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TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 340
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....dhi Agarwal For the respondent nos. 5, 6 & in MAT 991 of 2025 : Mr. Sudhasatva Banerjee, Mr. Sankarsan Sarkar, Mr. Debartha Chakrabort And Ms. Siddhi Agarwal For the respondent no. 8 in all the matters : Mr. Ranjan Bachawat, Sr. Adv., Mr. Subhankar Nag, Mr. Sanjiv Kr. Trivedi, Mr. Sayan Bandyopadhyay Mr. Soumya Roy Chowdhury, Mr. Sanket Sarawgi, Mr. Satyaki Mukherjee, Ms. Yukti Agarwal And Mr. Bhavesh Garodia ORDER SABYASACHI BHATTACHARYYA, J.: 1. The present appeals arise out of a common order passed in connection with three different applications. The backdrop of the case is that WPA No. 6088 of 2025 was filed under Article 226 of the Constitution of India by the present appellant against an order whereby the bank accounts of the appellant no.2-Company, of which the appellant no.1 is the director, was frozen by the respondent no.2, that is the Axis Bank Limited. 2. Upon the said decision being taken by the Bank, the appellants moved the banking Ombudsman of the Reserve Bank of India (RBI), the first respondent herein. The Ombudsman turned down the challenge on the ground that another similar proceeding on the same issue was pending before another competent forum....
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....ing the submissions of the parties, it appeared that the matter was required to be heard. Accordingly the contempt application against Axis Bank was kept in abeyance for the time being and it was directed that the order dated April 9, 2025 shall not be acted upon by any of the parties, also for the time being. 7. In the same breath, by the impugned order dated June 19, 2025, the recall applicants/present respondent nos. 5 to 7 were directed to be formally added as party-respondents in the writ petition and the copy of all documents in connection with the writ petition were directed to be served on the added respondents. 8. This court is informed that although the applications were directed to be relisted in July 24, 2025, those have not yet been taken up by the learned Single Judge. 9. Learned senior counsel appearing for the appellants contends that no germane material was suppressed from the writ court. It is argued that the respondent nos. 5 to 7 were not necessary parties to the writ petition at all. The appellants place reliance on a coordinate Bench judgment in the matter of Cardiological Society of India and Ors. Vs Sunip Banerjee and Ors., reported at MANU/WB/1130/....
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....which the Axis Bank mulled over the matter, in apparent collusion with the respondent nos. 5 to 7, and filed an unnecessary clarificatory application before this Court. 15. It is next contended that respondent nos. 5 and 6 herein were erstwhile Directors of the appellant no.2-Company but were subsequently removed/not reappointed as Directors along with one Vinay Sureka. The respondent nos. 5 and 6 and the said Vinay Sureka lodged the complaint with the ROC, asking not give effect to the change of directors, prompting the ROC to mark the company with 'management dispute'. The appellants argue that the decision of removal of respondent no.5 and non-reappointment of respondent no.6 as well as Vinay Surekha was by virtue of valid resolutions passed in Extraordinary General Meetings (EOGMs) and/or Annual General Meetings (AGMs) of the appellant no.2- Company. 16. Thus, the request made to the bank by the appellant no.2 for change of signatories in place of respondent no.5 to 7, in view of their removal/non re-appointment as Directors of the company, was perfectly justified and validated by a resolution in an EOGM dated May 10, 2021. 17. It is argued that the Bank did not have a....
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....any, even if there initially was, does not remain any further in view of the unmarking of 'management dispute' in respect of the appellant no.2 by the ROC on the directives of the MCA. 21. That apart, the Axis Bank cannot have any business freezing the account suo motu even if there is any such management dispute in the company. The Axis Bank, it is argued, is hand in glove with the Birla Family, at whose behest it is alleged that the APL is functioning. 22. Learned senior counsel appearing for the appellant further argues that the Ombudsman's order turning down the challenge of the appellants was bad in law, since the pendency of an intervention application by the Bank in a completely unrelated proceeding regarding oppression and mismanagement could not come within the ambit of a "similar dispute" with that relating to the freezing of the accounts of appellant no.2. 23. In any event, respondent nos. 5 to 7 have never challenged their removal/non-reappointment in their individual capacities or in their capacity as Directors but it is only the APL which had filed the challenge before the NCLAT. Not being Directors currently in the company, respondent nos. 5 to 7 did not hav....
