Kbm Foods Private Limited & Anr vs Pravesh Aggarwal

For Respondent:Mr. Dhruv Dewan, Mr. Prayuj Sharma, Advocates.

ORDER

06.07.2023: Heard Mr Vijay K Gupta, learned counsel for the

Appellant and Mr. Dhruv Dewan, learned counsel for Respondent.

The present appeal has been preferred under Section 421 of

the Companies Act, 2013 against an order dated 07.03.2023

passed by the National Company Law Tribunal, New Delhi Court

IV (hereinafter referred to as 'NCLT'). In the Memo of Appeal the

following relief has been sought for:-

a) The impugned order dated 07.03.2023 passed in

CP/86/ND/2022 by Hon'ble NCLT-IV may kindly be set

aside;

b) Hon'ble NCLT may kindly be directed to decide the

maintainability of CP/86/ND/2022 as filed by the

Respondent before proceeding further in the matter. 2

c) Pass any such order(s) as the Hon'ble Court may deem fit

in the facts of the present case.

It is better to reproduce the impugned order as follows:

"Contempt Petition /2/ND/2023

We have heard the submissions made by the Ld. Counsel for

the Petitioner/Applicant. The reply by the Respondents is not

available on the e-portal of the Tribunal. Therefore, the

Respondents/their Counsels are directed to ensure that reply

is reflected on the e-portal of the Tribunal and they also make

themselves present before this Adjudicating Authority on the

next date of hearing and show cause as to why the Contempt

Application should not be allowed. It is made clear that no

further opportunity will be given to the Respondents in this

matter. Court-Officer may serve e-notice of this order to the

Respondents as well as the Counsel for the Respondents.

Petitioner may also serve a private notice/today's order to the

Respondents with a specific direction to note the same and

present on the next date of hearing.

IA/313/ND/2022

We have heard the submissions made by the learned counsel

for the Applicant. No reply is filed by the Respondents in this 3

matter. Therefore, the Respondents are directed to file the

reply. Further, the Respondents Company No.1 is directed to

file the reply. Further the Respondents Company No.1 is

directed to provide the Bank Account Statements from 2022

onwards to till date to the Applicant and shall invariably

provide to the Applicant the Bank Account of Respondent No.1

Company on fortnightly basis.

All other reliefs prayed in the present application will be

considered after hearing of the parties on merits. Earlier

interim order passed in this matter shall continue till the next

date of hearing.

Let the matter be fixed for hearing on 25.304.2023."

Mr. Vijay K Gupta, learned counsel for the appellant at the

very outset submitted that it is true that in the relief portion a

prayer has been made for setting aside the order dated 07.03.2023

but the fact remains that he is assailing the order only in respect

of IA.No.313/2022. The order has been assailed primarily on the

ground that the Learned NCLT has not recorded anything as to

whether any prima facie case in favour of the respondent was made

or not. He further emphasised that before passing the order the

appellant had already filed reply in company petition raising issue 4

of locus of applicant before NCLT who is sole respondent before

this Tribunal. He has further argued that in a proceeding there

was no reason to entertain subsequent prayer for grant of interim

relief. At the time of arguments he has placed heavy reliance on

an order dated 27.05.2022 to elaborate that maintainability issue

was also raised and it remained pending. In sum and substance

it has been argued that without fulfilment of three requirements

for passing order, interim relief has been granted. It was argued

that before passing interim order the learned NCLT was to record

that there was prima facie case, balance of convenience and no

irreparable loss. However, it has been argued that no reason for

the same has been recorded and on this ground interim order is

required to be set aside. He further submits that while petition for

interim relief was already pending there was no reason to pass any

subsequent order in favour of the respondents. Accordingly he

submits that the impugned order is liable to be set aside.

Mr. Dhruv Dewan, learned counsel for the Respondent

opposing the appeal submits that the appeal is liable to be rejected

on the sole ground that the order impugned is an innocuous order.

He submits that by the impugned order the learned NCLT has only

directed the appellant herein only to provide the bank statement 5

to the applicant who is respondent herein. He further submits that

the Respondent herein had filed an application under Section 241,

242 for oppression and mismanagement in the appellant company

and during pendency of the said application with the consent of

the parties a Mediator was appointed. However, subsequently

mediation failed. He further submits that earlier Respondent was

provided bank statement. However, after an order was passed by

the NCLT on 12.07.2022 the Respondent was prevented to access

to bank statement and was stopped and this was the reason that

the Respondent was constrained to filed an IA which was number

as IA No.313/2022 with a prayer to direct the appellant herein to

provide bank statement. On such request learned NCLT has

passed part of the impugned order. He submits that IA i.e. IA

No.313/2022 was filed on 22.11.2022 after serving advance copy

on appellant and thereafter on 16.01.20233 notice was issued for

filing reply. Since no reply was filed by the appellant herein before

the NCLT, the NCLT was left with no option but in the meanwhile

an interim order was passed directing the appellant herein to

provide bank statement to the respondent herein.

Mr. Dhruv Dewan, learned counsel for the Respondent has

also drawn our attention to running page 240 to 244 of the Memo 6

of Appeal which is part of IA No.313/2022. Accordingly it has been

argued that by way of passing such interim order the learned NCLT

has not committed any error. He has further argued that appellant

is raising a plea that the company petition was not maintainable

in view of Section 244 but fact remain that the Respondent was

having more than 11% shareholding which has not been disputed.

