TaxTMI 
TaxTMI 
2024 (12) TMI 887
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....dv. Mr. Sayan Roy Chowdhury, Adv. Mr. Satyaki Mukherjee, Adv. Mr. B. Garodia, Adv. Mr. Paritosh Sinha, Adv. Mr. Sanbhik Chaudhury, Adv. ORDER Sabyasachi Bhattacharyya, J.:- 1. The present appeal arises out of an order refusing the prayer of the plaintiffs/appellants for interim injunction. The impugned order was passed in connection with a suit instituted by the plaintiffs/appellants seeking declaration that the decision taken by the defendants/respondent-Company nos.8 to 12 to obtain leasehold rights in their favour in respect of the seventh floor of the Birla Building at 9/1, R.N. Mukherjee Road, Kolkata - 700001 is illegal, null and void and for injunction restraining the defendants from giving further effect to the said decision as well as from removing or transferring any record or document of the defendants nos. 8 to 12 from their existing tenanted premise at the fourth floor of the same building as well as consequential reliefs. 2. In the said suit, an application was filed for appointment of Receiver/Special Officer to make an inventory of all such records found to be in symbolic possession of the respondent nos. 8 to 12 at their existing tenanted premises as well as ....
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....ich is also annexed to the pleadings of the plaintiffs, the plaintiffs became aware of the situation and filed the present suit. 8. Learned senior counsel seeks to take the court through the respective shareholdings of the estate of late PDB in the five companies to impress upon the Court that the estate has direct and legal control over the companies. Hence, the present decision would be detrimental to the interest of the estate, which confers locus standi on the plaintiffs, as universal legatees of the estate, to initiate the present legal action. 9. As per the observation of the Division Bench referred to above, the Testamentary Court cannot grant injunctions in respect of thirdparties, including the defendant nos. 8 to 12 companies. As such, the plaintiffs have approached the regular civil court for the present reliefs. 10. It is contended by the plaintiffs/appellants that the reliefs of declaration and other consequential reliefs sought in the suit cannot be granted by the National Company Law Tribunal (NCLT) as those do not come within the purview of the Companies Act, 2013 (hereinafter referred to as "the 2013 Act"). As such, neither the Testamentary Court nor the NCLT ca....
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....il right of the plaintiffs has been infringed and the Civil Court cannot interdict any internal affair of the defendant- Companies, who are independent juristic entities in their own right. It is argued that in the event there is any grievance over perceived oppression, mismanagement or control of the Company, it is for the members of the Company to move the appropriate forum under Sections 241 and 242 of the 2013 Act. The plaintiffs are strangers and not members of the companies. 18. The Civil Court cannot look into the commercial viability of a valid decision taken by the BoDs of Companies which are independent juristic entities. 19. Since the Division Bench has held that the Testamentary Court cannot interfere with the day-to-day affairs of third-party companies or pass any directions/injunctions in respect of them, the universal legatees do not have such right, standing on lesser legal footing than the APL. 20. Learned counsel appearing for the respondent no.9, one of the other defendant Companies, argues that the impugned order is not patently perverse and as such, there cannot be any interference in an intracourt appeal, that too at the interim stage. 21. Apart from reite....
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....inees and as such, acted independently to take the impugned decision. 28. If aggrieved by the action of the APL Committee, it is always open to the plaintiffs to approach the Testamentary Court. However, the Board decisions were taken fully in accordance with law. Learned counsel places reliance on Section 179 of the 2013 Act, which lays down the powers of the Board of Directors of a company. The decision impugned in the suit having been taken by the respective BoDs of the defendantcompanies in consonance with Section 179, it is argued that thirdparties/ strangers to the Companies do not have the right to maintain any legal action against the same. 29. Learned counsel relies on Section 430 of the 2013 Act, which precludes the Civil Court‟s jurisdiction to entertain any suit or proceeding in respect of any matter which the NCLT is empowered to determine by the said Act or any other law. The Section further provides that no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the 2013 Act or other any law for the time being in force by the Tribunal. 30. Thus, it is contended ....
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.... the date of death of the testator. However, the said Section is circumscribed by Section 211 of the said Act which operates to vest all the property of the deceased person in the Executor or Administrator, as the case may be. Since the APL Committee has been appointed by order of the Testamentary Court in respect of the estate of late PDB, Section 211 vests the property of the estate in the said APL. Also, as per Section 211(1) of the 1925 Act, it is the APL which is the legal representative of the estate for all purposes. Thus, the plaintiffs, in the capacity of universal legatees of the estate, cannot jump the queue bypassing the APL and directly assert their rights in respect of the estate. 39. Section 332 of the 1925 Act provides that the assent of the executor or administrator is necessary to complete a legatee‟s title to his legacy. Thus, although the rights of legatees relate back to the date of death of the testator, such right/title is conferred only upon probate/Letters of Administration being granted and assent to the legacybeing completed by distribution of the property by the Executor or Administrator as the case may be. 40. Hence, it is premature for the univ....
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.... majority decision of the APL. At best, if aggrieved and otherwise entitled in law, the legatees could approach the testamentary court in that regard. 43. In fact, the Division Bench judgment also stipulates that the Testamentary Court could be approached by the APLonly in case of major differences of opinion and not regular day-to-day decisions;however, whether a decision is "major" or not would be at the discretion of the third (judicial) member of the APL to decide. Hence, the attempt of the dissenting member to thwart the majority decision of the APL members in an oblique manner through the plaintiffs cannot be given a premium by the Court. 44. From the Company Law perspective, the plaintiffs are not "members" of the defendant-companies and, as such, cannot invoke the jurisdiction of the NCLT under Sections 241 and 242 of the 2013 Act. 45. The Legislature, in its wisdom, conferred powers only on the "members" of a company to take out such challenge, deliberately precluding thirdparties to the company, obviously to prevent unnecessary and frivolous intermeddling with the internal affairs of a company at the drop of a hat, which might have the effect of paralyzing the function....
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....ies within the contemplation of Section 179 of the 2013 Act. 52. The plaintiffs, being utter strangers to the companies, cannot intermeddle, or seek directions from the court to so intermeddle at their instance, or even look into the commercial prudence of the decisions of the companies. If aggrieved in that regard, only members of the companies can sue. 53. The bogey of „derivative action‟ raised by the appellants is not germane or applicable in the instant case. Such concept evolved in Company jurisprudence primarily to protect the interest of the Company and its shareholders - be it majority or minority. The plaintiffs, being complete third-parties to the defendant-companies, claiming on the basis of their rights as universal legatees of one of the shareholders, cannot have any say at this stage over the functioning of the companies. As clarified by the Division Bench, the control of the estate has to be exercised by virtue of the direct shareholding of the testatrix and that too, exercised by the APL duly appointed by the Testamentary Court and not universal legatees, having an inferior legal status than the APL so to say. 54. Insofar as the validity of the impug....