Moniveda Consultants Llp & Another vs Shajas Developers Private Limited

1. Moniveda Consultants LLP (formerly known as Gauri Rajeshwari Consultants Pvt. Ltd.), a shareholder holding 40% shares of Shajas Developers Pvt. Ltd. having office at 38 Pali Village, Bandra West, Mumbai Maharashtra- 400050. ...... Appellant No. 1. 2. Rajat Jhunjhunwala, Partner of Appellant No. 1 and Director of JLS Realty Pvt. Ltd., Having residence at 1st Floor, Natasha Seaview, Carter Road, Bandra (West), Mumbai, Maharashtra-400050. ...... Appellant No. 2.

Versus

1. Shajas Developers Private Limited, Bajaj Bhavan, 3rd Floor, J.P. Marg, 226, Nariman Point, Mumbai, Maharashtra-400021. ....... Respondent No. 1. 2. JLS Realty Private Limited, Duru House, 2nd Floor, Juhu Tara Road, Mumbai, Mumbai City, Maharashtra-400049. ....... Respondent No. 2. 3. Mr. Suketu Viren Shah A-52, Darshan Apartments, Malabar Hills, Mumbai, Maharashtra-400006. ....... Respondent No. 3. 4. Neelakantan Krishnan Iyer B/503, Pawan Building, Mohan Srishti-I 2

CHS Ltd. Near Patripul, Kachore, Kalyan (East), Dist. Thane, Mumbai, Maharashtra-421306. ....... Respondent No. 4. 5. Mangesh Pandurang Kadam I/20 Sanman Kunj Co-operative Society, J.M. Road, Near Shivaji Tank, Bhandup (W), Mumbai, Maharashtra-400078. ....... Respondent No. 5. 6. Mamta Digvijay Singh 404, Arna II Wing A, Poonam Garden, Mira Bhayandar Road, Main Road East Thane, Maharashtra-401107. ....... Respondent No. 6. 7. Mohammed Shahid 105/4, Karaya Road, Circus Avenue, Kolkata, West Bengal-700017. ....... Respondent No. 7. 8. Registrar of Companies, 100, Everest, Marine Drive, Mumbai, Maharashtra-400002. ....... Respondent No. 8. 9. Regional Director Everest 5th Floor, 100, Marine Drive, Mumbai, Maharashtra-400002. ....... Respondent No. 9.

Present: For Appellant: Mr. Abhijeet Sinha, Mr. Anil Jarival, Mr. Vishal Ganda, Mr. Ayandeb Mitra, Ms. Akanksha Mathur, Advocates. For Respondent:- Mr. Kunal Vajani, Mr. Kunal Mimani, Advocates for R- 1, 4 & 5. Mr. Ramji Srinivasan, Sr. Advocate with Mr. Rayan Dsouza, Ms. Shruti Pandey, Ms. Megha Dugar, Advocates for R-2. Mr. Krishnendu Datta, Sr. Advocate with Mr. Shikhar Khare, Advocate for R-3.

WITH

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Contempt Case (AT) No. 02 of 2022 IN Company Appeal (AT) No. 104 of 2021

IN THE MATTER OF:

1. Moniveda Consultants LLP (formerly known as Gauri Rajeshwari Consultants Pvt. Ltd.), a shareholder holding 40% shares of Shajas Developers Pvt. Ltd. having office at 38 Pali Village, Bandra West, Mumbai Maharashtra- 400050. ...... Appellant No. 1. 2. Rajat Jhunjhunwala, Partner of Appellant No. 1 and Director of JLS Realty Pvt. Ltd., Having residence at 1st Floor, Natasha Seaview, Carter Road, Bandra (West), Mumbai, Maharashtra-400050. ...... Appellant No. 2.

