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TMI Blog2024 (4) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners. 2. The case of the Petitioners in the Petition is as follows:- A] On 3rd September 2016 an Extra Ordinary General Meeting ("EOGM") of Petitioner No. 1 was held whereby Jagdischandra Mansukhani and his associates/family members ("JCM group") were removed from the board of the Petitioner No. 1-Company due to various acts of mismanagement. B] Between 2018-2021, the Registrar of Companies, Mumbai ("ROC") refused to take on record the forms for the removal of the JCM group since Petitioner No. 1 was marked to be under "Management Dispute". C] On 30th March 2021, Respondent No. 3, which is a non-banking finance company, filed Company Petition No. 312 of 2021, under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC"), before the NCLT. The said Company Petition was not served upon the present directors of Petitioner No. 1 but on the JCM group and the JCM group's Advocates filed their Vakalatnama on behalf of Petitioner No. 1 in the matter. D] In December 2021, Man Industries (India) Limited filed Writ Petition (L) 4798 of 2021 before this Court inter alia seeking an order directing the ROC to take on record the forms for the removal of the JCM group. By an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Mansukhani who were illegally appointed by the erstwhile management of Petitioner No. 1. This Resolution has also not been challenged before any Court or Tribunal. L] Thereafter, the NCLAT passed an Order dated 7th November 2023 in the Appeal filed by Respondent No. 3 against the NCLT Order dated 24th February 2023 and directed NCLT to decide the issue of limitation afresh by permitting Respondent No. 3 to file an Additional Affidavit to bring on record additional documents and by permitting Petitioner No. 1 to file a Reply to the Additional Affidavit and documents. Petitioner No. 1 was represented before the NCLAT by its true and correct representatives and not by the JCM group or their Advocates. M] By a Resolution passed by the Board of Petitioner No. 1, the Board revoked all authority granted to the Advocates appointed by the JCM group to represent Petitioner No. 1. This Resolution has also not been challenged before any Court. N] By an Order 18th December 2023, passed by NCLT, the Company Petition filed by Respondent No. 3 was restored. Petitioner No. 1 was not served with the pleadings in the matter and once again Advocate Mitika Agarwal unauthorizedly appeared on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on filed by Respondent No. 3 and rejected the said Interlocutory Application No. 859 of 2024 filed by Petitioner No. 1 for change of Advocate. 3. It is on this case that the Petitioner has challenged the Order dated 22nd March 2024 passed by the NCLT, and, in particular, the rejection of Interlocutory Application No. 859 of 2024 by the NCLT in the said Order. 4. Ms. Singhania, the learned Counsel appearing on behalf of the Petitioners, referred to that part of the Order dated 22nd March 2024, which rejected Interlocutory Application No. 859 of 2024 filed on behalf of the Petitioner No. 1. The said part of the Order reads as under:- "Interlocutory Application No. 859/2024. a) The present Interlocutory Application No. 859/2024 is filed u/s 60(5) of the IBC r/w Rule 11 of the National Company Law Tribunal Rules, seeking the following prayers: i. That this Hon'ble Tribunal be pleased to order and direct the registry to take on file and record the vakalatnama signed by the applicant in favour of the present advocate i.e. Advocate Devanshu P. Desia in Company Petition No. 312/2021; ii. That this Hon'ble tribunal be pleased order and declare that the earlier Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to file a Vakalatnama or Memorandum of Appearance as the case may be, in any pending case or proceeding before the Tribunal in which there is already a legal practitioner or authorised representative on record, shall do so only with the written consent of the legal practitioner or the authorised representative on record or when such consent is refused, with the permission of the Tribunal after revocation of Vakalatnama or Memorandum of Appearance as the case may be, on an application filed in this behalf, which shall receive consideration only after service of such application on the counsel already on record." 6. Ms. Singhania submitted that, in the light of Rule 120, it was imperative upon the NCLT to decide as to who would be entitled to represent the Corporate Debtor, i.e., Petitioner No. 1, before the NCLT. However, despite the same, the NCLT had refused to consider the same issue. 7. Ms. Singhania, further submitted that the Order passed by the NCLT on Interlocutory Application No. 859 of 2024 was passed in violation of the principles of natural justice. In this context, she submitted that paragraph (c) (at page 183 of the Petition) of the said order shows that the cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to make an Application to the NCLT for revocation of the Vakalatnama and serve the said Application on the earlier Advocate. However, although Petitioner No. 1 had filed such an Application, it had not followed the procedure provided under Rule 120 and have not served the same on the earlier Advocate. Ms. Behramkamdin submitted that, in these circumstances, the NCLT was correct in rejecting Interlocutory Application No. 859 of 2024 filed by Petitioner No. 1. 