2022 (6) TMI 55 - AT - Insolvency and Bankruptcy

Appointment of independent director/Board of Directors - seeking to order injunction to Respondent No.2 to 7 to present management from exercising any powers with respect to Respondent Company - stay on the operation of the bank accounts of Respondent No.1 to prevent misuse/misappropriation of the funds - inspection of books and papers of Respondent No.1 - conduct of forensic audit of books an accounts of Respondent No.1 for last three preceding financial years - conversion of remaining authorised share capital to equity shares in the name of respondents - HELD THAT - The Learned Tribunal is already hearing the Appeal for its final disposal there is no need to interfere with the impugned order. However, with the consent of the parties the Appeal is being disposed off with indication that subsequent change in the share if any of the either parties will be subject to the result of the proceeding pending before the Tribunal. This Tribunal expects that the Learned Tribunal considering nature of the dispute raised by the Appellant may take steps for disposal of the Company Petition expeditiously - Appeal disposed off.

Summary

Issues:
- Appeal against an order passed by the National Company Law Tribunal, Cuttack Bench, Cuttack.
- Dispute regarding share capital ownership and management of a company.
- Request for various interim and final reliefs including appointment of independent directors, forensic audit, and declaration of illegal acts.

Analysis:
The appeal was filed against an order issued by the National Company Law Tribunal, Cuttack Bench, Cuttack, concerning a dispute related to the ownership and management of a company. The appellant claimed to be a promoter and shareholder of the company, alleging a reduction in their share capital by the respondent. The appellant sought various interim and final reliefs through a Company Petition filed before the Tribunal, including the appointment of independent directors to ensure compliance with company laws, an injunction against the present management, inspection of company documents, forensic audit, and declaration of illegal acts by certain directors.

The Company Petition was filed on 15.12.2021, and the Tribunal reserved its order on interim relief on 10.03.2022, subsequently pronouncing it on 15.03.2022. Instead of deciding on interim relief, the Tribunal opted to schedule the final hearing for 06.04.2022. Despite this, the appellant hurriedly filed the present appeal seeking interim relief, expressing concerns about further reduction in their share capital. The Tribunal had already set a date for the final disposal of the Company Petition, yet the appeal was considered due to the appellant's apprehensions.

During the hearing, both parties acknowledged that the Tribunal's scheduled hearing on 06.04.2022 did not occur, with arguments presented on 07.04.2022 and further hearings set for 02.05.2022 and 07.07.2022. The Tribunal, after considering the submissions and the ongoing proceedings, decided not to interfere with the impugned order. The appeal was disposed of with a directive that any changes in share ownership by either party would be subject to the outcome of the pending proceedings before the Tribunal. The Tribunal emphasized the need for expeditious disposal of the Company Petition, allowing parties to approach the National Company Law Tribunal if aggrieved during the proceedings.