Versus

1. Shajas Developers Private Limited, Bajaj Bhavan, 3rd Floor, J.P. Marg, 226, Nariman Point, Mumbai, Maharashtra-400021. ....... Respondent No. 1. 2. JLS Realty Private Limited, Duru House, 2nd Floor, Juhu Tara Road, Mumbai, Mumbai City, Maharashtra-400049. ....... Respondent No. 2/Contemnor. 3. Mr. Suketu Viren Shah A-52, Darshan Apartments, Malabar Hills, Mumbai, Maharashtra-400006. ....... Respondent No. 3/Contemnor. 4. Neelakantan Krishnan Iyer B/503, Pawan Building, Mohan Srishti-I

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CHS Ltd. Near Patripul, Kachore, Kalyan (East), Dist. Thane, Mumbai, Maharashtra-421306. ....... Respondent No. 4/Contemnor. 5. Mangesh Pandurang Kadam I/20 Sanman Kunj Co-operative Society, J.M. Road, Near Shivaji Tank, Bhandup (W), Mumbai, Maharashtra-400078. ....... Respondent No. 5/Contemnor. 6. Mamta Digvijay Singh 404, Arna II Wing A, Poonam Garden, Mira Bhayandar Road, Main Road East Thane, Maharashtra-401107. ....... Respondent No. 6/Contemnor. 7. Mohammed Shahid 105/4, Karaya Road, Circus Avenue, Kolkata, West Bengal-700017. ....... Respondent No. 7/Contemnor. 8. Registrar of Companies, 100, Everest, Marine Drive, Mumbai, Maharashtra-400002. ....... Respondent No. 8. 9. Regional Director Everest 5th Floor, 100, Marine Drive, Mumbai, Maharashtra-400002. ....... Respondent No. 9.

ORDER

Dr. Ashok Kumar Mishra, Technical Member

The Appellant have preferred this Appeal under Section 421 of the

Companies Act, 2013 seeking setting aside of the order dated 29.07.2021 passed

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by the National Company Law Tribunal (Mumbai Bench, Court-IV) in CA-147 &

199/2021 in CP-159(MB)/2021. The Appellants are seeking following reliefs:

"a) Pass an ad interim ex parte order directing the

Respondents not to act on any resolution that has been passed

from February 24, 2021;

b) Pass an ad interim ex parte order directing the

Respondents to not proceed/stay any action that has been

taken pursuant to any resolutions that have been passed from

February 24, 2021;

c) Pass an ad interim ex parte order directing Respondent

No. 6 and 7 to not act as a director of Respondent No. 2;

d) Pass an ad interim ex parte order restraining the

Respondents from taking any action to remove or attempt to

remove Appellant No. 2 as a director of Respondent No. 2;

e) Pass an ad interim ex parte order restraining the

Respondents from transferring any investment/asset of

Respondent No. 1 and Respondent No. 2, in favour of any third

party or creating third party interest in Respondent No. 1

Respondent No. 2, in any manner;

f) Pass an ad interim ex parte order directing Respondent

No. 4 and 5 to not transfer or create any further encumbrances

or third-party rights on the shares held by them in Respondent

No. 1;

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g) Pass an ad interim ex parte order directing Respondent

No. 1 to not transfer or create any further encumbrances or third-

party rights on the shares held by them in Respondent No. 2;

h) Pass an ad interim ex parte order directing that status

quo be maintained in respect of the shareholding of Respondent

No. 1 and Respondent No. 2, as existed on January 27, 2021;

i) Pass an ad interim ex parte order directing Respondent

No. 8 to not consider any filing that have been done by

Respondent No. 1 and Respondent No. 2, post January 27,

2021;

j) Pass an ad interim ex parte order directing Respondent

No. 3 to not act as a director of Respondent No. 2;

k) Pass an ad interim ex parte order directing the

Respondents to comply and work in accordance with the

direction of Appellant No. 2, as was the case before February

24, 2021;

l) Pass an ad interim ex parte order to appoint a receiver to

regulate the affairs of Respondent No. 1 and Respondent No. 2,

in an equitable manner, during the pendency of the proceedings,

before the Hon'ble NCLAT and the NCLT;

m) Pass an ad interim ex parte order to appoint a local

commissioner to take possession of the statutory records of

Respondent No. 1 and Respondent No. 2;

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n) Pass an ad interim ex parte order to direct Respondent

No. 1 and Respondent No. 2 to permit the Appellants to access

the statutory records of Respondent No. 1 and Respondent No.

2;

o) Pass any other interim orders that are deemed expedient

by this Hon'ble Tribunal."

