TaxTMI 
TaxTMI 
2024 (4) TMI 827
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....tion Company Limited has been admitted and IA No.2889 of 2022 filed by the Corporate Debtor was disposed of as infructuous. The Suspended Director aggrieved by the order dated 22.03.2024 has come up in this Appeal. 2. This Appeal came up for consideration on 02.04.2024, on which date, noticing the submission of learned Counsel for the parties, following order was passed: "2.4.2024 - Learned Counsel for the Appellant submits that one of the issues in this Appeal is that in the Company Petition under Section 7, Orders were reserved by Court No.3 as it existed at that time i.e. 26th June, 2023 and thereafter one of the Members of the Bench was transferred to Guwahati and thereafter, an Application was filed by the Corporate Debtor on 22nd December, 2023 being IA No.5177 of 2023 which was also heard and orders were reserved on 4.3.2024. It is submitted that the main Company Petition was listed for pronouncement of Order on 22nd March, 2024 by the Bench which heard the matter on 26th June, 2023 and the Court was apprised that the IA 5177 of 2023 has been filed in which Order is also reserved but the Order was pronounced admitting Section 7 Application by Order dated 22nd Mar....
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.... of 2020 was filed before the Bombay High Court by Shri Prateek Agarwal. A SLP (C) was also filed by Shri Prateek Agarwal challenging order dated 14.05.2020 passed in the Writ Petition. (iv) Indiabulls Asset Reconstruction Company Limited filed Section 7 Application. Reply to Section 7 Application was filed by the Corporate Debtor. An IA No.2889 of 2022 was filed by the Corporate Debtor before the Adjudicating Authority praying for deferment of proceedings under Section 7 till the final hearing of Securitization Application. (v) The Court-III of Mumbai Bench of the Adjudicating Authority consisting of Shri H.V. Subba Rao and Ms. Madhu Sinha heard the parties in Section 7 Application as well as IA No.2889 of 2022 and reserved the orders on 26.06.2023. One of the Member of the Bench-III was transferred to Guwahati Bench by order dated 18.08.2023 and Court-III of the Mumbai Bench was reconstituted. (vi) On 05.10.2023, the Securitization Application No.116 of 2019 filed by Shri Prateek Agarwal was decided by Debt Recovery Tribunal, quashing the Demand Notice issued under Section 13, sub-section (2). Sale of secured asset was also set aside. The order dated 05....
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....ted the orders on the Application - IA No.5177 of 2023 filed by the Appellant in which orders were reserved. Without taking into consideration the subsequent events, which have bearing on Section 7 Application, Section 7 Application could not have been admitted and Adjudicating Authority committed error in admitting Section 7 Application without awaiting the orders in IA No.5177 of 2023. It is submitted that judgment by Adjudicating Authority, after reserving the same, ought to have been pronounced within 30 days from the final hearing as per Rule 150 (1) of NCLT Rules, 2016. Pronouncement of order after eight months is not in accord with the law laid down by Hon'ble Supreme Court in its judgment Anil Rai v. State of Bihar - (2001) 7 SCC 318. 7. Shri Gaurav Mitra, learned Counsel appearing for Respondent No.1 opposing the submissions of the learned Counsel for the Appellant submits that the order dated 05.10.2023 of the DRT which has been brought on record by IA No.5177 of 2023 in DRT proceedings with regard to which prayer has already been made by the Corporate Debtor in IA No.2889 of 2022, which IA has also been decided by the impugned order. There was no reason to await the o....
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....s, 2016. The learned Counsel for the Appellant has brought on record the order dated 28.11.2023 issued by NCLT containing directions/ clarifications about the issue regarding de novo listing of matters where orders are reserved. It is useful to extract entire order dated 28.11.2023, which is as follows: "Dated: 28/11/2023 ORDER Subject : Further Directions/Clarifications About The Issue Relating To De Novo Listing Of Matters That Were Reserved For Orders Post Transfer Of Members And Reconstitution Of Benches Reg. 1. NCLT Benches were reconstituted on 18.08.2023 vide Order Ref 10/3 / 2023 -NCLT. Further specific directions were issued, with approval of Hon'ble President, by Registrar on 25.09.2023 to all Ld. HODs of NCLT Benches, about Matters Renotified for De Novo Hearing-Cancellation of Notification/Cause Lists. 2. Now the undersigned is directed by Hon'ble president to circulate to all Hon'ble members Judicial as well as technical of all Hon'ble benches through the Ld. HOD, for circulation among Hon'ble members only, following further clarification/addition directions: i) If a particular Hon'ble Bench ....
