2021 (10) TMI 995 - HC - Companies Law

Seeking extension of time to clear office objections with respect to Company Application - Section 10(F) of the Companies Act, 1956 - HELD THAT - It must be borne in mind that the Appeals filed before us arise from the proceedings filed in Section 10(F) appeals and therefore the issue before the Company Court would be in respect of the management of Respondent No. 1 company. The Learned Single Judge has exercised his discretion in granting time to Respondent Nos. 1 and 2 to take steps to restore Company Application (L) No. 3 of 2017, which in our view is not perverse and does not warrant any interference. We are informed that Respondent Nos. 1 and 2 have filed Interim Application (L) No.15777 of 2021 in Company Application (L) No. 3 of 2017 for carrying out appropriate amendments since the form of Company Application (L) No. 3 of 2017 warranted such amendments. It would be apposite that the Appellant is permitted to intervene in Interim Application (L) No.15777 of 2021 as well. There is nothing perverse in the Impugned Order, which warrants any interference - Appeal disposed off.

Summary

Issues Involved:
1. Recall of Orders dated 11th January 2018 and 7th February 2018.
2. Extension of time to clear office objections.
3. Falsehoods and contradictions in affidavits.
4. Knowledge of the deceased's death.
5. Rights of the executor of the deceased's estate.
6. Abatement of Company Appeal No. 102 of 2015.
7. Prejudice to the Appellant from the Impugned Order.
8. Intervention rights of the Appellant in the appeal.

Issue-wise Detailed Analysis:

1. Recall of Orders dated 11th January 2018 and 7th February 2018:
The appeal arises from the order dated 3rd May 2021, as modified on 7th May 2021, passed by the Learned Single Judge. The original orders dated 11th January 2018 and 7th February 2018 directed Respondent No. 1 to take steps to restore Company Application (L) No. 3 of 2017, failing which the Company Appeal No. 102 of 2015 would stand dismissed. The recall application filed by Respondent No. 1 was initially dismissed but later recalled by consent of the parties.

2. Extension of time to clear office objections:
The Learned Single Judge extended the time to restore Company Application (L) No. 3 of 2017 till 10th June 2021, thereby restoring Company Appeal No. 102 of 2015. The Court exercised its discretion in granting this extension, which was challenged by the Appellant.

3. Falsehoods and contradictions in affidavits:
The Appellant argued that the affidavits filed by Respondent No. 2 contained falsehoods and contradictions and that no relief should have been granted due to these falsehoods. Specific false statements were alleged concerning the knowledge of the deceased's death and other related matters.

4. Knowledge of the deceased's death:
The Appellant contended that Respondent No. 1 company was aware of the deceased's death as early as 23rd January 2017, contrary to the statements made in the affidavits. The Court noted that the decision on abatement and related issues would be deferred to an appropriate stage.

5. Rights of the executor of the deceased's estate:
The Appellant claimed to be the proper and worthy successor as the executor of the deceased's will. However, Respondent No. 2 challenged the Appellant's rights, arguing that the Appellant's role as executor was not established until probate or letters of administration were granted by a competent court.

6. Abatement of Company Appeal No. 102 of 2015:
The Appellant argued that the Impugned Order was flawed as it restored the Section 10(F) Appeal, which had abated on 19th April 2017. The Court clarified that the decision on abatement was deferred and that the Appellant's rights to challenge the abatement were expressly kept open.

7. Prejudice to the Appellant from the Impugned Order:
The Court found that paragraph 6 of the Impugned Order did not cause prejudice to the Appellant, as it reserved the Appellant's right to raise all contentions before the Company Court. The Court noted that the Learned Single Judge had not set aside the abatement of Company Appeal No. 102 of 2015.

8. Intervention rights of the Appellant in the appeal:
The Court allowed the Appellant to intervene in the proceedings, including in Interim Application (L) No. 15777 of 2021, to address the grievances raised about the falsehoods in the affidavits. This direction, along with paragraph 6 of the Impugned Order, adequately protected the Appellant's concerns.

Conclusion:
The Court concluded that there was nothing perverse in the Impugned Order that warranted interference. The Appellant's rights were sufficiently safeguarded, and the appeal was disposed of with no order as to costs. The rights and contentions of the parties were expressly kept open. The same directions were applied to the companion Appeal (L) No. 12273 of 2021.