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TMI Blog2022 (10) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... he other hand informed to the Tribunal by supplementary affidavit filed in the month of Feb, 2021, but so far as other allegations of misuse of undertaking by 1st Appellant and prejudice caused to the Respondent No. 1 by the acts of the appellant No. 1 are subsequent events which form part of grounds to vacate or modify the order dated 28th June 2019 but no opportunity was given to deny or admit any of the allegations; such denial of opportunity to file counter, is violation of principal of natural justice. Denial of an opportunity to file counter to vacate stay petition amount to depriving the Appellant of their valuable right to file counter to rebut the allegation of serious in nature and it is also amount to violation of principle of natural justice. Whether the order impugned in the Appeal is in consonance with the requirements of an order? if not whether the order be sustained, legally? - HELD THAT:- Though, the Tribunal is under obligation to decide the petition on merits without leaving any stone unturned, the Tribunal specifically held that the order was not passed on merits. This itself sufficient to conclude that the order was passed by the Tribunal not on merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered by the Tribunal itself. There are no merit in the contention of learned counsel of the Respondents. Consequently, the point is held in favour of the Appellant and against the Respondents - appeal allowed. - Comp. App. ( AT ) No. 176 of 2022 - - - Dated:- 30-9-2022 - [ Justice M.Satyanarayana Murthy ] Member ( Judicial ) And [ Dr. Ashok Kumar Mishra ] Member ( Technical ) For the Appellant : Mr. Kapil Sibal, Mr. Neeraj Kishan Kaul, Mr. Amit Sibal and Mr. Jayant Mehta, Sr. Advocates, Mr. Padam Khaitan, Ms. Nandini Khaitan, Mr. Pratik Shanu and Ms. Raveena Rai , Advocates For the Respondent : Mr. Abhishek Manu Singhvi, Sr. Advocate, Mr. Arijit Majumdar, Mr. Soumabho Ghose, Mr. Deepan Kumar Sarkar, Advocates for R1. Mr. Ramji Srinivasan, Sr. Advocate, Ms. Kinjal Sheth, Advocates for R2. Mr. Mukul Rohatgi, Sr. Advocate, Mr. Abhijit Sinha, Mr. Raghav Shankar, Mr. Arunabha Deb, Ms. Akansha Kaushik, Advocates for R4. Mr. Krishnendu Dutta, Sr. Advocate for R7, Ms. Ashika Baga, Advocate for R10 ORDER ( Per Hon ble Mr. Justice M. Satyanarayana Murthy ) Aggrieved by the order dated September, 20, 2022 passed by the National Company Law Tribunal, Kolkata (h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order was extended on April 7, 2021. Later the order was not extended in the month of August, 2022, the 1st Respondent filed an application to recall the undertaking given on June, 26th, 2019 based on subsequent developments. v. The Application to recall the undertaking was allowed on September 20, 2022 by impugned order, vacated interim order / direction, on the sole ground that the settlement failed. The Tribunal did not afford an opportunity much less reasonable to submit reply to the Petition and thereby denied opportunity to rebut the allegation made in the petition; reserved the interlocutory application for order on the same day. vi. The main grounds urged in the appeal are that the Interlocutory application is frivolous and filed abusing process of law. The NCLT did not appreciate the factual basis and the findings that there is no impediment from the Respondent to implement the purported resolution regarding digital division and business, passed in the Board Meeting held on 24th April,2019 on the sole ground that in Settlement talks failed is erroneous. vii. It is also further contended that no relief was sought for vacating the interim order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other print publications of respondent No. 1. Another event that has been cited in the petition is that when the petitioner No. 1 Mr. Aveek Sarkar has directly questioned the authority of the management of the company pertaining to recruitment of the staff. In one such instance the petitioner No. 1 had sought to hire one Ms. Debashree Chadda against the policy of the company and when the HR Department questioned the recruitment, this was taken as an encroachment in the domain of digital division, which, as per the petitioner was supposed to be run by him independently, thus seeking to portray that the Digital Division considered itself independent of the company and its Board of Directors. This position is also starkly brought out by the petitioner No. 1 wherein it is even denied that affairs of digital division are subject to the control of Board of Directors of the Company. In this regard, certain mails exchanged between the petitioner No. 1 i.e. Mr. Aveek Sarkar and the Managing Director Ms. DD Purkayasth have also been annexed in the petition which bring out a corporate feud between petitioner No. 1 and the Management of ABP represented by its Managing Director in the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial to the interest of company by publishing a news item which attracts an offence punishable under Section 228-A of the IPC for which Chief Editor is being prosecuted. 7. It is further contended that the Respondents in detail explained the circumstances which lead to filing of the interlocutory application No.86/KB/2022. Finally, the Ld Sr. Counsel contended that the Appellant suppressed material papers thereby not entitled to claim any relief. Moreover, this tribunal while sitting over an appeal cannot reverse order, unless the order is totally against law and perverse placed reliance on five orders passed by the Co-ordinate Bench of this Tribunal and requested to affirm the order under challenge. 8. Mr. Ramji Srinivasan, ld Sr. Counsel for the R2 made a strenuous attempt to support the order under challenge, drawing attention of this Tribunal to Section 241 and 242 of the Act, to contend that neither there is any oppression nor mismanagement proved. On the other hand, the act of the Appellant No.1 is prejudicial to the interest of the company. 