11. Ms. Behramkamdin submitted that Respondent No. 3 had an apprehension that the two groups seeking to control Petitioner No. 1-Company were creating disputes so as to deprive Respondent No. 3, who is the financial creditor, from proceeding further in the Petition filed by it under Section 7 of the IBC. Ms. Behramkamdin submitted that, for this reason also, no interference is called for in the said Order dated 22nd March 2024. 12. Further, Ms. Behramkamdin vehemently submitted that, if Petitioner No. 1 had any grievance in respect of the rejection of its Interlocutory Application by the said Order dated 22nd March 2024, then it was open to Petitioner No. 1 to file an Appeal challenging the said order. She vehemently submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summarised these principles only to deal with the submissions of Mr. Kadam that in this case we should not entertain the petition simply because there is an alternate and equally efficacious remedy of appeal to the NCLAT and thereafter to the Hon'ble Supreme Court. 38. Mr. Kadam's arguments overlook the fact that if these principles summarised above are attracted; the writ cannot be refused. The writ cannot be refused only because the party resisting the writ petition urges that there are alternate and equally efficacious remedies available to the petitioner approaching this court seeking a writ of certiorari to challenge the adverse order. As has been succinctly clarified by the Hon'ble Supreme Court that this writ of certiorari goes to a court. It may be issued at the request of parties, but it is not a writ which can be claimed by the parties. It is a writ which is directed or addressed to the court and the High Court can always issue it once it is satisfied that the orders impugned before it and challenged on the grounds mentioned above occasion a failure of justice. Thus, if the orders of the court or tribunal subordinate to this court result or occasion a failu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The operation of the order impugned in that writ petition was stayed by the Division Bench. Thereafter, there were further developments and noted in para 6. The further developments also were impugned in a writ petition filed before the same High Court. The Division Bench of the High Court disposed of all the petitions and set aside the directions in the order of the State Commission. The Division Bench also expunged the remarks contained in para 13.1 of the order. It is in these circumstances that the Hon'ble Supreme Court examined the rival contentions and particularly that the Division Bench of the Delhi High Court committed error by entertaining the writ petition ignoring the fact that the 1986 Act is a Code in itself and the remedy of appeal available against the order passed by the State Commission is an equally efficacious remedy. The Hon'ble Supreme Court also noted the argument to the contrary. From para 11 onwards, the Hon'ble Supreme Court referred to the settled principles. The Hon'ble Supreme Court held that the High Court does not act as a court of appeal against a decision of the court or tribunal to correct errors of fact and does not, by assuming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singhania referred to paragraphs 68 and 75 of the said judgement, which read as under:- "68. Coming to the facts of the present case, immediately after NCLT pronounced its judgment on 28-11-2019 and even before the certified copy was made available on 18-12-2019, KIAL had filed writ petition before the Division Bench of the Bombay High Court on 11-12-2019 on the principal ground, that the procedure followed by NCLT was in breach of principles of natural justice. Such a ground could be legitimately pursued before a writ court. In that sense, it was not a proceeding before a wrong court, as such. Perusal of the Judgment and order dated 28-1-2020, passed by the Division Bench of the Bombay High Court, which dismissed the writ petition on the ground of availability of alternate and equally efficacious remedy would reveal, that the said writ petition was hotly contested between the parties and by an order running into 32 pages, the Division Bench of the Bombay High Court dismissed the petition relegating the petitioner therein (i.e. KIAL) to avail of an alternate remedy available in law. 75. It has been clearly held, that when the proceedings invoked before a statutory authority ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 2024, the Petition filed by Respondent No. 3, under Section 7 of the IBC, has been admitted against the Corporate Debtor, i.e., Petitioner No. 1. For all these reasons, we are not inclined to invoke our writ jurisdiction in the present case. 19. In the light of the aforesaid discussion, and for the aforesaid reasons, we hereby pass the following Orders:- a) Writ Petition is dismissed. b) The Petitioners are at liberty to challenge the said Order dated 22nd March 2024 by filing an Appeal against the same before the NCLAT. If an Appeal is filed by the Petitioners within a period of two weeks from the date a copy of this order is uploaded in that event as the Petitioner was bona fide pursuing this Writ Petition the Petitioners' Appeal be decided on its merit and without an objection as to limitation. c) If such an Appeal is filed by the Petitioners, then the NCLAT is directed to consider all the issues raised in the Appeal, including the issue as to whether the NCLT was correct in dismissing the Interlocutory Application No. 859 of 2024 filed by Petitioner No. 1 for the reasons stated in the said Order dated 22nd March 2024. d) We direct the NCLAT to decide any such App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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