Ace Skill Development Private Limited vs Vinod M.M
- CitationCompany Appeal (AT) (CH) No. 28 of 2022 & I.A.No.318 of 2022
Ratio decidendi
The rule this decision rests on
An order that grants or directs substantive relief, here the appointment of a forensic auditor and a direction restricting statutory meetings, which is made without assigning reasons is legally infirm and cannot be sustained, since reasons form the essence of a fair and reviewable decision and their absence causes prejudice to the affected party. Principles of natural justice, though uncodified, require that a tribunal hearing the parties and deciding contested relief state reasons for its conclusion so that the superior forum can examine the validity and legality of the order, and an order passed in a non-speaking manner is to be set aside on that ground alone without examining its merits. Where an order is set aside for want of reasons, the proper course is to remit the matter to the tribunal below for a de novo decision, after affording both sides adequate opportunity to be heard, with a reasoned order to follow.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Company Appeal (AT) (CH) No. 28 of 2022 & I.A.No.318 of 2022 (Appeal under Section 421 of Companies Act, 2013) (Arising out of the order dated 23.02.2022 in CP/82(CHE)/2021 passed by the National Company Law Tribunal, Division Bench - II, Chennai) In the matter of: 1. Ace Skill Development Private Limited 2. Cruz Antony Prabhakar ... Appellants Vs 1. Vinod Meenoth Madthal & 2 Othrs. ... Respondents
Present:
For Appellants : Mr. P.H. Arvindh Pandian, Senior Advocate
For Respondents : Mr. E. Om Prakash, Senior Advocate
ORDER
(VIRTUAL MODE) 06.06.2022: Heard both the sides.
By consent of the Learned Counsels appearing for the 'Respective
Parties', the instant Company Appeal (AT) (CH) No.28 of 2022, on the file of
this 'Appellate Tribunal', is taken up for 'Final Disposal'.
According to the Learned Senior Counsel for the Appellant, the
'impugned order' dated 23.02.2022 in CP/82(CHE)/2021 was passed by the
National Company Law Tribunal, Division Bench II, Chennai in granting
Company Appeal (AT) (CH) No. 28 of 2022 Page 1 of 5 relief (1)"(b) appointing an independent forensic auditor to conduct the
forensic audit on the affairs of the 1st Respondent Company from 01.02.2018
and to submit a report before this 'Tribunal' and (2) the direction was issued
by the 'Tribunal' that the Respondent Company shall not conduct Statutory
Meetings and if at all any meeting is to be conducted, the same shall be carried
out only in the presence of a Chairman appointed by this 'Tribunal', for
which, a separate 'Interim Application' is to be filed and further that the
matter was directed to be listed on 28.04.2022 for reporting compliance".
In this connection, the Learned Senior Counsel for the Appellant
submits that the aforesaid order is not valid, in the eye of Law, because no
tangible / substantial reasons were assigned by the 'Tribunal' (National
Company Law Tribunal, Chennai in CP/82(CHE)/2021 dated 23.02.2022) in
so far as granting relief (b) and other relief are concerned of course, to and in
favour of the Respondents / Petitioners.
Although the Learned Senior Counsel for the Appellants took this
'Tribunal' to the relevant pages of the 'Appeal Paper Book' in the instant
Company Appeal (AT) (CH) No.28 of 2022, the manner in which the
aforesaid order came to be passed, yet, this 'Appellate Tribunal' on going
through the 'impugned order' dated 23.02.2022 in CP/82(CHE)/2021 passed
by the National Company Law Tribunal, Division Bench - II, Chennai, in so
Company Appeal (AT) (CH) No. 28 of 2022 Page 2 of 5 far as it relates to the relief of (b) appointing an independent forensic auditor
to conduct the forensic audit on the affairs of the 1 st Respondent Company
from 01.02.2018 and to submit a report before this 'Tribunal' and the other
direction issued to the Respondent Company not to conduct statutory
meetings etc., were passed in a non-speaking manner, bereft of reasons, being
assigned thereto. On this simple ground alone, this 'Tribunal', as of the
considered opinion, that the said order as mentioned 'supra' suffers from
'legal infirmity', which cannot stand all 'moments scrutiny' in Law.
It must be borne in mind that 'Reasons' found in an order are the 'Heart'
and 'Soul' of any 'Order' passed by the 'Tribunal' in a given case and that is
the essence of 'Fair Play' action. If the 'Tribunal' / 'Court' of Law passes an
'Order' at least with some kind of reasons being assigned therein and not
arriving at a conclusion, then it will enable the 'Superior Forum' to examine
the 'Validity' and 'Legality' of the 'Order' passed by it in a 'qualitative' and
'quantitative' manner.
It is true that 'Natural Justice' is uncodified but the principles are
'ingrained' into the conscience of a Homo sapien.
No wonder, an 'impugned order', bereft of reasons, may be a valid one
from the point of view of an 'Authority' / 'Tribunal', who had passed the same
Company Appeal (AT) (CH) No. 28 of 2022 Page 3 of 5 but to the affected, the same is not a valid one, as it infringes the right, thereby
causing hardship and prejudice to him.
The principles of 'Natural Justice' are not the edicts of a 'Statute'. It is
to be remembered that absence of furnishing reasons will give an individual a
sense of feeling of 'injustice', whether it be an 'Administrative' / 'Judicial' /
'Quasi-Judicial Forum' which passes it as opined by this 'Tribunal'.
In view of the fact that the 'impugned order' dated 23.02.2022 in
CP/82(CHE)/2021, so far as it relates to the relief of (b) portion and the other
direction that the 'Respondent Company' shall not conduct 'statutory
meeting' etc., were passed by the 'Tribunal' in a 'non-speaking' manner and
without assigning 'qualitative' and 'quantitative' reasons. At this stage, this
Appellate Tribunal, without traversing upon the merits of the matter,
simpliciter, sets aside the same and allows the instant Company Appeal in
furtherance of substantial cause of justice. No costs.
However, this 'Appellate Tribunal' remits back the matter to the
National Company Law Tribunal, Division Bench II, Chennai to pass a 'de
novo' orders in CP/82(CHE)/2021 in so far as it relates to the aspect of
appointing an independent forensic auditor to conduct the forensic audit on
the affairs of the 1st Respondent Company from 01.02.2018 and for issuance
of directions in regard to the conduct of statutory meeting, by providing Company Appeal (AT) (CH) No. 28 of 2022 Page 4 of 5 adequate opportunities to both sides to argue the matter and after 'Hearing'
the parties, the 'Tribunal' (National Company Law Tribunal, Division Bench
II, Chennai), also following the 'Principles of Natural Justice', is to assign
reasons for arriving at its just fair conclusion in granting the reliefs or
otherwise in the subject matter in issue. It is open to the respective sides to
canvass all factual and legal pleas before the 'Tribunal' (National Company
Law Tribunal, Division Bench II, Chennai), which shall be considered, while
passing a 'Reasoned Order' in a 'Fair' and 'Just' manner and the said 'Order'
shall be passed by the 'Tribunal' in any event not less than 'four weeks' from
the date of receipt of a copy of this 'Order'.
In regard to the other 'Relief', granted by the 'Tribunal' (National
Company Law Tribunal, Division Bench - II, Chennai) in CP/82(CHE)/2021,
the same is left undisturbed by this 'Appellate Tribunal'. The connected
IA/318 of 2022 (for 'stay') is closed.
[Justice M. Venugopal] Member (Judicial)
[Mr. Kanthi Narahari] Member (Technical) ghk/tm
Company Appeal (AT) (CH) No. 28 of 2022 Page 5 of 5
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