Mrs. Sonia Khosla vs Mr Sameer Kudsia

IN THE MATTER OF: Mr. R. P. Khosla, Petitioner No. 6 in CP No. 144 of 2016, Son of Late Mr. R.R. M. Khosla, Aged 89 years, Occupation Entrepreneur Director and Shareholder of M/s. Montreaux Resorts (P) Ltd., D-328, Defence Colony, New Delhi - 10024 ...Appellant Email: rpkhosla@gmail.com

Versus 1. M/s. Ascot Hotels & Resorts Ltd. (A Company principally owned by Mr. Vikram Bakshi and Mrs. Madhurima Bakshi, and operated by them as their 'corporate veil') Acting through its Managing Director, Mr. Vikram Bakshi Address: 15th Floor, Mohan Dev Building, 13 Tolstoy Marg, New Delhi - 110001 Email: vikrambakshi@ascothotels.in

2. Mr. Vikram Bakshi, Director and Principal Shareholder of Ascot Hotels & Resorts Ltd, and erstwhile Managing Director of Connaught Plaza Restaurants (P) Ltd. S/o Late Mr. D.N. Bakshi, 157, Golf Links New Delhi - 110003 Email: vikrambakshi@ascothotles.in

3. Mr. Wadia Parkash, S/o Mr. Ved Prakash, Managing Director & CEO of Ascot Hotels & Resorts Ltd, & ex-Director of Montreaux Resorts (P) Ltd. Resident of : C-220 Defence Colony, 2

New Delhi Email: wadiaparkash@yahoo.co.in

4. Mr. Vinod Surha S/o Mr. R.G. Surha Director (Finance and Accounts) Ascot Hotels & Resorts Ltd, & ex-Director of Montreaux Resorts (P) Ltd. Resident of: B-43 Raju Park (Near Sainik Farms) New Delhi Email: vinod surha@yahoo.com

5. Mrs. Madhurima Bakshi Director and Principal Shareholder of Ascot Hotels & Resorts Ltd, W/o Mr. Vikram Bakshi, 157, Golf Links New Delhi - 110003 Email: c/o vikrambakshi@ascothotels.in

6. Ms. Devika Bakshi (nee Talwar) Daughter of Mr. Vikram Bakshi & Member of Executive Management of Ascot Hotels & Resorts Ltd., of Connaught Plaza Restautants (P) Ltd. & alleged shareholder of K.K. Ropeways Ltd. (w.e.f. 31.03.2007) 15th Floor, Mohan Dev Building 13 Tolstoy Marg New Delhi Resident of: B-2 Greater Kailash - I New Delhi Email: c/o vikrambakshi@ascothotels.in infor@ascothotels.in

7. Ms. Kanika Bakshi, Daughter of Mr. Vikram Bakshi & Member of Executive Management of Ascot Hotels & Resorts Ltd., of Connaught Plaza Restautants (P) Ltd. & alleged shareholder of K.K. Ropeways Ltd. (w.e.f. 31.03.2007) 15th Floor, Mohan Dev Building 13 Tolstoy Marg New Delhi Resident of:

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 3

157 Golf Links New Delhi Email: c/o vikrambakshi@ascothotels.in infor@ascothotels.in ...Contesting Respondents

Present: For Appellant: Mr. Deepak Khosla, Advocate. For Respondent: Mr. Jay Salva, Sr. Advocate with Mr. Anand Mishra, Advocate for Respondent Nos. 2 to 7. Mr. Rishi Sood, for R-1

with Company Appeal (AT) No. 32 of 2022

IN THE MATTER OF: Mr. R. P. Khosla, ...Appellant Petitioner No. 6 in CP No. 144 of 2016, Son of Late Mr. R.R. M. Khosla, Aged 89 years, Occupation Entrepreneur Director and Shareholder of M/s. Montreaux Resorts (P) Ltd., D-328, Defence Colony, New Delhi - 10024

Versus Mr. Vikram Bakshi, S/o Late Mr. D.N. Bakshi, 157, Golf Links, New Delhi - 110003 ...Respondent

Present: For Appellant: Mr. Deepak Khosla, Advocate. For Respondent: Mr. Jay Salva, Sr. Advocate with Mr. Anand Mishra, Advocate for Respondent Nos. 2 to 7.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 4

with Company Appeal (AT) No. 33 of 2022

IN THE MATTER OF: Mr. Vineet Khosla, Prospective Petitioner No. 7 in CP No. 144 of 2016 Son of Late Mr. K.K. Khosla Aged 56 years Occupation Entrepreneur Director and Shareholder of M/s. Montreaux Resorts (P) Ltd., A-501 The Vilas DLF Phase 2, Gurgaon Email: khosla.vineet@gmail.com ...Appellant

Versus 1. M/s. Ascot Hotels & Resorts Ltd. (A Company principally owned by Mr. Vikram Bakshi and Mrs. Madhurima Bakshi, and operated by them as their 'corporate veil') Acting through its Managing Director, Mr. Vikram Bakshi Address: 15th Floor, Mohan Dev Building, 13 Tolstoy Marg, New Delhi - 110001 Email: vikrambakshi@ascothotels.in

2. Mr. Vikram Bakshi, Director and Principal Shareholder of Ascot Hotels & Resorts Ltd, and erstwhile Managing Director of Connaught Plaza Restaurants (P) Ltd. S/o Late Mr. D.N. Bakshi, 157, Golf Links New Delhi - 110003 Email: vikrambakshi@ascothotles.in

3. Mr. Wadia Parkash, S/o Mr. Ved Prakash, Managing Director & CEO of Ascot Hotels & Resorts Ltd, & ex-Director of Montreaux Resorts (P) Ltd. Resident of : C-220 Defence Colony,

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 5

New Delhi Email: wadiaparkash@yahoo.co.in

4. Mr. Vinod Surha S/o Mr. R.G. Surha Director (Finance and Accounts) Ascot Hotels & Resorts Ltd, & ex-Director of Montreaux Resorts (P) Ltd. Resident of: B-43 Raju Park (Near Sainik Farms) New Delhi Email: vinod surha@yahoo.com

5. Mrs. Madhurima Bakshi Director and Principal Shareholder of Ascot Hotels & Resorts Ltd, W/o Mr. Vikram Bakshi, 157, Golf Links New Delhi - 110003 Email: c/o vikrambakshi@ascothotels.in

6. Ms. Devika Bakshi (nee Talwar) Daughter of Mr. Vikram Bakshi & Member of Executive Management of Ascot Hotels & Resorts Ltd., of Connaught Plaza Restautants (P) Ltd. & alleged shareholder of K.K. Ropeways Ltd. (w.e.f. 31.03.2007) 15th Floor, Mohan Dev Building 13 Tolstoy Marg New Delhi Resident of: B-2 Greater Kailash - I New Delhi Email: c/o vikrambakshi@ascothotels.in infor@ascothotels.in

7. Ms. Kanika Bakshi, Daughter of Mr. Vikram Bakshi & Member of Executive Management of Ascot Hotels & Resorts Ltd., of Connaught Plaza Restautants (P) Ltd. & alleged shareholder of K.K. Ropeways Ltd. (w.e.f. 31.03.2007) 15th Floor, Mohan Dev Building 13 Tolstoy Marg New Delhi

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 6

Resident of: 157 Golf Links New Delhi Email: ...Contesting c/o vikrambakshi@ascothotels.in Respondents infor@ascothotels.in

Present: For Appellant: Mr. Deepak Khosla, Advocate. For Respondent: Mr. Jay Salva, Sr. Advocate with Mr. Anand Mishra, Advocate for Respondent Nos. 2 to 7. Mr. Rishi Sood, for R-1

