2017 (2) TMI 657 - Tri - Companies Law

Appeal from orders of Tribunal - maintainability of petition - Held that - If the Tribunal has fixed the Company Petition for hearing both on the question of maintainability and if so required on merit, we find no reason to interfere with such order passed by Tribunal. However, we are of the opinion that during the final hearing the question of maintainability should be decided first and if it is answered in negative, against the appellants, the question of waiver of the petition be decided if any strong ground has been made out to claim exception under proviso to sub section (1) of Section 244. In case, aforesaid issues are decided in favour of the appellants, then the Tribunal can decide the case on merit. For the reasons recorded above, no relief can be granted to the appellants. The case is remitted to Tribunal to dispose of the Company Petition on merit after hearing the petition uninfluenced by any of the observation made in the impugned orders dated 22nd December 2016, 18th January 2017 and 31st January 2017. It will be open to the appellants to file a petition for amendment and may argue on the question of removal of 11th respondent, if he is removed by the decision of the EGM during the pendency of the Company Petition. In case the question of maintainability and/or waiver on merit is decided in favour of the appellants, it is always open to the Tribunal to pass appropriate order restoring the original position of Respondent No. 11, was at the time of filing of the Company Petition.

Summary

Issues Involved:
1. Refusal to pass interim order and decide the prayer for interim relief.
2. Maintainability of the Company Petition.
3. Contempt of court by respondents.
4. Interim relief against proposed removal of a director.
5. Jurisdiction of the Appellate Tribunal to entertain appeals against consent orders.

Issue-wise Detailed Analysis:

1. Refusal to pass interim order and decide the prayer for interim relief:
The appellants contended that the Tribunal summarily refused to pass an interim order and failed to decide their prayer for interim relief to restrain the respondents from removing the 11th respondent as a director at an EGM scheduled for 6th February 2017. They argued that the Tribunal's order dated 22nd December 2016, which fixed a tight schedule for the parties without granting specific interlocutory reliefs, led to confusion and subsequent actions by the respondents to call for an EGM, violating the order.

2. Maintainability of the Company Petition:
The appellants requested the Tribunal to decide the preliminary issue of maintainability of the Company Petition, either by ruling on the objection raised by the respondents or by ruling on their waiver application. The Tribunal's order dated 18th January 2017 directed the appellants to file an affidavit instead of an application to amend the Company Petition, indicating the need for pleadings on the proposed removal of the 11th respondent before considering the stay application on merits.

3. Contempt of court by respondents:
The appellants filed a Contempt Petition alleging willful disobedience by the respondents of the Tribunal's order dated 22nd December 2016. They claimed that the respondents, by issuing a requisition notice to hold an EGM for the removal of the 11th respondent, committed contempt of court. However, the Tribunal, in its order dated 18th January 2017, held that no case of contempt was made out, as the order dated 22nd December 2016 was a precautionary measure to ensure the completion of pleadings without any further filings causing hindrance.

4. Interim relief against proposed removal of a director:
The Tribunal's order dated 31st January 2017 indicated that the appellants' prayer for interim relief against the proposed EGM was not granted. The Tribunal observed that the appellants had argued for the stay of the EGM without a separate application, but the Tribunal felt that the issue should be considered during the hearing of the main Company Petition. The Tribunal also noted that the appellants' insistence on deciding the waiver plea before arguing the main petition was unmeritorious and directed them to proceed with the arguments on the main petition.

5. Jurisdiction of the Appellate Tribunal to entertain appeals against consent orders:
The Tribunal's order dated 22nd December 2016 was a consent order, and as per Section 421(2) of the Companies Act, 2013, no appeal lies to the Appellate Tribunal from an order made by the Tribunal with the consent of the parties. The Appellate Tribunal dismissed the appeal against the order dated 22nd December 2016 as not maintainable, stating that it could not express any opinion on the said order.

Conclusion:
The Appellate Tribunal dismissed all appeals, stating that no relief could be granted to the appellants. The case was remitted to the Tribunal to dispose of the Company Petition on merit after hearing the petition uninfluenced by the observations made in the impugned orders. The Tribunal was directed to decide the question of maintainability and waiver before deciding the case on merit. If the Tribunal found in favor of the appellants on these preliminary issues, it could pass appropriate orders restoring the original position of the 11th respondent. The appeals were dismissed with no order as to costs.