2017 (5) TMI 1762 - AT - Companies Law

Validity of 'the fake Board Resolutions uploaded with the Form No.MGT-14 transferring 500 shares by the 2nd Respondent to 3rd Respondent' - validity of allotment of 90,000 shares solely to the 2d Respondent at the purported Board meeting dated 3rd September, 2014 - HELD THAT - From reading of the impugned order dated 1st March, 2017, it is found that submissions made by all the parties was not discussed. Ld. Tribunal without going into the merits of the case passed certain orders and directions. It is a settled that when a Court of law or a Tribunal do not decide a case on merit has no jurisdiction to pass any specific order and directions including interim order, though it is always open to the Court/Tribunal to ask the parties to move before an appropriate forum. As it is held that the Tribunal had no jurisdiction to pass any specific order where it has not decided case on merit, we have no other option but to set aside impugned order dated 01.03.2017 passed by NCLT. The said order is set aside, accordingly. The case stands remitted to the Tribunal. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appeal against the order passed by National Company Law Tribunal, Hyderabad Bench at Hyderabad.
2. Disposal of Company Petition without going into the merits of the case.
3. Appointment of Chairperson and Auditor for Zetatek Engineering Systems Private Limited.
4. Grievance of the Appellant regarding the impugned order.
5. Jurisdiction of the Tribunal to pass specific orders without deciding the case on merit.
6. Setting aside the impugned order and remitting the case to the Tribunal.
7. Directions for early disposal of the Company Petition.

Analysis:

1. The Appellant filed an appeal against the order passed by the National Company Law Tribunal, Hyderabad Bench at Hyderabad. The Tribunal had disposed of Company Petition No. 58 of 2015 without delving into the merits of the case. The Appellant sought to challenge this decision.

2. The Tribunal, in its order, appointed a Chairperson and an Auditor for Zetatek Engineering Systems Private Limited. The Chairperson was tasked with conducting Board Meetings and Annual General Meetings for specific years, while the Auditor was directed to audit relevant records. Various directions were issued to ensure cooperation and timely completion of the assigned tasks.

3. The Appellant raised a grievance that the Tribunal did not consider the arguments presented by their counsel and passed the impugned order with certain directions. The Respondents contended that the order was passed with their consent, but it was evident that the order was not based on mutual agreement.

4. The Appellate Tribunal noted that the Tribunal did not discuss the submissions made by the parties before passing the order. It emphasized that a court or tribunal lacking a decision on the case's merits does not have the jurisdiction to issue specific orders. Consequently, the impugned order was set aside, and the case was remitted back to the Tribunal for proper consideration.

5. Given the prolonged pendency of the case before the Tribunal, the Appellate Tribunal directed all parties to cooperate for the expeditious disposal of the Company Petition. The Tribunal was instructed to decide the matter promptly without unnecessary delays, preferably within two months.

6. Ultimately, the appeal was allowed by the Appellate Tribunal with the aforementioned observations and directions, emphasizing the importance of a thorough consideration of the case on its merits and the need for timely resolution of legal matters.