Chintan Ashwin Sheth & Anr vs Sheth Developers Private Limited & Ors

IN THE MATTER OF: Chintan Ashwin Sheth & Anr. ....Appellants

Vs.

Sheth Developers Pvt. Ltd. & Ors. ....Respondents

Present: For Appellants: Mrs. Pooja M. Saigal, Mr. Nipun Gupta, Mr. Nikhil Sabri, Mr. Ishank Jha, Mr. S.K. Srivastav, Ms. Manorama, Advocates For Respondents: Ms. Smriti Churiwal, Mr. Jaiveer Kant, Mr. Vatsal Shah, Ms. Prapti Kedia, Advocates for R-1 Mr. Krishnendu Dutta, Sr. Advocate with Ms. Smriti Churiwal, Mr. Vatsal Shah, Ms. Prapti Kedia, Mr. Jaiveer Kant, Advocates for R- 2& 3.

ORDER

(Hybrid Mode)

22.01.2024: Heard Mrs. Pooja M. Saigal, the Ld. Counsel for the

Appellant and Mr. Krishnendu Datta, Ld. Sr. Counsel appearing for the

Respondent No. 2 & 3.

2. Earlier, the National Company Law Tribunal, Mumbai Bench-I, in C.A.

No. 244 of 2023 in C.P. No. 140/(MB)/2023 on 05.06.2023 at paragraph no. 7

& 8 had observed the following:

"7. After hearing the submissions on both sides and upon perusing the material available on record this Tribunal observe that the petitioners and the 2nd Respondent are non- other than father and sons and are making allegations against each other and the petitioners have created a dead lock in the affairs of the company. This Bench further observes that as rightly pointed out by the Respondents, the Petitioners are not behaving 2

according to their status and stature and have not approached this Tribunal with clean hands and there is no prima-facie case available to the petitioners for grant of any interim reliefs. In addition to the above, as rightly pointed out by Respondents this Tribunal has no power to restrain the Respondents from holding EOGM as per the settled position of law. Since there is another Executive Director Mr. Hanuman Kanodia who is a neutral person, the apprehension of the petitioners that the 2nd Respondent may take unilateral decisions is ill-founded and un-founded. This Bench also of the considered opinion that the petitioners conduct does not inspire any confidence for grant of any interim reliefs to them and passing any restraint orders against the respondents would seriously affect the business of the Respondent company and further deteriorate the affairs of the company.

8. For the aforesaid reasons this Bench is of the considered opinion that it is not fit and proper to grant any interim reliefs at this stage".

3. Viewed in that perspective had rejected the interim reliefs prayed for in

the said application.

4. Although, the Ld. Counsel for the Appellant has assailed the impugned

order dated 05.06.2023 in C.A. No. 244 of 2023 in C.P. No. 140/(MB)/2023

stating that the Reply of Respondent No. 2 was tendered in before the tribunal

and it was taken on record but yet the tribunal had made some observations in

paragraph 7 of the impugned order which affects the Appellants/Petitioners

because it touched upon the status and stature and added further, the

tribunal went out to observe that the Petitioners/Appellants have not made out

the prima facie case for grant of interim reliefs etc. and these observations had

affected the Appellants in a plea to, which had resulted in miscarriage of

justice.

CA (AT) No. 176 of 2023 3

5. Per-contra, it is the submission of Ld. Sr. Counsel of Respondent No. 2 &

3 and Respondent No. 1 that the 'interim order' in C.A. No. 244 of 2023 in C.P.

No. 140/(MB)/2023 passed by the NCLT, Mumbai Bench-I requires no

interference in the hands of this Tribunal, sitting in 'Appellate Jurisdiction'

because of the simple fact that the reliefs sought for in the main C.P.

140/(MB)/2023 by the Petitioners/Appellants and the reliefs sought for in

C.A. No. 244 of 2023 are similar in nature and in the instant case, the Tribunal

'ex-facie'/'prima-facie' had come to the conclusion that the

Petitioners/Appellants had not made out 'any prima-facie case' available to

them for the grant of 'interim relief' and as such, the rejection of C.A. No. 244

of 2023 requires no interference in the hands of this Tribunal.

6. Be it noted, it is a trite law that any observation made by any 'Tribunal'

or court of Law in an interim Application/An interlocutory application is only

prima-facie nature being confined to the said 'Application' alone and that it will

not be a factor for the tribunal to take a final call in main C.P. No.

140/(MB)/2023 on the file of NCLT, Mumbai Bench-I at the time of hearing the

main matter.

7. Viewed in that perspective, this Tribunal, is of the considered view that

the observations so made in paragraph 7 of the impugned order in C.A. No. 244

of 2023 are only 'tentative in nature' and the 'Tribunal' shall not be

guided/goaded/led by the very nose of the said observations so made by it in

C.A. No. 244 of 2023 and it is open to the respective parties especially the

Petitioners/Appellants and the Respondents and the contesting Respondents to CA (AT) No. 176 of 2023 4

apprise before the Tribunal that they being granted liberty to raise all factual

and legal pleas before it not only in main C.P. No. 140/(MB)/2023 and also if

'any interlocutory Application' to be filed, by the Petitioners/Appellants on the

premise that only in the preamble portion of the order that the 'Tribunal' had

only taken into consideration in respect of holding of 'EOGM' scheduled on

06.06.2023 and also an order restraining the Respondent No. 2 from taking

any unilateral action or decision whatsoever concerning the management and

affairs of Respondent No. 1 more fully described in prayer clause 'c'.

8. Be that as it may, ongoing through the impugned order dated

05.06.2023 in C.A. 244 of 2023 in C.P. No. 140/(MB)/2023 this Tribunal, is of

the considered view, that the view taken by the NCLT, Mumbai Bench in C.A.

No. 244 of 2023 in C.P. No. 140/(MB)/2023 are only 'tentative in nature' and

the Petitioners/Appellants to urge for the said reliefs in the main C.P.

140/(MB)/2023, after completion of pleadings between the parties before the

Tribunal and to seek such other remedy being made available to them in

accordance with Law if they so desire/advised.

9. If in the meanwhile, if the 'Petitioners/Appellants' feel that only in C.A.

No. 244 of 2023 in C.P. No. 140/(MB)/2023 two prayers were only considered

and others were not considered, the Appellants/Petitioners based on their legal

advice may prefer an 'interlocutory application', seeking for such necessary

reliefs, as they pray for, of course in the manner known to Law and in

accordance with Law if they so chooses/opt for the same.

CA (AT) No. 176 of 2023 5

10. With the aforesaid observations and directions, the main appeal no. 176

of 2023 stands disposed of. No costs. All the connected IA's, if any stand

disposed of.

[Justice M. Venugopal] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

sr/md

CA (AT) No. 176 of 2023