AI Drafter 
TaxTMI 
TaxTMI 
2023 (10) TMI 359
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....umani, Mr. G. Soundarajan , G. Selvaraj , Mrs. G. Sarojini (DECEASED) , Mrs. S. Asha Geethanjali , Mrs. S. Chitra , Mrs R. Lalithamani , C.R.I Amalgamations Private Limited [ Justice M. Venugopal ] Member ( Judicial ) And [ Dr. Alok Srivastava ] Member ( Technical ) For the Appellant : Mr. P. H. Arvindh Pandian , Sr. Advocate For Mr. Cibi Vishnu and Jerin Asher Sojan Advocate For the Respondents : Mr. R Vidhya Shankar , Mr. Pranav V Shankar Advocates for R4 Mr. Karthik Seshadri , Advocate for R1 to 3 and 5 & 9 JUDGMENT ( Virtual Mode ) Justice M. Venugopal , Member ( Judicial ) : Introduction The Appellants in Comp. App.(AT)(CH) No. 62, 63, 64 and 65/2023 (in Four Appeals) being 'aggrieved' against the impugned order dated 14.06.2023 in TCP/129/2016, TCP/130/2016, TCP/131/2016 and in TCP/128/2016 on the file of the 'National Company Law Tribunal' have preferred these 'Appeals', before this 'Tribunal', as 'Aggrieved persons'. 2. Appellants submissions (in Comp. App.(AT)(CH)62, 63, 64 and 65/2023 (in Four Appeals). The Learned Counsel for the Appellants (in all these Appeals) brings it to the notice of this 'Tribunal', that the National Company Law Tribu....
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....the 'Appellant' had pleaded that he wanted to 'withdraw the petition' with 'Liberty', due to the development, subsequent to the filing of the 'petition' and this is an admitted fact, as stated by the 'Respondents' at paragraph 5 of their written submissions dated 28.08.2023. 8. It is the stand of the Appellants that the Respondents projected a counter dated 27.01.2023 to the aforesaid 'withdrawal affidavit', of the Appellant, and later the 'Tribunal' heard the parties, on 14.06.2023 and passed the 'impugned order' on the same day i.e. 14.06.2023, wherein the Appellants TCP No. 128, 129, 130, 121 of 2016 were 'dismissed, as withdrawn', without 'Liberty', without furnishing 'any reasons', as to 'why' 'Liberty', was not granted', although, 'No Objection' was given by the Respondents, to the 'withdrawal of the Company Petitions', was recorded. 9. The Learned Counsel for the Appellants, project an argument that the 'Tribunal', had recorded, that the 'Appellants' could file fresh petitions, in respect of 'New Cause of Action', which right, is inherently available to the Appellants. 10. The Learned Counsel for the Appellant points out that the 'NCLT' Rules, 2016, specially Ru....
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....of action, the lower court cannot direct the withdrawal giving liberty to file a fresh suit on the same cause of action. If the court thought that the petitioner is not entitled to the liberty sought for by him, it should have dismissed the application without dismissing the suit on the basis that it has been withdrawn. As pointed out by Wanchoo, C. J. (as the then was) in Naru v. Mt. Najo MANU/RH/0018/1959, when an application for permission to withdraw a suit with permission to institute a fresh suit is made under sub-rule (2) of Order 23, Rule 1 of Civil P. C., it is not open to the court to treat it as if it is an application under sub-rule (1) without any condition and to grant the prayer for withdrawal and refuse the prayer for permission to bring a fresh suit for the prayer under sub-rule (2) must be treated as one whole and the court may either reject the entire prayer and allow the suit to proceed or allow the entire prayer, that is, permit the withdrawal of the suit with liberty to bring a fresh suit. The reason is obvious. If the court grants the petitioner the permission to withdraw but refuses the permission to institute a fresh suit, the result would be that the plain....
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....s', on 'various occasions; as 'borne out of records', but the Appellant / Petitioner (in all the four appeals) was only interested in keeping the 'Petitions' 'alive', for its ulterior purpose. 20. The Learned Counsel for the Respondents, points out that despite, the best efforts of the 'Mediator', Mr. S. Balasubramanian (Erstwhile Chairman of the Company Law Board), which spanned over a period of three years, the 'matter' could not be settled, in 'Mediation' and a Failure Report, was filed by the Mediator, on 25.12.2022. 21. The Learned Counsel for the Respondents, takes a plea, that the Appellants / Petitioners sought to 'withdraw the petitions with Liberty', on account of 'subsequent developments', and this was the 'only reason' mentioned in the Affidavit(s), and in fact, the Respondents, had objected to the same by filing a 'counter' on 27.01.2023 and that the 'Applications for Withdrawal', were heard on 14.06.2023 by the Tribunal and the 'impugned orders' came to be passed. 22. The Learned Counsel for the Respondents projects an argument that the ingredients of Section 397 and 398 of the Companies Act, 1956 which got amended and found place in Companies Act, 2013, as S....
