Indus Motor Company Private Limited vs Tp Anilkumar

For Appellants Mr. Alishan Naquee, Advocate No 1 : Ms. Rupal Bhatia, Advocate Mr. Athiban Vijay, Advocate For Appellants Dr. U.K. Chaudhary, Sr. Advocate No. 2 to 6 and 8: For Appellants Mr. P.S. Raman, Sr. Advocate No. 7: For Mr. P.H. Arvindh Pandian, Sr. Advocate Respondents: Ms. Ritu Bhalla, Mrs. Medha Sachdev, Mr. Abhishek Jain, Mr. Avinash Krishnan Ravi, Ms. Akhila Jayaraj, Mr. Vishnu Sumanth, Ms. Niranjana Pandian, Advocates.

JUDGMENT

(Virtual Mode)

KANTHI NARAHARI, MEMBER (TECHNICAL)

Preamble:

The Present Appeal is filed being aggrieved by the order dated

18.06.2021 (Impugned order) passed by the NCLT, Kochi Bench in

CA No. 44 of 2021 in CP No. 2 of 2020 whereby the NCLT makes

the interim order dated 17.01.2020 absolute, making it clear that

the Approvals/Resolutions etc. with respect to raising of any

additional debt shall be kept in abeyance and the same will be

subject to the outcome in the main Company Petition.

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Brief Facts:

Appellant's Submissions:

2. The Ld. Sr. Counsel for the Appellants submitted that the

NCLT erred in passing the impugned order by overlooking the fact

that there is no violation of the Status quo order dated 17.01.2020

by the Appellants. It is submitted that the Appellants herein are the

Respondents and the Respondents herein are the Petitioners before

the NCLT being CP No. 2 of 2020. The Appellant No. 1 Company

has been the most successful dealership of Maruti Suzuki Vehicles

in India both in terms of volumes and revenue. The Respondents 1

to 4 are the Shareholders of the Appellant No. 1 Company each

owning 5% shares respectively.

3. While matter stood thus, the Appellant No. 2 and Respondent

No. 2 along with other Respondents entered into a Memorandum of

Understanding on 31.03.2007 and the said MoU is binding

understanding between all the shareholders of the Company which

stands as on today. While so the 2007 MoU contains an Arbitration

Agreement under Clause 18 thereof and the parties had chosen and

agreed to refer all disputes pertaining to matters covered therein to

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Arbitration including shareholding pattern, Capital raising and

Share transfers, the composition of Board of Directors. In

accordance with the said MoU the shareholders are entitled to

nominate certain no. of Directors on the Board of the Company.

4. It is submitted that after filing the Company Petition by the

Respondents herein, the NCLT on 17.01.2020 passed status quo

order and later the Respondents have filed the Application bearing

no. 44 of 2021 in the above Company Petition sought a direction to

the Respondents therein (Appellants herein) to pass a direction to

the Respondents therein to maintain status quo in all aspects while

managing the affairs of the Company, and revoke all Approvals,

Resolutions etc. with respect to raising of any additional debt.

5. It is submitted that the Appellants have not violated the status

quo order passed on 17.01.2020 and submitted that as on the date

of status quo order, the Cumulative Credit Sanction limit of the

Appellant No. 1 Company was to the tune of Rs. 427.11 Crores and

as of 02.02.2021 the Cumulative Credit Sanction limit of the

Appellant No.1 Company was to the tune of Rs. 312 Crores.

Further, ECLGS (Emergency Credit Line Guarantee Scheme) of

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Govt. of India was not an additional loan facility and was only a

reorganising/ replanning of the structure of the existing loan. It is

submitted that the status quo order was never intended to prevent

the Appellant No.1 Company from carrying on its day-to-day affairs

as a going concern. The Appellants have also filed an ECLGS

Affidavit dated 03.03.2021 before the NCLT which contains detailed

explanation and rationale behind the availing of the ECLGS by the

Appellant No.1 Company.

6. It is submitted that the Hon'ble NCLT has completely ignored

that the Appellants Bona fide intent and explanation contained in

the Affidavit which was filed even prior to Respondents application

being CA No. 44 of 2021.Further, it is submitted that the Hon'ble

NCLT erred in passing the impugned order by overlooking the fact

that the status quo order can only be in the context of reliefs sought

in the Company Petition and cannot be an all encompassing order,

preventing the Company from carrying out its regular activities on a

day-to-day basis. Further, the Hon'ble NCLT erred in passing the

impugned order failing to take notice of the intent of the

Respondents which is to obstruct the smooth flow of funds, day-to-

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day management and affairs of the Appellant No.1 Company by

misconstruing the status quo order. Further, the impugned order is

vague and very wide and will cripple the functioning of the

Appellant No.1 Company, on which livelihood of around 6000

employees depends upon.

