties shall inform the Tribunal of the same on the next date of hearing, i.e. 26 August 2019 whereupon the Petitioners shall be at liberty to pray for interim reliefs, which will then be considered." List the matter on 26/08/2019, for recording settlement or for hearing, as the case may be." The above order was extended from time to time, i.e., on 17th March, 2021, 07th April, 2021 though it was brought to the notice of the Tribunal by filing supplementary affidavit in the month of February 2021. 15. While so, the Respondents took a serendipitous decision to get the interim order dated 20th September, 2022 vacated and raised the following grounds. i. Failure of settlement talks ii. Misuse and Misrepresentation of said undertaking by the Petitioner No. 1 i.e. 1st Appellant. iii. Prejudice caused to the Company on account of Petitioner No. 1's misuse of the said undertaking. Based on the grounds 'a' to 'h' in I.A. No. 86/KB/2022 the Respondents claimed relief to discharge the Respondent No. 1 from the said undertaki....
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....e reply to the application for vacating stay which was filed along with return by respondent No.5, but the application for vacating stay was taken-up for hearing, though notices were not issued on that application for stay and no time was granted to file reply to the said application by which the writ petitioner / writ appellant herein has been deprived of filing reply to the said application, as right to file reply to the application for vacating stay was important right of the writ appellant. He would further submit that further more, finding on merits of the case has been recorded by the learned Single Judge affecting the writ appellant's right in the writ petition having finality attached to it and thus the impugned order cannot be held to be a purely interlocutory order and as such, writ appeal would be maintainable in view of the decision rendered by the Supreme Court in the matter of Shah Babulal Khimji v. Jayaben D. Kania and another 3. He invited our attention towards paragraph 113 of the said report to buttress his 1 AIR 2017 Chh 45 2 2020 SCC OnLine Chh 2110 3 (1981) 4 SCC 8 W.A.No.342/2021 appeal, wherein the meaning of a final judgment, a preliminary judgment and i....
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....f Haryana and others5 in following words: - "While in a pleading, that is, a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petition or in the counter-affidavit not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it." 12. In the aforesaid judgment, their Lordships of the Supreme Court have clearly held that while in a pleading that is a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petition or as in the counter-affidavit not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it. As such, right to file counter-affidavit in a writ petition is an extremely valuable right of the parties and reasonable opportunity to file counter- affidavit has to be afforded to the parties before considering the writ petition / interlocutory application. 13. In the instant case, it is quite apparent that the application for vacating stay was taken-up for hearing for the first time on 28-9-2021, but it is the case of the writ petitioner that he has been deprived of an opportunity to file reply to that....
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....g to Rule147 all orders or directions of the Bench shall be stated in clean and prescribe terms in the last paragraph of the order. In the absence of any specification as to contend the order, the Tribunals may fall back on the contents of general orders passed by Courts or Tribunals. 20. It is settled law that the Court or Tribunal shall record reasons for its conclusion on the basis of merits. What an order should contain normally is not specified anywhere but the order must be reasoned one since the judgment or order in its final shape usually contains in additional to formal parts (a) A preliminary or introductory part, showing the form of the application upon which it was made, the manner in which and the place at which, the writ or other originating process was served, the parties appearing any consent, waivers, undertakings or admissions given or made, so placed as to indicate whether they relate to the whole judgment or order or only part of it, and a reference to the evidence upon which the judgment or order is based and (b) A substantive or mandatory part, containing the order made by the Court as has been said in Halsbury's Laws of England (4th Edition, Volume 26 ....
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....nt/order, which may not be germane to the facts of the case; It should have a co-relation with the applicable law and facts. The ratio decidendi should be clearly spelt out from the judgment/order. b) After preparing the draft, it is necessary to go through the same to find out, if anything, essential to be mentioned, has escaped discussion." c) The ultimate finished judgment/order should have sustained chronology, regard being had to the concept that it has readable, continued interest and one does not feel like parting or leaving it in the midway. To elaborate, it should have flow and perfect sequence of events, which would continue to generate interest in the reader. d) Appropriate care should be taken not to load it with all legal knowledge on the subject as citation of too many judgments creates more confusion rather than clarity. The foremost requirement is that leading judgments should be mentioned and the evolution that has taken place ever since the same were pronounced and thereafter, latest judgment, in which all previous judgments have been considered, should be mentioned. While writing judgment, psychology of the reader has also to be borne i....
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.... be done by the authorities concerned as held by the Apex Court in S.M.Mukerji Vs. Union of India 1990 Crl.L.J.2148. 21. In the present case, the judgment is only repetition of, the pleadings, contentions of the parties and the analysis by the Judge is only two or three paras consisting of four or five lines. Therefore, the reason only recorded by the Tribunal in the impugned order is that the settlement was failed and in pursuance of the order dated 28th June 2019, the parties are given liberty to inform to the Tribunal to pass appropriate order but no reasons have recorded by the Tribunal. The Impugned order passed by the NCLT is nothing but a slipshod consideration with utmost haste. Therefore, the unreasoned, nonchalant order passed by the Tribunal cannot be sustained, as it is not inconsonance with the requirement an order in general. 22. Mr. Krishnendu Dutta, Ld Sr. Counsel for the Respondent No.7 would submit that no order was passed it is only a concession, recorded by the Tribunal and therefore, the Tribunal is not required to advert to the various contentions on record its reasons but we are unable to agree with this contention for the simple reasons that the Respon....
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.... raised by both Appellants and Respondents before the Tribunal. Consequently, the order is bad and liable to be set aside. Accordingly, the point is answered against the Respondents and in favour of the Appellants. 27. In view of the above discussion, we find no substance in the contention, the same is hereby rejected. Accordingly, the point is answered. Point No.3 28. One of the contentions urged by the learned counsels for the Respondent is that the acts of the Appellants No.1 are prejudicial to the interest of the company. No doubt, the act complained against the 1st Appellant if really committed either by act or omission, it is prejudicial to the interest of the Company but the Tribunal did not advert to those contentions and on the other hand, the Appellant was not afforded an opportunity to file counter to rebut the allegations made in the IA No. 86/KB/2022 which is based on a subsequent event, as discussed in point No.1. When the Tribunal did not record any finding on this alleged prejudiced or if any finding is recorded without affording an opportunity, such finding is illegal and violates of principle of natural justice. Since, the Appellant was deprived of valuab....
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.... solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. As is often said, it is ordinarily not open to the appellate court to substitute its own exercise of discretion for that of the trial judge; but if it appears to the appellate court that in exercising its discretion the trial court has acted unreasonably or capriciously or has ignored relevant facts and has adopted an unjudicial approach then it would certainly be open to the appellate court-and in many cases it may be its duty-to interfere with the trial court's exercise of discretion. In cases falling under this class the exercise of discretion by the trial court is in law wrongful and improper and that would certainly justify and call for interference from the appellate court. These principles are well established; but, as has been observed by Viscount Simon, L. C., in Charles Osenton & Co. v. Johnston (1) " the law as....