TaxTMI 
TaxTMI 
2025 (5) TMI 1846
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....ates JUDGMENT ASHOK BHUSHAN, J. These Company Appeals have been filed against the same order dated 22.07.2024 passed by National Company Law Tribunal (NCLT), Mumbai Bench-1 in different CA Nos. 60/2024, 101/2024, 119/2024, 144/2024, 93/2024 filed by the Appellants and order dated 29.07.2024 in CA No.247/2024. The NCLT by the impugned order rejected the applications. Aggrieved by which order these appeals have been filed. 2. All the Appeals arise from same set of facts and raises common question of law, hence, they were heard together and are being decided by this common judgment. It shall be sufficient to refer to the pleadings and submissions in Company Appeal (AT) No.261 of 2024 for deciding all these appeals. Brief facts of the case necessary to be noticed for deciding these appeals are: 2.1. On 30.09.2018, Ministry of Corporate Affairs (MCA) directed Serious Fraud Investigation Office (SFIO) to carry investigation of IL&FS and its subsidiaries. MCA, Union of India - Respondent No.1 filed Company Petition No.3638 of 2018 against the IL&FS and their existing Board of Directors before the NCLT under Section 241 and 242 of the Companies Act, 2013. 2.2. On 01.10.20....
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....e), which has been wrongfully incorporated in the amended company petition. To the similar effect other Appellants in this appeal, filed applications seeking deletion of prayer clause (e) from the amended CP No.3638 of 2018. 2.10. Aforesaid applications filed by Appellants were objected by Union of India. An Affidavit in Reply was filed on behalf of the Respondent pleading that prayer (e) added to CP No.3638 of 2018 was contemplated under prayer (C) of MA No.2696 of 2019. 2.11. The NCLT heard counsel for the parties and by impugned order held that the Prayer clause (e) which was added in the CP No.3638 of 2018 falls within the scope of prayer (C) or (D) of the amendment application which was allowed by order dated 25.11.2019. After returning the aforesaid finding, the NCLT rejected CA No.60 of 2024 and other applications filed by other Appellants. Aggrieved by order of the NCLT these appeals have been filed. 3. We have heard Shri Arun Kathpalia, learned senior counsel for the Appellant and Shri Aditya Sikka, learned counsel appearing for Union of India. 4. Shri Arun Kathpalia, learned senior counsel for the Appellant in support of the appeal submits that the order of th....
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....ed or amended, the Court cannot effectively exercise its power to permit an amendment. It is necessary for an amendment applicant to set out specifically in his application, seeking leave of the court for amendment in the pleading. Present is a case where neither any application was filed nor any leave was sought from the Court. It is submitted that adding relief in the CP No.3638 of 2018 without leave of the Court and without giving opportunity to the Appellant is violative of both provisions of Rule 155 of NCLT Rules, 2016 and rules of natural justice and the NCLT committed error in rejecting CA No.60 of 2024. The NCLT also committed error in misconstruing the scope and ambit of earlier order dated 25.11.2019 allowing MA No.2696 of 2019. 5. Shri Aditya Sikka, learned counsel appearing for the Union of India opposing the submissions of learned counsel for the Appellant referred to various proceedings undertaken in the Company Petition No.3638 of 2018. It is submitted that order of the NCLT allowing the impleadment of various Ex- Directors, Key managerial personnel and Ex-Auditors including Appellant was unsuccessfully challenged upto the Hon'ble Supreme Court. It is submitted t....
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.... Respondent No.1company, comprising of Respondent Nos. 2 to 8, be suspended with immediate effect and,10 (ten) persons be appointed as directors in terms of provisions of section 242 (2) (k) of the Act, to manage the affairs of the Respondent No.1company and its group companies through their nominees, and such directors may report and function under the Hon'ble Tribunal on such matters as it may direct. (b) That the Board of Directors appointed by the Hon'ble Tribunal in terms of 242 (2) (k) of the Act be authorized to replace such number of directors of subsidiaries, joint ventures and associate companies as may be required to make the respondent No.1 and its group companies as going concern. (c) The Petitioner seeks the leave of this Hon'ble Tribunal to file supplement/enlarge/amend/ modify the scope of the reliefs sought and prayers made in this petition by filing any other documents or applications in view of the extraordinary nature of the circumstances detailed in the petition above. (d) Pass any other order(s) as deemed fit and proper, under the circumstances, by the Hon'ble Tribunal, Principal Bench." 8. After filing of the Comp....