7. On the question of Law the Ld. Sr. Counsel submitted that

after passing of the status quo order on 17.01.2020 there have been

various Board Meetings and Annual General Meeting where various

aspects including availing/renewal of Credit facilities have been

discussed and dealt with in the presence of Respondents 1 and 2

herein and they are estopped from raising a plea of violation of the

status quo order.

8. On the grounds the Ld. Sr. Counsel submitted that the

Hon'ble NCLT failed to appreciate that in light of the status quo

order i.e. parties to maintain status quo in all respects as on

January, 17, 2020, the ultimate test was first to determine the

context and secondly, if there is any violation of the status quo

order are not in terms of the position of the Company as of

17.01.2020.

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9. It is further submitted that it was the understanding of the

parties that all along for over a year, the status quo order was never

intended to prevent the Appellant No.1 Company from carrying on

its day-to-day affairs as a going concern within the bounds of the

order dated 17.01.2020 and the Appellant No. 1 Company has been

conducting its affairs on the basis since 18.01.2020 onwards.

10. The Ld. Counsel submitted that as on 17.01.2020, the

Cumulative Credit Sanction limit of the Appellant No.1 Company

from various Banks and Financial institutions was to the tune of

Rs. 427.11 Crores. As of 02.02.2021, the Cumulative Credit

Sanction limit of various Banks and Financial institutions towards

the Appellant No.1 Company was to the tune of Rs. 312 Crores and

accordingly, availing of ECLGS Schemes would have no adverse

impact on the overall Sanctioned Credit limit and thus, there is no

violation of the status quo order. Further, it is submitted that the

Appellant No.1 Company has not availed any additional debt and

has availed only a beneficial, favourable and time bound ECLGS

Schemes which is within the Credit Sanction Limit of the Appellant

No. 1 Company prevailing as on 17.01.2020. It is submitted that

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the ECLGS is mainly for meeting working capital requirements,

operational expenditure and to re-start the operations smoothly

post the lockdown announced owing to Covid-19.

11. In support of the oral submissions made and the contentions

as raised in the Appeal, the Ld. Sr. Counsel relied upon various

decisions on the point of that status quo orders should not be

vague and in cases of oppression and mismanagement, the interest

of the Company is paramount.

12. In view of the facts and precedents as stated above, the Ld. Sr.

Counsel prayed this Bench to allow the Appeal by setting aside the

impugned order dated 18.06.2021 and prayed this Tribunal to

restrict the operation of the status quo order only in relation to the

Constitution of the Board and the status of the Respondents and

expressly exempt from its ambit all operational and managerial day-

to-day matters including all financial transactions being done in the

course of business.

Company Appeal (AT) (CH) No. 25 of 2021 -10-

Respondent's Submissions:

13. The Ld. Sr. Counsel appearing for the Respondents submitted

the brief facts in opposing the pleas sought in the Appeal in its

entirety.

14. It is submitted that the Hon'ble NCLT after duly considering

the facts set out in the Company Application and the legal positions

represented by both the parties was pleased to allow CA 44 of 2021

filed by the Respondents herein by making its earlier interim order

of status quo dated 17.01.2020 absolute by clarifying that the said

order of status quo shall apply to Approvals/Resolutions with

respect to raising of additional debt. The Present Appeal is filed to

escape the consequences of violating the order of status quo dated

17.01.2020 passed by the NCLT Kochi Bench and the present

Appeal is not maintainable as there is no new interim order but is

merely a clarification pertaining to an earlier interim order dated

17.01.2020 wherein the parties to the Company Petition were

directed to maintain status quo until further orders.

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15. The Ld. Sr. Counsel submitted that the Respondents have filed

the Company Petition before the NCLT Kochi Bench alleging acts of

Oppressions and Mismanagement including fraudulently diverted

pecuniary benefits to the majority shareholders and various

violations and glaring malpractices committed by the Appellants.

