2022 (4) TMI 260 - AT - Companies Law

Jurisdiction - power of this Bench to appoint an independent Commissioner - appointment with the fact finding mission and to submit a report so that the information which is essentially required for the just adjudication of the list between the parties, is made available - HELD THAT - Without delving deep into the merits of the matter, this Tribunal is of the considered opinion that the matter be remitted to NCLT for hearing and deciding the case on merits. Having regard to the facts and circumstances of the attendant case on hand, this Tribunal is of the earnest view that the contents of the report not be quoted or used, till all the pleadings are completed and due opportunity is given to the Appellant for filing their objections. Needless to add, NCLT may, if it feels fit, decide to place reliance on the report, but not before the pleadings are completed and due opportunity is given to the Appellants herein. The NCLT shall hear the matter afresh giving due opportunity to the second Respondent who sought a few days time to file a Detailed Reply before the NCLT - Appeal disposed off.

Summary

Issues Involved:

1. Appointment of a Commissioner by NCLT.
2. Allegations of oppression and mismanagement.
3. Status-quo order by NCLT.
4. Shareholding disputes.
5. Mismanagement and conspiracy allegations.
6. Procedural contentions regarding the hearing and pleadings.

Detailed Analysis:

1. Appointment of a Commissioner by NCLT:

The NCLT, in its order dated 12/08/2021, appointed a Commissioner to submit a comprehensive report on the functioning of Asian Hotels (West) Limited (AHWL). The Tribunal observed that it had the power under Sections 241 and 242 of the Companies Act, 2013, to appoint an independent Commissioner to gather essential information for just adjudication. The Commissioner, Mr. M. V. Ravindran, was tasked with assessing the financial position, loan defaults, measures taken to service the debt, board meeting conduct, and managerial affairs. The Commissioner was instructed to interact with both parties and third parties if necessary, and submit the report within two weeks without interfering in the company's internal affairs.

2. Allegations of Oppression and Mismanagement:

The appeals challenge the NCLT's orders on grounds of oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013. The appellants alleged that the second respondent conspired with competitors and independent directors to oust the Sushil Gupta Group from AHWL and take over the company. They claimed that the second respondent mismanaged the operations while Mr. Sushil Gupta was incapacitated due to illness.

3. Status-quo Order by NCLT:

In its order dated 02/09/2021, the NCLT directed both petitioners and respondents to maintain the status-quo regarding the company and its shareholding until the next hearing. This order was to remain in effect until the Commissioner’s report was available.

4. Shareholding Disputes:

The case involves disputes over shareholding percentages and control within AHWL. The appellants, part of the Sushil Gupta Group, hold a combined shareholding of 17.35%, while the second respondent holds 1.84%. The appellants accused the second respondent of colluding with the Saraf Group, which allegedly holds 13.95% shareholding in violation of SEBI regulations and an inter se agreement. This shareholding dispute is also pending adjudication before the Hon’ble Delhi High Court.

5. Mismanagement and Conspiracy Allegations:

The appellants contended that various acts of oppression and mismanagement were committed by the second respondent, including conspiring with competitors and mismanaging the company’s operations. They sought urgent interim relief to prevent further damage and to secure an Emergency Credit Line Guarantee Scheme from Yes Bank Limited.

6. Procedural Contentions Regarding the Hearing and Pleadings:

The appellants argued that the NCLT prematurely appointed the Fact-Finding Commissioner without completing the pleadings and without a detailed hearing. They contended that the NCLT should have first addressed the interim relief sought against the second respondent. The Tribunal noted that it had directed status quo to be maintained and restricted the use of the Commissioner’s report until the appeal was decided.

Conclusion:

The National Company Law Appellate Tribunal (NCLAT) decided to remit the matter back to the NCLT for a fresh hearing and adjudication on merits, ensuring that all pleadings are completed and due opportunity is given to the appellants to file their objections. The NCLT was directed to hear the matter expeditiously and decide the case within three months. The NCLAT emphasized that it had not expressed any views on the merits of the matter and instructed all parties to appear before the NCLT on 20/04/2022.