Golden Cashew Products Pvt Limited & Ors vs Ramaiya Pillai Thirumurugan

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL\ CHENNAI BENCH CHENNAI COMPANY APPEAL (AT)(CH) NO.27/2021 In the matter of: Golden Cashew Products Pvt Ltd Appellant Vs Ramaiya Pillai Thirumurugan Respondent Present:

For Appellant : Mr. Anupam Lal Das, Sr. Advocate For Mr. Sinha Shrey Nikhilesh, Advocate and Mr. Aditi Ashok, Advocate

For Respondent : Mr. S. Satish, Advocate

ORDER

VIRTUAL MODE 24.11.2021: Heard the Learned Counsel for the Appellant as well as the

Learned Counsel for the Respondent.

According to the Learned Counsel for the Appellant, the instant Appeal

is filed against the 'impugned order dated 21.02.2020' passed by the National

Company Law Tribunal, Chennai Bench in CP No.124/2020 whereby and

whereunder an 'Ex parte interim relief' to and in favour of the Respondent

was granted in directing the Appellant to maintain Status Quo in relation to

the 'shareholding pattern' as well as in relation to the 'properties of the 1st

Respondent Company' without even considering whether the petition filed by

the Respondent is maintainable or whether the Respondent is eligible to file a

petition under Sections 241, 242 of the Companies Act, 2013 especially in the

absence of waiver under Section 244 of the Companies Act, 2013. 2

The prime plea taken on behalf of the Appellant is that the 'Tribunal'

had passed the 'impugned order dated 21.02.2020' in negation of the

'principles of natural justice' as against the well settled the principle of law

and judicial precedent.

Advancing his argument, the Learned Counsel for the Appellant comes

out with a plea that the Respondent is not having any shareholding in the

Company and added further, that the requisite application or any permission

was sought from the 'Tribunal' to file an application because he is not

possessing not less than 10% of the issued share capital of the company, in

terms of Section 244(1) (2) of the Companies Act, 2013. As such the main

Company Petition No.124/2020 filed by the Respondent is itself per se not

maintainable in law.

When the status of the Respondent/petitioner itself is very much is in

question and he has no 'Locus Standi' to file the main CP No.124/2020 by

not fulfilling the requirement of the Companies Act, 2013 in the teeth of

Section 244 of the Companies Act, 2013 then the petition No.124/2020 filed

by the Respondent, in any event, cannot stand scrutiny before the 'Tribunal'

in the eye of Law.

Per contra, it is the submission of the Respondent that the impugned

order passed by the Tribunal is a just, fair and a valid one, the same requires

no interference in the hands of this Tribunal sitting in Appeal.

The Learned Counsel for the Appellant, to support the contention that

the impugned order regarding grant of Status Quo as of today i.e. 21.02.2020

to be maintained in relation to the shareholding pattern as well as in relation 3

to the properties of the 1st Respondent Company relies on the judgement of

this Appellant Tribunal in Company Appeal (AT) No. 112/2019 dated

27.9.2019 in the matter of Mantena Raju Narasu Vs M/s Lexus

Technologies Pvt. Ltd. & Ors. Wherein at paras 5 to 7 it is observed as

under:-

5. It is stated that the other Respondents have also appeared in the

matter. The impugned order shows that while passing the order, the

NCLT had heard Respondent Nos.4, 7, 8 and 9. As it is stated that the

present Appellant and other Respondents have also appeared in the

Company Petition, it appears to us appropriate in the interest of justice

that the Appellant and other Respondents, who were not heard when the

impugned order was passed, should be heard by NCLT to appreciate the

grievances of the Appellant and other Respondents, who were not heard.

6. We dispose the present Appeal with the following directions: -

(i) The matter is remitted back to NCLT at Amaravati Bench,

Andhra Pradesh.

(ii) We direct the NCLT to hear Respondent Nos.1 to 3, 5 and 6 with

regard to the impugned order dated 6th February, 2019 and after

giving opportunity to these Respondents, the NCLT may either

maintain the order dated 6th February, 2019 or may modify or

pass any other suitable orders as deemed fit.

7. The stay granted by us on 16th May, 2019 will continue till 4th

November, 2019, by which time, the NCLT is requested to further hear

the parties as regard the impugned order dated 6th February, 2019 is 4

concerned. The parties are expected to cooperate. In case, the NCLT finds

that the parties are not cooperating, or for any other reason, interest of

justice so requires, it would be open for NCLT to direct that stay after 4th

November, 2019 will not continue."