16. It is submitted that an Appeal is a continuation of the original

proceedings and the scope of the original proceedings cannot be

enlarged in the Appeal proceedings and the Appellants have made

various averments and have claimed reliefs which were not dealt

with by the Hon'ble NCLT in the first place. Further, the Appellants

seek to set out a case for vacating the interim order of status quo or

modifying the same. However, without going into the merits or

veracity of the allegations pertaining to the nature of ECLGS

Scheme and its effect on the first Appellant Company and without

admitting to any averment contained therein, the question before

the Hon'ble NCLT was whether the availing of credit facilities under

the said scheme amounted to a violation of the status quo order

dated 17.01.2020. Per contra the Appellants herein appeared to be

setting up a case for the question as to whether the ECLGS Scheme

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is beneficial for the first Appellant or not, which question never

arose before the Hon'ble NCLT while hearing CA 44 of 2021.

17. It is submitted that the Hon'ble Tribunal has correctly held

that the order dated 17.01.2020 had directed the parties to

maintain status quo on all aspects which included the debt

structure of the first Appellant herein. The Appellants would have

approached the Hon'ble NCLT for permission to avail additional

Credit facilities instead of clandestinely filing an Affidavit about

availing of the Credit facilities without seeking

clarification/permission from the Hon'ble NCLT. Further, the

Appellants should have approached the Hon'ble NCLT after the

Respondents herein in the said 245th Board Meeting raised a

specific objection based on the order of status quo passed by the

Hon'ble NCLT.

18. It is submitted that the order under challenge is merely a

consequence of the conduct of the Appellants herein who have

clearly failed to follow a course of action warranted by respect for

judicial orders in order to escape from the consequences of the

same, the Appellants herein filed the instant Appeal indirectly.

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19. The Ld. Sr. Counsel submitted that the Operational guidelines

for the ECLGS Scheme dated 30.05.2021 itself provide that second

Charge will be created on existing charged assets as security for the

loan availed under the ECLGS Scheme. Thus, ex facie the loans

availed under the scheme were not mere restricting but additional

facilities requiring security as second ranking charge on existing

hypothecations.

20. Further, it is submitted that the Appellants have made

misreading statements and averments before this Tribunal that the

loan facilities availed under the ECLGS Scheme despite the

subsistence of interim order, were mere restructuring and

reorganisation of earlier existing facilities. The such statement is

belied by the documents filed by the Appellant company before the

ROC with respect to charges created against the facilities availed

under the ECLGS Scheme. These documents ex facie show that the

facilities availed were in addition to the pre-existing facilities and

new charge was created for each of said additional facility where

mostly it was a second charge on existing hypothecations. The

Appellants have not filed any of these documents before the NCLT

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and has made contradictory and incorrect statement before this

Tribunal.

21. In support of the factual and legal arguments the Ld. Counsel

relied upon the judgments. In view of the submissions as made the

Ld. Sr. Counsel prayed this Bench to dismiss the Appeal being a

devoid of any merit.

Analysis/Appraisal:

22. Heard the Ld. Sr. Counsel appeared for the respective parties

perused the pleadings, documents and citations relied upon by

them. After analysing the pleadings the point for consideration is

Whether the order dated 18.06.2021 which is impugned in the

Appeal is need any interference or not?

23. The Respondents 1 to 4 herein have filed the Company Petition

bearing No. CP 02 of 2020 before the National Company Law

Tribunal, Kochi Bench under various provisions of the Companies

Act, 2013 including alleging oppression and mismanagement in the

affairs of the Appellant No.1 Company and sought various main and

interim reliefs in the CP. It is contended that relief viii of the interim

reliefs in the main CP, inter alia the Respondents herein have

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sought a direction restraining the Appellants 2 to 8 herein from in

any manner alienating, mortgaging, selling or encumbering any of

the movable or immovable properties of the company.

24. After filing of the Company Petition, the NCLT Kochi Bench on

17.01.2020 after hearing the respective parties passed an interim

order as at para 12 (ii) as under:

"However, both the parties are directed to maintain status quo in all respects as on today until further orders".

25. Subsequently, an application bearing no. CA 44 of 2021 in CP

02 of 2020 filed by the Respondents herein before the NCLT seeking

a relief to pass a direction to the Appellants 2 to 8 herein to

maintain status quo in all aspects while managing the affairs of the

Company, and revoke all approvals/resolutions etc. with respect to

raising any additional debt. The grievance of the Respondents

herein is that the Appellants have completely disregarded the order

dated 17.01.2020 and have grossly violated the status quo

direction that was passed by the NCLT, by passing a Board

Resolutions at the 245th Board meeting of the Company to raise an

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additional debt of Rs. 62.67 Crores from various financial

institutions, as mentioned here under:

Sl. No. Bank Amount of loan (Rupees)

