9911796707
TMI Blog2023 (1) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ting an Intervention Application is entitled to intervene in support of one or other side. The intervener is well within its rights either to support the order dated 08.10.2021 or to oppose the said order. But when the Company Appeal (AT) Ins. No. 880 of 2021 which has been filed challenging the Order dated 08.10.2021 is sought to be withdrawn, there is no proceeding in which intervener can be heard in opposition of the Order dated 08.10.2021. Proceedings under the IBC are proceedings in a special statute with timeline where limitation prescribed under the Act is for a purpose - Order 23 which came for consideration before the High Court pertains to withdrawal of suit or amending part of claim, the restriction contained in Order 23 for withdrawal were for purpose of object and in the context of Order 23 of the CPC observations as noted above were made by the High Court. It was held that withdrawal cannot be as a matter of course and its Court s discretion. In the present case, Order dated 08.10.2021 has not been challenged by the SREI Equipment Finance Ltd. who has sought intervention. The judgment of the Hon ble Supreme Court relied on by the Appellant do support the content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. On 28th June, 2004, a Memorandum of Understanding was executed between the Corporate Debtor, Shree Ram Urban Infrastructure Ltd. Vijay Infrastructure Technology Pvt. Ltd. ( VIT in short) a sister concern of the Corporate Debtor and Respondent No. 1 for sale, transfer, assignment and conveyance of the property admeasuring 20,955.40 sq. mts. situated at Plot No. 5A of Lower Parel Division. iii. The Respondent No. 1-Kalpataru Properties Pvt. Ltd. had paid a sum of Rs. 30 Crores to the Corporate Debtor towards the sale consideration for transfer of subject property. In the year 2005, the Corporate Debtor sought to resile from the Agreement and failed to complete the sale transaction. The Respondent No. 1 referred the dispute to Arbitration for inter alia as specific performance of the Agreement and transfer of subject property with all rights under the agreement. On 29th August, 2016 an Award was passed by the Arbitral Tribunal in favour of the Respondent No. 1 in terms thereof the Corporate Debtor and Vijay Infrastructure Technology Pvt. Ltd, a sister concern of the corporate debtor were ordered and directed to specifically perform the agreement. The Corporate Debtor was di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titlement of the Corporate Debtor. viii. I.A. No. 1921 of 2021 was filed by Kalpataru Properties Pvt. Ltd.- Respondent No. 1 before the adjudicating authority seeking a direction to Respondent No. 2 to do all such acts as may be necessary for executing the conveyance deed and other documents of transfer in CP(IB) No. 494/MB/2019 after receipt of the balance consideration. In I.A. No. 1921 of 2021, objection was filed by VIT through I.A. No. 2107/2021 opposing the prayer of the Kalpataru Properties Pvt. Ltd. in I.A. No. 1921 of 2021. Resolution Professional has filed its Reply to I.A. No. 1921 of 2021 relaying on Section 14 of the IBC, 2016. In its Reply, Resolution Professional submitting that completion of transaction in pursuance of decree of arbitral award ordered by the High Court will be beneficial for the corporate debtor and execution of formal conveyance by the Corporate Debtor in favour of the Applicant-Kalpataru Properties Pvt. Ltd. valuable balance sale consideration of Rs. 75,30,00,000/- would be available to the Corporate Debtor to make the CIRP possible and to conclude it as a going concern. ix. The Adjudicating Authority after hearing the Applicant Kalp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been filed by the Indiabulls Housing Finance Ltd. praying to set aside the Order dated 08.10.2021. 3. This Tribunal passed an Interim Order in Company Appeal (AT) Ins. No. 880 of 2021 on 28.10.2021 staying the prayer b granted vide Order dated 08.10.2021 by the Adjudicating Authority. 4. Civil Appeal No. 7050 of 2022 was filed by Kalpataru Properties Pvt. Ltd. and Others challenging the Interim Order passed by this Tribunal dated 28.10.2021. Hon ble Supreme Court on 14.11.2022 passed following order in Civil Appeal No. 7050 of 2022: C.A. No. 7050/2022 Learned senior counsel for the appellant, on instructions states that the appellant is willing to bring in the money in terms of the arbitral award, approximately Rs. 75.30 crores in the corporate debtors account and the Resolution Professional will execute the sale deed on the said amount being so deposited. He submits on instructions that the amount will be deposited within 10 days. On the aforesaid statement taken on record, learned counsel for respondent no. 1 who is the appellant before the NCLAT submit that if the amount is brought in, the sale deed can be executed by the Resolution Professional and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior counsel submits that at least he should have been given liberty to be heard even as the status as an intervener before the NCLAT. We do believe that this