Alok Yoginder Punj & Ors vs Eurocoustic Products Ltd & Ors

Alok Yoginder Punj & Ors. ...Appellants

Versus

Eurocoustic Products Ltd. & Ors. ...Respondents

Present: For Appellants : Mr. Manish R. Bhatt, Senior Advocate assisted by Mr. Munjaal Bhatt, Advocate

ORDER

05.09.2018 The appellants (petitioners) filed an application under Section

241 and 242 of the Companies Act for alleged 'oppression and mismanagement'

on the part of the contesting respondents. The National Company Law Tribunal,

Ahmedabad Bench (hereinafter referred to as the 'Tribunal') passed an interim

order dated 6th June, 2018 (Single Bench). 2nd Respondent thereafter filed I.A.

No. 221/2018 for suitable modifications of the interim order, pursuant to which

the impugned order dated 27th July, 2018 has been passed by the Tribunal

(Division Bench) with clarifications and modifications, which is as follows:

"11. In a view to this, our order dated 06.06.2018 is

clarified and modified to this extent that the

respondent's company shall deal with the issue of

Right Share as per the relevant laws and rules for

the purpose of allotment of right issue to the

applicants including third party investor or to remit 2

back their application amount. Notwithstanding

the right, the proportionate share of the petitioner in

right issue and well as the present shareholding's

patterns not to be disturbed and their proportionate

right in existing shareholding pattern is protected;

subject to outcome of the present company petition.

The respondent's company can deal with rest of

shares in accordance with law only pertaining to

Right issue in respect of other applicants,

shareholders and third parties.

12. We also considered for permitting additional

director to participate in the meeting of board of

directors to achieve the aforesaid time bound task.

Therefore, the additional director appointed

through its meeting dated 07.06.2018 is permitted

to participate in board's meeting only for this

limited purpose and are expected not to take part in

other affairs of management of the company. This

order's direction that may be issued by this Court

at appropriate stage in the present matter."

Learned counsel appearing on behalf of the appellants submitted that the

interim order amounts to an order which is final in nature which will affect the

petition filed under Section 241 and 242 on merit. If issue is decided in favour

Company Appeal (AT) No. 276 of 2018 3

of the third party investor, in such case no relief can be granted after final

hearing even if the application under Section 241 and 242 is allowed. It will also

affect the shareholding pattern including the shareholding of the appellants

which in turn may render the application under Section 241 and 242

infructuous.

We have perused the impugned order dated 27th July, 2018 and the

records enclosed with the appeal.

We have noticed that the Tribunal has made it clear that notwithstanding

the right the proportionate shares of the petitioners in right issue, the present

shareholding pattern will not to be disturbed and proportionate right of the

existing shareholding pattern is to be protected subject to the outcome of the

company petition.

Though such specific observation has been made, we make it clear that if

any third party right is created during the pendency of the company petition,

then such right will be subject to the decision of the Tribunal. It is also within

the jurisdiction of the Tribunal to annul such third party right if created during

the pendency of the petition and the allegation of 'oppression and

mismanagement' is proved.

We also make it clear that all the observations made by the Tribunal and

by this Appellate Tribunal will not affect the rights and contentions of both the

parties and the Tribunal will pass final order uninfluenced by the impugned

order of 27th July, 2018.

As the matter is pending since more than three months and in the

meantime rights in favour of their parties are created, the Tribunal is expected

Company Appeal (AT) No. 276 of 2018 4

to decide the main petition on merit after hearing the parties. Parties in their

turn are directed to co-operate with the Tribunal and will not ask for

unnecessary adjournments. The appeal stands disposed of with the aforesaid

observations. No cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/uk/

Company Appeal (AT) No. 276 of 2018