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2024 (12) TMI 848 - AT - Companies LawCompromise or not - recourse to filing of a Miscellaneous Application for orders - permission to Applicants to do something indirectly which they are not otherwise able to do directly - extension of Order by resorting to the proceedings by filing the Miscellaneous Application, could at all be permitted to be carried, beyond the terms of the compromise or settlement, which may have a bearing of revival of power of the erstwhile Director, who otherwise, stands removed from the post of Managing Director - invocation of Section 421 of the Companies Act, 2013 in a proceedings which was otherwise drawn under Sections 397, 398, 402 403 of the Companies Act, to be read with Regulation 14 of CLB Regulations of 1991. HELD THAT - The directions given in the Impugned Order only intends to meet the terms of Settlement of Sub Clause (d) of Para 5 of the Settlement is absolutely a mis-normer for the reason being that the power of Mr. R.P. Trivikram, was not a power which was enshrined to him in relation to the affairs contemplated under Sub Clause (d) of Para 5 of the Settlement of 14.06.2017 - the powers conferred by the directions given in Sub-para 1 of Para 11 of the Impugned Order runs contrary to the spirit of the Order of 07.08.2018, which was only limited to confirming the Settlement of 14.06.2017 particularly when, the Settlement or the Order of 07.08.2018 is not in dispute nor under challenge before any Superior Forum. The directions issued in Sub-para 1 of Para 11 of the Impugned Order since being contrary to the earlier Order of 07.08.2018, is not maintainable particularly, when the same has been obtained by way of filing of a Miscellaneous Application in a Company Petition which has already been decided, especially when the case is being sought to be re-opened in a manner of review / recall and modify the Order which was not permissible under the terms of the earlier Order of 07.08.2018. The observations made in Sub-para 1 of Para 11 of the Impugned Order to the extent the Respondents are directed to involve the Applicant / Petitioner (Shri. R.P. Trivikram) in all the affairs of Respondent No. 1 Company , would hereby stand quashed - Appeal allowed.
Issues Involved:
1. Validity of filing a Miscellaneous Application within the terms of the compromise order. 2. Interpretation of the liberty granted in the settlement in relation to the compromise order. 3. Legality of extending the order beyond the terms of the compromise or settlement. Issue-wise Detailed Analysis: 1. Validity of Filing a Miscellaneous Application: The primary issue was whether the filing of a Miscellaneous Application was permissible within the terms of the compromise order dated 07.08.2018. The compromise order was based on a settlement reached on 14.06.2017, which was affirmed by the National Company Law Tribunal (NCLT) on 07.08.2018. The order allowed for the filing of Miscellaneous Applications by the parties, including the Executor/Observer, to seek directions for implementing the terms and conditions of the Joint Compromise Petition. However, the Tribunal clarified that this liberty was limited to addressing obstructions in implementing the compromise terms and not for purposes beyond the compromise itself. 2. Interpretation of Liberty Granted in the Settlement: The settlement agreement, as per Clause 5(c), involved Mr. R.P. Trivikram in all sale negotiations and transactions of the Scheduled Properties. The Tribunal interpreted the term "involve" to mean that Mr. R.P. Trivikram's role was limited to negotiations and transactions related to the sale of the Scheduled Properties and did not extend to other affairs of the company. The Tribunal emphasized that the powers granted to Mr. R.P. Trivikram were not unfettered and were strictly confined to the terms of the compromise. 3. Legality of Extending the Order Beyond the Terms of the Compromise: The Tribunal examined whether the extension of the order by filing the Miscellaneous Application could be permitted beyond the terms of the compromise. The application filed on 07.05.2019 sought to supersede the Board of the first respondent company and appoint the Executor as an Administrator, which was beyond the scope of the compromise. The Tribunal concluded that the relief sought in the application went beyond the liberty granted in the order dated 07.08.2018 and was not permissible. The directions in the impugned order, which involved Mr. R.P. Trivikram in all affairs of the company, were found to be contrary to the spirit of the earlier order and the terms of the compromise. Conclusion: The appeal was allowed, and the directions in the impugned order to involve Mr. R.P. Trivikram in all affairs of the first respondent company were quashed. The Tribunal held that the application filed was beyond the terms of the compromise and the earlier order, and thus, not maintainable. There was no order as to costs.
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