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TMI Blog2018 (8) TMI 1704X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal will lie under section 421 before the National Company Law Appellate Tribunal. If the Tribunal passes order under the capacity of the ‘Adjudicating Authority’ under the ‘I&B Code’, the appeal will lie under section 61 of the ‘I&B Code’ before the National Company Law Appellate Tribunal. If the Tribunal passes order in the capacity of ‘judicial authority’ under Section 45 of the Arbitration Act, 1996, the appeal will not lie under Section 421 of the Companies Act but before an appropriate forum. The impugned order dated 20th April, 2017 having passed by the Tribunal in the capacity of ‘judicial authority’ under Section 45 of the Arbitration Act, 1996, the present appeal under Section 421 of the Companies Act, 2013 is not maintainable before this Appellate Tribunal. X X X X Extracts X X X X X X X X Extracts X X X X ..... hares of 39.28% of the paid up capital. The 2nd Petitioner is a shareholder, Director and one of the Core Promoters of the 1st Respondent Company holding three equity shares in the Company. The 3rd Petitioner i.e. 'Paradigm Corporation Private Limited' is also a shareholder having equity shares of 8.60% of the paid up capital of the 1st Respondent Company. Thus, all of them together hold 47.88% of the total paid up capital of the 1st Respondent Company. 8. The 2nd Respondent i.e. 'Gleneagles Development Pte Limited', the Company registered in Singapore and its shareholders of the 1st Respondent Company holding equity shares of 51% of the paid up capital of the 1st Respondent Company. 9. According to the Petitioners, the 2nd Respondent approached the 1st Respondent Company and expressed its willingness to invest in the said company and to purchase shares from the existing shareholders. The Petitioners and the Respondents, including the 2nd Respondent thereafter entered into several agreements including the 'Share Purchase Agreement', 'Share Subscription Agreement' and 'Share Holders Agreement', all dated 18th February, 2015. 10. Pursuant to the aforesaid agreements, the 2nd Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 45 of the Arbitration Act, 1996, in terms with the agreement for reference to Arbitrator which has been done by impugned order dated 20th April, 2017. 15. Learned Counsel appearing on behalf of the 2nd Respondent submitted that the impugned order has been passed not under the Companies Act, 2013 but under Section 45 of the Arbitration Act, 1996, in the capacity of 'judicial authority' in exercise of power conferred by the Arbitration Act, 1996, therefore, the appeal filed under Section 421 of the Companies Act, 2013 is not maintainable. 16 Similar issue fell for consideration before the Hon'ble High Court of Punjab and Haryana in 'Smt. Sudershan Chopra vs. Vijay Kumar Chopra, (2003) 117, Company Cases 660". In the said case, the Division Bench considered a case where the Respondent had filed a Company Petition under Sections 397 and 398 of the Companies Act, 1956 (now Sections 241/242 of the Companies Act, 2013) before the erstwhile Company Law Board (hereinafter referred to as "CLB"). The Appellant in the said case filed an application under Section 8 of the Arbitration Act, 1996. The CLB held that the application was not sustainable and refused to refer the disputes to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isposing of the application filed under Section 8 of the Arbitration Act, 1996, the CLB was exercising jurisdiction vested in it under the Companies Act, 1956. The conclusion has to be, as noticed in the foregoing paragraphs, that the right to prefer an appeal against an order passed by the CLB in its capacity as "judicial authority" while deciding an application filed under Section 8 of the Arbitration Act, 1996, must be searched for, from within the provisions of the Arbitration Act, 1996, more so, because the impugned order is not referable to any provision of the Companies Act, 1956." 17. The aforesaid decision of the Punjab and Haryana High Court has been followed by the Hon'ble Bombay High Court in "Conros Steels Pvt. Ltd. Vs. Lu Qin (Hong Kong) Company Ltd. & Ors.−Civil Appeal No. 806 of 2011 in Suit No. 2358 of 2010". 