With Contempt Case (AT) No. 05 of 2019

in Company Appeal (AT) No. 36, 43-47 of 2016

IN THE MATTER OF: Mrs. Sonia Khosla ...Appellant

Versus Mr. Vikram Bakshi & Ors. ...Respondents

Present: For Appellant: Mr. Deepak Khosla, Advocate. For Respondent: Mr. Jay Salva, Sr. Advocate with Mr. Anand Mishra, Advocate for Respondent Nos. 1 to 5.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 7

With Contempt Case (AT) No. 12 of 2019 in Company Appeal (AT) No. 220 of 2017

IN THE MATTER OF: Mr. Rajinder Pal Khosla ...Appellant

Versus Rishi Sood (Adv) & Ors. ...Respondents/ Contemnors

Present: For Appellant: Mr. Deepak Khosla, Advocate. For Respondent: Mr. Jay Salva, Sr. Advocate with Mr. Anand Mishra, Advocate for Respondent Nos. 1 to 5. Mr. Rishi Sood, in person

With Contempt Case (AT) No. 08 of 2021

in Company Appeal (AT) No. 36 of 2016

IN THE MATTER OF: Montreaux Resorts (P) Ltd. ...Appellant

Versus Vikram Bakshi & Ors. ...Respondents

Present: For Appellant: Mr. Deepak Khosla, Advocate. For Respondent: Mr. Jay Salva, Sr. Advocate with Mr. Anand Mishra, Advocate for Respondent Nos. 1 to 5.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 8

JUDGEMENT

Ashok Bhushan, J:

1. These three Company Appeals and three Contempt Cases have been

heard together and are being decided by this Common Judgment.

2. These Appeals and Contempt Cases disclose a severe legal fight between

two groups namely 'Khosla Group' and 'Bakshi Group'. The

Appellants/Applicants before us are the members of Khosla Group and the

Contesting Respondents before us are the Members of Bakshi Group. There is

a chequered history of litigation between the parties. The matter has travelled

to the Apex Court and this Tribunal on several occasions. In spite of fond hope

expressed by the Hon'ble Supreme Court in its Judgement, the dispute

between the parties could not be finally adjudicated till date. During pendency

of the main dispute between the parties, filing of several Company

Applications, Interlocutory Applications under Section 340 of Cr. P.C. and

Contempt Applications have overshadowed the main dispute and the time of

both the Courts 'National Company Law Tribunal' and this 'Appellate Tribunal'

have been consumed in deciding various Interlocutory Applications and

peripheral disputes between the parties. These Appeals and Contempt

Applications have stemmed from a Company Petition filed by Khosla Group

under Section 397, 399 of the Companies Act, 1956 and Section 241 and 242

of the Companies Act, 2013.

3. A brief background of the facts and sequence of the events which gave

cause for filing these Company Appeals and Contempt Applications need to be

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 9

noted first before we notice the separate facts, submissions and issues of the

three Appeals and three Contempt Cases as above.

4. The Khosla Group owned a Land in Kasouli, Dist. Solan, Himachal

Pradesh. The land subsequently came to be owned by Montreaux Resorts Pvt.

Ltd. (hereinafter referred to as "MRL") and initially the shareholding of MRL

was held by the Members of the Khosla Group. The Khosla Group needed

finance and administrative expertise to develop a tourist resort for which they

needed finance and administrative expertise. Bakshi Group came forward to

provide finance and administrative expertise for the project. An MoU dated

21.12.2005 was entered into between Khosla Group and Bakshi Group where

Bakshi Group was to provide for necessary finance and to take charge of

administration and managing the entire project. MoU envisaged transfer of

shareholding in MRL from Khosla Group to Vikram Bakshi on certain

conditions. Pursuance to MoU dated 21.12.2005, Mr. Vinod Surha and Mr.

Wadia Parkash as the nominees of Mr. Vikarm Bakshi were appointed as

Director of MRL. An Agreement dated 31st March, 2006 was executed for

executing proposed project between Ms. Sonia Khosla wife of Mr. Deepak

Khosla, Ms. R.P. Khosla, MRL and Mr. Vikram Bakshi. The Agreement recorded

that 51 per cent shareholding in the MRL has been transferred to Vikram

Bakshi. Due to certain reasons, the project could not proceed. This led filing of

a Petition under Section 397, 398 of the Companies Act by Ms. Sonia Khosla

against Bakshi Group alleging oppression and mismanagement. Company

Petition prayed for various reliefs as contained in paragraph 7 of the Company

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 10

Petition. Company Petition was filed on 13th August, 2007 before the Company

Law Board, New Delhi which was numbered as CP No. 114 of 2007. An

Application under Section 8 of the Arbitration and Conciliation Act, 1996 was

filed by the Vikram Bakshi. During the pendency of the Company Petition

before the Company Law Board, Ms. Sonia Khosla called a Board Meeting on

11.12.2007 and inducted Mr. Vineet Khosla, his son, as Additional Director.

The Board Meeting was again held on 18.12.2007 wherein Mr. Deepak Khosla

and Mr. R.K. Garg were inducted as the Additional Directors and allotment of

6.58 lakh equity shares to the Khosla Group. An Application was filed in

Company Petition No. 114 of 2007 by Bakshi Group in which an Order dated

31st January, 2008 was passed by the Company Law Board directing for

maintaining "Status-Quo" with regard to the composition of the board and the

shareholding as existed on the day of filing of the Petition and directed the

Registrar of Companies not to take on record any documents filed by the

Company on or after 01.12.2007. The shares issued on 18.12.2007 were

cancelled as well as the Additional Directors appointed on 11.12.2007 and

18.12.2007 were ceased to be Additional Directors with immediate effect. The

Order dated 31st January 2008 was challenged by Mr. R.P. Khosla and Ms.

Sonia Khosla by way of Appeals before the Delhi High Court which Appeals

were dismissed on 11th April, 2008 and 22nd April, 2008. Review Petitions filed

by Mr. R.P. Khosla and Ms. Sonia Khosla to review Judgment of the Delhi High

Court was also dismissed on 06th May, 2008. One Mr. R.K. Garg who was also

appointed as an Additional Director in the Board Meeting dated 18.12.2007

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 11

filed a separate Company Appeal before the Delhi High Court. In which Delhi

High Court issued notice on 13th April, 2010 and stayed the operation of the

Order dated 31st January, 2008, in so far as he was concerned. Bakshi Group

filed Special Leave Petition being SLP No. 23796-23798 of 2010 challenging the

Orders passed by the Delhi High Court dated 13th April, 2010. Khosla Group

had filed an Application under Section 340 of Cr. P.C. before the Company Law

Board alleging that forged documents have been filed before the CLB. During

the pendency of the above application another Application under Section 340 of

Cr. P.C. was filed by the Khosla Group on the same ground before the Delhi

High Court. The High Court vide Order dated 15th February, 2010 in Criminal

Case No. 03 of 2008 directed for enquiry which Order was also challenged by

the Bakshi Group by filing a SLP (Crl.) No. 6873 of 2010. Both SLP (Civil)

23796-23798 of 2010 and Criminal No. 6873 of 2010 filed by the Bakshi Group

were heard by the Hon'ble Supreme Court and decided by common Judgment

dated 08th May, 2014. Hon'ble Supreme Court in its Order had noted severe

fight between the parties and taken note of different disputes which has arisen

between the parties. Hon'ble Supreme Court directed the parties to maintain

"status-quo" in the meantime and opined that the CLB will proceed to decide

the Company Petition No. 114 of 2007. High Court was directed not to proceed

further with the Criminal Misc. (Co.) No. 03 of 2008. It was further observed

that question as to whether Mr. R.K. Garg was validly inducted as Director

shall be gone into by the Company Law Board the proceedings initiated by Mr.

