2023 (10) TMI 682 - SCH - Insolvency and Bankruptcy

Interim relief not granted - HELD THAT - The appeal has been heard and orders were reserved by the NCLAT on 21 September 2023. However, while reserving orders, the NCLAT has directed the parties to maintain status quo as was available prior to EOGM dated 03.05.2019 till the judgement is delivered. No reasons have been indicated by the NCLAT even prima facie for issuing the interim order, particularly in the context of the fact that there was no interim relief operating since the dismissal of the application for interim relief on 31 December 2019. It is admitted that no relief was obtained by the first respondent in the proceedings before the Bombay High Court, as well. The interim direction is vacated - The Annual General Meeting (AGM) of the company, Finolex Cables Limited is to take place on 29 September 2023. Any action which is taken on proposed resolution No 4 pertaining to the appointment of the Executive Chairperson shall be subject to the outcome of the appeal which is pending before the NCLAT. The impugned order is set aside - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the dismissal of an application for interim relief by the National Company Law Tribunal, the appeal before the National Company Law Appellate Tribunal, the interim direction given by the NCLAT, and the upcoming Annual General Meeting of Finolex Cables Limited.

Dismissal of Application for Interim Relief:
The National Company Law Tribunal dismissed the application for interim relief filed by the first respondent, leading to an appeal before the National Company Law Appellate Tribunal. No interim relief was granted to the first respondent during the appeal process or in the proceedings before the Bombay High Court.

Interim Direction by NCLAT:
The NCLAT reserved orders on the appeal and directed the parties to maintain the status quo as it was before a specific date. However, no reasons were provided for this interim order, especially considering that no interim relief had been granted since the initial dismissal of the application in December 2019. The interim direction was vacated by the Supreme Court due to lack of justification.

Annual General Meeting (AGM) Concerns:
With the AGM of Finolex Cables Limited scheduled for 29 September 2023, the Supreme Court ruled that any action on a proposed resolution regarding the appointment of the Executive Chairperson must be subject to the outcome of the pending appeal before the NCLAT. This decision ensures that the AGM proceedings are contingent on the appellate tribunal's decision.

Judgment and Disposition:
The Supreme Court allowed the appeals, setting aside the impugned order to the extent mentioned. Additionally, any pending applications were disposed of in light of the modifications made to the interim direction and the consideration of the AGM proceedings in relation to the ongoing appeal.