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....y ought to remain frozen. Furthermore, the appellants sought a change in signatories, which would give untrammelled access to them in respect of the subject accounts. 28. It is next argued that being the complainants at whose behest the accounts were frozen, the respondent nos. 5 to 7 were necessary parties to the writ petition and them having not been impleaded in the writ petition, the original order passed in the writ petition was bad in law and ought to be recalled. The learned Single Judge was, thus, justified in directing the respondent nos. 5 to 7/recall applicants to be added as parties to the writ petition. As a necessary corollary, since the recall application as well as the clarificatory application is pending, the learned Single Judge rightly suspended the operation of the order under recall as well as the connected contempt application. 29. It is lastly submitted by the said respondents that the Ombudsman was justified in turning down the challenge on the ground of pendency of a similar issue before the NCLAT. In any event, having failed before the Ombudsman, the freezing of the bank accounts could not again be challenged before the writ court. Thus, learned seni....
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....of the freeze letter dated June 9, 2021, the second letter, which was the premise of the freeze order, was not issued on the letter-head of appellant no.2. Although the said letter was referred to as " The August Letter 2" by the Bank, from the subject quoted in the said letter, it is evident that the second letter dated May 18, 2021 was issued on the letter-head of VTL, with a merely a copy to the appellant no.2- Company, the latter being the customer of the Bank. 35. Thus, it is unclear as to what prompted the Bank to raise a dispute on the basis of third-party entity, that is, VTL, as opposed to a letter issued by the customer company itself. 36. That apart, we find from the relevant annexure to the stay application in the present appeal that by a communication dated July 15, 2021, the ROC itself wrote to the appellant no. 2- Company intimating it about the decision of the MCA dated July 9, 2021, as intimated to the ROC, for unmarking of the management dispute in respect of the appellant no.2-Company, also directing all consequential steps to be taken to remove such marking as management dispute in respect of the appellant no.2-Company. Pursuant to the said letter of the R....
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...., in the garb of oppression and mismanagement disputes under Section 241 and 242 of the Companies Act, 2013, was dismissed by the NCLT. Although an appeal is pending before the NCLAT against such dismissal, in the absence of any stay order passed by the Appellate Authority, the order of the NCLT is still operative and binding on the parties. Thus, as on date, the removal/non-reappointment of respondent nos. 5 to 7 as Directors of the appellant no.2-Company subsists, thereby denuding them of any locus standi to raise any objection with regard to the affairs of the appellant no.2-company or the operation of its bank accounts. 40. It is none of the business of the Axis Bank, in its capacity as the Banker of the appellant no. 1-company, to peep into the internal affairs of the company, in the teeth of the unmarking of the appellant no.2 as a 'management dispute' and in view of the NCLT order, which subsists as on date, whereby the respondent nos. 5 to 7 do not have any locus standi as any functionary of the appellant no.2 to raise any objection to the operation of its account. 41. The third important aspect of the matter which disturbs this Court is that the second letter dated M....
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....the respondent nos. 5 to 7 in their capacity as individual Directors of the Company. The respondent nos. 5 to 7 cannot piggyback on the APL challenge to claim locus, in view of themselves having not taken out any challenge to their removal or non-reappointment before any competent forum at any point of time. 44. The other ground on which the said respondents seek to be impleaded in the writ petition as necessary parties is that on their complaint, the freezure of the accounts-in-question took place. However, such plea is ex-facie a sham, since the bank itself, in its communication dated June 9, 2021 cited a letter dated May 18, 2021 on the letter-head of VTL, a 100% shareholding company of the appellant no.2 August Agents Limited, as the trigger for freezing the accounts. We do not find a whisper within the four corners of the freeze letter as to the respondent nos.5 to 7 having raised any allegation, objection or complaint to instigate such freezure. Hence, it is only VTL on whose contra letter dated May 18, 2021 the freezer was undertaken by the Bank, only which could come up in support of such freezure. On the contrary, VTL now supports the appellants in defreezing the accoun....