TaxTMI 
TaxTMI 
2025 (5) TMI 2107
X X X X Extracts X X X X
X X X X Extracts X X X X
....herein the Appellants in each of these Company Appeals put challenge to the Impugned Order dated 02.12.2022, which almost happens to be akin in nature in all the Company Appeals. Besides that, since these Company Appeals engage consideration of a common question of fact and law, for the purposes of brevity, they are being decided together. 2. As far as, Company Appeal (AT) (CH) No. 05 / 2023, the Company Appeal (AT) (CH) No. 06 / 2023, Company Appeal (AT) (CH) No. 21 / 2023 & Company Appeal (AT) (CH) No. 22 / 2023, the notices have been sent by this Tribunal, to the respective Respondent and ever since, the institution of these Company Appeals, none has appeared for the Respondents, despite service of notice. Hence, these four Appeals are being proceeded exparte. 3. Because of the fact that in each of the Company Appeals, there were different Interlocutory Applications, which were considered and decided, we feel it apt to summarily describe each of the Appeals, qua the order, which has been put to challenge under it:- (a) Company Appeal (AT) (CH) No. 04 / 2023, it challenges the Impugned Order dated 02.12.2022, as it has been passed by the learned Adjudicating Authority in MA ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2.2022, as it was passed in MA (C/ACT)/52/KOB/2022 in TCP/21/KOB/2019. (l) Challenge in this Appeal being Company Appeal (AT) (CH) No. 19 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/53/KOB/2022 in TCP/21/KOB/2019. (m) Challenge in this Appeal being Company Appeal (AT) (CH) No. 20/ 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/54/KOB/2022 in TCP/21/KOB/2019. (n) Challenge in this Appeal being Company Appeal (AT) (CH) No. 21/ 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/55/KOB/2022 in TCP/21/KOB/2019. (o) Challenge in this Appeal being Company Appeal (AT) (CH) No. 22/ 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/56/KOB/2022 in TCP/21/KOB/2019. (p) Challenge in this Appeal being Company Appeal (AT) (CH) No. 23/ 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/57/KOB/2022 in TCP/21/KOB/2019. (q) Challenge in this Appeal being Company Appeal (AT) (CH) No. 24/ 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/58/KOB/2022 in TCP/21/KOB/2019. (r) Challenge in this Appeal being....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or, he was also conferred with the powers to take all relevant steps necessary for the purposes of recovering the money, which is alleged to have been illegally diverted from the accounts of the Company and to recover the sold properties which had been illegally sold. 8. This Company Petition was initially filed as CP No. 29 / 2017, before the learned NCLT, Chennai and upon its transfer to learned NCLT, Kochi Bench, was re-numbered as TCP/21/KOB/2019. 9. The Administrator thus appointed i.e. Justice (Rtd) K. Narayana Kurup (former Acting Chief Justice of Madras High Court), could not complete the process, as it was contemplated in the order of appointment of Administrator dated 31.10.2018, till he demitted his office and in his place Mr. Jinan KR (former Member (Judicial), NCLT, Kolkata Bench), was appointed as the Administrator vide Order dated 29.11.2021 and was conferred with the similar powers as vested with the earlier Administrator to manage the Company and to take steps for recovery of funds and properties of the Appellant Company said to be diverted in contravention to the provisions of the Articles of Association of the said Company. 10. It is the case of the Appellants....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n TCP/21/KOB/2019, under Section 424(3) of the Companies Act, 2013 r/w. Order XXI Rule 11 & 11A of C.P.C. before the learned NCLT, Kochi Bench, along with a report containing report of Auditor and other details, praying for recovery of Rs.1,39,66,504/- with 12% interest from Mr. P.A. John and others, to be realised by arrest and detention of the Respondents with steps for attachment and sale of movable and immovable properties to be dealt with later, as steps are being taken to collect these details. 12. The proceedings thus drawn by the Administrator were considered by the learned Adjudicating Authority and the learned Adjudicating Authority, while taking a decision on the Execution Petition thus submitted by the Administrator, came to the conclusion that, owing to the fact that, since learned NCLT, Chennai had only directed to recover the appropriate money and property and there is no such specific order / decree / deemed decree to execute in the instant EP, the EP cannot be entertained and accordingly dismissed the EP with the liberty left open for the Petitioner / Administrator to file specific Miscellaneous Applications, against each of the parties so that, the Tribunal can p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Administrator have been pressed upon, to establish the fact of wrongful diversion of the Company's funds. 15. When all these Miscellaneous Applications came up for consideration in Company Petition i.e. TCP/21/KOB/2019, the question, which emerged for consideration was, as to whether at all in a proceedings of Company Petition TCP/21/KOB/2019, as preferred under Section 241 & 242 of the Companies Act, alleging an act of Oppression and Mismanagement, the process of recovery of the amount alleged to have been diverted / diversified could at all be pressed into by preference of the MAs in pursuant to the Order of 08.04.2022 for formulation of decree. 