TaxTMI 
TaxTMI 
2024 (9) TMI 1898
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....(AT) (CH) No. 5 / 2022, engage consideration of the same facts and circumstances and hence, for the purposes of brevity, they are being decided together, prior to venturing to decide the (C) Company Appeal (AT) (CH) No. 3 / 2022 which too emanates from the common Impugned Order, which is under challenge in the aforesaid two Company Appeals. 2. The Company Appeal (AT) (CH) No. 45 / 2021 is accompanied with a Condone Delay Application being IA No. 549 / 2021, wherein the Appellant has sought a condonation of 603 days of delay, which has chanced in preferring the appeal by taking recourse to Section 433 of the Companies Act, to be read with Section 14 of the Limitation Act, on the ground that, as against the Impugned Order of 30.12.2019, initially he has approached the Writ Court, by filing a Writ Petition (C) No. 3175 / 2020, which was disposed of on 29.09.2021, with a direction and liberty granted to the appellant for preferring of an appeal and hence, the delay has been sought to be condoned was on the ground that, it was a bonafide opinion, which was extended to the Appellant, because of which he has preferred the Writ Petition and hence, he would be entitled for an exclusion g....
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....ecured and unsecured creditors (as per Annexures A3, A4, A5, A10) and on the petitioner. (2) To pass such other order as this Hon'ble Court may deem fit in the circumstances of the case". 7. With the passage of time as it rolled, the NCLT, Chennai Bench was constituted under the Statute and as a consequence thereto, the Company Petition No. 43 / 2003, which initially stood instituted before the High Court of Kerala, was transferred to NCLT, Chennai Bench and was renumbered as TCP No.390/2019. 8. In the aforesaid Company Petition which was thus numbered as TCP No.390/2019, after its transfer, an IA No. 405/2019 was filed by the Respondent on 29.04.2019. 9. The said Company Petition, being CP No.390/2019 was yet again transferred from Chennai Bench of NCLT to NCLT, Kochi Bench after the creation of Kochi Bench on 05.08.2021 and upon its transfer was yet again re- numbered as TCP/13/KOB/2019 and accordingly, IA No. 405 / 2019, as it was preferred in TCP No.390/2019,was re-numbered as TIA/9/KOB/2019. 10. In the aforesaid proceedings of TIA/9/KOB/2019, as it was numbered, on its transfer to NCLT, Kochi Bench, an order was passed on 30.12.2019, imposing certain restr....
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....eferred to above, were the legal professionals who are and were practising Advocates in the District Courts of Quilon Bar Association at Kollam. But, however later on, since the Appellant Mr. S. Vijayakumar, had qualified for his judicial examination and ultimately, he rose up to the level of as a District Judge in his career and he had later retired in the said capacity. 15. These two appellants, had maliciously colluded with one another, for the purposes of usurping the assets of M/s. S.T. Reddiar & Sons (Quilon) Private Limited and ultimately after the judicial analysis of the evidence, which were adduced before the learned NCLT, it was ultimately found that, there was an apparent dishonest alliance, between the Administrator Mr. S. Vijayakumar, the District Judge and Mr. D. Asokan who had claimed himself to be the Managing Director of the aforesaid Company. 16. As far as Mr. S. Vijayakumar, the Retired District Judge is concerned, he claimed his title and status as to be an Administrator having adorned, as such in the capacity by exercising its powers under Section 259 of the Companies Act, which is the provision which stood omitted and hence was a non-existing provision.....
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....was the Company petitioner's case that, the entire story and claim which has been raised by the Appellant Mr. S. Vijayakumar, initially claiming himself to be an Administrator and later on in the alleged capacity as a Provisional Liquidator, is contrary to the records and documentary evidence, because in the absence of there being any evidence justifying his appointment, as such, he could not have functioned as an Administrator, nor could have even claimed himself as a Provisional Liquidator, for the reason being that, there was no order passed by any Competent Court, authorizing him to function either as an Administrator or as a Liquidator of the Company i.e. S.T. Reddiar & Sons (Quilon) Private Limited, coupled with the fact that, there was no such application which has been ever processed in accordance with law for the purposes of appointment of Mr. S. Vijayakumar as a provisional Liquidator of the said company. 22. Apart from that, he was not even qualified under law to be appointed as a provisional Liquidator, for the reason being that, he was not appointed as per the rules and besides that, since he was not even a registered Professional, who could have been appointed or e....
