TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 98
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....P. Nair, Rajeev Bhaskaran, Krishnan Koodacheri, Vasu Jayaprakash, Ajit Kumar Balaraman, Ajay Balaraman, Haridas Krishnankutty, Mathew Pandakasalail Thomas, C. Mohanan Pillai [Justice M. Venugopal] Member (Judicial) And [Naresh Salecha] Member (Technical) For the Appellants : Mr. P.H. Arvindh Pandian, Senior Advocate. For M/s. V. Ajakumar & Associates For the Respondents : Mr. Bijoy P. Pulipra, Advocate for 1 to 8 JUDGMENT (Virtual Mode) NARESH SALECHA, MEMBER (TECHNICAL) The present `Appeal' is filed against the 'Impugned Order' dated 06.06.2022, passed in CP/21/KOB/2020 by the 'Tribunal' (`National Company Law Tribunal', Kochi Bench), whereby, the ''Tribunal' gave order dated 06.06.2022 under the Companies Act, 2013. Brief Facts: 2. The present `Appeal' is preferred by the Appellants under Section 421 of the Companies Act, 20l3, against the 'Impugned Order' dated 06.06.2022 in CP/2l/KOB/2022 of the 'Tribunal' by the Respondent Nos. 2 to 7, 9 to 10 therein / Appellant Nos. 1 to 8 herein. 3. An exclusive right to run the Jatayupara Tourism Project, situated on Government Land by the State of Kerala has been granted in favour of the 'Appellants' on Build, Operate and Trans....
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.... companies. The Learned Counsel for the Appellants mentioned that at best the 'Impugned Order' could have been confined to 9th Respondent, whereas the 'Impugned Order' contained directive against the Appellant Nos. 5 to 8. The Learned Counsel for the Appellants challenged the locus of the 'Respondents' against the Appellant Nos. 5 to 8 and therefore the 'Respondents' were not entitled for any reliefs against the said 'Appellants'. 9. The Learned Counsel for the Appellants brought out that as per Sections 241 and 244 of the Companies Act 2013, the aggrieved party need to be a member of a company with minimum requisites number of members as required under Section 244(a) of the Companies Act, 2013. The Learned Counsel emphasised that since the Respondents are not members of Appellant Companies 5 to 8 and hence are not entitled to claim any relief under Section 241 and 242 of the Companies Act, 2013 against such companies. 10. The Learned Counsel for the Appellants also alleged that the 'Tribunal' vide its 'Impugned Order' has granted the Respondents, the final reliefs sought by them in the Company Petition in the form of an interim relief. 11. The Learned Counsel for the Appellants....
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....espondent may negotiate with the bank. 1f the same does not succeed, the respondent may negotiate with other financial institutions and make alternate arrangements so as to avoid Ext. P39 SARFAESI proceedings against the claimants as well as the respondents and see that the loan account is closed. 40. It is also ordered that the respondent will furnish detailed account of the ticket collections on a monthly basis before this Tribunal with copy to the respondent. The respondent will also file an affidavit containing the details of the ticket collections since taking over management and operation of the project after Ext. P12 termination notice till date. 41. The respondents are also directed not to cause any damage or destruction to the fixed assets in the project area which was operated by the claimant before Ext.P12 termination. As it is in the interest of the respondent as well to see that the assets are well maintained, the constitution of a supervisory machinery appears unnecessary and hence the above prayer is allowed only in part. 42. The prayer to order to produce Registers, Books of Accounts etc., we find that such a direction is uncalled for at the present stage. 4....