1 Federal Bank 31,00,00,000

2 Axis Bank 7,00,00,000

3 TATA Capital Financial Services 3,90,00,000 Limited 4 Kotak Mahindra Pvt Ltd. 1,55,00,000

5 HDFC Bank Ltd. 5,58,00,000

6 YES Bank Ltd. 3,70,00,000

7 ICICI Bank Ltd. 7,11,00,000

8 Indus land Bank Ltd. 2,83,00,000

Total 62,67,00,000

26. On the other hand, the Ld. Sr. Counsel for the Appellant

submitted that apart from filing the CA 44 of 2021 the Respondents

herein have filed an application under Section 425 of the

Companies Act, 2013 read with Section 10 and 12 of the contempt

of Courts Act, 1971 seeking initiation of Contempt against the

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Appellants and submitted that the Appellants have not violated the

interim order passed by the NCLT on 17.01.2020.

27. It is a fact that the 245th Board meeting held on 10.02.2021,

the Company proposed to avail ECLGS and the same was put up in

the agenda along with the notice for the 245th Board Meeting which

was circulated by an email dated 02.02.2021, during the Board

meeting held on 10.02.2021 the proposal was discussed the

Respondents (being minority shareholders) also participated in the

Board meeting. However, the Respondents 1 and 2 expressed their

dissenting view, which was duly recorded and noted in the minutes

of the meeting. However, the Appellant Company being a Board

managed Company with no restraint on its functioning, the Board

then passed appropriate Resolution to avail ECLGS in the best

interest of the Appellant No. 1 Company. Further, in the Board

meeting a loan of Rs. 70 Crores taken from State Bank of India

where collateral was required was also considered by the Board and

the same was repaid.

28. It is submitted that out of sanctioned Credit Limit of Rs.

427.11 Crores of the Appellant No.1 Company, the loan availed was

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to the tune of Rs. 242 Crores and the unutilised Credit Sanction

limit was Rs. 185.11 Crores. Accordingly, there was negligible

difference in the indebtedness of the Appellant No.1 Company. It is

submitted that the Appellant No. 6 had filed an Affidavit before the

NCLT Kochi Bench dated 03.03.2021 even prior to Respondents

application no. 44 of 2021, apprising the Hon'ble NCLT of the

developments by way of an abundant caution and explained the

aspect of raising of debt of Rs. 62.67 Crores by the Appellant No.1

Company by availing ECLGS. It is seen that the Appellants have

also explained the rationale behind the availing of ECLGS, the

necessity for the same, it not being in contravention of order dated

17.01.2020 and being in the best interest of the Appellant No.1

Company. The Ld. Counsel for the Appellant submitted that the

objections of the Respondents herein with respect to availing of

Credit facilities under ECLGS Scheme by the Appellant No.1

Company herein raised during the 245th Board meeting, in which it

was duly considered by the Appellants herein and the objections of

the Respondents was not with respect to the merits of the ECLGS

but on other considerations as mentioned below:

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"Mr. Anil Nair stated that they do not support the companies move on raising more debt because of lack of confidence in the Companies functioning and its Corporate governance.

Mr. Ajit kumar further explained that they cannot assent to this agenda item since they are not sure how the availed funds will be used and executed."

29. The contention of the Respondents herein that the NCLT Kochi

Bench passed an interim order of status quo in all aspects as on

17.01.2020 until further orders, however, the Appellants convened

and held 245th Board meeting on 10.02.2021 by taking certain

decisions more particularly raising of debt of Rs. 62.67 Crores by

the Appellant No.1 Company availing of ECLGS which is in

contravention of status quo order dated 17.01.2021 which is still

subsisting. It is also contended that the Appellants have not sought

modification of the interim order dated 17.01.2021, however, filed

an affidavit dated 03.03.2021 which is in violation of the status quo

order.

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Findings:

30. The NCLT in the order under challenge at para 10 and 11

observed as under:

"10. I have heard the Ld. Sr. Counsel appearing for the Applicants and the Ld. Sr. Counsel appearing for the Respondents and had gone through the documents produced. The only question to be considered here is whether the Respondents have violated the interim order passed by this Tribunal on 17.01.2020, after hearing both the parties? This Tribunal need not interfere with the progress of the Company by any additional funding through ECLGS Scheme under GECL Scheme of NCGTC. However, since there is status quo order given by this Tribunal, any action for the aforesaid purpose should be with the prior permission of this Tribunal. Nothing prevented the Respondents in approaching this Tribunal with a petition to modify or vacate the interim order dated 17.01.2020 before venturing to get nay well considered re-planning and re-organisation of the existing loans. The judicial propriety demands such an order from this Tribunal, while this tribunal ceased of the issue involved in this matter. If Respondents approach this Tribunal with an application to modify/vacate the interim order, definitely the petitioners will get an opportunity to say their views in the matter of re-planning etc. but, the Respondents have not done so. Their contention that on 03.03.2021 they submitted an ECLGS Affidavit before this Tribunal stating details of the GECL Scheme of NCGTC cannot be accepted, because for filing such an affidavit, that too flouting the interim orders, they