R.K. Garg in the High Court was held to have become otiose. Hon'ble Supreme

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 12

Court disposed of the SLP (Civil) and Criminal and in Paragraph 23 and 24 of

the Order, following has been observed:

"23. After considering the matter, we are of the opinion that it is not necessary to either enforce orders dated 31.1.2008 passed by the CLB or orders dated 11.4.2008 passed by the High Court. Fact remains that there has been a complete deadlock, as far as affairs of the Company are concerned. The project has not taken off. It is almost dead at present. Unless the parties re-concile, there is no chance for a joint venture i.e. to develop the resort, as per the MOU dated 21.12.2005. It is only after the decision of CLB, whereby the respective rights of the parties are crystallised, it would be possible to know about the future of this project. Even the Company in question is also defunct at present as it has no other business activity or venture. In a situation like this, we are of the opinion that more appropriate orders would be to direct the parties to maintain status quo in the meantime, during the pendency of the aforesaid company petition before the CLB. However, we make it clear that if any exigency arises necessitating some interim orders, it would be open to the parties to approach the CLB for appropriate directions.

24. Both these petitions are disposed of in the aforesaid terms. All other pending I.As including criminal contempt petitions and petitions filed under Section 340 Cr. PC are also disposed of as in the

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 13

facts of this case, we are not inclined to entertain such application. No costs."

5. After the above Order dated 08th May, 2014, the matter proceeded before

the Company Law Board in the CP No. 114 of 2007. Several Company

Applications filed by the parties were pending consideration at the time when

Hon'ble Supreme Court passed the Order dated 08th May, 2014, even

subsequent to 08th May, 2014 certain Company Applications were filed before

the Company Law Board in Company Petition No. 114 of 2007. On several

Applications filed subsequent to the Order of the Hon'ble Supreme Court, NCLT

passed an Order on 05th December, 2016 against which Order Company

Appeal (AT) No. 36 of 2016 along with Company Appeal (AT) No. 43-47 of 2016

were filed by the Khosla Group in this Tribunal. This Tribunal heard the

Appeals and disposed of the same by Order dated 12th April, 2017. This

Tribunal noted that there are large number of Company Applications and

Interlocutory Applications filed by the Appellant, some of them also filed by the

Respondents, which are pending. This Tribunal in its judgement disposed of

various Company Applications and directed the NCLT to complete the hearing

in Company Petition No. 114 of 2007. Certain Orders passed by the NCLT were

also upheld by this Tribunal vide Order dated 12th April, 2017, this Tribunal

directed the completion of Company Petition expeditiously and preferably

within a period of one month. After the Order dated 12th April, 2017, Mr. R.P.

Khosla filed an I.A. No. 189 of 2017 in the disposed of the Appeal praying for

recall of the Order and for fresh hearing in the Appeal. The said Application

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 14

was disposed of by this Tribunal vide Order dated 02.11.2018. This Tribunal

again directed the NCLT to hear the Company Petition on priority basis. The

Tribunal noticed that Company Petition No. 114 of 2007 has not proceeded due

to issues raised by one or other parties.

6. During pendency of Company Petition No. 114 of 2007 Khosla Group

filed another Company Petition being Company Petition No. 144 of 2016

through Company MRL under Section 241 and 242 of the Companies Act,

2013 alleging oppression and mismanagement on similar grounds as was

pleaded in Company Petition No. 114 of 2007. Certain additional grounds were

also raised in Company Petition No. 144 of 2016. NCLT vide Order dated 28th

March, 2019 issued notice in CP No. 144 of 2016. The Appellant filed an

Application before the NCLT praying that CP No. 114 of 2007 and CP No. 144

of 2016 be heard together. On 18.09.2019, an Order was passed by the

Principal Bench of the NCLT, New Delhi directing that matter be heard by the

Division Bench headed by Dr. Deepti Mukesh. Subsequent to the Order dated

18.09.2019, the matter was heard by Division Bench in Court No. IV consisting

of Dr. Deepti Mukesh and Shri Hemant Kumar Sarangi. Appellant-Khosla

Group by an Order dated 07.02.2020 passed by the Adjudicating Authority

were permitted to withdraw CP No. 114 of 2007 and to revive the same after

carrying out correction within a period of three days. Several other Company

Applications were filed by the Appellant in CP No. 144 of 2016 which were

heard since September, 2020 by the Bench consisting of Dr. Deepti Mukesh

and Mr. Hemant Kumar Sarangi. One Company Application No. 731 of 2020

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 15

was filed by the Khosla Group for impleadment of Vineet Khosla which was

rejected on 11.02.2021. TP No. 03 of 2021 and TP No. 07 of 2021 were also

filed by the Appellant which was decided on 31st May, 2021 by Acting

President. A Section 8 Application i.e. Company Application No. 533 of 2020

was filed by Bakshi Group in CP No. 144 of 2016 which was allowed by Order

dated 31st May, 2021 by the Adjudicating Authority by the Bench consisting of

Dr. Deepti Mukesh and Mr. Hemant Kumar Sarangi.

7. Now we proceed to notice the facts and submissions in all the three

Appeals separately as well as the facts and submissions in three Contempt

Cases.

8. Company Appeal (AT) No. 31 of 2022

This Company Appeal have been filed against the Order dated 31st May,

2021 passed by the Acting President of NCLT, Principal Bench, New Delhi

disposing of T.P. (Company Act) 07/PB/2021. TP No. 07 of 2021 was filed by

M/s. Montreaux Resort Pvt. Ltd. and Ors. on 23rd February, 2021 where

following prayers have been made.

"It is therefore most respectfully and humbly prayed that this Hon'ble Tribunal may be pleased to allow the following:

1. In compliance with the direction of Hon'ble NCLAT passed on 16.03.2020 (Annexure-1), grant day-to-day hearing to the application for interim relief (CA No. 18 of 2019 read with CA No. 459 of 2020), starting from the date of listing of the present

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 16

application, or starting from such other short date this Hon'ble Tribunal deems fit.

In the alternative:

2. Re-assign the petition to a Division Bench that has the logistical capability to not only decide CA No. 18 of 2019 within the time-lines laid down by the Hon'ble NCLAT vide its order dated 16.03.2020, but also complete adjudication of the petition within the time lines laid down in Section 422 of the Companies Act, 2013.

In conjunction to (1) or (2) (prayer intended for Regular Bench):

3. If grant of interim relief be opposed, dispose off (ex parte) CA No. 23 of 2020 (interrorgatories) and CA No. 24 of 2020 (document's production) to facilitate disposal of CA No. 18 of 2019, by directing the concerned Respondent to answer the relevant interrogatory and/or produce the specified document within the statutorily-stipulated period of 10 days, or such other short period this Hon'ble Tribunal deems fit.

4. Pass ex parte orders as prayed for above.

5. And pass such other order or further order or orders as this Hon'ble Tribunal may deem fit and proper under the circumstances of the case."

9. In Transfer Petition, the Applicant has made reference to CA No. 18 of

2019 by which Interim Relief was prayed for by the Appellant. The Appellant

had filed Company Appeal (AT) No. 74 of 2020 complaining lack of disposal of

Company Petition and for non-passing of appropriate orders on Company

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 17

Applications pending. This Appellate Tribunal vide Order dated 16th March,

2020 disposed of the Company Appeal by following Order:

"16.03.2020 Having regard to the facts and circumstances of the case, we request the National Company Law Tribunal, Court No. IV, New Delhi, to dispose of the matte with utmost expedition keeping in view the orders passed by the Higher Forums. The Tribunal shall make all endeavors to dispose of the matter preferably within two weeks."

