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TMI Blog2018 (8) TMI 1960X X X X Extracts X X X X X X X X Extracts X X X X ..... m the observations of the Orders of the Hon ble High Court referred to in above para 16D that it has called upon the parties to place on record various steps required to be taken to implement the complete separation between the parties in terms of the MOU and DOA. It can also be seen that the Hon ble High Court has observed that the Court is still seized of the matters and several orders have been passed towards effectuating the division of the units among the parties. There is no dispute that in a petition like the present one, the question of oppression and mismanagement would be matters which are required to be exclusively dealt with and decided by the NCLT. For Interim Orders, it would be necessary in the application to spell out a prima facie case which requires interference of the Tribunal without which interference, it has to be shown that the Applicant/Petitioner would suffer irreparable injury and that balance of convenience lies in the fact that Interim Orders should be passed. If the present matter is perused and the reliefs as sought by the Appellants Petitioners are seen, when it appears from the record that on the basis of documents executed between the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 002 while his father Respondent No.3 S.K. Beri became Director on 21.02.2015. 2. It appears that Respondent No.5 - Banaras Marbles and Granites Limited, incorporated in 1992 was acquired in September, 2014 and the Appellant and Respondents 2 and 3 became Directors in the said Company. 3. The Appellant claims that he set up D B Engineering Private Limited and Atlas Knives as Limited Liabilities Partnership (LLP). 4. According to the Appellants, somewhere in 2014 disputes arose between the Appellant and Respondent No.2 with regard to business, business assets and family properties, jointly owned and controlled by them which includes the Respondent Company. The other entities jointly owned and controlled by the parties are S.K. Beri and Brothers (SKB), D.B. Engineering Company (DBC) and Banaras Marbles and Granites Limited (Banaras). According to Appellants, there were discussions regarding dividing the business and assets. To sort out differences between the brothers, Respondent No.3 S.K. Beri, the father was taken as Director on 21.02.2015 in the Company but the same did not help. On 20th January, 2016, the Appellant and Respondent No.2 entered into agreement to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deed of Arrangement. According to the Appellants, Respondent No.2 instead of abiding by the terms of the Award, filed OMP 396 of 2016, a petition under Section 34 of the Arbitration Act, 2016. The OMP 382 of 2016 field by the Respondent Nos.3 and 4 was also filed subsequently. According to the Appellant, there was breach of Order dated 19th August, 2016 passed by the High Court as Respondent No.2 opened another bank account having CBCA/1/209 in the name of Respondent Company on 05.11.2016 with Corporation Bank, Village Kasna Pergana, Dankor, Greater Noida without any authority or Board Resolution and without letting the Appellant know. The Appellants claimed ₹ 3,04,48,547/- have been siphoned by opening such account and transferring the money to the personal accounts of Respondent No.2 and his children. 8. The Appellant further claims that in view of such illegal acts of Respondent No.2, the Appellant No.1 filed IA 13 of 2017 in OMP 326 of 2016 (Page 177) as Respondent had opened new account in the name of Company. It is stated that the Hon ble High Court took serious note of the conduct of Respondent and, with other directions passed Orders appointing Court Commissioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Protection seeking directions for grant of status quo in relation to assets, management and shareholding, and 2) Inspection of books of accounts and statutory records of the Company. The argument of the Counsel is that the NCLT wrongly refused Interim Orders observing that the affairs of the Company were custodia legis of the Hon ble High Court and that if NCLT would pass any orders in relation to the assets and books of account, the same may lead to a conflict of orders. It has been argued that NCLT was not right in refusing Interim Orders only because Section 9 and Section 34 proceedings under the Arbitration Act were pending in High Court. The learned counsel for Appellants claimed that the NCLT had jurisdiction to pass the Interim Orders as mentioned above. According to the learned counsel, Respondent No.2 was involved in acts of under-invoicing of goods, illegal removal of assets and machines of the Company among other acts of siphoning. Thus, according to the learned counsel, orders of status quo on assets and the Board of Directors of the Company and status quo with regard to the shareholding should have been passed. According to the counsel, the Appellants have rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel that as per the Arbitration Agreement (Annexure A-2), it was necessary to seek views of Respondent No.3 but according to the counsel, this was not done and the dispute on this count was already raised in OMP 382 of 2016 filed by these Respondents. 14. It has been argued on behalf of the Respondents 1, 2 and 5 that the NCLT has recorded reasons why it was not passing Interim Orders. The reasons are not perverse and so interference in appeal is not called for. It has been argued that the OMP 382 of 2016 and 396 of 2016 filed by the Respondents under Section 34 were already heard by the Hon ble High Court and Judgements in those matters were reserved which were due to be passed on 31st May, 2018, same day when the argument was being made in this Appellate Tribunal. The OMP 326 of 2016 filed by the Appellant, however, was still pending. The learned counsel referred to the IAs filed by the Appellant in OMP 326 of 2016 and the prayers made therein to submit that if those prayers are read along with the prayers made in the Company Petition, there was an overlap and when the Appellant had already moved the High Court for reliefs, the NCLT rightly refrained from interferi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies interim orders to the Appellants (para 14 15 of the Impugned Order); (ii) Pass appropriate order and/or directions restraining the Respondents from appointing any Director(s) on the Board of Directors of the Respondent No.1 Company; (iii) Pass appropriate order and/or directions restraining Respondents from altering/changing the shareholding pattern of the Respondent No.1 Company; (iv) Pass appropriate order and/or directions directing status quo to be maintained with respect to fixed assets and other properties, both movable and immovable, of the Company; (v) Pass appropriate order and/or directions directing the Respondents to grant access to the Appellants to the accounts and accounting software of the Company inter-alia by providing to the Appellants the current password to the accounting software of the Company; We recall here submissions for Appellants noted supra in para 11, to note above underlined portions. 