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..../ Escrow Account from07.06.2022 and that the said collection should not be utilized until further orders of the 'Tribunal'. The Appellants challenged the report of the 'Inspector' in CA/21/KOB/2022before 'Tribunal', however the said CA was dismissed by 'Tribunal' on 22.06.2022. The Appellants have preferred an appeal against the order of 'Tribunal' before this Tribunal. 18. The Learned Counsel for the Appellants stated that unless the merits of the main petition were examined, appointment of an 'Inspector' by exercising powers under Section 426 was not proper and desirable by the 'Tribunal'. The Learned Counsel for the Appellants mentioned that they had challenged the maintainability of the Company Petition before the 'Tribunal' in CA/10/KOB/2021 and CA/89/KOB/2021 and no orders were passed by the 'Tribunal' in both the said applications. The 'Appellants' moved before Hon'ble High Court of Kerala to quash the company petition pending before 'Tribunal' and the Hon'ble High Court of Kerala passed order dated 11.07.2022 directing the 'Tribunal' to consider the same on priority. The Learned Counsel for the Appellants stated that the question of maintainability is yet to be dec....
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....the project was stated to be Rs25 Crores in the prospectus/offer letters. 25. The Learned Counsel for the Respondents stated that they sought specific reliefs in the IA/198/KOB/2022 in CP/21/KOB/2020 filed under Section 221 of the Companies Act read with Rule 32 of the National Company Law Tribunal Rules,2016 to put an end to the oppressive actions and continuous fund siphoning by the 'Appellants'. One of the prayers sought for in the above I.A.is as follows: "c. To pass an order under Section 221 of the Companies Act, 2013 to freeze the removal, transfer or disposal of funds, assets, and properties of the Respondent No I, till the approval of shareholders of Respondent No I under Section 188 and approval of Board of directors of Respondent No I undersection180 of the CompaniesAct,20I3 is obtained." 26. The 'Tribunal' had passed an order to file the names of three reliable persons, with mutual consent, in the form of a Memo, from which one can be appointed as the Inspector to identify and list out the assets of the 'Jatayupara Tourism Private Limited' installed at the 'Jatayu Project'. 27. However, Appellants l to 4 had not cooperated with Respondents 1 to 8 to identif....
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....2013 to other Appellant Companies (which are in full and absolute control of the 1st Appellant and his close relatives) allotment of shares in violation of section 62 of the Companies Act, 2013 escalation of the cost of the project of the company, siphoning off the funds of the 9th Respondent Company etc. 33. The Learned Counsel for the Respondents stated that the 'Tribunal' after perusing the contents of the inspector's report for violations, had ordered for freezing the funds of the concerned Companies, which was one of the prayers of the Respondents herein in IA/l98/KOB/2021, to protect the assets of the 9th Respondent Company from further syphoning and diversion and therefore plea of the 'Appellants' that the 'Tribunal' should have confined due to 9th Respondent is not correct. 34. The Learned Counsel for the Respondents also assailed conduct of 'Appellants' stating that despite specific direction of the 'Tribunal' was to open a separate Bank Account /Escrow Account, the Appellants had opened an Account with the Sub-Treasury, Government of Kerala, to avoid the Online collection of the ticketing revenue and to divert the daily collections of the Project with intent to defr....
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....tained and only directed the 'Tribunal', to hear the maintainability petitions on priority. 40. The Learned Counsel for the Respondents further stated that the 'Appellants' have not approached this Appellate Tribunal with clean hands as entire ticketing revenue is being collected in cash and not through Online mode to the Bank account of the 9th Respondent as per orders of the 'Tribunal'. 41. The Learned Counsel for the Respondents finally concluded his arguments stating that the Shareholders had already lost their entire capital investment and will get a further jolt if the 'Impugned Order' dated 06.06,2022 is set aside. The Learned Counsel for the Respondents, therefore, urged this Appellate Tribunal to dismiss the appeal. Findings 42. Heard Learned Counsel for the Appellant and the Respondents and also perused record made available to us. 43. It is a case of the Appellant that the 'Tribunal' have appointed the 'Inspector' exercising the power contained in Section 426 of the Companies Act, 2013 without having jurisdiction. It is further the case of the 'Appellants' that no opportunity was given before passing the 'Impugned Order' based on Inspector's Report despite request f....