The Learned Counsel for the Respondent in response to the Appellant's

arguments points out that the main Company Petition No.124/2020 was filed

before the Tribunal on two grounds namely i.e. cancellation of shares and also

on plea of 'Oppression and Mismanagement' and the main Company Petition

filed by the Respondent/Petitioner before the 'Tribunal' is perfectly

maintainable and justiciable in law.

This 'Tribunal' has heard the Learned Counsels appearing for the

respective parties and noticed their contentions.

There is no two opinion of a primordial fact that no waiver application

as per Section 244 (1)(b) was filed before the 'Tribunal' (National Company

Law Tribunal, Chennai Bench, in main Company Petition) by the

Respondent/Petitioner/Applicant.

On behalf of the Appellant, reliance is placed on the judgement of this

'Tribunal' in 'Cyrus Investments Pvt Ltd & Anr. Vs Tata Sons Ltd & Ors'

2017 SCC OnLine NCLAT 261 wherein it is observed and held as under:-

"150.The Tribunal is not required to decide merit of (proposed) application

under Section 241, but required to record grounds to suggest that the

applicants have made out some exception case for waiver of all or of any

of the requirements specified in clauses (a) and (b) of subsection (1) of 5 Section 244. Such opinion required to be formed on the basis of the

(proposed) application under Section 241 and to form opinion whether

allegation pertains to 'oppression and mismanagement of the company

or its members. The merit cannot be decided till the Tribunal waives the

requirement and enable the members to file application under Section

241."

The other stand of the Appellant (vide Notes of Submissions of the

Appellant) is that the 'transfer of shares' in favour of the Respondent was

absolutely prohibited under the Articles of Association of the Appellant

Company and because of the fact that no 'instrument of transfer of shares'

as required under Section 56 of the Companies Act, 2013 was ever executed,

the same was legally not permissible, in the absence of any payment

consideration. There is no proof in regard to the payment of consideration for

the 'transfer of shares' made by the Respondent in cash and the same cannot

be countenanced in Law.

The plea of the Respondent is that the Appellant as an afterthought

wants to raise fresh issues which were not even pleaded in the Reply/Counter

filed before the 'Tribunal' in CP No.124/2020. According to the

Respondent/Petitioner, in main Company Petition, he is holding 15% of the

issued and paid up capital of the 'First Appellant Company' numbering

3,57,588 equity shares of Rs.19/- fully paid and that the 'Annual Returns of

the Company' stand testimony to this fact.

In short the contention of the Respondent/Petitioner is that the main

Company Petition No.CP/124/2020 before the Tribunal is nothing but a 6

composite petition, projected under Sections 59, 241 and 242 of the

Companies Act, 2013 and that he is eligible and entitled to file the said

Petition. The Learned Counsel for the Respondent/Petitioner has relied on

the following decisions :-

1. Manoj Kumar Kanuga & Ors Vs Mandhar Power Pvt Ltd & Others

CDI 2013 APHC 092.

2. Dr. Renuka Datla and Others Vs M/s Biological I Ltd & Ors -CDI

2017 APHC674

3. Shashi Prakash Khemka (Dead) through LRs and Another Vs NEPC

Micon (now called NEPC India Ltd & Anr, CDI 2019 SC 052.

Taking note of the divergent contentions advanced by the Learned

Counsel appearing for the parties, in view of the fact that the plea of

maintainability of the petition going to the root of the matter is raised on

behalf of the Appellant and the same is repelled/repudiated on the side of the

Respondent and added further, that the 'plea of waiver' as visualised under

the Companies Act, 2013, in the absence of application being filed by the

Respondent before the Tribunal is projected before this 'Appellate Tribunal',

at this stage, this Tribunal, simpliciter, without traversing upon the merits of

the case and also without expressing any opinion in disregard set aside the

impugned order dated 21.02.2020, since the said 'Ex Parte impugned order'

was passed in disregard to the ingredients of Section 420 of the Companies

Act, 2013 (providing reasonable opportunity of being heard) in negation of the

principles of natural justice and in not issuing 'Notice' to the opposite party

as required under Rule 37 of the NCLT Rules, 2016 which is required to be 7

adhered to by the 'Tribunal'. As a logical corollary, this Tribunal allows the

Appeal and remits back the matter for passing a 'de novo order', by granting

opportunity to the respective parties to raise all factual and legal pleas before

the Tribunal in main Company Petition No.124/2020 and that the 'Tribunal'

soon after the completion of pleadings in the main Company Petition, if any,

after providing due opportunity to both parties is required to dispose of the

main Company Petition No.124/2020 pending on its file in a fair, just and

dispassionate manner, of course, uninfluenced and untrammelled with any

of the observations made by this 'Tribunal', in this Appeal.

(Justice M. Venugopal) Member (Judicial)

(Mr. Kanthi Narahari) Member (Technical)

Bm/manu