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....to pronounce the orders. There is no necessity to renotify for de novo hearing by another Bench." 12. The order dated 25.09.2023 issued by the President, NCLT clearly indicates that if orders were reserved and thereafter there is a change in the composition of Bench, approval for constituting a Special Bench should be obtained from Hon'ble President. In the present case, Special Bench was constituted on 22.03.2024 for pronouncement of the judgment as per the direction of the President dated 25.09.2023. The present is a case where after reserving the judgment on 26.06.2023, an IA No.5177 of 2023 was filed by the Corporate Debtor. In IA No.5177 of 2023, the Corporate Debtor prayed that Company Petition be de-reserved and Company Petition as well as IA No.2889 of 2022 be listed for re-hearing and the order dated 05.10.2023 passed by Debt Recovery Tribunal be taken on record. The Application was filed in November 2023, in which following prayers were made: "a) That this Hon'ble Tribunal be pleased to de-reserve the captioned Company Petition and the Interlocutory Application 2889 of 2022 for rehearing; b) That this Hon'ble Tribunal be pleased to list the captioned ....
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....022 was reserved for order along with the CP 769/2022 vide order dated 26.06.2023 by the bench consisting of Shri. H. V. Subba Rao Member (J) and Ms. Madhu Sinha Member (T). Therefore, order would be pronounced by the same members which heard the matter. As far as IA 5177/2023 is concerned, this application has been filed for dereserving the I.A. 2889/2022 & C.P. 769/2022 in view of the judgment passed by the Hon'ble DRT on 05.10.2023. I.A. 5177/2023 is reserved for order. Liberty is granted to file written submissions not exceeding 4 pages and compilation of judgments to be relied within one week." 15. IA No.5177 of 2023 was filed by the Corporate Debtor before the existing Bench, where Company Petition was proceeding and hearing was concluded. Filing of any Application before the Adjudicating Authority is clearly permissible as per Rule 32 of NCLT Rules, 2016. Rule 32 provides: " 32. Interlocutory applications. - Every Interlocutory application for stay, direction, condonation of delay, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall be in prescribed form and the requirements prescr....
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....ring on law as well as on fact as invoked by an aggrieved person. The first appeal is a valuable right of the appellant and therein all questions of fact and law are open for consideration by reappreciating the material and evidence. Therefore, the first appellate court is required to address on all the issues and decide the appeal assigning valid reasons either in support or against by reappraisal. The court of first appeal must record its findings dealing with all the issues, considering oral as well as documentary evidence led by the parties." 18. There is a celebrated judgment of the Federal Court reported in AIR 1941 FC 5 - Lachmeshwar Prasad Shukul and Ors. vs. Keshwar Lal Chaudhuri and Ors., where Chief Justice Gwyer laid down the contours of jurisdiction of the Appellate Court in paragraph-1, which is as follows: "Gwyer, C.J- In this case I find myself entirely in agreement with the judgment to be delivered by my brother Varadachariar, which I have had an opportunity of reading. I do not think it necessary therefore to deliver a judgment of my own; but, with regard to the question whether the Court is entitled to take into account legislative changes since the d....
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....ower to do justice between the parties cannot be restricted to cases in which it is able to hold that the lower Court has gone wrong in its law. The contention that the power of a Court of appeal is so limited was distinctly negatived in Attorney-General v. Birmingham, Tame, and Rea District Drainage Board (1912) 1912 A C 788 and Quilter v. Mapleson (1882) 9 QBD 672 which are referred to in the judgment in Shyamakant Lal v. Rambhajan Singh ('39) 26 AIR 1939 PC 74 As stated in Shyamakant Lal v. Rambhajan Singh ('39) 26 AIR 1939 PC 74 there is no reason to suppose that the powers of this Court when acting as a Court of appeal are less extensive than those of the High Courts when hearing an appeal; and it has been a principle of legislation in British India at least from 1861 that a Court of appeal shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by the Civil Procedure Code on Courts of original jurisdiction" 21. We, thus, are of the view that in exercise of appellate jurisdiction, the Appellate Court can take all decision, which could have been passed by Adjudicating Authority while deciding Section 7 Application....
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....upreme Court : 11. The ordinary rule of civil law is that the rights of the parties stand crystallised on the date of the institution of the suit and, therefore, the decree in a suit should accord with the rights of the parties as they stood at the commencement of the lis. However, the Court has power to take note of subsequent events and mould the relief accordingly subject to the following conditions being satisfied: (i) that the relief, as claimed originally has, by reason of subsequent events, become inappropriate or cannot be granted; (ii) that taking note of such subsequent event or changed circumstances would shorten litigation and enable complete justice being done to the parties; and (iii) that such subsequent event is brought to the notice of the court promptly and in accordance with the rules of procedural law so that the opposite party is not taken by surprise. In Pasupuleti Venkateswarlu v. Motor & General Traders [(1975) 1 SCC 770 : AIR 1975 SC 1409] this Court held that a fact arising after the lis, coming to the notice of the court and having a fundamental impact on the right to relief or the manner of moulding it and brought diligently to the notice of the....