Company Appeal (AT) (CH) No. 25 of 2021 -21-

should have obtained the leave of this Tribunal. Here also, Respondents failed to do so. The Ld. Sr. Counsel for the Petitioners stated that, they have filed a Contempt Petition which is pending for hearing.

11. In view of what is stated above, this tribunal see force in the submission of the Petitioners. Hence, this Tribunal makes the Interim order dated 17.01.2020 absolute, making it clear that the approvals/resolutions etc. with respect to raising of any additional debt shall be kept in abeyance and the same will be subject to the outcome in the main Company Petition."

31. From the above order, it is seen that the NCLT made absolute

the status quo order dated 17.01.2020, further by making it clear

that the approvals/resolutions with respect to raising of any

additional debt shall be kept in abeyance and the same will be

subject to the outcome in the main Company Petition.

32. This Tribunal is of the view that the NCLT while passing the

interim order of status quo on 17.01.2020 simply stated that the

parties are directed to maintain status quo in all aspects as on

today until further orders, has not specifically made out whether

status quo to be maintained with respect to management,

shareholding and immovable assets of the Company. This Tribunal

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is of the view that the status quo order is in wider amplitude. It is

an admitted fact that the Appellant No.1 Company is into the

business of automobile sector and there are 6000 workers in the

Company. As per the MOA, the main objects are to carry on the

business of motor dealers of cars, motor vehicles etc. and the

company has to perform its functions as per its objectives. The

NCLT ought to have specified the status quo order with regard to its

either shareholding, management and immovable properties etc.

Though the Respondents herein have alleged the acts of oppression

and mismanagement in the affairs of the company and sought

various reliefs i.e. main and interim reliefs and the Company

Petition is still pending for Adjudication. While so it is not out of

place to mention that the Petitioners expresses their apprehension

that the assets of the Company are being sold or the

Petitioners/Applicants proposed to remove from the Board of

Directors of the Company, in such cases to prevent such acts the

Tribunals keeping in view of the interest of the Applicants grants

interim order. Any orders either interim or final should invariably in

the paramount interest of the Company.

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33. In the present case the Respondents herein have alleged that

the Appellants have violated the orders of the status quo dated

17.01.2020 by availing ECLGS i.e. Emergency Credit Line

Guarantee Scheme offered by the Govt. of India and the Appellant

Company in it 245th Board meeting dated 10.02.2021 taken a

decision by majority of Board of Directors to avail ECLGS during

subsistence of status quo order dated 17.01.2020. Taking such a

decision in the Board meeting is in the interest of the Company or

not is a moot question to be considered by this Tribunal. The Ld.

Counsel for the Appellant contended that they have filed an affidavit

dated 03.03.2021 bringing to the notice of the NCLT with regard to

its decision to avail ECLGS. Further, the Appellants contended that

the debt to the tune of Rs. 62.67 Crores from various Banks was

not an additional debt and only re-organising of the existing Credit

Sanction limit as on the date of the status quo order.

34. This Tribunal is of the view that the Appellants have not

violated the orders of the Tribunal dated 17.01.2020 by making it

clear that the Company has to function through the Board of

Directors and there is no stay with regard convening and holding of

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the Board meetings to take a timely decision on the basis of the

business of the Company. It is made clear that the interest of the

Company is paramount. It is also made clear that the Appellant

No.1 Company is a Board managed Company and the Company in

variably takes its decisions in the Board and General Meetings

which is to take business decisions and also to comply with the

applicable provisions of the Companies Act, 2013.

35. It is an admitted fact that the Appellant No.6 filed an affidavit

dated 03.03.2021 before the NCLT Kochi Bench after the Board

meeting held on 10.02.2021. However, the Respondents herein have

filed CA 44 of 2021 subsequent to filing of Affidavit. The NCLT

ought not to have interfered with its business decisions which is in

the interest of the company. Further, the NCLT ought to have

clarified the status quo order dated 17.01.2020 more specifically,

however in absence of clarification, the passing/granting of status

quo in all respects leads to ambiguity. Even the Appellants have not

questioned the status quo however, aggrieved by further imposing

restrictions with regard to raising of additional debt, which

Company Appeal (AT) (CH) No. 25 of 2021 -25-

according to the Appellants is a interference in the day-to-day

affairs of the Company.