9. Whereas appearing for R4, Mr.Mukul Rohatgi, learned Sr. Counsel and Mr. Abhijeet Sinha, learned counsel demonstrated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Injunction restraining the Respondents form giving any effect or further effect to the purported decision taken at the Board Meeting of April 24, 2019 regarding the reporting structure of the digital content team and digital business team of the Company; f. Injunction restraining the Company from incurring any expenses for the purpose of instant litigation. g. The Respondent nos. 7, 8 and 9 be restrained from involving themselves in the affairs or business of the Company; h. Directions be passed to ensure that the digital division of the Respondent no.1 be allowed to function independently under the aegis of the Petitioner no.l, without interference from the Respondents; i. Restore the cut made in the budget of digital division for FY 2018-19; j. this Tribunal be pleased to restrain the Respondents from in any manner whatsoever, directly or indirectly, alienating or disposing of or encumbering or creating any third party right(s) in the property, assets and investments of the company as well of any of its subsidiaries; k. This Tribunal be pleased to direct company to ensure that it remains a neutral party and provides all assistance of this Tribunal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which comes up for consideration today alleging oppression and mismanagement of R-1 Company by the respondents. Both sides jointly submit that an order be passed with consent that they may be permitted to continue with talks of settlement for arriving at a settlement. On the joint statement of the parties it is recorded that The Parties have submitted that they are in talks for settlement, the stands adjourned to 26 August 2019. In view of the settlement discussions, Counsel for the Respondents states that they shall not implement the purported resolution regarding the digital division and business passed in the board meeting of respondent no. 1 held on 24 April, 2019 till such settlement talks are on and in any event till the next date of hearing, i.e. till 26 August, 2019. In the event settlement cannot be reached, the parties shall inform the Tribunal of the same on the next date of hearing, i.e. 26 August 2019 whereupon the Petitioners shall be at liberty to pray for interim reliefs, which will then be considered. List the matter on 26/08/2019, for recording settlement or for hearing, as the case may be. The above order was extended from time to time, i.e., on 17th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that denial of an opportunity to file counter to vacate petition opposing the plea amounts to depriving in the party from its valuable right to file counter. It would be better to reproduce the relevant paras of the above mentioned judgments. Para 3, 9 to 12 13 is extracted below: 3. Replying to the preliminary submission, Dr. Abhishek Manu Singhvi, learned Senior Counsel appearing for the writ appellant, would submit that the interim order dated 26-7-2021 was passed in presence of learned counsels for respondents No.1 to 5 and thereafter, when the matter came-up for hearing on 28-9-2021, copy of rejoinder was served to learned counsels for the respondents and time was sought to file reply to the application for vacating stay which was filed along with return by respondent No.5, but the application for vacating stay was taken-up for hearing, though notices were not issued on that application for stay and no time was granted to file reply to the said application by which the writ petitioner / writ appellant herein has been deprived of filing reply to the said application, as right to file reply to the application for vacating stay was important right of the writ appellant. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties to a definite issue. The purpose of pleading is also to eradicate irrelevancy. In order to have a fair trial it is imperative that the party should state the essential facts W.A.No.342/2021 so that other party may not be taken by surprise (see Ram Sarup Gupta v. Bishun Narain Inter College4). 11. Right to make pleading in a writ petition is more important than right to make pleading in a civil suit. Distinction between a pleading under the Code of Civil Procedure and a writ petition or a counter affidavit filed in a writ petition has been brought-out by their Lordships of the Supreme Court in the matter of Bharat Singh and others v. State of Haryana and others5 in following words: - While in a pleading, that is, a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petition or in the counter-affidavit not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it. 12. In the aforesaid judgment, their Lordships of the Supreme Court have clearly held that while in a pleading that is a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellants is that the order is bereft of any reasons and the I.A 86/KB/2022 is not decided on merits whereas the Ld. Sr. Counsel appearing on behalf of the Respondents contended that the order is a consequence of failure of settlement talks, since, liberty was given to intimate about settlement, impugned order does not require elaborate consideration of facts and law, consequently it is not a ground to set aside the order under challenge. 19. In view of the contentions of both parties, we shall now advert to relevant rules which deals with order of NCLT. Para XIX of NCLT rules deals with disposal of cases and pronouncement of order. According to Rule147 all orders or directions of the Bench shall be stated in clean and prescribe terms in the last paragraph of the order. In the absence of any specification as to contend the order, the Tribunals may fall back on the contents of general orders passed by Courts or Tribunals. 