2. It is case of the Appellants that the Respondent No. 1- Company Shajas

Developers Private Limited was incorporated on 29.07.2009 with an authorized,

subscribed and paid-up capital of Rs. 1,00,000/-.

a) The Respondent No. 2 - JLS Realty Private Limited which is a wholly owned

subsidiary of Respondent No. 1 Company and is involved in the business of real

estate development and construction more specifically rehabilitation of slums.

b) The Respondent No. 1 till 06.05.2016 owned 14,27,4999 shares of

Respondent No. 2, which constituted 35.92% of the total issued and paid-up

capital of Respondent No. 2.

c) The Respondent No. 2 had borrowed more then 138 crores from IIFL

Finance Limited and the loan was secured by the Respondent No. 3 by providing

a personal guarantee in favour of IIFL Finance Limited.

d) From the year 2015, the Respondent No. 2 started experiencing immense

financial pressure, which had a direct bearing on the Respondent No. 3.

However, due to the abysmal state of the project, high debt and lack of various

statutory approvals and compliances, no financer was willing to replace IIFL and

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no developer was willing to partner with the Respondent No. 2. As on 31.03.2016,

the total debt of Respondent No. 2 was approximately Rs. 275 crores.

e) The Appellant is alleging that shares of Respondent No. 1 was then equally

held between the Respondent No. 4 and 5 i.e. 5,000 equity shares each and thus

the Respondent No. 4 and 5 were merely rubber stamps of the Respondent No.

3.

f) It is also been alleged by the Appellant that the Respondent No. 4 and 5

had handed over 4,000 equity shares of the Respondent No. 1 to the Appellant

No. 1.

• The Appellant No. 2 was in charge of the management of the Respondent

No. 1.

• The Appellant No. 2 was in charge of the management of the Respondent

No. 2.

• The Respondent No. 3 had started putting pressure upon the Appellant

No. 2 to give away the Respondent No. 1 and Respondent No. 2, so that

the said loan along with other loans that was secured by the personal

guarantees of the Respondent No. 3 could be settled. Upon the refusal by

the Appellant No. 2, to agree to such unreasonable demands of the

Respondent No. 3, the Respondent No. 3 decided to usurp the assets of

Appellants and hand them over to IIFL.

• The Respondent No. 3 in connivance with his employees i.e. Respondent

No. 4 and 5, perpetrated a systematic fraud and in the process gravely

prejudiced the interest of the Respondent No. 1 and 2.

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• Unlawful appointment of Respondent No. 6 and 7 as Directors of the

Respondent No. 2

• The Respondents have unlawfully attempted to illegally oust the

Appellant No. 2 as the Director of the Respondent No. 2.

3. There are various acts which he has alleged to be an illegal act done by

Respondent No. 6 and 7 like no board meeting of Respondent No. 2 was held to

call the EGM. The Annual Report etc. 40 % shares holding of the Appellant No.

1 in Respondent No. 1 Company. The Appellants came to know about the input

available in RoC website and otherwise.

4. The IDBI Trusteeship has issued notice dated 01.02.2021 about a

purported default of a financial facility which was not even availed by the

Respondent No. 2. And have invoked 39,73,636 equity shares of Respondent No.

2 and the said notices were sent to the both Appellant No. 2 and Respondent No.

2.

5. Thereafter, another purported notice was issued by IIFL dated 26.02.2021,

informing about the decision of IIFL, as 95% shareholder of Respondent No. 2

company to remove Appellant No. 2 from the board of Respondent No. 2. The

Board of Respondent No. 2 had not even taken cognizance of the purported share

transfer in favour of IDBI Trusteeship. The IIFL is not even a shareholder and

therefore not competent to requisition an EGM.

6. Being aggrieved all the stated issues the Appellants have approached this

Tribunal for an interim relief / final relief.

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7. The National Company Law Tribunal (Mumbai Bench, Court-IV) has

passed the following order (Interim Order) on 29.07.2021 is explicitly clear,

which is hereunder:

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8. The Ld. Counsel for the Appellants took us through page 15 of the written

submissions vide Diary No. 61503 dated 28.09.2022 reflects list of shareholders

as on 31.03.2018 the same is reproduce below:

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9. Further, he also took us through page 65 of the written submissions the

same list of shareholders as on 31.03.2018 and impressed upon us what is being

seen above scan copy that the shareholding of Gauri Rajeshwari Consultants

Private Limited holding 40% shares has been removed in the other statement,

which reproduce hereinbelow:

Further, he also took us through page 66 of the written submissions and

impressed upon us which is reproduce hereinbelow:

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10. There was no stage of meeting where these Directors were appointed and

at list the Appellants are unaware about this. Similarly, he took us through IDBI

Trusteeship Services Ltd. declaration of an Even of Default under the Debenture

Trust Deed which are reproduce hereinbelow:

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11. The Ld. Counsel for the Appellant also took us through page 70 of the

written submissions which reflects total plot area 21882.17 sq. mt. whose

market value is presently over Rs. 123 crores and they are worried for disposal

one way or other of the same.