18. The Hon'ble Supreme Court in "Sumitomo Corporation v. CDC Financial Services (Mauritius) Ltd. (2008) 142 Comp Cas 114 (2008) 4 SCC 91" held: "To our mind, the reading of Section 50 clearly suggests that an appeal shall lie from the order of CLB to the court authorised by law to hear the appeals from such order of CLB. To make it clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Courts Act, observed and held: "16. Thus, an order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub-sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a) and, therefore, under Section 13(1) of the Commercial Courts Act. 17. So far, so good. However, it is Shri Giri's main argument that Section 50 of the Arbitration Act does not find any mention in the proviso to Section 13(1) of the Commercial Courts Act and, therefore, notwithstanding that an appeal would not lie under Section 50 of the Arbitration Act, it would lie under Section 13(1) of the Commercial Courts Act. 18. To answer this question, it is necessary to advert to the judgment in Fuerst Day Lawson (supra). The common question that arose for consideration in the batch of cases before the Court was whether an order, though not appealable under Section 50 of the Arbitration Act would, nevertheless be subject to appeal under the Letters Patent of the High Court. In answering this que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rized by law to hear such appeals would then be found in Sections 10(1) (a) and 10F of the Companies Act. The present case is a parallel instance of Section 50 of the Arbitration Act providing for an appeal, and Section 13(1) of the Commercial Courts Act providing the forum for such appeal. Only, in the present case, as no appeal lies under Section 50 of the Arbitration Act, no forum can be provided for. xxx xxx xxx 26. What is important to note is that it is Section 50 that provides for an appeal, and not the letters patent, given the subject matter of appeal. Also, the appeal has to be adjudicated within the parameters of Section 50 alone. Concomitantly, where Section 50 excludes an appeal, no such appeal will lie." 21. Learned counsel for the Appellants has relied on the decision of the Hon'ble Supreme Court in "State of Goa Vs. Praveen Enterprises− (2012) 12 SCC 581". In the said case, the Hon'ble Supreme Court, while explained "reference to arbitration" and the parties who can refer the same, observed that the "reference to arbitration" can be in respect of reference of disputes between the parties to arbitration, or may simply mean referring the parties to arb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The matter can be looked into from different aspects. The National Company Law Tribunal has been constituted under Section 408 of the Companies Act, 2013, consisting of a President and such number of Judicial and Technical members, as the Central Government may deem necessary, to be appointed by it by notification, to exercise and discharge such powers and functions as are, or may be, conferred on it by or under the Companies Act, 2013 w.e.f. 1st June, 2016. 27. Section 420 of the Companies Act, 2013 deals with 'Orders of Tribunal' as under: "420. Orders of Tribunal.─(1) The Tribunal may, after giving the parties to any proceeding before it, a reasonable opportunity of being heard, pass such orders thereon as it thinks fit. (2) The Tribunal may, at any time within two years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it, and shall make such amendment, if the mistake is brought to its notice by the parties: Provided that no such amendment shall be made in respect of any order against which an appeal has been preferred under this Act. (3) The Tribunal shall send a copy of every order passed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is not passed as a Tribunal constituted under Section 408 but in the capacity of 'judicial authority'. 31. From the aforesaid provisions, it is clear that under Section 420 of the Companies Act, 2013, the National Company Law Tribunal passes an order as a 'Tribunal', whereas under the provisions of Section 7 or Section 9 or Section 10 or sub-section (5) of Section 60, the same very Tribunal passes an order as an 'Adjudicating Authority' and the same Tribunal in the capacity of 'judicial authority' passes order under Section 8 or Section 45 of the Arbitration Act, 1996. As the Tribunal is empowered to pass orders in different capacities under different provisions of the Act, we are of the view that the appeal will lie before the competent forum under the said very Act under which the Tribunal passes the order. If it passes order under Section 420 of the Companies Act, the appeal will lie under section 421 before the National Company Law Appellate Tribunal. If the Tribunal passes order under the capacity of the 'Adjudicating Authority' under the 'I&B Code', the appeal will lie under section 61 of the 'I&B Code' before the National Company Law Appellate Tribunal. If the Tribunal p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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