Mr. Rajan Goel & Ors vs Chaman Products Pvt. Ltd. & Ors

[Arising out of order dated 31.05.2022 passed by the National Company Law Tribunal (New Delhi Court IV) in New IA-116/ND/2022 in CP-88/ND/2021]

IN THE MATTER OF: 1. Mr. Rajan Goel S/o Late Mr. Chaman Lal Goel Aged 61 Years R/o 280 Kailash Hills, New Delhi-110065 E-mail: rajan.goel@rediffmail.com ....... Appellants No. 1. 2. Rajan Goel HUF Through Karta Mr. Rajan Goel R/o 280 Kailash Hills, New Delhi-110065 E-mail: rajan.goel@rediffmail.com ....... Appellants No. 2. 3. Mr. Rachit Goel S/o Mr. Rajan Goel Aged 32 years R/o 280 Kailash Hills, New Delhi-110065 E-mail: 19.racchitgoel@gmail.com ....... Appellants No. 3. 4. Mr. Sanchit Goel S/o Mr. Rajan Goel Aged 29 Years R/o 280 Kailash Hills, New Delhi-110065 E-mail: 19.racchitgoel@gmail.com ....... Appellants No. 4. 2

Versus

1. Chaman Products Pvt. Ltd. A company incorporated under the Companies Act, 1956 Having its registered office at: 280 Kailash Hills, New Delhi-110065 Email: chamanproducts@gmail.com ...... Respondent No. 1. 2. Mr. Vikas Goel S/o Late Chaman Lal Goel Aged 56 years R/o G-46 East of Kailash, Ground Floor New Delhi-110065 Email: vikas_kgoel@rediffmail.com ...... Respondent No. 2. 3. Mr. Akash Goel S/o Mr. Vikas Goel Aged 28 years R/o G-46 East of Kailash, Ground Floor New Delhi-110065 Email: akash.goel@gmail.com ...... Respondent No. 3.

Present: For Appellant: Mr. Aayush Agartwal, Mr. Siddham Nahata and Mr. Auritro Mukherjee, Advocates. For Respondent:- Mr. Surabh Kalia and Mr. Chaitanya Bansal, Advocates for Respondents.

JUDGMENT

(12th December, 2022)

Justice Anant Bijay Singh;

The instant Appeal under Section 421 of the Companies Act, 2013, has

been filed by the Appellants against the impugned order dated 31.05.2022

Company Appeal (AT) No. 118 of 2022 3

passed by the National Company Law Tribunal (New Delhi Court IV) in New IA-

116/ND/2022 in CP-88/ND/2021. By which, the Tribunal dismissed the

application filed by the Appellants seeking issuance of summons to one Mr.

Moolchand Surana, resident of 227D, Prakash Mohalla, East of Kailash, New

Delhi 110065 and to examine him on oath.

2. The facts giving rise to this Appeal are as follows:

i) The Appellants filed petition before the Tribunal in light of gross acts of

oppression and mismanagement by the Respondents in the affairs of Respondent

No. 1 - Chaman Products Pvt. Ltd. The Appellants, who were the Petitioners

before NCLT, belong to the Rajan Goel group. Mr. Rajan Goel is the head of this

group as well as the head of the Goel family. He is also the promoter and founder

of Chaman Products Pvt. Ltd. ('Company'). He is a Chartered Accountant by

profession and enjoys tremendous stature and goodwill in the society. Mr. Rachit

Goel and Mr. San Chit Goel are his sons and constitute the Rajan Goel group

alongwith Mr. Rajan Goel and his wife Ms. Anita Goel.

ii) The Rajan Goel group collectively held 54% shares of the Company and

even today collectively holds about 35.8% shares of the Company. The facts

leading to the subject petition filed before NCLT for oppression and

mismanagement are not being repeated herein for the sake of brevity, but

essentially the captioned petition came to be filed since Respondent Nos. 2 and

3 arbitrarily and completely illegally halved the shareholding of the Rajan Goel

group (from 35.8% to 17.9%) in the space of merely 3-4 months. Mr. Vikas Goel,

who is Respondent No. 2 herein, is the head of the Vikas Goel group. He is the

younger brother of Mr. Rajan Goel and was encouraged to join the Company by Company Appeal (AT) No. 118 of 2022 4

Mr. Rajan Goel himself. The Vikas Goel group comprises of his wife Ms. Ritu Goel

and his son Mr. Akash Goel (Respondent No.3) herein. The Vikas Goel group,

while reducing the shareholding of Rajan Goel group as indicated above, have

within the space of the same 3-4 months, increased own shareholding from 2.3%

to 80.65%.

iii) The subject petition accordingly narrated the several acts of oppression

and mismanagement at the hands of Respondent Nos. 2 and 3 and sought

various prayers including restoration of the shareholding of the Rajan Goel

group. The Vikas Goel group belatedly filed a reply to the subject petition wherein

various false and baseless pleas were taken. One of the pleas taken by the Vikas

Goel group in its reply was that the Rajan Goel group has already transferred its

shares in the Company to the Vikas Goel group. In support of this false

allegation, the Vikas Goel group filed certain share transfer forms wherein one

Mr. Moolchand Surana had stood and signed as a witness.