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....e Applicant- Petitioner for impleadment of Mrs. Asha Kiran Bawa and Ms. Akanksha Bawa, wife and daughter of Mr. Ramesh C Bawa (Respondent No. 315), respectively, as Respondent Nos. 319 and 320, in the main Company Petition No.3638/2018. 5. MA No. 1577/2019 filed by the Applicant- Petitioner seeking extension of orders dated 03/12/2018 (as modified by this Hon'ble Tribunal's order dated 16/01/2019) to Respondent Nos. 319 and 320 restraining them from alienating their moveable and immoveable properties. 6. 2nd Interim Report of IL&FS & its subsidiaries dated 28/05/2019 titled "Investigation Report of IL&FS Financial Services Ltd." submitted to the Applicant-Petitioner by SFIO. 7. MA No. 2071/2019 file Applicant-Petitioner for impleadment of Additional Respondents Nos. 321 to 343, on the basis of the 2nd Interim Report submitted by SFIO. (B) Allow the amendment of the cause title of the Company Petition No. 3638/2018, to include Sections 246 r.w. Section 339, besides the already invoked Section 241 and 242, of the Companies Act, 2013. (C) Permit the Applicant-Petitioner to further supplement/enlarge/ amend/modify the scope of the re....
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....t been served to them. The Ld. Counsel for the Applicant seeks some time to look into the matter and have the amended copy of the petition serve to the Respondents also. The Counsel for the Respondent informed that they have filed an application objecting the admission of compilation of documents placed earlier on the last hearing. Few of them have been numbered. Registry is directed to number all these Applications and list tomorrow. Rest of the applications are list on Board on 21.02.2024. " 11. After passing of above order dated 20.02.2024, amended petition was served on the Appellant on 21.02.2024. The copy of amended Company Petition, which was served on the Appellant has been brought on the record as Annexure A-11. In Para 22 of the original petition reliefs (e) and (f) were added, which are to the following effect: "e) Declare that the Respondents named in the Investigation Report dated May 28, 2019 namely Respondent Nos.2, 3, 9, 313, 314, 315, 321 to 335, 340 and 341 were knowingly parties to the fraudulent conduct of business of IL&FS Financial Services Limited and/or parties to the conduct of business of IL&FS Financial Services Limited with a view to defraud ....
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....on 25.11.2019. Whereas, the contention of the Appellant is that prayers (C) and (D) which was allowed did not empower the Union of India to add any further relief in CP No.3638 of 2018 without filing any application or without any leave of the court. 14. We may now notice Rule 155 of the NCLT Rules, 2016 which contains general power of amendment. Rule 155 is as follows: "155. General power to amend.- The Tribunal may, within a period of thirty days from the date of completion of pleadings, and on such terms as to costs or otherwise, as it may think fit, amend any defect or error in any proceeding before it; and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on such proceeding." 15. The above rule clearly empowers the Tribunal to permit to amend necessary amendment for the purpose of determining the real question or issue raised in the proceeding. Section 424 of the Companies Act, 2013 deals with procedure before Tribunal and Appellate Tribunal. Section 424 is as follows : "Section 424: Procedure before Tribunal and Appellate Tribunal. (1) The Tribunal and the Appellate Tribunal....
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....the Tribunal and the Appellate Tribunal shall be deemed to be civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974)." 16. The above provision makes it clear that the NCLT is not bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice. Even though provisions of the Code of Civil Procedure are not strictly applicable, however, the principles contained therein are always the guiding factor for the procedure for proceeding before the Tribunal. Statutory provision of Order VI, Rule 17 of the Civil Procedure Code, 1908 are not applicable to the proceedings before the NCLT. When the petition is filed under Companies Act, 2013 under Section 241-242, pleadings which are submitted are record of the Court and no amendment or tinkering in pleadings filed by the parties can be allowed without leave of the Court. The first principle which is to be noticed is the fact that any amendment in the pleadings which is filed by a party under Section 241 and 242 of the Companies Act requires leave of the Court. 17. The submission which has been advanced by the Responden....