36. This tribunal also makes it clear that the business and its

operations of the Company cannot be put to a grinding halt.

37. The Ld. Counsel for the Respondents herein had submitted

that the no relief can be granted to the Appellants for the reason

that the Appellants have not come before this Tribunal with clean

hands and relied upon the judgments of the Hon'ble Supreme Court

in "S.P. Chengalvaya Naidu vs. Jagannath" (1994) 1 SCC 1 wherein

the Hon'ble Supreme Court held that a litigant coming before the

court with unclean hands can be thrown out at any stage of

litigation" as held at para 5 & 6. Further, the Ld. Counsel relied

upon the Judgment of the Hon'ble Supreme Court in "Oswal Fats &

Oils ltd. vs. Additional Commissioner" (2010) 4 SCC 728. The

Hon'ble Supreme Court held that "it is the duty of the court not to

grant any relief to a person who has withheld material facts (para

15)".

38. This Tribunal considered the above Judgements however we

are of the view that the Appellants have made out a prima facie case

Company Appeal (AT) (CH) No. 25 of 2021 -26-

hence, it cannot be said that the Appellants have come before this

Tribunal with unclean hands.

39. On the other hand, the Ld. Counsel for the Appellants

submitted that by way of this impugned order the Appellant No.1

Company cannot carry on its day-to-day affairs independently by

taking its decisions apt to the requirements of the Company.

However, by way of the impugned order it amounts to interference

with day-to-day running of the Company as going concern. The Ld.

Counsels for the Appellants also relied upon the following

judgments on the aspects of status quo order should not be vague.

1987 (supplement) SCC 394 in the matter of "Bharat Coking Coal

ltd vs. State of Bihar & Ors." para 5. Further, the Hon'ble High

Court of Karnataka in the matter of "N Ramaiah vs. Nagaraj S &

Anr." reported in 2001 SCC online Kar 191 para 21 & 22. Para 22

reads as under:

"22. An order of status quo is a specie of interim orders, when granted discriminately and without qualifications or conditions, leads to ambiguity, difficulties and injustice. If Courts want to give interim relief, they should endeavour to give specific injunctive relief. If grant of order of (status quo) is found to be the only appropriate relief, then Courts should indicate the

Company Appeal (AT) (CH) No. 25 of 2021 -27-

nature of status quo, that is whether the status quo is in regard to possession, title, nature of property or some other aspects. Merely saying status quo or status quo to be maintained should be avoided. Further, it is held that "in such a case, if the court wants to direct status quo it should specify the context in which or conditions subject to which, such status quo direction is issued."

40. The Ld. Counsel also relied upon the Judgment of this

Tribunal reported in 2019 SCC online NCLAT 166 in the matter of

"Amritsar Swadeshi Woollen Mills Pvt. Ltd. vs Vinod Krishan Khanna

& Ors." para 59.

Conclusion:

41. This Tribunal comes to a resultant conclusion that while

passing of status quo order it should be specific with respect to

subject matters more particularly in the matters of Oppression and

mismanagement, on the basis of the facts of each case and if such

status quo is warranted to protect the interest of the Applicants/

Petitioners therein. In such circumstances the Tribunals while

passing of status quo order, should be more specific as held by the

Hon'ble High Court of Karnataka in the matter of "N Ramaiah vs

Nagaraj" supra. However, by way of impugned order dated

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18.06.2021 the NCLT while making interim order dated 17.01.2020

as absolute, however, with respect to passing of order viz; "raising of

any additional debt shall be kept in abeyance", is in our considered

view is interfering with the day-to-day affairs of the Company.

Therefore, this Tribunal find that the impugned order dated

18.06.2021 para 11 third sentence onwards namely "making it clear

that the approvals/resolutions etc. with respect to raising of any

additional debt shall be kept in abeyance and the same will be

subject to the outcome in the main Company Petition." is hereby

quashed and set aside. Accordingly, the issue is answered.

42. With the above directions the Company Appeal No. 25 of 2021

is allowed to the extent above. No order as to costs. Applications if

any pending stands closed.

[Justice M. Venugopal] Member (Judicial)

[Kanthi Narahari] Member (Technical) 11/05/2022

sr

Company Appeal (AT) (CH) No. 25 of 2021