iv) The Appellants filed a rejoinder in the subject petition pointing out the

patent falsity of the stand taken by the Respondents. It was averred that the

share transfer forms were of no value since they were not accompanied by share

transfer certificates. Further, the share transfer forms had been signed at a time

when the parties were considering an overall settlement of the assets of various

family businesses. These share transfer forms were never handed over to the

Respondents but placed in the custody of Mr. Moolchand Surana who was made

a witness to the transaction precisely for this reason. The Appellants,

immediately after filing the above rejoinder, also filed the subject application

seeking that Mr. Moolchand Surana be summoned and examined on oath with Company Appeal (AT) No. 118 of 2022 5

respect to the facts and circumstances in which the share transfer forms came

to be signed by the Appellants. This was for the reason that Mr. Moolchand

Surana, being a witness to the discussion, had special knowledge about the facts

in which the documents came to be signed. Further, the NCL T admittedly has

powers to summon witnesses and examine them on oath under Section 424 of

the Companies Act, 2013, thereafter, after hearing the parties, the Tribunal

dismissed the said application which led to filing of this Appeal.

3. The Ld. Counsel for the Appellants during the course of argument and in

his memo of Appeal submitted that the Tribunal has completely failed to

appreciate that it possesses powers under Section 242 of the Companies Act,

2013 to issue summons to individuals and examine them on oath in appropriate

cases. The Appellant prayed before the Tribunal to issue summons because the

witness viz. Mr. Moolchand Surana possessed special knowledge on the issue of

the execution of share transfer forms since he stood and signed as a witness to

the same and hence his evidence was necessary in the matter.

4. It is further submitted that the Tribunal has clearly erred in observing that

documentary evidence and affidavits filed by the parties will in all cases be

sufficient to adjudicate the disputes of oppression and mismanagement of a

company. The Tribunal neither considered nor appreciated the grounds urged in

the subject application which clearly set out the precise and specific reason

which necessitated that Mr. Moolchand Surana be summoned and examined on

oath in the matter. Based on these submissions the impugned order is fit to be

set aside and the Appeal be allowed.

Company Appeal (AT) No. 118 of 2022 6

5. The Ld. Counsel for the Respondents during the course of argument and

in his Reply Affidavit submitted that no question of law or otherwise on fact

arises to seek interference of this Tribunal in the impugned order challenged

herein. A bare perusal of the impugned order shows that the Appellants failed to

bring provide sufficient reasons and further failed to bring on record any material

documents necessary for examination Mr. Moolchand Surana on oath. Further,

shows that the Tribunal for the reasons recorded above rightly held that there is

no need to examine any witness especially when the matter has reached at an

advance stage and in ripe for arguments. The Appellants have admitted the

issues raised in the reply to the petition and have also filed rejoinder along with

the affidavit wherein the Appellants have nowhere in the petition and rejoinder

been able to prove that the shares were deposited in the custody of Mr.

Moolchand Surana and that his examination is necessary for adjudication of the

proceedings. Thus, the Appellants had no locus to demand examination

subsequently by way of the application.

6. It is further submitted that it is an established principle that the

proceedings before the Tribunal are of summary nature. It has been held in

plethora of judgments that the Tribunal should allow examination of witness on

oath only in special circumstances or when the petitioner is able to prove with

irrefutable evidence that grave injustice will be caused if the examination is not

allowed. In the present matter, the Appellants herein have utterly failed to satisfy

any of the fundamental conditions as specified above. Further, it is a settled

principle of law that the party who wants to prove anything as made out in the

Company Appeal (AT) No. 118 of 2022 7

pleadings has to give evidence in support of the same, which was absent in the

application and is also absent in the instant Appeal.

7. It is further submitted that as per Section 56 of the Companies Act, 2013,

a company upon receipt of duly executed, stamped and signed copy of the

Instrument of Transfer of shares along with share certificates has to register

such transfer. The Appellants herein executed 2 different Form SH-4, first on

27.12.2019 executed by Appellant No. 1 in which Mr. Moolchand Surana was

not made a witness and second on 02.12.2020 executed by Appellant No. 2

transferring 2500 shares in which only Mr. Moolchand Surana was a witness,

had there been any objection with respect to the transfer of shares by the

Appellants the same should have been raised with the company within a period

of 60 days from the date of execution of the above forms. But the Appellants

deliberately avoided to take any action on the said transfer and subsequently,

on 26.05.2022 while filing the rejoinder in petition made a failed attempt to

challenge the transfer without adducing any material evidence and without

explaining the reasons necessitating examination of witness with sole intent to

impede the adjudication of the petition. Based on the above submissions, the

instant Appeal is liable to be dismissed.

8. After hearing the parties and going through the pleadings made on behalf

of the parties, we have noticed from the impugned order that the Tribunal has

examined those documents which have been filed by the parties and the main

matter is ripe for arguments, therefore, in the facts and circumstance of the case

aforenoted, there is no illegality in the impugned order. Therefore, we do not find

any merit in the instant Appeal. The impugned order dated 31.05.2022 passed Company Appeal (AT) No. 118 of 2022 8

by the National Company Law Tribunal (New Delhi Court IV) in New IA-

116/ND/2022 in CP-88/ND/2021 is hereby affirmed. Accordingly, the instant

Appeal is hereby dismissed devoid of merit. No order as to costs. I.A, if any,

stands disposed of.

9. Registry to upload the Judgment on the website of this Appellate Tribunal

and send the copy of this Judgment to the National Company Law Tribunal (New

Delhi Court IV), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

New Delhi 12th December, 2022 R. Nath.

Company Appeal (AT) No. 118 of 2022