TaxTMI 
TaxTMI 
2026 (1) TMI 220
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....rv Surana & Mr. S. Karunamoorthy, Advocates For the Respondent : Mr. PH Arvindh Pandian, Senior Advocate, Mr. T.K. Bhaskar, Advocate For Mr. Krishna Vennelakanti, Mr. Pranay Sohini & S. Sriraman, Advocates JUDGMENT [Per: Justice Sharad Kumar Sharma, Member (Judicial)] The fact and issue as involved consideration in both these company appeals stand on a common pedestal. Hence, for the purposes of brevity, they are being decided together. 2. Company Appeal (AT) (CH) No.124/2025, has been preferred by the Appellant, being aggrieved against the impugned order of 11.09.2025, that has been rendered by the Ld. NCLT Hyderabad bench. By virtue of the impugned order, the counter affidavit, which has been filed by Respondents No. 1 & 2, has been permitted to be adopted by Respondents No. 3 & 4, the Appellant has been directed to file rejoinder to those counter affidavits, and the next date of hearing has been directed to be fixed as 09.10.2025. Relevant part of the order is extracted hereunder: - "Counter filed by Respondents No. 1 and 2 has been adopted by Respondents No.3 & 4. Rejoinder be filed within 2 weeks. For filing of rejoinder, matter is adjourned to 09.10.20....
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....sed in the impugned order, which cannot be accepted by this Appellate Tribunal. Besides, since the order itself happens to be a routine order and is interlocutory in nature, the same cannot be interfered into while exercising our appellate jurisdiction under Section 421 of the Companies Act, 2013. Hence, the appeal lacks merit and the same is dismissed. All interlocutory applications would stand closed. Company Appeal (AT) (CH) No.125/2025 6. In this Company Appeal (AT) (CH) No.125/2025, the Appellant, who is an opposite party to the proceedings of Company Petition No. 32/241/HDB/2025, challenges the order of Ld. Tribunal dated 25.08.2025 by virtue of which Ld. Tribunal has granted interim stay, while considering the application IA (CA)/208/2025 for the grant of the interim stay. 7. Before we proceed to deal with the argument that has been extended by the Ld. Senior Counsel for the Appellant, we feel it apt to observe that, since at the stage of either passing the order in the company petition or even in the interlocutory application, which was inclusive of an order on the application i.e., IA (CA)/208/2025, for the grant of the interim order, as the nature of the order ha....
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....ding pattern of Respondent No. 1 company in any manner whatsoever, till the disposal of the company petition and for grant of any other consequential or incidental relief as may be necessary under the circumstances of the case. The prayer as modulated therein the application is extracted hereunder: - "It is therefore prayed that pending the above Company Petition, the Applicants seeks the following interim directions in the interests of justice: a) Direct the Respondents not to further alter the shareholding pattern of the Respondent No.1 Company in any manner whatsoever, till the disposal of the Company Petition. b) Pass any other consequential, incidental or other order(s) as this Hon'ble Tribunal may deem fit." 11. It is on this interim application, that the Ld. Tribunal has proceeded to pass the impugned order, whereby an interim order has been granted by the Ld. Tribunal, while exercising its jurisdiction under Rule 32 to be read with Rule 11 of the NCLT Rules, 2016. The provisions of Rules 11 and 32 of the NCLT Rules, 2016, prescribes for the extraordinary inherent powers, which have been vested with the Ld. Tribunal to pass an appropriate or....
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....nsel for the Appellant has primarily constructed his argument around two strands, i.e., (i) The order doesn't express any reason justifying the grant of the interim order and hence, the impugned interlocutory order passed under Rule 32 of the NCLT Rules, 2016, is bad as it has been rendered without assigning any reasons or justifying the reasons, which necessitated to pass an interim order. (ii) The grounds taken in the application and in the company petition itself, do not justify the passing of the interim order of the nature, as it has been granted, resulting in restraining the Appellant from exercising the voting rights on the basis of the change of the shareholding pattern due to the effect of the EGM of 28.06.2025. 15. We make it clear that, this impugned interim order was granted by the Ld. Tribunal on 25.08.2025 and the matter was thereafter scheduled for 11.09.2025. On the date, when the interim order was passed, i.e., on 25.05.2025, the Appellants were represented through their respective counsels, but all the contentions, which have been raised by the Appellants herein, in the instant Company Appeal were never raised by them before the Ld. Tribun....