10. In the Application, the Applicant has also referred to an Order dated 21st

May, 2018 of Delhi High Court in Co. A (SB) 26/2008. In the Transfer Petition,

details of various other proceedings undertaken by the Adjudicating Authority

has been noticed. Reference to earlier Transfer Petition No. 03 of 2021 has also

been made in paragraph 18 of the Application. In the Transfer Petition No. 07

of 2021, the Applicant had pleaded delay in disposal of the various

applications. In view of the facts stated in the Company Petition, the prayers

were made in Transfer Petition No. 07 of 2021 which has already been

extracted above. Transfer Petition was heard by the Acting President and by the

Impugned Order dated 31st May, 2021 has been disposed of.

11. Mr. Deepak Khosla, Learned Counsel for the Appellant challenging the

Order dated 31st May, 2021 passed on Transfer Petition No. 07 of 2021 submits

that Order dated 31st May, 2021 have been passed in violation of principal of

natural justice since the Applicant was not heard. It is submitted that no

affidavit in opposition was filed to T.P. No. 07 of 2021 although Affidavit in

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 18

Opposition was filed in T.P. No. 03 of 2021. It is submitted that Order

impugned confer jurisdiction on sans-jurisdiction bench. The doctrine of

prospective overruling cannot be availed of by the Hon'ble Acting President. Mr.

Khosla further submits that in paragraph 3 of the Impugned Order there is

mention of an Order passed by Delhi High Court whereas there is no such

order of the Delhi High Court as noted in paragraph 3 of the Judgment. It is

submitted that observation in the Impugned Order that the Bench No. IV has

already heard some application and reserved the Order which are going to be

pronounced on 31st May, 2021 could not be in the knowledge of the Acting

President unless there is a nexus between the Acting President and Bench of

Court No. IV.

12. The submissions of Learned Counsel for the Appellant has been refuted

by Learned Counsel appearing for the Respondent and it is submitted that

Company Petition No. 144 of 2016 were being heard by Bench consisting of Dr.

Deepti Mukesh and Mr. Hemant Kumar Sarangi from September, 2019. Several

Applications were filed, in some Orders were reserved and some were decided.

The filing of Transfer Application by Khosla Group was abuse of process of the

Court and was only with an intent to delay the disposal of Company Petition

No. 144 of 2016. Learned Acting President has rightly rejected the Transfer

Petition filed by the Appellant.

13. We have considered the submissions of Learned Counsel for the parties

and have perused the record.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 19

14. The Appellant itself in the Appeal has brought on record the copy of the

Order dated 18.09.2019 passed by the Principal Bench consisting of Hon'ble

President and Shree S.K. Mohapatra where Principal Bench passed following

Order:

"We have heard Mr. Deepak Khosla in person and Ld. Senior Counsel for the non-applicant-Mr. Jai Savla for Respondent No. 2 to 4. After hearing we are of the considered view that the order dated 02.07.2019 passed by the Hon'ble Appellate Tribunal must be respected and matter be accordingly heard by Bench No. 4 headed by Dr. Deepti Mukesh, Hon'ble Member (Judicial). Let the matter be posted before the aforesaid Bench on 23.09.2019.

CA-1838(PB)/2019 stands disposed of.

15. One of the grounds which have been taken by the Appellant is that the

Order was to hear the Company Petition by Bench No. IV headed by Dr. Deepti

Mukesh, Hon'ble Member (Judicial) hence the Bench consisting of Dr. Deepti

Mukesh and Mr. Hemant Kumar Sarangi ought not to have heard the matter.

16. We have noticed the prayer made in TP No. 07 of 2021. The prayers

made in the Company Petition has been also quoted in the Impugned Order

and the Learned Acting President has observed in paragraph 4 that there is no

relief in prayer portion asking for transfer of entire Company Petition from

Court No. IV to some other Bench. It is useful to extract the observations made

by Learned Acting President in the Impugned Order:

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 20

"4. Looking at the relief sought in this application, it is evidence that there is no relief in the prayer portion asking for transfer of entire Company Petition from Court No. IV to some other Bench except asking for re-assignment of the Petition to a Division Bench that has logistical capability to not only decide CA-18 OF 2019 but also to complete the adjudication of Petition within timelines laid down under Section 422 of the Companies Act, 2013. The respective Bench has already taken up the matter for hearing. When the said Bench itself is in all respects competent to decide the Company Petition, this Authority on that ground cannot give any separate direction to the Bench to decide it expeditiously because no such power is conferred under Rule 16(d) of NCLT Rules to give directions to expedite the hearing in CA-18/2019 or to complete the adjudication of the Petition.

5. As to the request of assignment of this case to other Bench, owing to the pandemic and depletion of members strength, it can't be assigned to any other Bench, especially in a situation where some application was heard and orders reserved. Whereby I hereby hold that this application is devoid of any merit to transfer this Company Petition from respective Bench to some other Bench. It is also further held that the Bench comprising Dr. Deepti Mukesh, Hon'ble Judicial Member & Shri Hemant Kumar Sarangi, Hon'ble Member (Technical) is competent to hear the matter and it will keep hearing the respective Company Petitions as a Special Bench

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 21

comprising Dr. Deepti Mukesh, Hon'ble Judicial Member & Shri Hemant Kumar Sarangi, Hon'ble Member Technical. It is further clarified that the Bench is competent to pass orders in the applications already held, therefore this order shall not be construed as an order directing the Special Bench for re-hearing the applications already heard."

17. The judicial order of the Principal Bench dated 18.09.2019 has been

noted above; The grounds taken by the Appellant himself is that the matter

was assigned to Bench presided by Dr. Deepti Mukesh, Hon'ble Judicial

Member. Dr. Deepti Mukesh being in the Bench heard the various applications

filed by the Appellant from September, 2019 consistently, the copy of the

proceedings have been bought on record where several orders were passed by

the Court No. IV consisting of Dr. Deepti Mukesh, Hon'ble Judicial Member

and Mr. Hemant Kumar Sarangi, Hon'ble Member Technical in Company

Petition No. 144 of 2016. The above order indicates that the Bench consisting

of aforesaid members heard several applications in Company Petition No. 144

of 2016 and certain Company Applications were "heard in part" also by the

Bench. It is useful to notice the order dated 06.11.2020 in C.P. No. 144 of 2016

in which the Court in Company Application No. 533 of 2020 observed "C.A. No.

553/2020: For further arguments on 23.11.2020". Further Order sheet dated

23.11.2020 also indicate that matter was heard. When the Bench consisting of

above two members was continuously hearing various Applications in

Company Petition No. 144 of 2016, we are of the view that filing of Transfer

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 22

Petition by Appellant for the prayers as noted above was wholly uncalled for.

The Appellant in his Application for Transfer, on one hand is complaining of

non-disposal of the various applications including applications for Interim

Reliefs and on the other hand is filing transfer petition No. 03 of 2021 and 07

of 2021, without their being any justified grounds. The Order passed by the

Acting President in this Appeal is an Order passed in exercise of power under

Rule 16(d) of NCLT, Rules, 2016. Rule 16(d) of NCLT Rules, 2016 provides as

follows:

"16(d) transfer any case from one Bench to other Bench when the circumstances so warrant;"

18. The president in exercise of the power under Rule 16(d) has passed the

Order with regard to which no exception can be taken in this Appeal. The

Acting President has noticed in the Impugned Order that the Bench consisting

of Dr. Deepti Mukesh, Hon'ble Judicial Member and Mr. Hemant Kumar

Sarangi, Hon'ble Member Technical has been hearing the Company Petition

and has also reserved the Orders on some applications. The fact that orders

were reserved on some applications is a matter of record, the Acting President

has rightly observed that Application is devoid of any merit and there is no

ground made out to transfer the Company Petition to some other Bench. The

submissions of Mr. Khosla that by the Impugned Order the Acting President

has conferred the jurisdiction to a sans-jurisdiction bench also does not

commend us. The matter was being heard by the Bench consisting of Dr.