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12. He also took us through Indenture of Mortgage appearing at page 118 of

the written submissions, all these documents the Appellants were impressing

upon the Tribunal to provide immediate relief / final relief to them. The

Appellants were repeatedly asking for granting some stay and if it is not possible

then parties be directed not to take any perceptive steps in the subject matter.

13. The Ld. Sr. Counsels Mr. Ramji Srinivasan and Mr. Krishnendu Datta took

us through various issues relating to suppression and mis-representation by the

Appellants. Some of which reproduce hereinbelow:

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Company Appeal (AT) No. 104 of 2021 with Contempt Case (AT) No. 02 of 2022 20

Company Appeal (AT) No. 104 of 2021 with Contempt Case (AT) No. 02 of 2022 21

14. They also try to impress upon us that the Appellants are not the

shareholders of the Company and so far, they have failed to produced any share

certificate while the Respondents have all the share certificates as and when

required by the Tribunal can be produced even the originals, while photo copy of

the same already filed.

15. The Appellants have suppressed even the share transfer forms of the

Respondent No. 1 Company. The Appellants are making all attempts to

jeopardize the financial resolution of the Company and they even raised the issue

of maintainability at the threshold and continued to submit various other issues

projected from the Appellant side is far from truth and Appellants filed have

mischievous, misconceived and false statements.

16. The Ld. Counsel for the Respondents No. 1, 4 & 5 also raised the issue of

application under Section 8 of the Arbitration and Conciliation Act, 1996 which

is also lying in NCLT. Further, submitted that he has adopted the submissions

made by Mr. Ramji Srinivasan, Sr. Advocate for the Respondent No. 2.

17. We have gone through the pleadings made by the parties and also brief

submissions made by the Sr. Counsels / Counsels of the parties and available

material on record and are having following observations:

i) The Tribunal has not commented on maintainability which is the primary

issue raised by the Respondents.

ii) The Tribunal also did not specify any where the reason for not granting

interim orders at this stage.

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iii) The property relates to Respondent No. 2 whereas the Appellants are

alleged to be the shareholders of Respondent No. 1, there is not much clarity on

the issue how the shareholder of holding Company is interested in the activity of

the subsidiary Company directly. There is a laid down mechanism to oversee

subsidiary company by holding company.

iv) It is the settled law that the court or tribunal shall record the reasons for

its conclusion on the basis of merits what an order should contain normally not

specified anywhere in the order. The order must be reasoned one since the

judgment or order has to take a final shape of judgment is of value on the

strength of its reasons. The weight of a judgment, its binding character or its

persuasive. Character depends on the presentations or articulations of reason.

Reasons, therefore, is soul and spirit of a good judgment or order. Reference is

invited to the Hon'ble Apex Court judgment which laid down the guidelines on

such writing of judgment or order in Civil Appeal No. 4278 of 2010 (Joint

Commissioner of Income Tax, Surat Vs. Saheli Leasing & Industries Ltd.) at para

7.

v) All this suggest that the matter deserves to be remanded back to the NCLT,

Mumbai Bench for final consideration of all issues and then pass the reasoned

order.

vi) Keeping in mind the full consideration of the case, we are directing the

parties not to take any perceptive steps in the subject matter for a period not

exceeding one month from the date of this order.

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With above observations and directions, we do not find any need in the

movement in Contempt Case and accordingly, let the issue raised in the

Contempt Case be also heard by the NCLT, Mumbai Bench. With these

observations both the matters are disposed of.

18. Registry to upload the Order on the website of this Appellate Tribunal and

send the copy of this Order to the National Company Law Tribunal, Mumbai

Bench, forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Dr. Ashok Kumar Mishra] Member (Technical)

New Delhi 11th October, 2022 R. Nath./Kam./

Company Appeal (AT) No. 104 of 2021 with Contempt Case (AT) No. 02 of 2022