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TMI Blog2021 (10) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... s the NCLT has the authority and competency to decide such aspect. The issues involving the C.P. proceeding are clearly barred for being undertaken in exercise of a suit before the Civil Court. This Court since finds, same are to be left for consideration of the NCLT dependent on the claim and counter of both the parties involved, touching these aspects at this stage of the matter will be amounting to encroaching upon the jurisdiction of the NCLT. In the circumstance, this Court is not inclined to enter into any other area and leaves all these open to the parties to agitate and get adjudicated by the NCLT concerned - Petition dismissed. - W.P.(C) No.23128 of 2021 WITH In W.P.(C) No.12645 /2021 - - - Dated:- 4-10-2021 - BISWANATH RATH, J. For Petitioner : M/s. L.N. Rayatsingh For Opposite Party Nos.1 2 : Mr. M.K. Mishra, Senior Advocate For Opposite Party No.3 : Mr. P.K. Parhi, Asst. Solicitor General For Opposite Party Nos.6, 7, 8, 10 11 : Mr. A.Ch. Swain, J U D G M E N T JUSTICE BISWANATH RATH 1. Writ petition bearing W.P.(C) No.12645 of 2021 is filed by the elected executive members of the Company, Utkal Chamber of Commerce Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e passed declaring the Executive Committee is the only and final authority to take decision on confirmation of Balance Sheets, Annual General Meeting and the Office Bearers / directors be part of Executive Committee not a separate body; b) Let a decree be passed directing defendants to perform duties in accordance with the Article of Association (AoA) of the Chamber, c) Let a decree be passed in favour of the plaintiffs permanently restraining defendants taking decisions of Balance Sheets and AGM; d) Any other further or other order(s)/direction(s) may be passed as this Hon ble Court may deem fit and proper under the circumstance of the case. Prayer made in in C.P.No.11/CTB/202: In the facts and circumstances, the Petitioners humbly pray for the following reliefs: (a) A scheme be framed for management and administration of the Company. (b) Declare the decision of the board of Directors vide resolution dated 12.1.2021 as absolute and binding; (c) The purported cessation of the Petitioners as Director of the Company be adjudged null and void; (d) The Petitioners and other ex-Directors be forthwith reinstated as Director of the Respondent No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es due to expire of tenure. It is claimed that opposite party nos.1 and 2 in the writ petition were due to retire for expiry of their tenure and thus both of them filed nomination for the post of Vice President and Honorary Joint Treasurer respectively. It is, in the meanwhile, on 14.1.2021 when the Executive Committee passed a resolution suspending five members for their involvement in indiscipline work as per the provision of AoA and new Returning Officer was appointed to conduct the election of the Governing Body, keeping in view resignation of the previous Returning Officer. On 23.1.2021 the result of the election was published declaring the successful candidates, which discloses opposite party nos.1 and 2 failed to be elected to their contested post. On 15.2.2021, the opposite pastries filed C.P.No.11/CTB/2021 under Section 241 and 242 of the Companies Act, 2013 alleging oppression and mismanagement involving the Company. 6. In the above background, in their common challenge to the maintainability of the Company Proceeding in the pendency of the Civil Suit, Mr. Swain, raised the following grounds: A) For that the O.P.Nos.1 2 suppressing the material facts are making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one voting rights only; J) For that the allegations in the Company Petition are all personal in nature and to feed fat to the grudge of the O.P.-1 2, particularly when they failed in the election process to be elected have filed the Company Petition under the guise of Section 241 and 242 of the Company s Act, 2013, which is not maintainable; K) For that Hon ble Supreme Court of India in catena of cases held that the issue pertaining to Directorial are outside the scope of the petition under Section 241 and 242 of the Company s Act, 2013; L) For that it is only the civil court have the jurisdiction on the issue at hands and the O.P.-1 2 be directed to pursue in civil court in C.S.No.1182 of 2020 pending before Civil Judge, Sr.Div., Bhubaneswar and not in the NCLT. 7. It be stated here that both the writ petitions involve almost same ground except there is little bit of change here and there not making any effect ultimately. It is not a material. Mr.Swain, learned counsel submitted that the attempt of opposite party nos.1 and 2 in filing the Company Petition is not only in suppression of the material fact but is an ill attempt to softer fuse the order of the Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sful in the election. Mr.Swain, learned counsel taking this Court to the catena of decisions contended that apart from factual background, the grounds narrated hereinabove, there is also support of law to the case at hand and Mr.Swain thus relied on the decisions in the cases of Tata Consultancy Services Ltd. Vs. Cyrus Investments Pvt. Ltd. Ors : 2021 SCC Online SC 272, Union of India (UOI) Vs. Tarachand Gupta Bros. : (1971) 1 SCC 486, Shashi Prakash Khemka (Dead) through legal representatives and Anr. Vs. NEPC MICON (Now NEPC India Limited) Others : (2019) 18 SCC 569, SAS Hospitality Pvt. Ltd Anr. Vs. Surya Constructions Pvt. Ltd. Ors : 2019 (212) Comp. Cas. 102, Naresh Dayal and Ors. Vs. Delhi Gymkhana Club Ltd. and Ors. : (2021) 225 Comp. Cas. 259, Jai Kumar Arya Ors. Vs. Chhaya Devi and Anr. : 2017 SCC Online Del. 11436. 8. Similarly, in reference to the jurisdiction of the Civil Court vis- -vis provision under Section 9 of the C.P.C., limiting to Section 9 of the CPC vis- -vis a restriction contained in Section 430 of the Companies Act, Mr.Swain, learned counsel taking this Court to both the provisions also attempted to rely on the decisions in the cases of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short be referred to as NCLT vide C.P.11/C.B/2021, contended that there has been deliberate concealment of material facts in approaching through the writ petitions indicated hereinabove and both the writ petitions appear to have been filed with unclean hands. In elaborating his such grounds Mr. Mishra, learned Senior Advocate taking this Court to different paragraphs involving the C.P. proceeding and on reading through the same, attempted to justify that the Petitioner herein has not only twisted the fact, but the grounds involved herein are also contrary to the material facts available on record and further also in clear suppression of the factual aspect involved in the Company Petition. Referring to the provision at Section 241 and 242 of the Companies Act, 2013 hereinafter in short be reflected as the Act, 2013 , Mr. Mishra, learned Senior Advocate made an attempt to justify his above submission and contended that for the clear disclosures in the C.P. proceeding involved herein the proceeding U/s.241 242 of the Act, 2013 is very much maintainable and further the issue raised therein are within the competency of the NCLT . It is next, taking this Court to the dispute invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s up the preliminary objection of the Opposite Party Nos.1 2 that the writ petition bearing W.P.