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....(i) the petition must suffer from a formal defect or (ii) the Court must be satisfied that there are sufficient grounds, for allowing the plaintiff, to file a fresh suit. 28. The Learned Counsel for the Respondents refers to the decision of Hon'ble Supreme Court in K.S. Bhoopathy Vs. Kokila and Ors. 2000 5 SCC 458, wherein at paragraph 13, 17 it is observed as under:- "13...No doubt, the grant of leave envisaged in sub-rule (3) of Rule 1 is at the discretion of the court but such discretion is to be exercised by the court with caution and circumspection. The legislative policy in the matter of exercise of discretion is clear from the provisions of sub-rule (3) in which two alternatives are provided; first where the court is satisfied that a suit must fail by reason of some formal defect, and the other where the court is satisfied that there are sufficient grounds for allowing the plaintiff to institute a fresh sit for the subject-matter of a suit or part of a claim. Clause (b) of sub-rule (3) contains the mandate to the court that it must be satisfied about the sufficiency of the grounds for allowing the plaintiff to institute a fresh suit for the same claim or part of ....
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....nsel for R6 and R4(vide CA 62 and CA 63-65) the Appellant is a Minority Shareholder and R2 to R4 in CRI Pumps Appeal are brothers. As a matter of fact, the family members are parties to a memorandum of 'family arrangement' entered into the year 2010, pursuant to which the 9th Respondent was constituted as the parent Company, holding 55% stake in all the 1st Respondent Companies. 33. It is represented by Learned Counsel for the R6 and R4 that the Appellant though in active Management and all branches were protected through the family arrangements sought to exit the family business in the year 2010 and took steps including initiating Arbitration Proceedings, among other family members. He filed Company Petitions in the year 2013, which were re-numbered in 2016 as TCP Nos. 128, 129, 130 and 131 of 2016 before the NCLT Bench and other branches of the family, are shown by the Appellant as Respondents and his, is the sole branch fighting the entire family for 13 years. 34. The Learned Counsel for R6 and R4 contends that the Appellant, among other things sought for the reliefs prayers (C) and (D) in para VIII of the Company Petition, seeking directions against the Respondents, for t....
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....n or the application or otherwise, may permit such withdrawal upon imposing such costs as it may deem fit and proper for the Tribunal in the interests of the justice." 40. The Learned Counsel for R6 and 4, by adverting to the ingredients of Order XXXIII of Civil Procedure Code, points out that 'no permission of court is required to 'withdraw a suit'. However, permission is required only if 'liberty' to 'institute' a fresh suit prayed for. But, as per Rule 44 of the 'NCLT' Rules, 2016, even to 'withdraw' permission of the 'Court', is required. 41. It is the clear cut stand of the Learned Counsel for the R6 and 4 that, there is 'no provision' in the 'NCLT' Rules, 2016, providing for liberty being prayed for by a person / party. As such, whether to 'grant liberty' or otherwise etc., under the 'Rules', or in the 'exclusive' ambit of the 'NCLT' Rules, 2016. To put it, pin pointedly, the 'NCLT' Rules, 2016, or very different from the Civil Procedure Code provisions. The Learned Counsel for the R6 & R4 refers to the decision of this 'Tribunal' in VLS Finance Limited Vs. Southend Infrastructure Pvt. Ltd. & Ors. (2018) SCC Online NCLAT 485, wherein at paragraph 20.1 & 22 it is observe....
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....fag end and thereafter grant of permission to withdraw the suit with liberty to file fresh suit on the same cause of action leads to multiplicity of proceedings and the Courts are not in a position to afford trying such multiple proceedings in respect of same cause of action unless special circumstances warrant. Having regard to the precious time spent for the trial of the suit, the rejection of application is justified. The reliance placed upon the judgment of the Apex Court reported in AIR 1968 SC 111 is misplaced as the ratio laid down in that case is wholly inapplicable to the facts of the present case." and the 'Revision Petition' was dismissed. Assessment 43. At the outset, this 'Tribunal', pertinently that the National Company Law Tribunal, Division Bench-II, Chennai in TCP/129/2016 (pertaining to Comp. App. (AT)(CH) No. 62 of 2023) (vide Company Petition No. 76/2013) was renumbered as TCP/129/2016 on 14.06.2023 had observed the following: "Ld. Counsel for the Petitioner submits that various subsequent developments have taken place which necessitated the Applicant to withdraw the instant petition. He submits that by withdrawal, no prejudice would be caused ....
