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Jubey M. Devasia & Anr vs Kims Bellerose Institute Of Medical ...

National Company Law Appellate Tribunal10 December 2018

Ratio decidendi

The rule this decision rests on

An appeal under Section 421 of the Companies Act, 2013 does not lie against an order of the National Company Law Tribunal allowing an application under Section 8 of the Arbitration and Conciliation Act, 1996 and dismissing a petition under Sections 241 and 242 of the Companies Act, 2013 on the ground of reference to arbitration, because in passing such an order the Tribunal acts as a judicial authority under the Arbitration Act and not in its capacity as a Tribunal under the Companies Act. The fact that the underlying petition under Sections 241 and 242 was to be determined on its merits does not take the case outside that principle, since the nature of the order is determined by the capacity in which the Tribunal acts when it refers the parties to arbitration. The National Company Law Tribunal has no inherent power under its Rules, including Rule 11 of the National Company Law Tribunal Rules, 2016, to pass orders beyond those conferred by the statute, and cannot rely on such Rules to sustain an appeal against an order that is not appealable.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHICompany Appeal (AT) No. 377 of 2018IN THE MATTER OF:

Jubey M. Devasia & Anr. ...Appellants

Vs.

Kims Bellerose Institute of Medical Sciences Pvt. Ltd. & Ors. ...Respondents

Present: For Appellant: - Mr. Piyush Singh, Advocate.

ORDER

10.12.2018─ This appeal has been preferred by the Appellant against

the order dated 5th September, 2018 passed by the National Company

Law Tribunal ('Tribunal' for short), Division Bench, Chennai.

2. By the impugned order, the Interlocutory Application preferred by

the Respondent under Section 8 of the 'Arbitration and Conciliation Act,

1996' has been allowed and the Company Petition filed under Sections

241 & 242 of the Companies Act, 2013 has been dismissed.

3. In "Thota Gurunath Reddy & Ors. Vs. Continental Hospitals

Pvt. Ltd. & Ors.─ Company Appeal (AT) No. 160 of 2017", this

Appellate Tribunal while dealing with the application filed under Section

45 of the Arbitration and Conciliation Act, 1996, held that the appeal

under Section 421 of the Companies Act, 2013 is not maintainable

Contd/-................

-2-

against an order of reference to Arbitral Tribunal as the National

Company Law Tribunal do not pass the order in the capacity of a

Tribunal but in the capacity of the 'judicial authority'.

4. Learned counsel appearing on behalf of the Appellant tried to

distinguish the decision in "Thota Gurunath Reddy & Ors." (Supra)

on the ground that the application under Sections 241 & 242 was

required to be determined on merit. He further submits that the

Tribunal has inherent power under Rule 11 of the National Company

Law Tribunal Rules, 2016.

5. However, such submission cannot be accepted as the Tribunal

has no inherent power under its Rules to pass any order. The case of

the Appellant being covered by the decision in "Thota Gurunath Reddy

& Ors." (Supra) as the appeal under Section 421 of the Companies Act,

2013 is not maintainable, we are not inclined to interfere with the

impugned order dated 5th September, 2018. It is accordingly dismissed.

No cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice Bansi Lal Bhat) Member(Judicial) Ar/uk

Company Appeal (AT) No. 377 of 2018

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