16B. The Hon ble High Court passed common Order dated 19.08.2016 in OMP 382 of 2016 and OMP 326 of 2016 (Annexure A-7 - Page 129). The Order shows in Para 4 (Page 131) that present Respondent No.3 reconfirmed before the High Court that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the charges of the employees and other statutory liabilities due. Parties shall also file the full details about the issuance of cheques along with list of documents before the next date. It was then directed in concluding part of para 7:- As desired by both parties, an order for appointment of an Observer/Mediator would also be passed on the next date for remaining compliance of division of assets of the Companies/Firms as per settlement. 16C. The Appellant appears to have then filed IA 13 of 2017 in OMP 326 of 2016 (Page 177), inter alia, making prayers (Page 188) that the Hon ble High Court should appoint Receiver to take charge of all the assets including factory premises, books of accounts, operations of the bank accounts, plant and machinery, etc. as well as domain names belonging to D B Engineering Pvt. Ltd. (Respondent No.1 Company) and other business entities of the parties. He also sought forensic audit of the books of accounts of Respondent Company and other Companies to identify siphoning of funds. He also sought restraint on the Respondents from operating the account CBCA/1/209 and CBCA/1/211 maintained with Corporate Bank, Kasna Branch, Greater Noida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 12,41,076. Referring to the account opened, the Hon ble High Court observed in para 16 as under:- 16. The Court is surprised that such a step has been taken when the Court is still seized of the matters and several orders have been passed, as noticed hereinbefore, towards effectuating the division of the units among the parties. It is indeed disconcerting that a separate bank account could have been opened in the name of DBEPL without the participation and consent of Mr. Deepak Beri. At this stage, the Court is not aware if Mr. Surinder Kumar Beri and Mrs. Ramesh Beri consented to the opening of such an account of DBEPL by Mr. Atul Beri. This prima facie appears to be a brazen attempt by Mr. Atul Beri to overreach the Court and present it with a fait accompli . [Emphasis supplied] After such observations, the Hon ble High Court gave certain directions so as to freeze the Account CBCA/1/209 which had been opened as well as CBCA/1/211, the Branch Manager was directed to remain present before the Hon ble High Court along with statements of the Accounts. The Hon ble High Court then proceeded to appoint, H.P. Sharma, a former District and Session Judge as Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble High Court, in the context of the Award is dealing with not merely the present Respondent Company but also other entities of the parties and is, inter alia, seized with questions of division of assets, movable and immovable. The Appellant himself has in the IA 13/2017 in OMP 326/2016 sought appointment of Receiver to take charge of the assets including factory premises, books of accounts, operations of the Bank Accounts, plant and machinery, etc. He has also sought forensic audit of the books of accounts of Respondent Company and other companies to identify siphoning of funds. It can be seen from the observations of the Orders of the Hon ble High Court referred to in above para 16D that it has called upon the parties to place on record various steps required to be taken to implement the complete separation between the parties in terms of the MOU and DOA. It can also be seen that the Hon ble High Court has observed that the Court is still seized of the matters and several orders have been passed towards effectuating the division of the units among the parties. The Hon ble High Court appointed Court Commissioner and Chartered Accountant to visit the business entity and insp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Orders, it would be necessary in the application to spell out a prima facie case which requires interference of the Tribunal without which interference, it has to be shown that the Applicant/Petitioner would suffer irreparable injury and that balance of convenience lies in the fact that Interim Orders should be passed. If the present matter is perused and the reliefs as sought by the Appellants Petitioners are seen, when it appears from the record that on the basis of documents executed between the parties an Arbitration Award has been passed and the Hon ble High Court has while dealing with the OMPs filed by the parties passed different orders, it does not appear that the Appellants are able to show prima facie case, as regards the counts on which prayers referred above, were made before NCLT. 20. Learned counsel for the Appellants relied on the case of Telecommunications Consultants India Ltd. versus TCIL Bellsouth Ltd. and others ILR (2006) II Delhi 780 to submit that the scope of the Petition under Section 397 and 398 of the old Act was very wide and in that matter, the Hon ble High Court had in spite of pendency of Civil Suit and Writ Petition observed that the Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Orders which may go in conflict with the steps Hon ble High Court is taking, we do not think that the NCLT was wrong. 22. Similarly, the other Judgement relied on by the Appellant is in the matter of M.S.D. Chandrasekar Raja vs. M/s. Jayabharath Textiles Pvt. Ltd. and M.S.D.C. Radha Ramanan reported as MANU/TN/2357/2013. That Judgement and observations of the Hon ble High Court itself in para - 75 shows that there, the issues directly and substantially arising for consideration before the two separate Forums of Company Law Board and Civil Court could not be said to be the same. We do not find so in the present matter. 23. The Appellant claimed that the Hon ble High Court of Bombay has in the matter of ICICI Ltd. vs. Alpine Industries Ltd. 1999(2) Mh.L.J. 683 held that if receiver has not taken charge of the property, it cannot be said that the property is custodia legis of the High Court and NCLT could not have held that property is custodia legis . According to us, in the present matter, even if the Hon ble High Court has not appointed a receiver, and in view of the Judgement of ICICI Ltd., it cannot be said that the property is custodia legis , still looking to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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