TaxTMI 
TaxTMI 
2026 (9) TMI 1430
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....rder had been, that the learned Tribunal, after considering the entire conspectus of the controversy, had proceeded to pass an Order directing the parties to maintain status quo, qua the subject involved in the Company Petition. 2. It is argued by the learned counsel for the Appellant that the nature of the Impugned Order, as it has been passed by the learned Tribunal on 04.02.2026, ought not to have been passed in the proceeding under Section 271, to be read with Section 273 of the Companies Act, 2013, for the reason that as a result the entire business transactions of the Company have come to a standstill, due to which the business activities of the Appellant are being adversely hampered, that too because of the pending proceedings of winding up and the parameters were yet to be determined. 3. When this Company Appeal was laid before this Tribunal, this Tribunal had proceeded to pass an Interim Order on 29.05.2026 and primarily, this Tribunal, while directing the Respondent to file the counter affidavit, had passed an interim Order of the nature, observing thereof that, since the cash as reflected in the books of account of the Appellant Company was showing a standing balan....
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....d reckoned, require an approval from RBI, it was submitted that owing to the aforesaid procedural formality that was required to be satisfied, the RBI had expressed its reservation as regards the nature of transfer of shares by way of letters dated 12.12.2011 and 27.02.2012 which was not known procedure, and hence, a certain clarification was sought from IIPL, before giving any final approval of such transfer, which was carried by the letters dated 12.12.2011 and 27.02.2012, which were more or less of administrative nature. 7. The ASK France, to whom the additional shares were issued in 2011-2012, was alleged to have been merged with the Paragon Group, resulting into a "resulting entity" called "Paragon ID", to become a shareholder of IIPL. But owing to the fact that as no approval had been granted to ASK France, any subsequent transfer or ownership of Paragon ID, i.e., the resulting Company, was argued by the Appellant to have a cloud over it, and cannot be reckoned in the eyes of law. 8. Besides that, it was the case, that during the period from 2013 to 2017, number of outstanding exports had taken place of the goods, which were exported to its shareholders, ASK France SA/P....
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.... under the export invoices, the Directorate of Enforcement issued notices under Section 37 of the Foreign Exchange Management Act, 1999, to be read with Section 133(6) of the Income Tax Act,1961 calling upon IIPL to furnish the details and the documents pertaining to the outstanding exports, relating to the Financial Year 2012-2013 and 2013-2014. 13. A show cause notice was thus issued on 12.07.2019, which had concluded that during the pendency of the same, it would not be appropriate to carry out any liquidation process and, consequently, the interest of the Company was still protected. The Respondent contended that they have entered into an agreement to transfer the shareholding of IIPL, but because of the fact that there was no Board approval for the said transfer as required under the Articles of Association, no Board meeting for the purposes of transfer of shares to IIPL could be convened and hence also no approval from RBI was sought for the said transfer. 14. It is based upon the aforesaid intricate facts and, particularly, the effect of the Orders passed by Bombay High Court on 12.01.2022 and 04.05.2018 directing the liquidation of IIPL. In these peculiar situations, ....
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.... reference to the details pertaining to the other proceedings, complaints and also pertaining to the issue of transfer of shares between Paragon ID France to the Petitioner No. 2 in this Company Petition. 18. The learned Tribunal observed that owing to the report that, has been placed on record, since the Company was shown not to be operational for about last 07 to 08 years and as no transaction had taken place, nor was there was any proof placed on record for the same, not even the books of Accounts reflected any transactions except for reflecting the valuable assets that the Company owed in the shape of cash equivalent amount shown to be lying in the Bank. Hence, the Tribunal proceeded to pass an Order of status quo. The Appellant expresses his grievances as against the said Order while putting a challenge to the Order of status quo dated 04.02.2026 in the instant Company Appeal. 19. It is a settled principle of law that once, in a judicial proceeding, a Tribunal or a Court exercises its discretionary powers to grant a stay in order to protect the subject matter of the proceedings, during the pendency of the proceedings itself, the appropriate recourse left to the opposite ....
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....fication before the learned Tribunal itself. 23. Having not done so, the instant Company Appeal at the behest of the Appellant may not be tenable. 24. Be that as it may, since at the time of admission of the Company Appeal, this Appellate Tribunal found that certain unused amount was lying in the books of accounts and, owing to the pleadings of the appeal, this Tribunal came to a conclusion that since the record shows that there was no business activity being carried in the Company. The amount lying in the books of accounts by way of cash was directed to be deposited in a fixed deposit account, which was to be secured by FDR in a maximum interest-bearing account. 25. The grant of the Interim Order of status quo by an Order dated 04.02.2026, in fact, it protects the subject of the proceedings, and that too particularly when it has been granted to secure the interest of the parties, at the discretions of the Tribunal. The Appeal against the Interim Order ought not to be maintainable. The appropriate recourse available to the Appellant would have been to approach the Tribunal for getting the stay Order vacated or modified, rather than filing of an Appeal. 26. Be that as it....