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....n as amended on 25.11.2019. 19. The order dated 20.02.2024, which we have already extracted, was an order passed where objection was raised by the Respondents (Appellants herein) that they have not been served with the amended copy of petition. On the next date i.e. 21.02.2024, amended petition was served on the Appellants where new prayer (e) was added. Order which came to be passed on 20.02.2024 cannot be said to be any grant of leave by NCLT to the Union of India to add further prayers in the CP No.3638 of 2018. The fact that Union of India itself has filed amendment application which was allowed on 25.11.2019, clearly indicate that the Union of India was aware that it has to file application for adding further relief. We have already noticed the prayers in the original Company Petition where initially Union of India itself has sought leave for filing further application for amendment, which prayer was contained in prayer (c). As was existing in the original petition, for ready reference, prayer (c) is as follows: "(c) The Petitioner seeks the leave of this Hon'ble Tribunal to file supplement/enlarge/amend/ modify the scope of the reliefs sought and prayers made ....
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....rs a discretionary jurisdiction on the court exercisable at any stage of the proceedings to allow either party to alter or amend his pleadings in such manner and on such terms as may be just. The Rule goes on to provide that all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties. Unless and until the court is told how and in what manner the pleading originally submitted to the court is proposed to be altered or amended, the court cannot effectively exercise its power to permit amendment. An amendment may involve withdrawal of an admission previously made, may attempt to introduce a plea or claim barred by limitation, or, may be so devised as to deprive the opposite party of a valuable right accrued to him by lapse of time and so on. It is, therefore, necessary for an amendment applicant to set out specifically in his application, seeking leave of the court for amendment in the pleading, as to what is proposed to be omitted from or altered or substituted in or added to the original pleading. 14. In Pleadings: Principles and Practice by Jacob and Goldrein (1990 Edn.) it is stated that a party....
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....this Tribunal held that amendment cannot be incorporated without order of the Court. Para 2 and 4 of the judgment notices the facts and this Tribunal in Para 9 and 13 laid down following: "9. The above chart would reveal that the amendments were substantial in nature though learned counsel for the respondent alleges it to be mere explanatory. Admittedly new reliefs have been added in the amended petition as also a new party being impleaded. Further the additional acts of oppression have also been added for which, of course, an opportunity ought to have been granted to the appellant to rebut such a move." "13. In the circumstances and on perusal of the comparative chart, we are of considered opinion that for such substantial amendments, an application ought to have been moved with such proposed amendments and with a liberty to the appellants to rebut such proposed amendments and only thereafter, the amended petition ought to have been brought on record. The impugned order does not adhere to the principles of natural justice as it did not give an opportunity of being heard to the appellant. Thus we set aside orders dated August 21, 2024 and June 7, 2024 and hence we....
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.... unlawfully been a beneficiary of any property/assets/funds belonging to IL&FS Financial Services Limited ("IFIN"). There is no property of IFIN in the form of unlawful gains in my hands and the issue of any non-existent property being required to be secured does not arise. As such, and in view of there being no such property of IFIN in my hands, there is no question of any final relief being sought or granted against me and as such there can be no interim relief in aid thereof." 27. The above affidavit, Para 4, on which reliance has been placed only mentions that Respondent No.323 by the said Additional Affidavit, which is sworn on 10.06.2023, has submitted that the Petitioner has not amended the final reliefs sought in the petition. Said affidavit in reply was filed in MA No.2070 of 2019 and we are of the view that said affidavit has no relevance in determining the issues, which has arisen in CA No.60 of 2024 and other applications filed by the Appellants. The objection that petitioner has not amended the petition cannot mean that on the basis of leave granted to serve amended petition Respondent - Union of India can add relief without filing any application and without obtain....