Deepti Mukesh and Mr. Hemant Kumar Sarangi. In the judicial Order dated

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 23

18.09.2019, we have noticed that the matter was to be heard by bench headed

by Mr. Deepti Mukesh. When several Applications in Company Petition No. 144

of 2016 were filed which were heard and part-heard by the same Bench and

same bench was continuing to hear the Company Petition and all other

applications, no exception can be taken to hearing by such bench when the

same Bench is continuing to hear from September, 2019. Other submission

made by Mr. Khosla is that the Acting President was in communication with

the members of the Bench otherwise how he would have been known that

matter which is reserved is coming for pronouncement on 31st May, 2021.

Firstly, the Impugned Order does not mention of any pronouncement on 31st

May, 2021 only observation made in paragraph 5 is that some application was

heard and orders reserved which is a fact reflected from the proceedings of the

court. The Acting President has rightly observed that the Bench which has

been hearing is competent to decide the Company Petition and there is no

occasion for asking for re-assignment of the Petition to a Division Bench that

has logistical capability to decide CA-18 of 2019 and complete Company

Petition. The bench was fully competent and hence no orders were required to

be passed in the above context. We do not find any error in the Impugned

Order passed by the Acting President refusing to re-assign the Company

Application No. 18 of 2019 and Company Petition. The Acting President has

rightly observed that Bench which has been hearing the Company Petition and

Company Application has reserved the Orders on some applications and was

fully competent to decide the Company Petition. Order dated 31st May, 2021

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 24

passed by the Acting President does not require any interference in exercise of

our Appellate Jurisdiction.

19. Company Appeal (AT) No. 32 of 2022

This Company Appeal has been filed by Mr. R.P. Khosla challenging the

Order dated 31st May, 2021 passed by Court No. IV, Special Bench, NCLT, New

Delhi in Company Application No. 553 of 2020 in C.P. No. 144 of 2016 by

which Order the Adjudicating Authority has allowed the Application 553 of

2020 filed by Respondent Mr. Vikram Bakshi under Section 8 of the Arbitration

and Conciliation Act, 1996. Company Application No. 553 of 2020 was filed by

Mr. Vikram Bakshi (Respondent No. 2 to the Company Petition No. 144 of

2016) under Section 8 of the Arbitration and Conciliation Act, 1996 read with

rule 11 of the NCLT Rules, 2016 praying to refer the parties to Arbitration in

light of the Arbitration Clause contemplated in Clause 29 of the Agreement

dated 31st March, 2006 executed among the parties. In the Company

Application No. 553 of 2020, dated 22nd September, 2020 following prayers

have been made:

"It is therefore most respectfully prayed that the Hon'ble Tribunal may please to:

(a) Stay the proceedings & refer the parties to Arbitration in light of mandate of Section 8 of Arbitration and Conciliation Act, 1996.

(b) Pass any other orders as deem fit and proper in the facts and circumstances of case."

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 25

20. In the application, the Applicant (Respondent No. 1 herein) had referred

to MoU dated 21st December, 2005 as well as the subsequent agreement dated

31st March, 2006 which was entered into to implement Joint Venture Project.

The Applicant relied on clause 29 of Agreement dated 31st March, 2006 for

refereeing the dispute to Arbitration. Clause 29 of the Agreement is as follows:

"All disputes or differences which shall at any time arise between the parties whether during the term or afterwards, touching or concerning this agreement or its construction or effect or the rights duties or liabilities of the parties under, or by virtue of it, or otherwise, or any other matter in any way connected with or arising out of the subject matter of this Agreement, the parties shall in the first instance try and amicably resolve them by mutual negotiations. In the event such disputes or difference are not resolved amicably, they shall be referred to a single arbitrator to be agreed upon by the parties or, in default of such agreement, by three arbitrators, one to be nominated by each party and the third (acting as President of the Tribunal) to be nominated by the two parties nominated as arbitrators. The arbitration shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment of it for the time being in force.

Where the dispute involves multiple parties, whether as claimant or as respondent, the multiple claimants, jointly, and the multiple respondents, jointly, shall nominate an arbitrator each. In this agreement,

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 26

Khosla family are one party, VB and the Company are the other party.

In the absence of such joint nomination and where all parties are unable to agree to a method for the constitution of the Arbitral Tribunal, any party may approach the Delhi High Court for the constitution of the Arbitral Tribunal in accordance with the Indian Arbitration and Conciliation Act, 1996."

21. The Appellant filed a counter affidavit to Section 8 Application as well as

the written submissions opposing the Section 8 Application. Respondent No. 1-

Vikram Bakshi filed Rejoinder to Section 8 Application, written submissions

and additional written-submissions were also filed by the parties. On

26.11.2020 arguments were heard on Section 8 Application and Orders were

reserved. On 31st May, 2021 memo of parties was filed by the Respondent

Vikram Banshi in relation to his Company Application 553 of 2020 at 02:38 PM

on 31st May, 2021, the Order was passed at 03:00 PM allowing Company

Application No. 553 of 2020 and referring the parties to Arbitration under

Section 8 as prayed in Section 8 Application. Aggrieved by the Order dated 31st

May, 2021, this Appeal has been filed by Mr. R.P. Khosla. In the Appeal, 40

Respondents have been impleaded, by an Order on a prayer made by Learned

Counsel for the Appellant, Respondent No. 8 to 40 (in Company Appeal (AT) No.

32 of 2022) were deleted from the array of parties. The Appellant proposed not

to serve the said Respondents.

22. Mr. Deepak Khosla challenging the Order dated 31st May, 2021 in

support of this Appeal made various submissions. It is contended that the

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 27

Order dated 31st May, 2021 is void order delivered by Coram non judice. It is

submitted that the Order which is nullity can be ignored without it being even

challenged. Mr. Khosla has submitted that despite issuance of notice the

Respondent chosen not to file Reply/objection to the Appeal to the facts

ascertained in the Affidavit. The Appeal deserves to be allowed in this ground

alone. It is further submitted that there is an Order passed by NCLAT where

NCLAT restrained the Adjudicating Authority with proceeding with Section 8

Application. Mr. Khosla during his oral submissions submitted that he be

granted liberty to challenge the Order dated 31st May, 2021 before the Hon'ble

Supreme Court by filing Special Leave Petition since the Order is not

appealable before this Tribunal. However, in his written submissions, Learned

Counsel for the Appellant has enlarged his submissions contending that appeal

would be very much maintainable against the Order dated 31st May, 2021

before this Tribunal, under Section 421 of the Companies Act. It is stated in

the written-submissions that challenge to such order is not confined merely to

the Supreme Court under Article 136 of the Constitution of India and the same

can be challenged before this Tribunal also. Additional Submissions advanced

in the Written-Submissions is that even if the Order is not nullity, the Appeal

under Section 421 of the Companies Act is very much maintainable against an

Order allowing Section 8 Application. He submits that even if sans-jurisdiction

bench has jurisdiction, the order is not sustainable on merits. Allegations of

bias and repeated perversity has also been made. The submission which has

been pressed by Mr. Khosla both in his oral submissions and written-

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 28

submissions is that Section 8 Application does not lie in a Company Petition

alleging oppression and mismanagement which seeks statutory relief. Allowing

Section 8 Application tantamount to rejecting the Company Petition.