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....h Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce clarity in the decisions; and (iii) minimise chances of arbitrariness in decision-making. In this regard a distinction has been drawn between ordinary courts of law and tribunals and authorities exercising judicial functions on the ground that a Judge is trained to look at things objectively uninfluenced by considerations of policy or expediency whereas an executive officer generally looks at things from the standpoint of policy and expediency". 18. The decision on which the reliance has been placed by Ld. Senior Counsel for the Appellant, will not be applicable under the given circumstances of the instant company appeal, for the reason being that, the said order was in the context of a situation where Hon'ble High Court was exercising its powers and jurisdiction under the supervisory jurisdiction as vested to it under Article 227 of the Constitution of India, while rendering a ....
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....Rules, 2016. Hence, the said ratio will not apply. 22. There is yet another remarkable feature requiring consideration in the instant company appeal, which is that the interim order was granted on 25.08.2025, and the next date fixed for hearing was 11.09.2025 and during the intervening period, the Appellant had filed his counter to the main appeal, as well as a counter to IA, being IA(CA)/208/2025 and yet did not file the application to vacate interim stay. 23. What is surprising is that under the normal procedural law, when the Ld. Tribunals or a court created under law, grants an interim order, and that too in the presence of the party to the proceedings, the appropriate recourse that would be available to the Appellant herein, who was an opposite party to the company petition, should have been to file a stay vacation application, before preferring of an appeal before this Ld. Tribunal (NCLAT) by invoking the jurisdiction as under Section 421 of the Companies Act, 2013, though it may not be specifically barred under law. 24. We are of the view that, the nature of the impugned order dated 25.08.2025 takes the shape of an interlocutory order where the Ld. Tribunal has exer....
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....g not done so and having instead prayed for non-grant of stay which already stood granted, which is a non-est relief, the Appellants have acted in a manner which is contrary to the procedural law, and therefore, they cannot be permitted to agitate the same by filing a company appeal. 27. Reverting back to the elaborate argument that has been extended by the Ld. Senior Counsel for the Appellants, on not assigning reasons while passing the impugned order, the said argument cannot be accepted, as there cannot be any specific parameters, by which one can test as to what will be the amplitude of the responsibility, to be cast on the Ld. Tribunal while exercising its judicial powers to assign reasons. Assignment of a reason is always a variable factor depending upon the facts of a particular case, and non-assignment of reason while passing the impugned order as in this instant case cannot be construed to come to a conclusion that, the order was passed without any reason or basis, for the reason being, it was also a simultaneous duty, cast upon the Appellants to raise their objection at the stage when the application IA (CA)/208/2025 was being considered by the Ld. Tribunal on 25.08.20....
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....e memorandum of appeal, particularly relating to the question of law, as framed by the Appellants, have a direct nexus to the argument extended by them about the implications of the non-service of the copy of the application, i.e., IA (CA)/208/2025. 31. Besides that, none of the authorities that are relied by the Ld. Senior Counsel for the Appellant, to highlight that the impugned order would be bad in law because of the failure to assign reasons while passing the said order will come to their rescue as the Appellants themselves have failed to effectively argue the matter on 25.08.2025, by failing to plead the alleged fact of non- service of the copy of the application upon them at the first available instance, before choosing to venture to argue the application on merits. Hence upon passing of an order against them, they would now be estopped from taking a stand, that the proceedings were vitiated because they were not served with a copy of the application. 32. Though, there had been quite elaborative argument extended by Ld. Senior counsel for the Appellants, we are of the view that, the nature of the order, which has been subjected to challenge in this Company Appeal, is i....