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TMI Blog2017 (1) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... te. Though it is not a point to be taken up in a Contempt Application, having the Petitioners already mentioned and brought it to this bench notice, this Bench, invoking the inherent powers endowed upon this Bench under Rule 11 analogous to powers under section 151 of CPC, the petitioners and R11 are given liberty to file an affidavit limiting it to the proposal for removal of R11 from the Board within three days from the day this order made available to the parties and then the answering Respondents to file reply within three days from thereof and rejoinder if any three days from the date of filing reply affidavit, so that this Bench could hear this issue along with other issues of main company petition. - C.P. NO. 82/241,242,244/NCLT/MAH/2016 - - - Dated:- 18-1-2017 - B.S.V. Prakash Kumar and V. Nallasenapathy, JJ. For The Petitioner : Mr. Aryama Sundaram, Sr. Counsel, Mr. Milind Sathe, Sr. Counsel, Mr. Somasekhar Sundaresan, Mr. Rugvesh Mistry, Mr. Apurva Diwanji, Mr. Anoj Menon, Mr. Gujan Shah, Mr. Parag Sawant, Mr. Akshay Doctor, Advocates For The Respondent : Dr. Abhishek Manu Singhavi, Sr. Counsel, Mr. Ravi Kadam, Sr. Counsel, Mr. Nitesh Jain Advocate, Mr. Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs is that the spokesperson (name has not been mentioned) for the Tata Group has spoken to the Media on 21.12.2016 (that is before mentioning date of the CP, i.e., 22.12.2016), inter alia, representing that the Respondents had no intention to remove R11 from the Board and even marked that excerpt as Exhibit to this CA as if it is evidence to decide the relief sought in this Application. Had News Papers become evidence, the petitioners should not forget that almost all newspapers minced no words to say that interim reliefs sought on 22.12.2016 were not granted by NCLT. Of course, this Bench will neither take the newspaper cutting the petitioners made as Exhibit nor the news saying that interim reliefs rejected to R11 as material or inputs to arrive to a determination over this application. 3. In Para-h of this Application it has been mentioned that R14, 17, 20 having categorically agreed that they will not initiate action over this subject matter pending disposal of the company cannot cause such notice to be issued. This bench will answer this point later. As to EGM notice and its contents, it has already been enumerated in the first Para of this order itself. 4. The Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners side, agreed to file reply to the Company Petition within one week hereof enabling the answering Respondents to file response to R11 reply within one week thereof and reply to the main Petition within 15 days hereof The Petitioner shall file rejoinder to the reply within 15 days thereof In case R11 notices any new facts in the response of the answering Respondents to R11 Reply, he is at liberty to further respond to the same within 15 days. It has also been further agreed by all the parties, more specially by the Petitioner Counsel, R11 Counsel and the Counsel on behalf of the answering Respondents, that they will not file any interim Application or initiate any action or proceedings over this subject matter pending disposal of this Company Petition. They have also further agreed that they will not violate the time schedule mentioned above. Since the answering Respondents Counsel was about to argue over the maintainability of the Company Petition seeking dismissal of the Company Petition in limine, this Bench hereby gives liberty to the answering Respondents to raise maintainability point as first issue in the reply they file to this Company Petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being agreed to be posted for completion of pleadings, this has also been agreed that they will not file any interim application or initiate any action or proceeding over this subject matter pending disposal of this Company Petition this in fact is a precautionary order added to the directions for completion of the pleadings, so that there would not be any further filings in between causing hindrance or postponement to hearing of main company petition. 12. Generally, in 397 398/241 company petitions, once proceeding is launched, if no interim order is passed, to anchor CP to the shore of this Forum, one after another application will come, for inspection one application, for some other cause some other application, from time to time amendment applications on the ground of bringing new facts, no end to it, ultimately main company petition will never come for hearing. This is not an irresponsible statement coming from this Bench; though it does not go well, stark reality is these inconceivable applications, most of the times do not permit the forum to deal with main petition. Though it has been categorically mentioned that this Tribunal or even erstwhile CLB is not bound by CP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir interest, normally this Bench can interfere under this section only when governance of the company is going out of the mandate of the constitutional documents, that is Memorandum of Association and Articles of Association and when the actions of the persons conducting the affairs of the company are unfairly prejudicial to the interest of the members. The jurisdiction under this section triggers into action only when the interest of the members unfairly dealt with a malafide to effect the interest of the members. There being in house checks and balances for management, this Bench will normally not interfere, unless action is solely done with a malafide intention to cause harm to the interest of members. This exceptional right of minority will be dealt with under section 241 and 242 of the Act 2013. Perhaps by looking at the delay taking place in resolving the corporate litigation, strict mandate has been given to make the corporate sector free from litigation, so that organization can devote time and efforts to develop the business which ultimately takes this country forward. 13. To avoid a situation like above, this Bench suggested not to initiate any proceeding in relation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een given against the answering Respondents to act or not to act in respect of something, here in this case it is self-evident that it is a Consent Order passed by this Bench as to how to go about the proceedings pending before this Bench, as we said above, this Bench has not passed any order in respect to the relief sought by the Petitioner Counsel. When the Petitioner Counsel argued the matter, this Bench straight away put it to the said Counsel why not this matter be posted for completion of pleadings instead of dealing with interim reliefs sought by the Petitioner Counsel. Therefore, it could not now be said that the Respondents side agreed for passing interim reliefs against the Respondent Company not to take decisions in relation to the affairs of the company. At the cost of repetition, we must again say that a clause initiate any action over the subject matter cannot be taken out of the context and read it as injunction against the company. If the words in the order saying that they will not file any interim application or initiate any action or proceeding over this subject matter pending disposal of this Company Petition is again visited, if the word initiate any action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from carrying its functions. 18. It goes without saying whenever any contempt Petition is moved, it has to be seen whether order on face showing a restraint order against any of the parties, if it is there, then only first element mentioned above comes into existence, if it comes into being, then second element about knowledge of the Respondents is to be proved, if second element is also through, then third element about ability of the Respondents to comply with is to be proved, if all the above three are proved, then fourth element about disobedience has to be proved, unless all these elements have been proved, it cannot be held that action of the answering respondents is contumacious. Here, the petitioners failed to prove that a restraint order has been pending against the Respondents, because out of the four elements, not even first element has been established. 19. In the main company petition, it has not been said that the company is likely to hold EGM to remove R11 as the Director of the Company, it cannot even be a subject matter in the Company Petition because no such action was initiated against R11 for his removal as Director. Simply by looking at the wording in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court to punish for contempt is a special and rare power available both under the Constitution as well as the Contempt of Courts Act, 1971. It is a drastic power which, if misdirected, could even curb the liberty of the individual charged with commission of contempt. The very nature of the power casts a sacred duty in the Courts to exercise the same with the greatest of care and caution. This is also necessary as, more often than not, adjudication of a contempt plea involves a process of self-determination of the sweep, meaning and effect of the order in respect of which disobedience is alleged. Courts must not, therefore, travel beyond the four corners of the order which is alleged to have been flouted or enter into questions that have not been dealt with or decided in the judgment or the order violation of which is alleged. Only such directions which are explicit in a judgment or order or are plainly self-evident ought to be taken into account for the purpose of consideration as to whether there has been any disobedience or willful violation of the same. Decided issues cannot be reopened; nor can the plea of equities be considered. Courts must also ensure that while conside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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