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....ections: Respondent Nos 1,6,7,8,9 and 10 Companies In CP/21/KOB/2020 are directed to allow Shri Ravish Kumar to inspect all books, statutory records and data of the group of Companies. All Directors, Officers and employees of R-1, R6, R7, R8, R9 and R1O Companies in the CP/21/KOB/2020 are directed to co-operate with Shri Ravish Kumar and make available all such documents records, books/or inspection of Shri Ravish Kumar. Shri Ravish Kumar is directed to submit his report on or before 10.04 2022 positively. " Respondents are also directed to co-operate with Shri Ravish Kumar as directed under (i) and (ii) above". [emphasis supplied] (c) Further, this Appellate Tribunal observed that in the daily order dated 25.05.2022the 'Tribunal' had stated the following: "Shri Ravish Kumar K, Inspector appeared through VC and stated that he has already filed the report, but could not come toa conclusion due to the non-cooperation of respondents and non-availability of whole records from them. According to him. the respondents have not provided him the relevant books of accounts, bank statements and Fixed asset registers of the Respondent Companies.**" [emphasis supplied] (d) Thi....
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....y ought to be investigated; or (c) in public interest, it may order an investigation into the affairs of the company. (2) Where an order is passed by a court or the Tribunal in any proceedings before it that the affairs of a company ought to be investigated, the Central Government shall order an investigation into the affairs of that company. (3) For the purposes of this section, the Central Government may appoint one or more persons as inspectors to investigate into the affairs of the company and to report thereon in such manner as the Central Government may direct 213. Investigation into company's affairs in other cases.- The Tribunal may,- (a) on an application made by- (i) not less than one hundred members or members holding not less than one-tenth of the total voting power, in the case of a company having a share capital; or (ii) not less than one-fifth of the persons on the company's register of members, in the case of a company having no share capital, and supported by such evidence as may be necessary for the purpose of showing that the applicants have good reasons for seeking an order for conducting an investigation into the affairs of the company; or (b) on an applicati....
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....er member or members or in a manner prejudicial to the interests of the company; or (b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter. (2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter. 244. Right to apply under section 241.- (1) The following members of a company shall have the right to apply under section 241, namely:- (a) in the case of a company ha....
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....pter XXVII (containing Section 407 to 434) pertain to National Company Law Tribunal and National Company Law Appellate Tribunal. 49. As regard contentions of Appellants that in order to initiate proceeding under Section 241 minimum requisites number as prescribed under Section 244(1) is necessary, it is seen that proviso to Section 244(1)(b) gives power to Tribunal to waive or any requirement specified in clause (a) or clause (b) so as to enable the members to apply under Section 241. 50. From the perusal of above legal position of the Companies Act, 2013 this Appellate Tribunal do hold that prima-facie the 'Tribunal' had sufficient powers to appoint the 'Inspector' and therefore we do not find any error on this aspect. Incidentally, it is noted that opportunity was given to both 'Appellants' and 'Respondents' to give the memo of names to appoint inspector. However, due to non-response from the 'Appellants', the 'Tribunal' appointed on request of the 'Respondents' herein 'Shri Ravish Kumar' as an 'Inspector'. 51. As regard the contention of the 'Appellants' that no opportunity was given to them of being heard and they were denied two weeks period to file objection to report of S....
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....of the prayer by the Appellant therein/ Respondent herein to cover all such associated companies to present 'Oppression & Mismanagement' actions of the 'Appellants' and similar request was made by the Inspector who wanted the final statements and other details of the Appellant companies to arrive at right conclusion. The 'Tribunal', therefore, gave the ruling accordingly in his 'Impugned Order'. Therefore, this Appellate Tribunal hold that the 'Tribunal' has not erred on this aspect. 54. It has been brought to the notice of this Appellate Tribunal that though the specific direction of the Hon'ble Tribunal was to open a separate Bank Account /Escrow Account, the Appellants had opened an Account with the Sub-Treasury, Government of Kerala, which is against the specific directions of the 'Tribunal'. The depositing of money in the Treasury Account has been allegedly done to avoid the Online collection of the ticketing revenue and to divert the daily collections of the Project. It has further been alleged that due to the said reason, the Investors, as well as the Government, are losing their share of the revenue and therefore having adverse impact on public interest. 55. It has be....