16. The learned Adjudicating Authority, after considering the respective MAs preferred under the aforesaid provisions praying for formulation of a decree against the Respondents for recovery of the money, came up with the view, that such type of an Application would not be maintainable, because the concept of drawing a "decree" as defined under the Code of C.P.C., in pursuance to an order, which was passed under the proceedings held under the Companies Act, is not a concept, which is contained under the Companies Act, and that, the dec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om which an appeal lies as an appeal from an order, or (b) any order of dismissal for default. Explanation.-- A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final;" 20. On its simpliciter interpretation, the decree in itself is not a Judgment, but rather, it is a formal expression of an adjudication which based on reasons given in a Judgment, made by the "Civil Courts", conclusively determining the rights and liabilities of the parties in the matters which are in controversy "in the Suit", and can be in the nature of preliminary, final or part preliminary and part final. 21. We are of the tentative view that even if the orders passed by this Tribunal or the Appellate Tribunal are made enforceable as per Sub-Section (3) of Section 424 like a "Decree" passed by the Civil Court, this mechanism of its enforceability in itself will not make the said Order as to be a decree, which has been passed by the competent Civil Court in a Suit, because, the enforceability of the Order of a Tribunal as a decree as contem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t been made competent to formulate a decree besides being summary proceedings, they may not be able to invoke the provisions contained under Order XX Rule 6A. (b) Secondly, it has to be taken into consideration that, a decree is a concept which is in vogue under a Civil Law, which is strictly governed by the proceedings contemplated under the Code of the Civil Procedure. Since the Tribunals constituted under the Companies Act, do not regulate their proceedings under the Code of Civil Procedure, the expression of formulation of a decree under Order XX Rule 6A to be read with the definition of a decree under Section 2(2), may not be attracted for the purposes to be made enforceable by filing of an Application under Rule 11 to be read with Rule 102 of the NCLT Rules, 2016. (c) Section 424(3) of the Companies Act, which uses the word "decree" is a legislation by "reference" and not by "incorporation", hence, orders under Companies Act will never be a decree. 25. Apart from it, there are various other elements, which are required to be satisfied to make an Order to be a Decree, one of them being that there has had to be a determination of rights inter se between the two rival parti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of an Order of the Tribunal. In the circumstances, it is but natural that the Tribunal dismissed the Application EP/01/KOB/2021, by the Order dated 08.04.2022, after assigning the following reasons: "10. The Petitioner / Administrator may appraise in writing to this Tribunal, after finding out some persons particularly some borrowers as well as some directors are involved in misappropriation of the fund of the Company. It is only then hearing both the parties, this Tribunal can pass an order which tantamounts to a deemed decree that too through an application as provided under the Rules. Failure on the side of the opposite side, the Petitioner / Administrator can file an Execution Petition to execute the order of this Tribunal under Rule 56 of the NCLT Rules, 2016 in Form NCLT-8. 11. For the aforesaid reasons, particularly there is no such specific order/decree/deemed decree to execute in this EP, this EP cannot be entertained and any orders passed in that. Hence, EP/01/KOB/2021 is dismissed with liberty to the Petitioner to file specific Miscellaneous Applications against each of the parties so that this Tribunal can pass executable orders amounting to a decree/deemed decree a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcise of powers by the learned NCLT as formulation of a decree under Order XX is not a power which is vested with the Tribunal, as per law, though, being conscious of the fact that the orders passed by the Tribunals could be executed as a decree in the light of the provisions contained under Sub-Section (3) of Section 424 of the Companies Act. 33. Thus, the controversy in all these Appeals is the relief sought in the respective applications filed by the Appellant which is reproduced hereunder: "i. It is most humbly prayed that in the interest of justice, this Hon'ble Tribunal may be pleased to pass a decree for realisation of an amount of Rs.58,324/- (Fifty Eight Thousand Three Hundred Twenty Four only) with interest at the rate of 12% per annum from the date of demand till the date of realisation of the amount with costs. ii. In terms of treating the Miscellaneous Application as one under Order XX, Rule 6A of the Code of Civil Procedure, 1908." It appears to us that this formulation of relief, may not itself create an impediment for the Appellants to get an order executable under the provisions of Sub-Section (3) of Section 424 of the Companies Act and the Learned Tribunal i....