2021 (12) TMI 158 - Tri - Companies Law

Seeking dismissal of the company petition - refund of money siphoned - mismanagement and oppression into the affairs of the Respondent No. 1 Company - HELD THAT - From a bare perusal of the said company petition, it will be evident that the allegations raised in the Company Petition are since 2009 to 2019 despite the fact that the first round of litigation was filed by the petitioners were instituted in 2011 before the Learned Company Law Board, Kolkata Bench at Kolkata., inter alia, alleging mismanagement and oppression against the identical respondents. The said company petition was registered as C.P. No. 992 of 2011 - From a bare perusal of the said Company Petition being C.P. No. 992 of 2011, the allegations raised in paragraph VII to XII at pages 111 to 113, XVI-XX at pages 115 and 117, Para XXVI at page 120 and para XXXI at page 123 are the identical allegations raised in the company petition being C. P. No. 10 of 2021 and the same will be evident from a bare perusal of page no. 43 to 48 of the main Company Petition. The petitioners, during pendency of the civil appeal, had filed an application against the administrator before the Hon ble NCLAT raising frivolous allegation, however, the Hon'ble NCLAT had refused to entertain such application in view of the fact that the civil appeal is pending before the Hon ble Supreme Court of India - The civil appeal is pending since 2019, notices were issued after admitting the said appeal by the Hon'ble Supreme Court. In the said civil appeal, identical issues are pending adjudication which have been prayed for before this Hon ble Tribunal. In the present case, the issues, which are being agitated in the present company petition, are from 2009 till 2019 and during the entire period, the previous company petition being C.P. No. 992 of 2011 was pending before this Hon ble tribunal till March 8, 2018 and before the Hon'ble NCLAT till May 28, 2019 and the allegations, which are now being raised, would have been raised in the earlier company petition, however, the petitioners have chosen not to agitate the same. In view of such omission, the petitioners are barred from raising such issues by filing the present company petition, that too during the pendency of the civil appeal arising out of the earlier company petition. The present Company Petition being C.P. No. 10 of 2021 is an abuse of process of law, forum shopping and is liable to and should be dismissed with exemplary costs.

Summary

Issues Involved:
1. Allegations of mismanagement and oppression in the affairs of the company.
2. Whether the current petition is barred by the principles of constructive res judicata.
3. The maintainability of the current petition in light of pending litigation before the Supreme Court.
4. Alleged frivolous and harassive nature of the current petition.
5. Procedural fairness and equity in hearing the petition.

Detailed Analysis:

1. Allegations of Mismanagement and Oppression:
The Petitioners alleged mismanagement and oppression in the affairs of the Respondent No. 1 Company. They claimed that the statements in the Company Petition were false and frivolous. The allegations included issues from 2009 onwards, such as remuneration paid to directors, salary and allowances to employees, selling and purchasing of goods, opening of bank accounts, travelling expenses, selling expenses, and further issuance of share capital.

2. Constructive Res Judicata:
The Respondents argued that the current Company Petition is barred by the principles of constructive res judicata. They contended that the allegations raised were identical to those in a previous litigation (C.P. No. 992 of 2011), which had been adjudicated by the Tribunal and the National Company Law Appellate Tribunal (NCLAT). The NCLAT had set aside the Tribunal's order, and the matter was currently pending before the Supreme Court.

3. Pending Litigation Before the Supreme Court:
The Respondents highlighted that the issues in the current Company Petition were almost identical to those pending before the Supreme Court in Civil Appeal No. 6556 of 2019. They argued that the Petitioners should not be allowed to re-agitate the same issues in a new petition while the appeal was still pending. They cited a recent Supreme Court judgment emphasizing the principle of comity of courts and the need to avoid entertaining petitions on identical issues when the matter is sub-judice.

4. Frivolous and Harassive Nature of the Petition:
The Respondents claimed that the current petition was a ploy to re-agitate issues already adjudicated and was intended to harass the Applicants with a series of frivolous proceedings. They argued that the petition was not maintainable and was an abuse of the process of law and forum shopping.

5. Procedural Fairness and Equity:
The Petitioners denied and disputed the allegations made in the application for dismissal. They argued that the application was frivolous, not maintainable in law, and based on fraud. They invoked the concept of equity and cited various judgments to support their submissions. They contended that the Tribunal should hear the entire matter together rather than addressing preliminary issues separately.

Order:
The Tribunal heard both sides at length and, in view of the order passed in the main petition C.P. No. 10/GB/2021, disposed of the application IA (Comp. Act) 1/2021.