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....tended by the Company Petitioner that, in the proceedings which were held before the Hon'ble High Court of Kerala on 08.10.2014 and the proclamation made by Mr. S. Vijayakumar, claiming himself to have been appointed to be the Liquidator, was the aspect, which has been vehemently opposed and it was due to the objection, which was made by the petitioner, the Hon'ble High Court has not passed any positive or direct order as regards to the appointment of Mr. S. Vijayakumar, the Retired District Judge, as an Administrator / Director of the company or even as an Insolvency Professional. 26. Rather, in the order dated 08.10.2014 as passed by the Hon'ble High Court, it has also been observed and taken by way of an objection by the Company Petitioner that, in the proceedings held before the Company Law Board in Company Application No. 103 / 2002, an order was passed to the effect that, no Board Meeting shall be held till the disposal of the application itself. In that eventuality, the very factum of issuance of notice and false claim raised by Mr. S. Vijayakumar, on 10.04.2019 was apparently contrary to the very directions issued by the Company Law Board, as well as, that of the Hon'ble....
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....t, he was habitual of functioning in the aforesaid manner, because in a Company Petition No. 24 / 2001, a stricture was passed against him, by the Hon'ble High Court, for his malafide functioning with an intention to usurp the property of the Petitioner's Company, therein i.e. of Company Petition No.24/2001. 31. As against the order of the Hon'ble High Court, which was passed in CP No. 24 / 2001, issuing the strictures against Mr. S. Vijayakumar, he had preferred MFA/721/2002, before the Division Bench of Hon'ble High Court of Kerala, which was dismissed and it was observed therein that the Appellant i.e. Mr. S. Vijayakumar was engaged in malafide activities by joining hands with Mr. D. Asokan, as well as with such other unsecured Creditors, for the purposes engaging in the activities intending to usurp the property of the company. The Hon'ble High Court vide its order had appointed an Expert Committee in the Company Petition No. 43 as it was numbered prior to its transfer to the Chennai Bench and the aforesaid Expert Committee constituted, of a Retired District Judge, two Experts, Chartered Accountant, Engineer and a Valuer of the property. 32. The said Expert Committee thus....
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....f, it is seen that these two persons were apparently found to be intentionally engaged in a activity which would be falling well within the ambit of Section 425 of the Companies Act and as a consequence thereto, the learned Adjudicating Authority had passed the Impugned Order of 30.09.2019, holding thereof that the Appellants, who had been the Respondent Nos. 1 & 2 to the Company Petition, would be barred from carrying out any activities of the Company and the following restrictions were levied by the learned NCLT by the Impugned Order, which are under challenge before us. 35. The restrictions which are imposed thereof are extracted hereunder: "47. We have heard both the parties and perused the whole case records including documents and photocopies appended with the case records. Considering all these aspects, we pass the following Orders: - a. Restraining the Respondents No. 1 and 2 from convening any further meeting at the Administrative Office of ST Reddiar & Sons (Quilon) P. Ltd, STR VV Tower and shopping complex, Main Road, Kollam- 691 001, or at any other place on any other date until further Orders of this Tribunal and final disposal of TCP/13/KOB/2019. ....
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....nd by the Expert Committee appointed by the Hon'ble High Court of Kerala, to be incompetent to be appointed as a Professional to look after the affairs of the company including its liquidation. 39. The ultimate analysis which has been made by the Impugned Judgment of 30.12.2019, by imposing restrictions in the exercise of powers of the appellants under Section 425 of the Companies Act, do not call for any interference in these appeals and rather, this Tribunal is of the view that, the quantum of punishment, which has been imposed upon Mr. S. Vijayakumar, the Retired District Judge, is too minimal, because he has to set an example in the Society, as he was an ex-Judicial Officer, and if he engages himself into such a nefarious activity in collusion with his professional colleague right from 1988 for his personal monetary benefits, he ought to have been imposed with a heavier fine then what has been imposed by the Impugned Order, so as to act as a deterrent and an example for such erring judicial officers. 40. In modification to the restrictions which has been imposed by the Tribunal by the Impugned Order, this Appellate Tribunal feel it apt to debar the Respondent Nos. 1 & 2, ....
