TaxTMI 
TaxTMI 
2025 (8) TMI 722
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.... been filed by the Calcutta Cricket & Football Club. 2. Brief facts necessary to be noticed for deciding the Appeal are: (i) The Appellant - Calcutta Cricket & Football Club was established in the year 1876. The Appellant has 1880 Members. The Appellant is a registered company under Section 8 of the Companies Act, 2013. (ii) The four Members of the Club including Respondent Nos.1, 2 and 3 to this Appeal, filed a Company Petition under Section 97, 213, 241, 242 and 244 of the Companies Act, 2013 (hereinafter referred to as the "Act") in October 2023. The Company Petition having not been filed by requisite number of Members, i.e. by 1/5th of total number of Members, an application was filed to waive the requirement as per Section 244 of the Act. The application of waiver being I.A. (CA) No.183/KB/2023 was allowed by NCLT vide order dated 17.01.2024. Against which order a Company Appeal (AT) No.56 of 2024 was filed in this Tribunal by challenging the order dated 17.01.2024. (iii) The Appellant issued as notice dated 07.09.2024 for conducting the election for the year 2024-25. In an Annual General Meeting, Election Officer and a team of Scrutinizers was ap....
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....itting filing of reply was only an eyewash. Thus, the order impugned has been passed in violation of principles of natural justice. It is submitted that the petition for oppression and mismanagement has been filed by only four Members, in which although the waiver was granted by the NCLT, against which order, Appeal filed in this tribunal was also dismissed. But in Civil Appeal No.6604 of 2025 filed against the order of this Tribunal, the Hon'ble Supreme Court has initially passed an interim order on 19.05.2025 that no final order shall be passed in Company Petition. However, by a subsequent order on 18.07.2025, the Hon'ble Supreme Court has directed that NCLT shall not proceed further with the Company Petition till the next date of hearing. It is submitted that however, order impugned, which was passed on 03.01.2025 needs to be examined on merits as the said order was passed prior to interim order by the Hon'ble Supreme Court on 19.05.2025. It is submitted that initially the Company Petition was filed by four persons, out of which only three filed the IA No.225 of 2024 and out of three, one has expressed during hearing that he wants to withdraw from the application. Thus, only two....
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....ted that by interim order dated 13.01.2025 passed in this Appeal, this Tribunal has also directed for preserving the ballot boxes, so as to keeping it safe for final adjudication of the Company Petition. It is submitted that mere lack of issuance of formal notice in IA No.225 of 2024, is not failure of natural justice and the Appellant having been submitted written submissions, the principles of natural justice were complied. Learned Counsel for the Respondents has supported the impugned order. 6. We have considered the submissions of learned Counsel for the parties and have perused the records. 7. As noted above, the Company Petition was filed by four Members of the Appellant's Club, out of 1880 Members. An application was also filed by the Company Petitioners, praying for waiver under the Proviso to Section 244, sub-section (1), which waiver was granted by the NCLT vide its order dated 17.01.2024 against which an Appeal being Company Appeal (AT) No.56 of 2024 was filed in this Tribunal, which was dismissed and challenge to the order passed by NCLT and NCLAT is raised in Civil Appeal No.6604 of 2025. In the Civil Appeal, initially an interim order was passed by the Hon'ble S....
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....24 to the Receiver/ Special Officer/ Scrutiniser appointed by the Hon'ble Tribunal forthwith upon communication of this order; c) A direction also be made upon the Receiver/ Special Officer/ Scrutiniser to scrutinise the results of the manual voting conducted at the election of the respondent no. 1 held on September 30, 2024 and to submit a report before the Hon'ble Tribunal; d) An order of injunction be passed restraining the respondents from taking any coercive measures or action or from proceeding against the petitioners in any form or manner whatsoever; e) In the event, it is ascertained that the results of the elections held on September 28, 2024 to September 30, 2024 for the respondent no. 1 for the year 2024-2025 have been incorrectly declared, the same be set aside and appropriate directions for reelection or re-counting of votes be passed upon the respondent no. 1; f) Ad interim orders in terms of prayer above; g) Such further and/or other order or orders be passed, direction or directions be given as Your Lordships may deem fit and proper" 10. In paragraph 4 of the impugned order, the NCLT has noted the facts of the case and....
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.... In view of the fact that the applicant has reasons to believe that there has been manipulation in the results and the allegations if proved would amount to mismanagement of the company/ club in question by the present management it would only be fair if an independent scrutiniser is appointed to count the votes once again." 13. The above paragraph indicates that what is recorded is that the Applicant has reasons to believe that there has been manipulation in the result and the allegations if proved would amount to mismanagement of the Company/ Club. The above paragraph does not indicate that NCLT has given any reason or its prima facie satisfaction for passing an order in IA No.225 of 2024, which was filed two months after conduct of the election and after election result was announced and Office bearers assumed charge. The submission that the Applicant has reasons to believe, cannot substitute the requirement of giving reasons by a Court for passing an order on the application, that too, in election of a Club. As noted above, paragraph 5, which contains heading 'Analysis and findings', all sub-paragraph of paragraph 5.1 to paragraph 5.6 are only directions and the heading 'Ana....