Application under Section 8 arise out of contract between the parties and in

the Arbitration only contractual reliefs can be granted. Arbitrator is not

competent to grant any statutory reliefs hence Section 8 Application ought not

to have been allowed by the NCLT. Submissions raised in Company Appeal No.

31 of 2022 questioning the jurisdiction of bench consisting of Dr. Deepti

Mukesh and Shree Hemant Kumar Sarangi has been repeated and it is

submitted that the Bench deciding Company Application No. 553 of 2020 is

sans-jurisdiction bench. Learned Counsel for the Appellant has also made

various submissions with regard to the minutes of the meetings of the Board of

Directors of the Company. Allegation of fraud regarding the minutes have also

been canvassed. It is submitted that Hon'ble Supreme Court as well as this

Appellate Tribunal has directed for deciding the Company Petition 114 of 2007

and 144 of 2016, there was no occasion to entertain or allow Section 8

Application by the Adjudicating Authority. Mr. Deepak Khosla has submitted

that the memo of parties of Company Application No. 553 of 2020 was received

by the Court at 02:38 PM and the Order in C.A. No. 553 of 2020 was delivered

at 03:00 PM which clearly indicates that there was nexus between the

Respondent and the Members of the Bench since Order was pronounced at

03:00 PM after receiving the mail at 02:38 PM. It is submitted that memo of

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 29

parties which was filed by Respondent at 02:38 PM contains the same mistakes

and error which is contained in memo of parties filed in the Company Petition.

23. Learned Counsel for the Respondent-Mr. Jai Savla refuting the

submissions of Learned Counsel for the Appellant supports the Order dated

31st May, 2021 passed by the NCLT allowing Section 8 Application. It is

submitted that Khosla Group having admitted in their oral submissions that

Order passed in Section 8 is not appealable, appeal deserves to be dismissed.

Mr. Savla submits that memo of parties filed at 02:38 PM was filed by Vikram

Bakshi Group and in Memo of parties filed in C.P. No. 144 of 2016 there was

47 number of parties and since Vikarm Bakshi filed Section 8 Application he

was applicant and others were arrayed as Respondents. Memo of Parties was

rearranged accordingly. There was no addition or rejection in memo of parties

which memo of parties was filed after the advance service to the Khosla Group

and after filing the same, the Order was pronounced. The arguments on the

basis of filing of memo of parties at 02:38 PM by the Applicant have been made

to prejudice the Court. It is submitted that agreement dated 31st March, 2006

executed between the Khosla and Bakshi Group provided specifically

Arbitration Clause i.e. Clause 29. It is pleaded that earlier Section 11

Application was filed by Mr. Vikram Bakshi and Company for appointment of

Arbitrator before the Delhi High Court and Arbitrator Tribunal was constituted

by Order dated 29.02.2008 of the High Court however due to obstructive

conduct from Mr. Deepak Khosla, all members of the tribunal resigned. It is

submitted that the submissions of Learned Counsel for the Appellant that this

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 30

Appellate Tribunal in its Judgment dated 12th April, 2017 has restrained filing

of Section 8 Application, hence Section 8 Application was not maintainable, is

incorrect. This Tribunal in its Order dated 12th April, 2017 noted that earlier

Section 8 Application filed before the Company Law Board has become

infructuous due to constitution of arbitral tribunal by Order of the Delhi High

Court which Order in no manner preclude Respondents to file Section 8

Application. The Order dated 31st May, 2021 being non-appealable order, the

present Appeal is not maintainable and to be dismissed. It is further submitted

that Khosla Group also challenged the Order dated 31st May, 2021 before the

District Court, Saket, New Delhi which suit was dismissed vide Judgment

dated 07th July, 2022.

24. We have considered the submissions of Learned Counsel for the parties

and have perused the record.

25. From the submissions of Learned Counsel for the parties and materials

on record, following two questions arise for consideration in this Appeal:

(i) Whether, against the Order dated 31st May, 2021 passed by

NCLT in Company Application No. 553 of 2020 under Section 8 of

the Arbitration and Conciliation Act, 1996 in C.P. No. 144 of 2016

under Section 241 and 242 of the Companies Act, this Appeal is

maintainable under Section 421 of the Companies Act, 2013?

(ii) Whether the Impugned Order dated 31st May, 2021 allowing

the Section 8 Application in C.P. No. 144 of 2016 filed under

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 31 Section 241 and 242 of the Companies Act is a valid order passed

in accordance with the law ?

26. We may first notice provisions of Arbitration and Conciliation Act, 1996

which are relevant in the present case. Section 8 of the Arbitration and

Conciliation Act provides for the power to refer the parties to Arbitration where

there is an Arbitration Agreement. Section 8(1) is as follows:

"8(1). A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applied not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration."

27. Section 37 of the Arbitration and Conciliation Act, 1996 provides for the

Appealable Orders. Section 37 is as follows:

"37. Appealable Orders.-

1. Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order, namely:-

(a) refusing to refer the parties to arbitration under section 8;

(b) granting or refusing to grant any measure under Section 9; (b) setting aside or refusing to set aside an arbitral award under section 34.

Company Appeal (AT) No. 31, 32, 33 of 2022

Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 32

2. An appeal shall also lie to a Court from an order of the arbitral tribunal.

(a) accepting the plea referred to in sub- section (2) or sub-section (3) of section 16; or (b) granting or refusing to grant an interim measure under Section 17. 3. No second appeal shall lie from an order

passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."

28. Perusal of Section 37(1)(a) indicates that an Order refusing to refer the

parties under Section 8 has been made appealable whereas the Order allowing

Section 8 Application has not been made appealable. The above provision thus

indicates that under Arbitration and Conciliation Act, 1996 no Appeal is

provided against an Order allowing Section 8 Application. It was due to above

reasons that Deepak Khosla during the course of submissions submitted that

against the Order dated 31st May, 2021 he has remedy before the Supreme

Court under Article 136 of the Constitution of India which liberty may be

reserved. Despite the above submissions, Mr. Khosla during the oral

submissions has challenged the Order dated 31st May, 2021 on various

grounds as has been noticed above.

29. Now we need to notice the provisions of Companies Act, 2013 to find out

as to whether the Order dated 31st May, 2021 passed by the NCLT is

appealable under the Companies Act, 2013 despite their being no Appeal

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 33

provided under Section 37 of the Arbitration and Conciliation Act. Section 421

of the Companies Act, 2013 provides the Appeal from Orders of Tribunal.

Section 421 is as follows:

"Section 421. Appeal from Orders of Tribunal (1) Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal.

(2) No appeal shall lie to the Appellate Tribunal form an order made by the Tribunal with the consent of parties.

(3) Every appeal under sub-section (1) shall be filed within a period of forty five days from the date on which a copy of the order of the tribunal is made available to the person aggrieved and shall be in such form, and accompanies by such fees, as may be prescribed;

Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of 45 days from the date aforesaid, but within a further period not exceeding forty-five days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.

(4) On the receipt of an appeal under sub-section (1), the Appellate Tribunal shall, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 34

(5) The Appellant Tribunal shall send a copy of every order made by it to the Tribunal and the parties to appeal."

