TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 13
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....012, filed under Section 397, 398, 402, 403, 235, 237 and 111A of the Companies Act, 1956. 3. During the course of litigation, a settlement agreement dated 19.05.2014 was entered into between the appellants no. 1 and 2 and Respondent No. 3 viz the brother of appellant no. 1. In view of the settlement dated 19.05.2014, the appellants no. 1 and 2 filed an application CA No. 122/C-1/2014 praying for withdrawal of company petition but the said application was dismissed by the Ld. Company Law Board vide its order dated 29.08.2014 as under: "ORDER Reply is filed by P-3 which is duly supported by an affidavit. Ld. Counsel for P-3 forcefully argued that the application CA No. 122 for withdrawal of CP No.40(ND)/2012 has been filed by P-1 & 2 in collusion with each other and no compromise between P- 1 & 2 and Respondents has ever taken place. Shri Arun Saxena, Id Chartered Accountant representing R 8&9 also argued that no compromise has ever taken place with the Respondents Shri Charanjit Singh Ahluwalia, the Patriarch of the family who is present also strongly denied the factum of the compromise. If a compromise had taken place in such a hotly contested matter it should have been red....
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....lf on record in view of the order of this Tribunal dated 19.01.2016. The counsel proposing to appear for applicant No.1 and 2 should clarify the position and appear in the proper manner after he is restored back to file. In so far as other cases are concerned, the matter will be listed on 22.09.2022," 7. It is argued the impugned order completely misread the earlier orders passed by the Ld. NCLT. Reference was made to L.RM K Narayanan and Another Vs Pudhuthotam Estates Ltd and others (1992) 74 Comp Case 30 wherein it was held once a petition is validly presented, it is well open to a shareholder to ask for substitution and prosecute the proceedings even though such a shareholder by himself could not have presented a petition under Section 397 for want of required share qualification. It was argued the court has to only consider whether the petition was a valid petition at the time of its presentation and that requirement of share qualification is relevant and material, only at the time of institution of the petition. Further in Rajamundry Electric Supply Corportion Ltd Vs A Nageswara Rao & Others (1956) 26 COMP Case 91 it was held even if 13 of the members who consented to the fil....
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....o. 40(ND)/2012 Further without seeking any liberty to restore the proceedings qua them since 19.01.2016 till the filing of IA-321 of 2023 for any reason whatsoever. Even otherwise, there has been inordinate delay of 7 years in seeking the restoration of name in memo of parties, which cannot be justified. The conduct of Applicant speaks for themselves. 16. Furthermore, basis the alleged settlement, we cannot admit the contentions that there has been violation of the alleged settlement. This can also not be a ground for seeking restoration of proceedings qua Petitioner No. 1 and 2. Hence, we find no legal merit and we are inclined to dismiss the prayers sought in this Application." 12. Now the settlement talked above in the impugned order was entered into on 19.05.2014. Its salient features are as under: - "This agreement dated 19th May 2014 between the parties (parties), Sh Ramandeep Singh Ahluwalia s/o Sh Charanjit Singh Ahluwalia, [RSA] a resident of H No 132, Sector 8/A Chandigarh herein after referred to as Party A [PartA], And Sh Sarabjit Singh Ahluwalia s/o Charanjit Singh Ahluwalia [SSA] a resident of 119 Anupam Gardens, Sainik Farm, New Delhi, herein after referred to a....
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....lants no. 1 & 2 admittedly held shares in M/s Sun Time Energy Limited and both were the directors in the said company, but in pursuance to the settlement above, both had sold their shares in the company to Respondent No. 3 for consideration and then both the appellants no. 1 and 2 had resigned from the directorship of the company. It was argued from 19.05.2014 till date both the appellants had no shares in Respondent No. 1 company and sale/purchases of their shares were rather uploaded on the portal of the ROC/MCA etc. 15. Admittedly, per order dated 18.11.2014, the Ld. Company Law Board had noted the appellants no. 1 and 2 does not wish to participate and prosecute the proceedings before the Company Law Board and it was only upon objections raised by someone else, their withdrawal applications were dismissed, as not pressed. In any case the stand of appellants no. 1 and 2 was absolutely clear; both never wished to participate in the proceedings and rather did not participate in it from 2014 till I.A. No. 321/2023 was filed. Admittedly in its order dated 19.01.2016, the Ld. Company Law Board had observed the company petition survive only qua petitioners no. 3, yet the appellants f....
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....any way. As a result, if it is held that the company petition should be proceeded with for giving a decision on the merits, in my view, it will produce only an academic decision. As is known, no court is to permit litigants to pursue any litigation inviting decision on academic questions. 27. For these reasons, I hold that the company petition should be dismissed. I accordingly allow the application taken out by Turner Morrison and dismiss the company petition. On the facts of the case, I find no reason to make any order for costs: Hence there shall be no order for costs in the case." 17. Now admittedly none of the appellants had challenged the settlement agreement between the parties and in fact the appellants had moved an application viz IA No.122/C-1/2014 praying for withdrawal of the company petition on the basis the appellants have compromised the matter with Respondent No. 3, but since the appellants require the Ld. Company Law Board to withdraw the entire company petition, hence, per order dated 29.08.2014 it was not allowed, since Petitioner No.3 was still holding his field. 18. Moreso, it is pertinent to mention IA No.321/2023, which had culminated into the impugned or....