controversy should be resolved by the NCLAT itself i.e. whether on the appellants seeking to withdraw the appeal, there can be any impediment in withdrawal of the appeal and is the NCLAT really required to comment on the merits of the order of the NCLT at the behest of an intervener. We further make it clear that we are not expanding the array of parties before the NCLAT as a number of entities seems to have jumped into the picture as the matter has gone on before this Court. We make it clear that only the parties/existing interventionist before the NCLAT will have the right of hearing. In view of the orders passed in Civil Appeal No.9062/2022, this appeal will also to be listed before the Bench presided over by the Chairman. In view thereof, the final picture which would emerge would be before the NCLAT and to that extent the order passed by us on 14.11.2022 would be kept in abeyance till the NCLAT resolves the issue. List on 07.02.2023. 6. I.A. No. 2623 of 2021 which is filed in Company Appeal ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution. The CIRP has already been initiated against the SREI Equipment Finance Ltd. pursuant to order dated 08.10.2021 passed by the NCLT, Kolkata Bench, Kolkata in CP(IB) No. 294/2021. Mr. Rajnish Sharma has been appointed administrator of the intervener who authorized officers and management of the Corporate Debtor to continue to undertake requisite action in pursuance of which the present application has been filed. It is submitted that intervener s application filed under Section 7 of the Code, CIRP was initiated against the Corporate Debtor vide Order dated 06.11.2019. The SREI Equipment Finance Ltd. is a member of CoC of the Corporate Debtor and is a secured Financial Creditor. It is submitted that the Respondent No. 1-Kalpatatru Properties Pvt. Ltd. by I.A. No. 1921 of 2021 is seeking enforcement of the decree during the CIRP of Corporate Debtor which is not permissible in view of the provisions of Section 14(1)(b) of the Code. It is submitted that intervener has also filed objection before the Adjudicating Authority vide I.A. No. 2205 of 2021 in I.A. No. 1921 of 2021 which objection has not been considered by the Adjudicating Authority by passing the Order dated 08.10.2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplemented which cannot be objected by the Applicant. 14. Mr. Arun Kathpalia, Learned Sr. Counsel appearing for the Kalpataru Properties Pvt. Ltd. submits that the MoU between the Kalpataru Properties Pvt. Ltd. and Indiabulls Housing Finance Ltd. was executed on 28th June, 2004 and the arbitral award in favour of the Kalpataru was delivered on 29th August, 2016 which was affirmed by both Learned Single Judge and Division Bench of the Bombay High Court dismissing the Application under Section 34 and 37 of the Arbitration and Conciliation Act, 1996 filed by the Corporate Debtor. SLP Challenging the Order of Bombay High Court filed by the Official Liquidator in which the Resolution Professional was also permitted to be substituted got dismissed by Hon ble Supreme Court on 16.10.2022 hence no error was committed by the Adjudicating Authority in passing the Order dated 08.10.2021 on application filed by the Respondent No. 1 seeking direction for execution of conveyance. Mr. Arun Kathpalia submits that IBC contemplates strict timeline of completion of all proceedings which timeline can not be allowed to be thwarted by the Applicant by filing this Application. The Applicant having not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether Applicant who has not filed any Appeal against the Order dated 08.10.2021, can claim for setting aside the Order dated 08.10.2021 on the basis of Intervention Application? ii. Whether the withdrawal of Company Appeal (AT) Ins. No. 880 of 2021 can successfully be opposed by the Applicant? 19. Both the questions being inter-related are being considered together. The Order dated 08.10.2021 which has been challenged in the Company Appeal (AT) Ins. No. 880 of 2021 has been passed by the Adjudicating Authority on an Application filed under Section 60(5) of the Code. IBC provides for filing an Appeal against the Order passed by the Adjudicating Authority by virtue of Section 61(1). Section 61(1) (2) are as follows: Section 61.-(1) Notwithstanding anything to the contrary contained under the Companies Act 2013, any person aggrieved by the order of the adjudicating authority under this part may prefer an appeal to the National Company Law Appellate Tribunal. (2). Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal: Provided that the National Company Law Appellate Tribunal may allow an ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptive mechanism, affecting rights of stakeholders who are not necessarily parties to the proceedings, mandates diligence on the part of applicants who are aggrieved by the outcome of their litigation. An appeal, if considered necessary and expedient by an aggrieved party, is expected to be filed forthwith without awaiting a free copy which may be received at an indefinite stage. Hence, the omission of the words from the date on which the order is made available for the purposes of computation of limitation in Section 61(2) IBC, is a consistent signal of the intention of the legislature to nudge the parties to be proactive and facilitate timely resolution. 