20. It is settled law that the Court or Tribunal shall record reasons for its conclusion on the basis of merits. What an order should contain normally is not specified anywhere but the order must be reasoned one since the judgment or order in its final shape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng costs; and (vi) Finally, the order of the Court. Keeping in view various principles and observations, the Apex Court laid down certain guidelines for writing judgments and orders in Joint Commissioner of Income Tax, Surat, Vs. Saheli Leasing and Industries Limited (Civil Appeal No. 4278 of 2010) in para No. 7 of the judgment and they are extracted hereunder: 7. These guidelines are only illustrative in nature, not exhaustive and can further be elaborated looking to the need and requirement of a given case:- a) It should always be kept in mind that nothing should be written in the judgment/order, which may not be germane to the facts of the case; It should have a co-relation with the applicable law and facts. The ratio decidendi should be clearly spelt out from the judgment/order. b) After preparing the draft, it is necessary to go through the same to find out, if anything, essential to be mentioned, has escaped discussion. c) The ultimate finished judgment/order should have sustained chronology, regard being had to the concept that it has readable, continued interest and one does not feel like parting or leaving it in the midway. To elaborate, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by both parties. Courts/Tribunals ought to be cautious and only on being satisfied that there is no fact which needs to be proved despite being in admission, should proceed to pass judgments (vide Balraj Taneja and another Vs. Sunil Madan and another AIR 1999 SC 3381 . The need for recording of reasons is greater in a case where the order is passed at the original stage, a decision without reasons is like grass without root, the requirement to record reasons is one of the principles of natural justice as well and where a statute required recording of reasons in support of the order, it must be done by the authorities concerned as held by the Apex Court in S.M.Mukerji Vs. Union of India 1990 Crl.L.J.2148 . 21. In the present case, the judgment is only repetition of, the pleadings, contentions of the parties and the analysis by the Judge is only two or three paras consisting of four or five lines. Therefore, the reason only recorded by the Tribunal in the impugned order is that the settlement was failed and in pursuance of the order dated 28th June 2019, the parties are given liberty to inform to the Tribunal to pass appropriate order but no reasons have recorded by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is under obligation to decide the petition on merits without leaving any stone unturned, the Tribunal specifically held that the order was not passed on merits. This itself sufficient to conclude that the order was passed by the Tribunal not on merits. 26. The counsel for the Respondents contended that the order cannot be reversed unless the order is totally against the law are perversed, merely because the Tribunal did not record reason, the order cannot be set aside. Therefore, we hold that the order under challenge is unreasoned and without focused consideration of various contentions raised by both Appellants and Respondents before the Tribunal. Consequently, the order is bad and liable to be set aside. Accordingly, the point is answered against the Respondents and in favour of the Appellants. 27. In view of the above discussion, we find no substance in the contention, the same is hereby rejected. Accordingly, the point is answered. Point No.3 28. One of the contentions urged by the learned counsels for the Respondent is that the acts of the Appellants No.1 are prejudicial to the interest of the company. No doubt, the act complained against the 1st Appellant if re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different view may not have justified to interfere with the trial court exercise of discretion after referring to those principles in the Printers (Mysore) Pvt. Ltd. Vs. Pothan Joseph 1960 AIR 1156, 1960 SCR (3) has held at para 14: Where the discretion vested in the court under s. 34 has been exercised by the trial court the appellate court should be slow to interfere with the exercise of the said discretion. In dealing with the matter raised before it at the appellate stage the appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. As is often said, it is ordinarily not open to the appellate court to substitute its own exercise of discretion for that of the trial judge; but if it appears to the appellate court that in exercising its discretion the trial court has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order in nonchalant manner which will not stand to the legal scrutiny by this Appellate Tribunal. Therefore, the findings recorded by the Tribunal for vacating the interim order on the ground that the settlement was failed, without deciding the claim of the appellant for interim relief is an erroneous approach. Where the Tribunal did not record such findings, this Appellate Tribunal cannot undertake the exercise of recording any reason or findings as to the oppression of minority shareholders or mismanagement of the Company which are mandatory to claim relief under Section 241 242 of the Act. Therefore, the contention of the Respondent No.4 needs no further consideration by this Appellate Tribunal and such contentions has to be considered by the Tribunal itself. 33. One of the contention of Mr. Abhishek Manu Singhvi, Ld Sr. Counsel for the Respondent No.1 is that, in the matters like the instant case, the court shall not interfere with the order passed by the Tribunal except to direct the Tribunal to dispose the main petition by sustaining the order. In support of his contention, he placed reliance on five judgment of this Tribunal passed by Coordinate Bench: Pradeep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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