2022 (7) TMI 663 - Tri - Companies Law

Request to implead M/s. Avadh Projects (proposed respondent no. 6) as a party in the main company petition - seeking impleadment on the ground that said M/s. Avadh Projects has purchased the assets of the respondent no. 1 company during the pendency of the main company petition when there is an order of status-quo to maintain the fixed assets of the company - maintenance of start quo - HELD THAT - The petitioner, having lost in Civil Court way back in the year 2017, has come out with this application. It is seen from the material on record that proposed respondent no. 5 had purchased the assets of respondent no. 1 company prior to filling of main company petition. Before purchasing the assets, a notice was published calling upon the objections. The proposed respondent no. 5 may be a bonafide purchaser of the assets. He cannot be dragged into this litigation at this stage, more particularly, when the issue that whether the proposed respondent no. 5 is a bonafide purchaser of the assets? is still pending before the Civil Court. This Tribunal in its limited jurisdiction cannot decide the above civil rights of the parties. Moreover, the issue that whether the main company petition itself is maintainable or not is still pending for consideration of this Tribunal. If the finding on that issue goes against the petitioner, then, the main company petition itself is required to be dismissed and this application also would thereby become infructuous - the petitioner alleged that the proposed respondent no. 6 purchased the assets though there was an order of status quo to be maintained relating to the fixed assets of respondent no. 1 company. This application is not maintainable at least at this stage - Application dismissed.

Issues:
1. Impleadment of M/s. Avadh Projects as a party in the main company petition.
2. Allegations of oppression and mismanagement against respondents under section 397-398 of the Companies Act, 1956.
3. Sale of assets by respondent no. 1 company during the pendency of the main company petition.
4. Validity of sale deeds and involvement of proposed respondent no. 5 and proposed respondent no. 6.
5. Jurisdiction of the Tribunal to decide civil rights of the parties.
6. Maintainability of the application at the current stage.

Analysis:
1. The petitioner sought to implead M/s. Avadh Projects as a party in the main company petition due to the purchase of assets by them during the pendency of the petition. The petitioner alleged that respondent no. 1 company sold assets to proposed respondent no. 5, who subsequently sold them to proposed respondent no. 6. The petitioner argued that without making these parties part of the proceeding, he would be unable to claim relief against them. Both proposed respondents objected to the prayer, stating that the main company petition itself might not be maintainable. The Tribunal noted that proposed respondents were not directly involved in the company's affairs and rejected the application, considering them as strangers to the company.

2. The main company petition alleged oppression and mismanagement against respondents under section 397-398 of the Companies Act, 1956. The petitioner, a former director of respondent no. 1 company, challenged his removal and the subsequent sale of assets to proposed respondent no. 5. The petitioner argued that the assets' disposal jeopardized his ability to benefit from any successful petition outcome. Proposed respondents contended that the petitioner lacked the necessary share percentage to maintain the petition, and the scope of litigation was being expanded unjustly. The Tribunal highlighted the petitioner's previous unsuccessful attempts in civil court regarding the sale deed's validity.

3. The sale of assets by respondent no. 1 company during the main company petition's pendency raised concerns about maintaining status quo on fixed assets. The petitioner's claim that the assets were disposed of despite the status quo order led to a dispute involving proposed respondent no. 6. However, the Tribunal clarified that the assets were already transferred to proposed respondent no. 5 before the status quo order, making the allegations against proposed respondent no. 6 invalid.

4. The validity of sale deeds and the involvement of proposed respondent no. 5 and proposed respondent no. 6 were central to the application. The petitioner challenged the sale agreements and sought to hold both proposed respondents accountable for asset transfers. Proposed respondents argued that the petitioner's claims lacked merit and that they were not directly linked to the company's internal disputes. The Tribunal emphasized the ongoing civil court proceedings regarding the sale deed's legality and declined to interfere in those matters.

5. The jurisdiction of the Tribunal to decide civil rights of the parties was a crucial aspect of the case. The Tribunal acknowledged its limited authority in determining civil rights and highlighted the pending consideration of the main company petition's maintainability. The complexity of civil issues and the potential dismissal of the main petition influenced the Tribunal's decision to reject the current application.

6. The application's maintainability at the current stage was a key issue addressed by the Tribunal. Considering the lack of direct involvement of proposed respondents in the company's affairs and the ongoing civil court proceedings, the Tribunal deemed the application premature and rejected it. The Tribunal emphasized the need for a comprehensive legal assessment before involving external parties in the proceedings.

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