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.... p. 788, para 14 : AIR p. 1922, para 14). 28. In Gurdial Singh Fijji v. State of Punjab [(1979) 2 SCC 368 : 1979 SCC (L&S) 197] this Court, dealing with a service matter, relying on the ratio in Capoor [(1973) 2 SCC 836 : 1974 SCC (L&S) 5 : AIR 1974 SC 87], held that "rubber-stamp reason" is not enough and virtually quoted the observation in Capoor [(1973) 2 SCC 836 : 1974 SCC (L&S) 5 : AIR 1974 SC 87] to the extent that : (Capoor case [(1973) 2 SCC 836 : 1974 SCC (L&S) 5 : AIR 1974 SC 87], SCC p. 854, para 28) "28. ... Reasons are the links between the materials on which certain conclusions are based and the actual conclusions." (See AIR p. 377, para 18.)." 15. The Hon'ble Supreme Court in the above case further relied on its earlier judgment in (1984) 1 SCC 141 - M/s Bombay Oil Industries Pvt. Ltd. vs. Union of India and Ors. and held following in paragraph 31 : "31. In Bombay Oil Industries (P) Ltd. v. Union of India [(1984) 1 SCC 141 : AIR 1984 SC 160] this Court held that while disposing of applications under the Monopolies and Restrictive Trade Practices Act the duty of the Government is to give reasons for its order. This Court made it very clea....
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....t his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or "rubber-stamp reasons" is not to be equated with a valid decision-making process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor [(1987) 100 Harvard Law Review 731-37]. ) (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562 para 29 and Anya v. University of Oxford [2001 EWCA Civ 405 (CA)], wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, "adequate and intel....
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....i. Reserved for orders." 20. It is relevant to notice that on the first day when the application came on board, the orders were reserved. The order, although, mentions that reply affidavit, if any, be filed within one week. When the Court has reserved the order on 09.12.2024 itself, we fail to see any justification granting one week's time for filing the reply affidavit. Filing of reply affidavit was meaningless, since, even if, reply affidavit was filed, the parties had no opportunity to refer to reply or make any submissions. Orders having been reserved on 09.12.2024 itself, when opportunity was given to the party to file reply affidavit, opportunity should ought to have been afforded for making submissions on the basis of reply affidavit. Thus, opportunity, which was sought to be given to file reply affidavit on 09.12.2024 was an empty formality. It is true that in a case where both the parties agree and do not want to file any affidavits and advance submissions before the Court, the Court does not lack jurisdiction to hear the parties and decide the application on the same day. But granting of time to file reply indicates that parties have not dispensed with their right to f....
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....the Notice. Such Notice in Form No. NCLT. 5 shall be accompanied by a copy of the application with supporting documents. (2) If the respondent does not appear on the date specified in the Notice in Form No. NCLT. 5, the Tribunal, after according reasonable opportunity to the respondent, shall forthwith proceed ex-parte to dispose of the application. (3) If the respondent contests to the Notice received under sub-rule (1), it may, either in person or through an authorised representative, file a reply accompanied with an affidavit and along with copies of such documents on which it relies, with an advance service to the Petitioner or applicant, to the Registry before the date of hearing and such reply and copies of documents shall form part of the record. 23. Therefore, it is clear that the Learned NCLT has committed an error in not granting reasonable and sufficient time for filing a reply, which is a complete violation of Rule 37 of NCLT Rules and Principles of Natural Justice. Therefore, in the circumstances, as stated above, we are of the opinion that reasonable and sufficient opportunity should be given to the Appellants for filing a reply. Af....
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....earned NCLT has committed an error in not granting reasonable and sufficient time for filing a reply, which is a complete violation of Rule 37 of NCLT Rules and Principles of Natural Justice. Therefore, in the circumstances, as stated above, we are of the opinion that reasonable and sufficient opportunity should be given to the Appellants for filing a reply. After hearing both the parties, the Learned NCLT should proceed further. The appeal is disposed of accordingly-no order as to costs." 15. In view of the above, we find that Adjudicating Authority did not grant reasonable opportunity to the Corporate Debtor to file its reply as is envisaged by Rule 37 of the NCLT Rules and rejecting the request of the Corporate Debtor for time to file reply on the very first day of hearing is denial of principles of natural justice. We, thus, are of the view that order impugned cannot be sustained. However, we are of the view that Appellant - Corporate Debtor be allowed time to file a reply, so as to obviate any further delay in proceedings before the Adjudicating Authority. We, thus, allow two weeks' time to the Appellant to file a reply before the Adjudicating Authority. The ....