30. Above provision indicate that any person aggrieved by an Order of the

Tribunal is entitled to file an Appeal. The Appealability under Section 421 has

thus been provided against an Order passed by NCLT. Order in Company

Application No. 553 of 2020 which was filed in C.P. No. 144 of 2016 is also an

order passed by the NCLT which is clearly appealable under Section 421 of the

Companies Act. The statutory scheme of Companies Act, 2013 thus clearly

provides for an Appeal against the Order dated 31st May, 2021 which is the

impugned in the present Appeal.

31. The above question is not res integra. The issue is concluded by

Judgment of Hon'ble Supreme Court in [(2021) 6 SCC 436] in the matter of

"Indus Biotech Pvt. Ltd. Vs. Kotak India Venture (Offshore) Fund". In the

above case, an Appeal was filed against the Order dated 26th March, 2021

passed by the NCLT allowing an Application under Section 8 of the Arbitration

and Conciliation Act, 1996. While considering challenge to said order, the

Hon'ble Supreme Court has observed that against the Order passed by NCLT,

Appellant ought to have availed remedy before NCLAT as provided under

Section 61 of the Code. The submissions that the Order passed under

Arbitration and Conciliation Act allowing such application is not appealable

hence remedy before the NCLAT was not available was rejected. In paragraph

13 of the Judgment, following has been laid down:

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 35

"13. Before adverting to the contentions in this regard, it is to be taken note that against the order dated 09.06.2020 assailed in the special leave petition, Kotak India Venture in the normal course if aggrieved, ought to have availed the remedy of appeal by filing an appeal in the NCLAT as provided under Section 61 of IB Code. Having not done so, in a normal circumstance we would have chosen to relegate Kotak India Venture to avail the alternate remedy of appeal. The contention on behalf of Kotak India Venture that they do not have the remedy of appeal as it is an order disposing an application filed under Act, 1996 and not an order under the part as provided in Section 61 of IB Code is noted only to be rejected. The order dated 09.06.2020 is certainly an order passed by the Adjudicating Authority under IB Code and petition under Section 7 of that Code is also disposed. However, as noted from the narration made above, the order dated 09.06.2020 passed by the NCLT is while taking note of petition under Section 7 of IB Code, in the backdrop of Indus Biotech seeking for the resolution of dispute through arbitration and the Arbitration Petition to that effect was already pending before this Court as on the date the order was passed by the NCLT. It is only in this special circumstance we have proceeded to entertain the petition and examine the matter on merits."

32. The above judgment is clearly applicable with regard to the Appeal

provided under Section 421 of the Companies Act, 2013 against an Order of

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 36

NCLT. The above Judgement clears all doubts with regard to the

maintainability of the Appeal against the Order dated 31st May, 2021 under

Section 421 of the Companies Act, 2013. We thus hold that present Company

Appeal No. 32 of 2022 filed against the Order dated 31st May, 2021 is

maintainable and hence had to be decided on merits.

33. We now proceed to examine as to whether the Application CA 533 of

2020 in C.P. No. 144 of 2016 filed under Section 241/242 of the Companies

Act, by the Respondent No.1 could have been allowed by the NCLT.

34. We may first notice Section 241 and 242 of the Companies Act under

which provision C.P. No. 144 of 2016 was filed. Section 241(1) of the

Companies Act, 2013 is as follows:

"Section 241(1). Any member of a company who complaints that-

(a) that affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or

(b) the material change, not being a change brought about by, or in the interest of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 37

the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members.

May apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this chapter."

35. Section 242 enumerates the powers of the Tribunal which can be

exercised in an Application under Section 241. Section 241(1) and Section

242(2) are as follows:

"241. (1) Any member of a company who complains that--

(a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or

(b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 38

change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter.

.....

242(2) Without prejudice to the generality of the powers under sub-section (1), an order under that sub-section may provide for--

(a) the regulation of conduct of affairs of the company in future;

(b) the purchase of shares or interests of any members of the company by other members thereof or by the company;

(c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of its share capital;

(d) restrictions on the transfer or allotment of the shares of the company;

(e) the termination, setting aside or modification, of any agreement, howsoever arrived at, between the company and the managing director, any other director or manager, upon such terms and conditions as may, in the opinion of the Tribunal, be just and equitable in the circumstances of the case;

(f) the termination, setting aside or modification of any agreement between the company and any person other than those referred to in clause (e):

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 39

Provided that no such agreement shall be terminated, set aside or modified except after due notice and after obtaining the consent of the party concerned;

(g) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property made or done by or against the company within three months before the date of the application under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference;

(h) removal of the managing director, manager or any of the directors of the company;

(i) recovery of undue gains made by any managing director, manager or director during the period of his appointment as such and the manner of utilisation of the recovery including transfer to Investor Education and Protection Fund or repayment to identifiable victims;

(j) the manner in which the managing director or manager of the company may be appointed subsequent to an order removing the existing managing director or manager of the company made under clause (h);

(k) appointment of such number of persons as directors, who may be required by the Tribunal to report to the Tribunal on such matters as the Tribunal may direct;

(l) imposition of costs as may be deemed fit by the Tribunal;

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 40

(m) any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision should be made."

36. Company Petition No. 144 of 2016 was an Application alleging

oppression and mismanagement. The remedy provided under Section 241 to

any Member of a Company is a statutory remedy which has been provided to

serve particular Objectives. The Tribunal has been conferred with ample power

under Section 242, wide enough which encompasses expression "make such

order as it thinks fit". Sub-Section 2 of Section 242 as extracted above provides

for, without prejudice to the generality of the powers, different orders which

can be passed; The power under Section 242 entrusted to the Tribunal by

statute are statutory powers which cannot be exercised by any arbitrator which

is appointed in pursuance of any agreement between the parties.

37. The question as to which disputes are arbitrable and which disputes are

not arbitrable has come up for consideration before the Hon'ble Supreme Court

in large number of cases. A two Member Bench Judgment of Hon'ble Supreme

Court in [(2011) 5 SCC 532] in the matter of "Booz Allen and Hamilton Inc.

Vs. SBI Home Finance Ltd. & Ors." has occasion to consider the question

regarding arbitrability of different nature of disputes. The Hon'ble Supreme

Court laid down following in paragraph 35 and 36:

"35. TheArbitral tribunals are private fora chosen voluntarily by the parties to the dispute, to adjudicate their disputes in place of courts and tribunals 18 which are public fora constituted under the laws of

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 41

the country. Every civil or commercial dispute, either contractual or non-contractual, which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of arbitral tribunals is excluded either expressly or by necessary implication. Adjudication of certain categories of proceedings are reserved by the Legislature exclusively for public fora as a matter of public policy. Certain other categories of cases, though not expressly reserved for adjudication by a public fora (courts and Tribunals), may by necessary implication stand excluded from the purview of private fora. Consequently, where the cause/dispute is inarbitrable, the court where a suit is pending, will refuse to refer the parties to arbitration, under section 8 of the Act, even if the parties might have agreed upon arbitration as the forum for settlement of such disputes.

36. The well recognized examples of non-arbitrable disputes are : (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction 19

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 42

and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes."