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....r', was passed on 14.06.2023 (pertaining to Comp. App. (AT)(CH) No. 65 of 2023). 48. Like the impugned order, dated 14.06.2023 in TCP/129/2016 on the file of the NCLT, Chennai Bench (relating to Comp. App. (AT)(CH) No. 62 of 2023), in Comp. App. (AT)(CH) No. 63 of 2023, in TCP/130/2016 (vide Company Petition No. 77/2013), in Comp. App. (AT)(CH) No. 64 of 2023 (vide Company Petition No. 78/2013), in TCP/131/2016 and in Comp. App. (AT)(CH) No. 65 of 2023 (vide Company Petition No. 75/2013), in TCP/128/2016, the 'impugned orders' were passed on 14.06.2023, by the 'National Company Law Tribunal, Division Bench-II, Chennai'. 49. The plea of the Appellants, in Comp. App. (AT)(CH) Nos. 62, 63, 64 and 65/2023 (in Four Appeals) is that the 'impugned order' records, the 'reasons' for the Appellants to withdraw the 'Company Petitions' and also record the 'No Objection' given by the 'Respondents' the 'Tribunal', went 'wrong' in dismissing the petitions as 'withdrawn', 'without Liberty', the same cannot be countenanced in the 'eye of law'. 50. Also, the other stand of the 'Appellants' in Comp. App. (AT)(CH) Nos. 62, 63, 64 and 65/2023 (in Four Appeals) is that Rule 82 of 'NCLT' Rules, ....
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....wever, in respect of proceedings filed under the 'Companies Act, 2013', the procedure, to be followed, shall be as 'specified in the Rules'. 55. As a matter of fact, any order, passed by the Tribunal / Appellate Tribunal, shall be enforced as a 'Decree', passed by the 'Court'. The fetters of 'Civil Procedure Code', are not binding on the 'Tribunal', and the 'Appellate Tribunal', but they are guided by the 'Principles of Natural Justice'. 56. Rule 20 of 'NCLT' Rules, 2016, specified the 'procedure', to be followed, for 'institution of proceedings', 'petition', Appeals etc. Rule 23 of 'NCLT' Rules, 2016, deals with the 'presentation of petition or Appeal'. 57. It must be borne in mind, that 'Orders' and 'Rules' of 'Civil Procedure Code', shall not be made, in matters under the Companies Act, 2013. No wonder, that 'Tribunal', and the 'Appellate Tribunal', being 'creatures of statutes', are required, to adhere to the 'Principle of Natural Justice', 'in proceedings', before it. 58. At this juncture, this 'Tribunal', aptly points out that where 'permission to withdraw a suit' with 'Liberty to file fresh suit', is granted, at the 'Appellate' or at the second Appellate stage, '....
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.... 66. It cannot be brushed aside, that the 'grant of such a relief', in the light of express provisions of the 'statute', to the contrary, 'is not permissible'. After all, 'Equity' must yield to 'Law', as opined by this 'Tribunal'. More importantly, this Tribunal, points out that a 'Civil Court', does not 'Grant Leave', to file 'another suit'. If the 'Law', permits, the 'plaintiff', may file 'another suit', 'but not on the basis of 'observations' made by a superior court', as per judgment of the Hon'ble Supreme Court of India dated 18.09.2007 in Shiv Kumar Sharma Vs. Santosh Kumari Appeal (Civil) No. 4341/2007 (arising out of SLP (Civil) No. 8275/2007). 67. It is to be remembered, that there is 'no justification', in 'respect of proceedings' under Section 397 of the Companies Act, 1956 (now under Section 241 of the Companies Act, 2013) to insist on 'fresh petition' being filed, only resting upon, 'Fresh Cause of Action'. Besides this, the 'aspect', of 'Fresh Cause of Action', is 'inapplicable' to a petition under Section 397 of the Companies Act, 1956 (now under Section 241 of the Companies Act, 2013). 68. At this juncture, this 'Tribunal', aptly points out that Order 2 Rul....