22. Now we need to notice the judgments which have been relied by the Learned Counsel for the Applicant. The first Judgment relied on by the Applicant is Judgment of Madras High Court The Law Weekly, 1934 Part 13, Page 521, Volume 39. In the above case, a suit filed by the plaintiff against two brothers of deceased husband for decree directing the defendant to render on account of the assets belonging to her estate was sought to be withdrawn by the plaintiff which was opposed by the intervener who has filed an I.A. in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perative. The Court if satisfied that the suit has been compromised, is bound to pass a decree in accordance with the terms thereof. That being so, it has been held that the special procedure therein laid down is not affected by the general provisions of O. 23 R. 1. The principle to be kept in view in a matter like this has been stated by Jenkins C.J. in Satyabhama Bai V. Ganesh Balkrishna (2) at page 18; . 23. The High Court after considering the case observed that suit cannot be dismissed at that stage and application of the plaintiff ought to have been kept pending and till the I.A. No. 673-674/1931 were decided. Following is the observations made by the Madras High Court: On a due consideration of the circumstances in this case, I am of opinion that the suit cannot be dismissed at this stage by reason of the plaintiff s withdrawal from it. Her application for the unconditional dismissal of the suit by reason of the withdrawal cannot now be granted. It depends upon the result of the enquiry which the lower Court has undertaken in respect of I.As 673 and 674 of 1931. The lower Court would have done well, if it kept the plaintiff s petition (I.A. 249 OF 1933) p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh suit for the subject matter of the suit or part of the claim. There is no other eventuality or situation provided in the said rules for withdrawal of any action. The Legislature in its wisdom has provided the aforesaid restricted provision for withdrawal for the simple reason, in our opinion is that a party cannot go out from the Court after filing a lis, at their own whims, for once a lis is filed it has to be dealt with in appropriate manner by the Court and Court alone. The Learned Trial Judge has nowhere recorded such satisfaction and even there is no prayer that the suit is formally defective or for some other reason fresh action is to be brought. It appears from the judgement and order of the Learned Trial Judge that no leave was prayed for by the petitioner to bring a fresh action nor leave is granted either. According to us if any order is required to be passed for withdrawal the Learned Trial Judge cannot assume jurisdiction unless the application mentions either of the aforesaid two grounds. We have already noted that neither of the two grounds has been mentioned in the said application for withdrawal, we have seen so from the original petition produced before this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opers Pvt. Ltd. (4.78% shares) (hereinafter referred to as the appellant ) and shri R.L. Gaggar(7.61% shares), alleging mismanagement and oppression. 4. Respondent 2 contested the said company petition by raising the preliminary issue of maintainability, stating that the valid shares held by the petitioners and consenting parties therein, were valued at less than 10% of the total shareholding, and thus, the petition itself was not maintainable. The Company Court Judge vide order dated 13-1- 1992/14-1-1992, dismissed the said company petition as not maintainable, allowing the aforementioned preliminary objection, without entering into the merits of the case 28. For purpose of recalling the Order of dismissal of the Appeals and for transposition of Chatterjee brothers before the Division Bench as pro forma respondents whilst substituting the appellant as the sole appellant was the prayer which application was dismissed by the Division Bench vide Order dated 02-02-1995 against which Order, SLP 19193 and 19217 of 1995 was filed before the Hon ble Supreme Court which appeals were disposed of vide Judgment and order dated 26th April, 1996 permitting the Appellant to prefer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintenance of an appeal against the judgment of the learned Single Judge dated 2-2-1995 was in fact an offer made by the respondents themselves, with a further undertaking being provided by them with respect to the question of limitation and locus standi of the appellant, stating that the same would not be raised. What was granted to them was only permission to raise the contention that as on the date of actual filing of the company petition before the Company Court Judge, the petitioners along with the consenting parties, had 10 % shareholding out of the total stakeholding of the company. 