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....der Section 425 of the Companies Act, exclusively as against Mr. D. Asokan, the Applicant of the Restoration Application, the said Application at his behest on behalf of the Company was held to be not maintainable. 47. To deal with the aforesaid peculiar issue, as to what would be the impact of the restrictions imposed upon Mr. D. Asokan by the Impugned Order of 30.12.2019, for the purposes of creating an embargo for him, from filing of the Restoration Application, in a Company Petition, we have to deal with certain provisions of law particularly in the context of the provisions contained under Section 9 of the Companies Act. Section 9 of the Companies Act reads as under: "9. Effect of registration.- From the date of incorporation mentioned in the certificate of incorporation, such subscribers to the memorandum and all other persons, as may, from time to time, become members of the company, shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company under this Act and having perpetual succession with power to acquire, hold and dispose of property, both movable and immovable, tangible and intang....
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....the Constitution of India, with regards to right to legal remedies. 52. The Hon'ble Apex Court in the aforesaid judgment has held that, be it whatsoever, the right to litigate or right to a judicial remedy, cannot be curtailed either for an 'Inanimate Juristic Person' or an 'Animate Juristic Person', because that curtailment will amount to restricting an access to Justice. This Principle has been derived from the declaration made by the Universal Declaration of Human Rights which was drafted as back as in the year 1948 which in Article 8 & Article 10 contained therein, has provided that 'Animate' and 'Inanimate Persons', will have a right where the judicial remedies, cannot be curtailed in any manner whatsoever and the aforesaid convention of Universal Declaration of Human Rights, stood fortified by Clause 3 of Article 2 of the International Convention on Civil and Political Rights of 1966. Relevant paragraph nos. 9, 10 & 11 of the Hon'ble Apex Court Judgment are extracted hereunder: "9. The concept of 'access to justice' as an invaluable human right, also recognized in most constitutional democracies as a fundamental right, has its origin in common law as much ....
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.... judicial, administrative or legislative authorities, and the State should also ensure to develop the possibilities of judicial remedies.'' 53. The aforesaid Constitution Bench Judgment of the Hon'ble Apex Court, while dealing with the concept of protection of a right to litigate or a legal remedy, has determined with regard to the proposition laid down by the Judgment of Hon'ble Apex Court as reported in 2012 Vol. VI SCC P 502 in Brij Mohan Lal V. Union of India & Ors. by referring to Page 137 of the said Judgment, which is extracted hereunder: "21. Now, we may notice another group of cases where the prayer made is diametrically opposite to that made in Brij Mohan Lal. The petitioners in Writ Petition (C) No. 261 of 2008 titled Sovan Kumar Dash v. State of Orissa have approached this Court directly under Article 32 of the Constitution with a prayer that they should be absorbed against vacant posts in the regular cadre as per the directions contained in Brij Mohan Lal case [Brij Mohan Lal v. Union of India, (2002) 5 SCC 1 : 2002 SCC (L&S) 615 : AIR 2002 SC 2096] . They further made a prayer that the Notification dated 11-4-2008 issued by the State of Orissa calling for ....
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....ffairs or cause of M/s. S.T. Reddiar & Sons (Quilon) Private Limited, the company cannot for ever be left to remain unrepresented being an 'Inanimate Juristic Person' its cause as protected by Article 21, and it has had to be pursued by a person competent to be held by the Board of the Company, by filing an appropriate restoration application, despite of the fact that the Restoration Application preferred by Mr. D. Asokan, was found to be not tenable as already observed above, because of the restrictions imposed by the Impugned Order, under challenge in the earlier two appeals, which we have confirmed with the dismissal of the appeals. 57. This Tribunal is of the view that, as far as the order of 18.11.2019 (impugned in Company Appeal (AT) (CH) No. 3 / 2022) is concerned, the Restoration Application has not been decided on its merits, except for the fact that, it has been rejected on the ground that it was not tenable, since being preferred at the behest of Mr. D. Asokan, because Mr. D. Asokan in the capacity of Chairman has represented the cause in the Restoration Application No. 1 / KOB / 2021, for recalling the order, dismissing the appeal in default by an order of 28.09.2020....