(C) No.23128 of 2021 being filed by one Sri Brahmananda Mishra claiming to be the president of the Utkal Chamber of Commerce Industries Ltd., is not maintainable. This Court here finds, there is no doubt that if the writ petition at the instance of the Institution is initiated, there must be a resolution or an authorization in favour of the person undertaking such litigation. On entire reading of the pleadings involving the said writ petition, this Court nowhere finds, Brahmananda Mishra the Petitioner representing the Company has any authorization or support of any resolution of the Board of the Company at least authorizing him to initiate such litigation. Furthermore, looking to the law of the land on this aspect, this Court here taking into account the case of State Bank of Travancore (supra) finds, the Hon ble apex Court in similar situation in paragraph nos.14 15 therein has come to observe as follows: 14. In our view, the judgment under challenge is liable to be set aside because the respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of the Supreme Court cited by learned counsel for opposite party No.4 in the case of Charanjit Lal Chowdhury Vrs. Union of India, AIR 1951 SC 41; State of Orissa Vrs. Madan Gopal Rungta, AIR 1952 SC 12 and Calcutta Gas Co. (Proprietary) Ltd. Vrs. State of West Bengal, AIR 1962 SC 1044 , are aptly applicable to the fact situation of the case. 12. Looking to the above decisions and further for the support of both the decisions hereinabove to the case of the Opposite Party Nos.1 2, this Court finds, Sri Brahmananda Mishra is not duly authorized to institute such litigation and as such the writ petition bearing W.P.(C) No.23128 of 2021 is not maintainable. The writ petition bearing W.P.(C) No.23128 of 2021 stands dismissed as not maintainable. This Court since finds, the other writ petition bearing W.P.(C) No.12645 of 2021 is filed at the instance of the elected Executive Members in their personal capacity being elected as the Executive Members of the Company i.e M/s. Utkal Chamber of Commerce and Industries Ltd. in the meantime and the same is maintainable. This Court proceeds to consider the merit involving such writ petition as hereunder. 13. For a question be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er director or manager, upon such terms and conditions as may, in the opinion of the Tribunal, be just and equitable in the circumstances of the case; (f) the termination, setting aside or modification of any agreements between the company and any person other than those referred to in clause (e): Provided that no such agreement shall be terminated, set aside or modified except after due notice and after obtaining the consent of the party concerned; xx xx xx (h) removal of the managing director, manager or any of the directors of the company; xx xx xx (m) any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision should be made. xx xx xx 14. From the provision at Section 241 of the Act, 2013, this Court finds, this provision of the Act, 2013 authorizes any member of the company to complain under the provision of oppression mismanagement. Similarly section 242 of the Act, 2013 gives power to the NCLT to opine that the company affairs have been or are being conducted in a manner prejudicial or oppressive to any member or members and also on other aspect, which are of course not relevant here. Section 242( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance of the aforesaid it is also mentioned herein that the Respondent No.2 with connivance of other Respondents has also issued orders barring entry of the Petitioners to office premises of Respondent No.1 Company. Prior to the said direction also the Respondent No.2 had issued a written direction to Respondent No.1 office staff barring access of any office papers and documents to all members including office bearers without his permission. RESPONDENTS CAN BE TERMED TO BE OFFICERS IN DEFAULT UNDER SECTION 2 (60) OF THE COMPANIES ACT, 2013. 15. It is, at this stage of the matter, on reading of the factual background of the case involving the suit referred to hereinabove and the prayer made therein alongwith the factual aspect involving the company petition and the prayer made therein, this Court not only finds, both the proceedings are aimed with different directions, but keeping here in view the prohibition U/s.430 of the Act, 2013, this Court finds, subject involving the proceeding vide C.P.11/CTB/2021 cannot be undertaken by a Civil Court as the NCLT has the authority and competency to decide such aspect. The issues involving the C.P. proceeding are clearly barred for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specially considering the manner in which Section 430 of the Act is widely worded. 7. We are thus of the opinion that in view of the subsequent developments, the appropriate course of action would be to relegate the appellants to remedy before NCLT under the Companies Act, 2013. In view of the lapse of time, we permit the appellants to file a fresh petition within a maximum period of two months from today. Looking to the contest in the above case and involved herein, this Court finds, above decision has direct application to the case at hand. This Court at this stage taking into account the citations shown by Mr. Swain, learned counsel, finds, none of the decisions are applicable to the case at hand at this stage of the matter. Even though the writ petition involves some other aspect, this Court since finds, same are to be left for consideration of the NCLT dependent on the claim and counter of both the parties involved, touching these aspects at this stage of the matter will be amounting to encroaching upon the jurisdiction of the NCLT. In the circumstance, this Court is not inclined to enter into any other area and leaves all these open to the parties to agitate and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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