2024 (8) TMI 103 - HC - Companies Law

Wilful violation / disobedience committed by the petitioners - Grant of injunction against the petitioners till disposal of the main proceedings - HELD THAT - The triple test / requirement before granting interim injunction viz., prima facie case, balance of convenience and irreparable injury and loss / hardship has not even been adverted to, much less, considered or appreciated by the NCLT before passing the impugned order which is clearly a non-speaking, unreasoned, cryptic and laconic order without assigning any reasons as to why and how the respondents 1 to 5 would be entitled to an order of interim injunction against the petitioners and on this short ground alone, it is opined that the impugned order passed by the NCLT deserves to be set aside. In the case of CENTRAL BOARD OF TRUSTEES VERSUS INDORE COMPOSITE PVT. LTD. 2018 (7) TMI 2206 - SUPREME COURT , the Apex Court held ' Time and again, this Court has emphasised on the courts the need to pass reasoned order in every case which must contain the narration of the bare facts of the case of the parties to the lis, the issues arising in the case, the submissions urged by the parties, the legal principles applicable to the issues involved and the reasons in support of the findings on all the issues arising in the case and urged by the learned counsel for the parties in support of its conclusion.' A perusal of the remaining portion of the impugned order will clearly indicate that except for merely / summarily stating at paragraph-16, no other reasons, much less, valid or cogent reasons as required in law are forthcoming in the impugned order, which stands vitiated on this score alone. A perusal of the impugned order will clearly indicate that as stated supra, the same is an unreasoned, cryptic, laconic and non-speaking order without application of mind, thereby being violative of principles of natural justice warranting interference by this Court under Articles 226 and 227 of the Constitution of India; under these circumstances, the contention urged by the respondents 1 to 5 that in view of availability of equally efficacious alternative remedy by way of an appeal under Section 421 of the Companies Act, 2013, the present petitions are not maintainable cannot be accepted in the facts and circumstances of the instant case which establish that there has been violation of principles of natural justice in the impugned order and consequently, availability of the remedy of appeal would not come in the way of this Court entertaining the present petitions. The impugned order passed by the NCLT deserves to be set aside and the matter remitted back to the NCLT for reconsideration - Petition allowed by way of remand.

Summary

Issues Involved:
1. Validity of the NCLT's impugned order dated 12.06.2024 granting injunction.
2. Alleged violation of undertaking and interim order dated 27.02.2024 by the petitioners.
3. Necessity of a reasoned and speaking order by the NCLT.
4. Availability of alternative remedy and maintainability of the writ petition.

Detailed Analysis:

1. Validity of the NCLT's Impugned Order:
The petitioners contended that the NCLT's order was "cryptic and nonspeaking," granting an injunction without assigning reasons. The NCLT deferred consideration of other applications (C.A.No.72/2024 and C.A.No.76/2024) but allowed C.A.No.71/2024 without addressing the triple test for interim injunction: prima facie case, balance of convenience, and irreparable injury. The High Court found that the impugned order lacked detailed reasoning and failed to consider the material on record, making it a non-speaking and unreasoned order. Consequently, the order was set aside.

2. Alleged Violation of Undertaking and Interim Order:
Respondents argued that the petitioners violated the undertaking and interim order dated 27.02.2024, which was confirmed by the NCLT. The respondents had initiated contempt proceedings and filed C.A.No.72/2024 against the petitioners. The NCLT noted these allegations but deferred their consideration. The High Court observed that the NCLT should have adjudicated these issues before granting the injunction. Since the contempt petition and C.A.No.72/2024 were pending, the High Court found it inappropriate to uphold the injunction based on disputed allegations.

3. Necessity of a Reasoned and Speaking Order:
The High Court emphasized the need for a reasoned and speaking order, citing several Supreme Court judgments. The NCLT's order was found to be lacking in detailed reasoning, violating principles of natural justice. The High Court highlighted that the NCLT failed to provide a substantive analysis of the issues, making the order unsustainable. The High Court reiterated that judicial orders must contain a narration of facts, issues, submissions, legal principles, and reasons for the findings.

4. Availability of Alternative Remedy and Maintainability:
Respondents argued that the writ petition was not maintainable due to the availability of an alternative remedy under Section 421 of the Companies Act, 2013. However, the High Court held that the violation of principles of natural justice in the NCLT's order justified the exercise of its jurisdiction under Articles 226 and 227 of the Constitution. The High Court noted that the impugned order was a final order on C.A.No.71/2024, despite respondents' contention that it was an ad-interim order.

Conclusion:
The High Court set aside the NCLT's impugned order dated 12.06.2024 and remitted the matter back to the NCLT for reconsideration of C.A.No.71/2024 afresh. The NCLT was directed to pass a reasoned and speaking order within two weeks from 04.07.2024. All rival contentions were kept open, and no opinion was expressed on the merits of the case.