2022 (12) TMI 59 - AT - Companies Law

Restraint on Respondent No.1 i.e. M/s Electrotherm (India) Ltd from holding a Board Meeting of its Directors - Section 421 of the Companies Act, 2013 - HELD THAT - For deciding the appeal there is no reason to delve into the merit of the case. It is only interpretation of the order passed by this Appellate Tribunal and also by the Hon ble Supreme Court. In view of final disposal of the appeals by this Appellate Tribunal by its judgement dated 20.01.2022 in which there was no indication for restraining holding of the Boards Meeting, such point was not required to be raised before the NCLT for restraining board Meeting of the Company. Besides this even for the time being if it is considered that this Appellate Tribunal by its order dated 24.5.2021 had directed not to hold further meetings of Board of Directors, the said interim order was only to the next date of hearing i.e. 7.6.2021. Again by order dated 7.6.2021 the interim order was directed to continue till next date but on the next date i.e. on 17.6.2021 this Appellate Tribunal modified the earlier order and only stayed the order in respect of appointment of Siddarth Bhandari as joint signatory of bank account with Shailesh Bhandari. The order dated 17.6.2021 is a specific and unambiguous. The present appeal is nothing but simply an abuse of process of Court - appeal dismissed.

Summary

Issues Involved:
1. Restraint on holding Board Meetings.
2. Interpretation of interim orders by NCLAT and Supreme Court.
3. Validity of NCLT's decision to allow Board Meetings.
4. Alleged violation of interim orders by NCLT.

Detailed Analysis:

1. Restraint on Holding Board Meetings:
The appellant sought to restrain the respondent company from holding a Board Meeting of its Directors, citing an interim order dated 24.05.2021 by NCLAT which allegedly prohibited such meetings. The NCLT, however, rejected this application, stating that there was no existing order restraining the company from holding Board Meetings.

2. Interpretation of Interim Orders by NCLAT and Supreme Court:
The NCLT referred to multiple orders, including those by NCLAT and the Supreme Court. The NCLAT's order dated 24.05.2021 had initially stayed the holding of Board Meetings. However, this order was modified on 17.06.2021, where the stay was limited to the appointment of Mr. Siddarth Bhandari as a joint signatory of bank accounts. The Supreme Court, on 25.02.2022, continued the interim order of 17.06.2021, which did not include a stay on Board Meetings.

3. Validity of NCLT's Decision to Allow Board Meetings:
The NCLT concluded that there was no existing order preventing the holding of Board Meetings. The Supreme Court's interim order only stayed the joint signatory requirement and did not address Board Meetings. The NCLT found the appellant's application to be misconceived and not maintainable.

4. Alleged Violation of Interim Orders by NCLT:
The appellant argued that the NCLT's decision to allow Board Meetings violated the interim order of 24.05.2021, which was supposedly upheld by the Supreme Court. However, the NCLAT clarified that the interim order was modified on 17.06.2021, and the Supreme Court's continuation of this order did not include a stay on Board Meetings. Therefore, the NCLT did not violate any interim orders.

Conclusion:
The appeal was dismissed as the NCLT correctly interpreted the interim orders and found no restraint on holding Board Meetings. The NCLAT noted that the appellant's interpretation was incorrect and the appeal was deemed an abuse of the court process. The appeal was dismissed without costs.