9911796707
TMI Blog2024 (7) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... the reason being that:- (i) No demand notice was ever issued to the applicant. (ii) That he was not a party to the proceedings. (iii) There is no cause of action against the appellant. (iv) That the order of impleadment of the Appellant was passed without the prior notice to be issued to the Appellant. It is contended by the Appellant M/s. Inkel Limited, that it had come to know of the Impugned Order of 26.11.2020, only when he received the notice on 03.12.2020 based on regards the order passed by the Learned Adjudicating Authority whereby he was directed to be impleaded as party in the Company Petition praying for initiation of the CIRP Proceedings. The Appellant has further contended that when he received the notice dated 03.12.2020, calling him to participate in the proceedings by the Learned Adjudicating Authority, only then he could learn from the Registry of the NCLT, Kochi Bench, that he has been impleaded as a party in the proceedings in IBA/30/KOB/2020 by the Impugned Order as rendered in IA/187/KOB/2020. On receipt of the notice, he immediately procured the Certified Copy of the Impugned Order, and therein he found that the Impugned Order wherein he has been im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant cannot be treated as to be an "Additional Corporate Debtor", for the purposes of proceedings under section 9 for the principal Corporate Debtor, until and unless the Operational Creditor is able to establish by evidence on record that the affairs of the Respondent No.2 herein, that is the Corporate Debtor, was controlled and managed by the Appellant, and that, in the absence of the establishment of the said fact by the Operational Creditor, the Appellant ought not to have been permitted to be impleaded in the proceedings as an Additional Corporate Debtor by the Learned Adjudicating Authority, merely on the basis of the fact that he was a majority shareholder of the Corporate Debtor. He further submits that the issue of impleadment of an Additional Corporate Debtor in a CIRP Proceedings has been quite elaborately considered in the matters of Vodafone International Holdings BV Vs Union of India, where it has been emphasized that the subsidiary companies are separate legal entities, when they are vested with their own managerial and operational rights. By this reasoning, the Corporate Debtor, that is, Respondent 2 being a subsidiary of the Appellant cannot be taken as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the arbitration proceeding and when the same were being undertaken, the Appellant has been sought to be impleaded by referring him as to be an Additional Corporate Debtor, by the Impugned Order. This has resulted into a situation where many of the investors of the Appellant, in their own independent undertaking are stated to have lost faith in the Appellant's Company and this has severely / adversely affected the functioning of the Appellant in its business and in other several allied matters. He has submitted that owing to the initiation of the CIRP Proceedings under section 9, as sought for by the Operational Creditor, if the Appellant is permitted to be impleaded as an Additional Corporate Debtor, there will be a material loss to the multiple projects, which are being undertaken by the Appellant in the state of Kerala, where huge public money is at stake. And further all those businesses and the other projects in which the Appellant is involved may be affected. Materially he has submitted that the Operational Creditor cannot be permitted to take the liberty to make the Appellant liable for the default, if any, which has been committed by the Respondent No.2 Company, becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.155/2018 to push forward his case for impleading M/a. Inkel Ltd. in the CIRP Proceedings. While drawing its reasoning from Para 14 & 15 of the said Judgment, the Learned Adjudicating Authority has come to the conclusion that in view of the directors' report given to the shareholders, as part of the annual returns filed by the proposed Corporate Debtor for the Financial Years 2018 & 2019, M/s. Inkel holds a 65% share in M/s. Seguro Foundation and Structures Pvt. Ltd., and the latter is only a subsidiary of M/s. Inkel and in view of the fact that the Managing Director is only a minority shareholder, applying the ratio of the Judgment of M/s. Mamatha as referred to herein above, the present Appellant having acquired the major shareholding of the Corporate Debtor to the tune of 65% and having a major control over the affairs of the Corporate Debtor ever since 1st December 2017, he would have to be the necessary party to be impleaded as an Additional Corporate Debtor the Company Petition. Ultimately, the Learned Adjudicating Authority based on the aforesaid logic has passed the following orders: - "Registry is directed to carryout necessary impleadment in the IBA and issue noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een allowed without there being a notice issued to him, who was sought to be impleaded in order to enable him to put forth his views on whether at all he happens to be the necessary party to the proceedings or not. Hence, primarily the contentions of the Appellant is that in the absence of their being any notice prior to the Impleadment, that itself would vitiate the Impugned Order. This contention of the Learned Counsel for the Appellant is being vehemently refuted by the Learned Counsel for the Respondent contending that if the vital principles of Order I, Rule 10 of CPC are taken into consideration, it is an exclusive prerogative of the Court / Tribunal to come to a conclusion as to whether, any particular entity or a person, is at all required to be made as a party in a proceedings. It will exclusively depend upon the rationales and determination to be made by the Court / Tribunal, prior to passing any order on the Impleadment Application. He has further argued that the power of determination, as to whether the subject matter in the Judicial proceedings could have been effectively decided after impleadment of a particular party to the proceedings, has been exclusively left ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be impleaded and notice would thereafter be issued to it. There is no scope, nor is this practice, for obvious reasons, at the very first instance and at the very initiation of the suit to show cause why it should be arrayed as a defendant. Of course, it is always open to the defendant as it would be available to a party impleaded in the course of litigation to file an application under Order I Rule 10(2) of the CPC for striking it out of the array of parties". He further refers to yet another Judgment rendered by the Hon'ble High Court of Bombay at Goa in the matters of Zavier Fernandes & Anr., Vs. State of Goa & Ors., wherein the person who was impleaded had contended in a proceeding before the Hon'ble High Court, that in the absence of there being any notice issued prior to his impleadment therein as a party, the notice or the order of the impleadment itself would violate the principles of natural Justice. Though this order was in the context of the provision of Lokayukta's Act, but still the Hon'ble High Court of Bombay at Goa, had drawn a conclusion that since the mandatory scheme for the purposes of impleading a person as the party to the proceedings do not prescribe for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) CPC and held that the "sub-rule is not about the right of a non-party to be impleaded as a party, but about the judicial discretion of the court to strike out or add parties at any stage of a proceeding". The discretion under the sub-rule, according to it, can be exercised either suo motu or on any party's application. The court can strike out any party who is improperly joined; it can also add anyone as a plaintiff or as a defendant if it finds he is a necessary or proper party. "Such deletion or addition can be without any conditions or subject to such terms as the court deems fit to impose". In exercising its judicial discretion under Order 1 Rule 10(2) of the Code, the court will of course act according to reason and fair play and not according to whims and caprice. 47. Finally, the icing on the cake is found in paragraph 26 of the Judgment. Ashwani Kumar aptly observes that Order 1, Rule 10 of the code expressly does not provide that a proposed party must be heard before his impleadment. But, then, the provision does not also mandate that under no circumstance or situation should any notice go to the proposed party. Harmoniously construed, the provision, according to Ash ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