However, the Respondent herein was claiming shareholding upto

39.60%. According to Mr. Dhruv Dewan, learned counsel for the

Respondent there is no reason to interfere with the impugned

order.

Mr. Gupta in rejoinder submits that the statement of non-

disputing 11% of the shareholding is completely incorrect and he

reiterated that the Respondent is not shareholder of the company

in question.

Besides hearing learned counsel for the parties we have

perused the material available on record particularly the impugned

order. In the relief portion there is no specific prayer as to

appellant is assailing which order of NCLT passed on 7.3.2023.

Learned NCLT has passed two orders; one in a contempt petition

2/ND/2023 and another on an application i.e. IA No.313/2022

which was filed by the Respondent for interim relief. Normally 7

without specific pleading no relief can be granted. However, during

arguments Mr. Gupta argued that he was confining his relief

against order passed in IA No.313/2022. During course of hearing

learned counsel for both the parties had taken us to order passed

by NCLT which are order dated 27.05.2022 and order dated

12.07.2022. Both the orders are reproduced hereinbelow:

"27.05.2022: Part arguments have been heard. At this stage,

during the course of arguments, the parties are inclined to have

mediation in between the parties, because this company

pertains to a family member.

In the meanwhile, it is being stated by ld. Sr. Counsels Shri

Arun Kathpalia for the respondent that there will no General

Meeting, no change of share capital and no alienation of any

property of the company in any manner.

As the parties want to have mediation, therefore, with the

mutual consent of Ld. Sr. Counsels Shri Krishnendu Dutta and

Shri Arun Kathpalia for both the parties, a common Sr.

Mediator will be appointed, who will try to mediate between

the rival parties. Accordingly, parties are referred to Ld.

Mediator.

8

Let the matter be taken up for part hearing on the point of

interim relief on 12.07.2022 as part arguments have already

been heard."

"12.07.2022- Learned counsel for the parties, in view of the

previous order sheet, have hereby agreed that Mr. P Nagesh,

Sr. Counsel be appointed as "Mediator" in the present matter

to mediate between the petitioner and respondent, (who are

closely related, being between the father and sons).

Accordingly, Mr. P Nagesh, Senior Advocate is appointed as

"Mediator'. He would file brief report within three weeks.

Earlier interim order dated 27.05.2022 shall continue till the

next date of hearing. If the parties do not come to any

settlement during mediation, then the respondent shall file the

reply positively on or before the next date of hearing.

Further it is directed that in the meantime none of the parties

shall purchase any items from the Company's funds for their

personal use.

Let the matter be fixed for 2308.2022."

Of course, at the time argument, Mr. Gupta has emphasised

that he had filed an application raising locus of the Respondent

and the same was heard orally and the issue of maintainability 9

was raised, however, he was unable to satisfy by both the orders

that the issue of maintainability was argued or not. After going

through the aforesaid orders it is evident that the issue of

maintainability was not discussed by learned NCLT. This fact is

further demolished on the basis of reply filed by the Appellant

before the NCLT which was filed on 21.11.2022 i.e. much much

after the aforesaid two orders were passed. It is true that objection

of locus has been raised.

Before further proceeding we would like to reproduce para

11(a) and para 13 of the application which was filed on 22.11.2022

as follows:

"11(a) Until about 21.08.2022, the Applicant had internet and

mobile access to the bank account of the Respondent No.1 with

Axis Bank which is the main account of Respondent No.1. It

was for this reason that in the course of the hearing on

12.07.2022 the Applicant could show to this Hon'ble Tribunal

how the funds of Respondent No.1 company were being

directed for the personal expenses of Respondent No.2.

Realizing that continued access of the Applicant to the Bank

statement of Respondent No.1 company with Axis Bank would

expose the Respondents continued acts of siphoning and 10

embezzlement, the Applicant's access to the bank accounts of

the Respondent No.1 has been stopped from on or around

21.08.2022. This has resulted in a situation where the

Applicant has no visibility on any financial transaction

concerning the Respondent No.1 company. A snapshot

retrieved from the mobile banking application of Axis Bank

showing that the Applicant's access to the account has been

disabled is annexed herewith and marked as Annexure-6."

"13. It is submitted that because of all the above, the Applicant

today is in complete dark about the affairs and conduct of

business of Respondent No.1 company. Thus, the Applicant is

not in a position to know whether the affairs of Respondent

No.1 company are being conducted in a lawful manner and

whether even the Order dated 12.07.2022 passed by this

Hon'ble Tribunal directing that no personal purchases will be

made from the funds of the Respondent No.1 company is being

complied with. IN other words, it is impossible to even discern

the compliances of the order dated 12.07.2022 passed by this

Hon'ble Tribunal."

11

In view of the stand taken in the application for Interim relief

we are of the opinion that learned NCLT in the impugned order has

committed no error in asking the appellant to provide bank

statement. Moreover the order impugned particularly order passed

in IA No.313/2022 appears to be innocuous order on which there

was no reasons to raise any issue by the appellant. So far as the

claim of the Respondent that they were having 39% shareholding

or the objection raised by the appellant that the applicant before

NCLT was not having locus to maintain application, we are unable

to record any observation due to the reason that the issue of

maintainability is still pending before the NCLT.

In view of the above observation and discussions we find no

ground to interfere with the impugned order. The appeal stands

dismissed.

(Justice Rakesh Kumar) Member (Judicial)

(Dr. Alok Srivastava) Member (Technical) Bm/gc