Fine Handling And Automation Private ... vs Eepos Fine Rail Systems India Private ...

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI COMPANY APPEAL (AT) NO.27 OF 2021 In the matter of: Fine Handling and Automation Pvt Ltd Appellant Vs Eepos Fine Rail Systems India Pvt Ltd & Ors Respondent For Appellant; Mr Anuj Tiwari, Mr shwetabh Shashtri, Ms Aroshi Pal, Mr Bandila, Advocate. For Respondent: Mr anandh K, Ms Nishita Jagetia, Advocates. ORDER

HYBRID MODE 25.09.2024: This appeal is against the impugned order dated 18.09.2020

whereby the Company Petition No.2183/2019 seeking the following directions

filed under Section 97 of the Companies Act, 2013 was dismissed. The

directions sought are as under:-

a) To call the Annual General Meeting (AGM) of the Respondent No.1 Company to consider the financials for the year 2013-2014, 2014-15, 2015-16, 2016-17 and 2017-18.

b) To direct that the presence of the petitioner through its authorised representative at such meetings would constitute the requisite quorum for the AGMs.

c) To appoint a chairperson or administrator who may be authorised to hold the AGM and to all deeds requisites to complete the formalities for holding the AGMs and completing the filing of annual documents and with further powers to ensure all compliances.

d) To authorise the petitioner to exercise all powers to complete annual compliances and hold the AGM for all the pending years and complete formalities for filing with the ROC.

2. The Ld. NCLT gave the following reasons for dismissing the petition

under Section 97 of the Companies Act, 2013:

2 i) The admitted position is that there is a default within the meaning of Section 96 of the Companies Act, 2013 in conducting the AGM of the company, albeit with both sides blaming each other for the default. There was exchange of correspondence in so far as the financials were concerned.

Given the indurate positions of both sides as revealed during the course of arguments, we donot see this being resolved to satisfaction at all. The internecine quarrel has already taken its toll on the Respondent No.1 company, with visible scars that cannot be erased by ordering the AGMs to be conducted. The Roc has also issued notice asking the Respondent No.1 Company to show cause why the name of the company should nto be struck off from the Register of Companies.

ii) We are conscious that the section confers on the Tribunal to order the AGM of the company to be conducted if there is a default. The Respondent No.4 has submitted on oath in the form of affidavit that there is no possibility of any business relationship between it and the Petitioner that could contribute to reviving the business of the Respondent No.1 company. There is also the matter of the petition bearing CP No.2530/2018 filed under Section 271-272 of the Companies Act, 2013 for winding up of Respondent No.1 Company which is pending before a coordinate bench of this tribunal. This reality stares us in the face. Any order would serve only a very limited purpose to enable the Respondent No.1 Company to convene its AGM which could not be convened due to the management deadlock and no other.

iii) The exercise of judicial discretion vested in us by virtue of Section 97 ibid should be used with great circumspection and carefully calibrated to do good to the Respondent No.1 company. In a milieu of paralysis caused by two sets of members holding equal shares and having co-equal powers on the Board not willing to bury the hatchet and come to terms with each other, ordering the AGMs of the Respondent No.1 Company, while being legally sustainable in terms of section 97 of the Companies Act, 2013, would not be practically of any use except prolonging the agony and delaying the inevitable that stares us in the face.

iv) The present petition is, therefore, dismissed with liberty given to the Petitioner to approach the Tribunal again, if need be, after judgment is pronounced in CP No.2530/2018 by the tribunal. We also make it clear that in case the Petitioner and the Respondent No.4 are able to come to terms, they are at liberty to conduct the pending AGMs and nothing contained in this Order shall stand in the way with the leave of this Tribunal.

3 3. Admittedly the Company Petition No.2539/2018 is still pending for

winding up of the company. Admittedly as per impugned order while

exercising its discretion under Section 97 of the Companies Act, 2013, the Ld.

NCLT had though dismissed the Company Petition but granted a liberty to the

appellant herein to approach the Tribunal, if need be, after judgement is

pronounced in CP No.2539/2018 by the said Tribunal.

4. The said Company Petition is now listed on 27th September, 2024.

Considering the fact the said petition is listed for final hearing, we request

the Ld. NCLT to hear the petition and dispose it of in a time bound manner

preferably within two months from today. In the meanwhile if any action is

taken against the appellant under Section 99 of the Act, the appellant shall

be at liberty to explain its position with the reasoning given in the impugned

order. Further if the appellant need to file an application, after the disposal

of the company petition 2539/2018, as is envisaged in the impugned order,

the said application be decided uninfluenced by the finding given in the

impugned order.

5. With the above observations, the appeal stands disposed.

6. Pending applications, if any, are also closed.

(Justice Yogesh Khanna) Member (Judicial)

(Mr. Ajai Das Mehrotra) Member (Technical) Bm/md