30. It is relevant to notice that in the above case Appeal which was filed was with leave of the Hon ble Supreme Court which was erroneously rejected by the Calcutta High Court disregarding order of the Supreme Court dated 26.04.1996. Above judgment of the Hon ble Supreme Court is clearly on facts of its own and has no application in the present case before us. 31. Another judgment of the Hon ble Supreme Court relied on by the Applicant is Judgment of the Supreme Court in R. Dhanasundari Alias R. Rajeswari V. A.N. Umakanth Ors. [2020 14 SCC 1]. In the above case, the facts have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 11. (2.5) However, the other plaintiffs (Nos. 2 to 4 and 6 to 8) took exception to the aforesaid transaction of sale by the plaintiff No. 5; they revoked his power of attorney and moved an application (IA No. 468 of 2003) for transposition of the plaintiff No. 5 and his purchasers (plaintiff Nos. 9 to 11) as defendants. This application was allowed on 25.06.2003 and, accordingly, the plaintiff No. 5 and plaintiff Nos. 9 to 11 were transposed as defendants 3 to 6 in this suit. (2.6) Thus, at and until the given juncture, the proceedings and developments had been that in the civil suit for cancellation of sale deed executed by the defendant No. 1 in favour of the defendant No. 2, the original sole plaintiff had expired; his legal representatives came on record as plaintiff Nos. 2 to 8 with plaintiff No. 5 being the power of attorney holder of the other plaintiffs; the suit was decreed ex parte and the said attorney sold the suit property to three persons; when the ex parte decree was set aside and the suit was restored to its number, the said purchasers came on record as plaintiff Nos. 9 to 11; and later on, the said seller and purchasers (plaintiff Nos. 5 and 9 to 11) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who or to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit be added. 9. On the other hand, the law of procedure in relation to withdrawal and adjustment of suits is contained in Order XXIII of Code of Civil Procedure. As per Rule 1 thereof, a plaintiff may seek permission for withdrawal of suit or abandonment of a part of claim. Rule 1-A thereof1 deals with an eventuality where the plaintiff withdraws his suit or abandons his claim but a pro forma defendant has a substantial question to be decided against the co-defendant. This Rule 1-A of Order XXIII CPC reads as under:- 23.(1-A). When transposition of defendants as plaintiff may be permitted.- Where a suit is withdrawn or abandoned by a plaintiff under Rule 1, and a defendant applies to be transposed as a plaintiff under Rule 10 of Order 1, the Court, shall, in considering such application, have due regard to the question whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court upheld the Order of the transposition. Present is not a case where there is any case for any transposition nor principles applicable in Order 23 Rule 1-A are attracted which permits the transposition of defendant as plaintiffs, the above judgment in the present case, does not help the applicant in any manner. 35. Learned Counsel for the Appellant has relied on Judgment of the Hon ble Supreme Court in Civil Appeal No. 5909 of 2021 Acharya Tejendraprasadji Devendraprasadji Anr. Vs. The Charity Commissioner Ors. . In the above case, against a decree passed by City Civil Court framing scheme for administration of the temple, appeals were filed in the High Court. Applications were filed by the Appellants to withdraw the Appeals which were dismissed by the High Court. Withdrawal was opposed by the intervener and order of the High Court was challenged before the Hon ble Supreme Court. SLP were withdrawn setting aside the Judgment of the High Court. When the Appeal again was listed before the Gujarat High Court, High Court refused to terminate the proceedings on the basis of withdrawal as prayed by the Appellant. Against the subsequent order dated 05.03.2015 of the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or variation of the Scheme. Such an undertaking is not binding on third parties. Therefore, it is not as though the rights of 3rd party intervenors are completely obliterated. They always have their own remedies in Law and they cannot insist upon their grievance being addressed to in the appeals filed by the appellants herein. 36. Hon ble Supreme Court in the above case has observed that any person objecting the final decree had to independently file an Appeal. In the present case, Order dated 08.10.2021 has not been challenged by the SREI Equipment Finance Ltd. who has sought intervention. The judgment of the Hon ble Supreme Court relied on by the Appellant do support the contention of the Appellant. Hon ble Supreme Court has held that 3rd parties including interveners have their own remedies in law and they cannot insist upon their grievance being addressed in the appeals filed by the Appellants herein. 37. We also refer to one Judgment of the High Court of Madhya Pradesh reported in 2014 SCC OnLine MP 2103 Jeevan Singh Chhatwal V. Bank of Baroda and Ors. MP High Court has also observed that intervener could not claim any relief for himself in paragraph 5 of the Judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
