M.N Pratap Reddy & Ors vs Lakshmi Narasima Mining Co (P) Ltd & Ors

For Appellant:- Mr. P.K. Mittal, Advocate and MR. GV Rao, CA.None For Respondents: - Mr. Jayant Mehta, Ms Sayaree Basu Malik, Ms anu Shrivastava, Ms Vailshali Kalera and Mr. Madhur Mahajan, Advocates for R3 and R4.

ORAL JUDGEMENT (26th February, 2019)

Per: A.I.S. Cheema, J: This Appeal is filed by original Petitioner against

Orders passed in IA 30/2016 which was filed by original Respondents 3 and

4. The present Appeal is against the Impugned Order dated 20th December,

2018 of National Company Law Tribunal, Bengaluru Bench, Bengaluru

('NCLT', in short) passed in IA 30/2016 in CP 59/2014 (TP 66/2016). The IA

was filed inter alia seeking Order for holding Annual General Meeting of the

Company and to direct the Respondents to transfer all the books of accounts,

records, etc. to the registered office and for lifting restrictions on holding of

the meetings of the Board of Directors.

2. When as per the Impugned Order, steps were initiated for holding the

AGM on 18th January, 2019, present Appeal was filed seeking to restrain

holding of the same with other prayers like expediting disposal of the

Company Petition and asking for copy of Audit Report issued by M/s.

Brahmayya & Co. and to restrain parties from shifting, altering or modifying

shareholding, etc. The matter came up before the learned Single Judge of this

Tribunal on 18th January, 2019 when although Notice was issued, it was

observed that the Respondents may go ahead with the proposed AGM, but the

same shall be subject to the outcome of this Appeal and the decision taken at

the AGM shall not be implemented till next date of hearing.

Company Appeal (AT) No.17/2019 3

3. Now the matter is before us on stage of admission hearing.

4. Heard counsel for appellant. The learned counsel for the appellant is

making various grievances to say how the AGM directed by NCLT has been

conducted. It is being claimed that IA No. 30/2016 was earlier dismissed by

NCLT and later on it has been again taken up and the impugned order has been

passed to hold the AGM for which the appellant feeling aggrieved filed this

appeal. Learned counsel for appellant is raising various other issues which are

agitated before NCLT in company petition.

5. The counsel for the appellant states that in the impugned order the NCLT

has directed M/s Brahmmaya & Co to hand over records and final report of the

company to R1 company. He submits that the NCLT should have directed giving

copy of the report also to the appellant, the original petitioner.

Regarding this it is for the appellant to move NCLT itself.

6. According to the learned counsel the present impugned order passed

amounts to not complying with the earlier order of this Tribunal passed in

Company Appeal (AT) No.86/2018. Learned counsel points out the copy of the

order at Annexure XVII (Page 390). This tribunal at that time had expressed as

under:-

"Taking into consideration the facts and circumstances of the case,

while we do not express any specific opinion with regard to the

impugned order dated 19th January, 2018, which may otherwise

affect the merit of the claim and counter claim made by the parties,

we allow the appellants to withdraw this appeal with directions to

the parties not to ask for unnecessary adjournments in both the

Company Petitions as one of the company petition is pending since

Company Appeal (AT) No.17/2019 4

2016 and in terms of Section 422 of the Companies Act, 2013, the

Tribunal is required to dispose of the matter preferably within three

months. The Tribunal is expected to hear both the company

petitions together, as the parties are common and relates to the

same very company. It is expected that the Company Petitions will

be disposed of on an early date preferably within three months."

7. The appeal was accordingly disposed of as withdrawn and the matter was

sent back.

8. Now the NCLT has in the impugned order observed and directed in para 9

and 10 as under:-`

"9. The case is pending disposal before the Tribunal since 2014 and

the Tribunal cannot stall normal/statutory affairs of the Company

unless it finds any prejudice is being caused to the party/parties to

permit it. Moreover, it is mandatory for the Board of directors of a

Company to carry out its statutory obligations, failing which, they

are also liable penal/financial actions as stated supra. Therefore,

it is just and proper to permit the Respondent No.1 Company to

conduct its pending Annual General Meetings, duly following

prescribed procedure to conduct AGMS by directing the Auditor and

all the petitioners (including Ms Nandana Reddy) to return all the

records of the Company to Respondent No.1 Company. Since the

parties are not interested/cooperating with the Tribunal to finally

decide the cases by filing several I.As/CAs, and the Tribunal cannot

permit the Company to violate statutory compliances for a long time,

it is just and proper for the Tribunal to see normal functions of the

Company Appeal (AT) No.17/2019 5

Company should take place in accordance with law pending

finalization of the case.

10. In the result, IA No.30 of 2016 in C.P. No.59 of 2014 (T.P.No.66

of 2016) is disposed of with the following directions:

i) M/s Brahmayya & Co (the Auditor appointed in the case) is directed

to hand over all Records and final report of the Company to the

Respondent No.1 company within 10 days after receipt of the fee:

ii) All the three petitioners are also directed to handover all the

records of the Company keeping with them, to the Respondent No.1

Company, within two weeks from the date of receipt of copy of this

order;

iii) The Respondent No.1 company is permitted to conduct its

pending Annual General Meetings duly following procedure

prescribed under the law and take appropriate decision in

accordance with law.

iv) The Company is directed to give proper notice to all concerned

including the petitioners of the CP for conducting of AGM.

v) The decisions to be taken during the above meetings would be

subject to the final decision taken in the case by the Tribunal."

9. Learned counsel for the appellant is making various grievances as

mentioned in the Appeal but we are not going into the particulars of the same,

considering the orders as referred above, portions of which we have reproduced.

It appears to us that between the parties they have serious grievances against

Company Appeal (AT) No.17/2019 6

each other and the company petitions are getting delayed, for non-cooperation

by parties.

10. We find nothing wrong if the NCLT has observed that it is mandatory for

the Board of Directors to carry out statutory obligations and that to facilitate

AGM, orders are required to be passed. We do not think that anything is wrong

in it. AGM has already been held, copy of which is at Annexure 4 of the Counter

Affidavit filed by Respondent No.3 and 4. The impugned order itself stated that

the decisions to be taken would be subject to the final decision to be taken in

the case before the Tribunal.

11. We do not find any reason to entertain this appeal. The admission of the

appeal is declined. Parties to bear their own costs.

(Justice A.I.S.Cheema) Member (Judicial)

(Mr. Balvinder Singh) Member (Technical) Bm

Company Appeal (AT) No.17/2019