38. Another judgment of the Hon'ble Supreme Court in [(2016) 10 SCC 386]

in the matter of "A. Ayyasamy Vs. A. Paramasivam & Ors." again considered

the question as to which disputes are arbitrable and which disputes are not

arbitrable. Dr. Justice D. Y. Chandrachud in his separate opinion held that

the basic principle which must guide judicial decision making is that

arbitration is essentially a voluntary assumption of an obligation by

contracting parties to resolve their disputes through a private tribunal. In

paragraph 35 and 36, following was held:

"35. Ordinarily every civil or commercial dispute

whether based on contract or otherwise which is

capable of being decided by a civil court is in principle

capable of being adjudicated upon and resolved by

arbitration "subject to the dispute being governed by

the arbitration agreement" unless the jurisdiction of

the Arbitral Tribunal is excluded either expressly or

by necessary implication. In Booz-Allen and Hamilton

Inc. v. SBI Home Finance Ltd.[13], this Court held that

adjudication of certain categories of proceedings is

reserved by the legislature exclusively for public fora

as a matter of public policy. Certain other categories

of cases, though not exclusively reserved for

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 43

adjudication by courts and tribunals may by

necessary implication stand excluded from the

purview of private fora. This Court set down certain

examples of non-arbitrable disputes such as:

(i) Disputes relating to rights and liabilities which give

rise to or arise out of criminal offences;

(ii) Matrimonial disputes relating to divorce, judicial

separation, restitution of conjugal rights and child

custody;

(iii) Matters of guardianship;

(iv) Insolvency and winding up;

(v) Testamentary matters, such as the grant of

probate, letters of administration and succession

certificates; and

vi) Eviction or tenancy matters governed by special

statutes where a tenant enjoys special protection

against eviction and specific courts are conferred with

the exclusive jurisdiction to deal with the dispute.

This Court held that this class of actions operates in

rem, which is a right exercisable against the world at

large as contrasted with a right in personam which is

an interest protected against specified individuals. All

disputes relating to rights in personam are considered

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 44

to be amenable to arbitration while rights in rem are

required to be adjudicated by courts and public

tribunals. The enforcement of a mortgage has been

held to be a right in rem for which proceedings in

arbitration would not be maintainable. In Vimal

Kishore Shah v. Jayesh Dinesh Shah[14], this Court

added a seventh category of cases to the six non-

arbitrable categories set out in Booz Allen, namely,

disputes relating to trusts, trustees and beneficiaries

arising out of a trust deed and the Trust Act.

36. In Natraj Studios (P) Ltd. v. Navrang Studios

[15], a Bench of three judges of this Court dealt with

the issue as to whether a dispute between a landlord

and a tenant falling within the exclusive domain of

the Court of Small Causes at Mumbai, to the

exclusion of the civil court, is arbitrable. This Court

held that the Bombay Rent Act is a welfare legislation

aimed at a definite social objective of protecting

tenants as a matter of public policy. The conferment

of exclusive jurisdiction on certain courts was in

pursuance of a specific social objective which the

legislation seeks to achieve. Public policy, this Court

held, requires that parties cannot be allowed to

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 45

contract out of the legislative mandate which requires

certain kinds of disputes to be resolved by special

courts constituted under rent control legislation.

Hence, arbitration agreements between parties

whose rights are regulated by rent control legislation

would not be recognised by a court of law."

39. In "Indus Biotic Pvt. Ltd." (supra) the Hon'ble Supreme Court had

occasion to consider the applicability of Section 8 Application in the context of

Section 7 IBC. In paragraph 29 of the Judgment, following has been laid down:

"27. Therefore, to sum up the procedure, it is clarified that in any proceeding which is pending before the Adjudicating Authority under Section 7 of IB Code, if such petition is admitted upon the Adjudicating Authority recording the satisfaction with regard to the default and the debt being due from the corporate debtor, any application under Section 8 of the Act, 1996 made thereafter will not be maintainable. In a situation where the petition under Section 7 of IB Code is yet to be admitted and, in such proceedings, if an application under Section 8 of the Act, 1996 is filed, the Adjudicating Authority is duty bound to first decide the application under Section 7 of the IB Code by recording a satisfaction with regard to there being default or not, even if the application under Section 8 of Act, 1996 is kept along for consideration. In such event, the natural consequence of the consideration made therein on Section 7 of IB Code application

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 46

would befall on the application under Section 8 of the Act, 1996."

40. Another Judgment which is relevant to notice is the Judgement of the

Hon'ble Supreme Court in [(2021) 2 SCC 1] "Vidya Drolia & Ors. Vs. Durga

Trading Corporation" a three judge Bench of the Hon'ble Supreme Court has

dealt in detail non-arbitrability of a dispute. Referring to and relying on the

Judgment of "A. Ayyasami" (supra) in paragraph 40 of the Judgment. Court

laid down as under:

"40. D.Y. Chandrachud, J. in A. Ayyasamy v. A. Paramasivam and Others,18 referring to the dictum in Booz Allen & Hamilton Inc., has made two important comments:

"35...This Court held that this class of actions operates in rem, which is a right exercisable against the world at large as contrasted with a right in personam which is an interest protected against specified individuals. All disputes relating to rights in personam are considered to be amenable to arbitration while rights in rem are required to be adjudicated by courts and public tribunals...

xx xx xx

38. Hence, in addition to various classes of disputes which are generally considered by the courts as appropriate for decision by public fora, there are classes of disputes which fall within the exclusive domain of special fora under legislation which confers exclusive jurisdiction to

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 47

the exclusion of an ordinarily civil court. That such disputes are not arbitrable dovetails with the general principle that a dispute which is capable of adjudication by an ordinary civil court is also capable of being resolved by arbitration. However, if the jurisdiction of an ordinary civil court is excluded by the conferment of exclusive jurisdiction on a specified court or tribunal as a matter of public policy such a dispute would not then be capable of resolution by arbitration.""

41. What is relevant to notice from the above paragraph is that the ratio that

if the jurisdiction of an ordinary civil court is excluded by the conferment of

exclusive jurisdiction on a specified court or tribunal as a matter of public

policy such a dispute would not then be capable of resolution by arbitration is

quoted with approval. In "Vidya Drolia & Ors" (supra) the exclusion from

arbitrability is accepted in cases of clear exclusion as well as implied exclusion.

The three judge bench further laid down that When arbitration cannot enforce

and apply such rights or the award cannot be implemented and enforced in the

manner as provided and mandated by law, the right of election to choose

arbitration in preference to the courts or public forum is either completely

denied or could be curtailed. In paragraph 55 and 58 of the Judgment following

has been laid down:

"55. Doctrine of election to select arbitration as a dispute resolution mechanism by mutual agreement is available only if the law accepts

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 48

existence of arbitration as an alternative remedy and freedom to choose is available. There should not be any inconsistency or repugnancy between the provisions of the mandatory law and arbitration as an alternative. Conversely and in a given case when there is repugnancy and inconsistency, the right of choice and election to arbitrate is denied. This requires examining the "text of the statute, the legislative history, and 'inherent conflict' between arbitration and the statute's underlying purpose" with reference to the nature and type of special rights conferred and power and authority given to the courts or public forum to effectuate and enforce these rights and the orders passed. When arbitration cannot enforce and apply such rights or the award cannot be implemented and enforced in the manner as provided and mandated by law, the right of election to choose arbitration in preference to the courts or public forum is either completely denied or could be curtailed. In essence, it is necessary to examine if the statute creates a special right or liability and provides for the determination of each right or liability by the specified court or the public forum so constituted, and whether the remedies beyond the ordinary domain of the civil courts are prescribed. When the answer is affirmative, arbitration in the absence of special reason is contraindicated. The dispute is non- arbitrable."

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 49

58...........However, non-arbitrability may arise in case the implicit prohibition in the statute, conferring and creating special rights to be adjudicated by the courts/public fora, which right including enforcement of order/provisions cannot be enforced and applied in case of arbitration. To hold that the claims of banks and financial institutions covered under the DRT Act are arbitrable would deprive and deny these institutions of the specific rights including the modes of recovery specified in the DRT Act.

Therefore, the claims covered by the DRT Act are non-arbitrable as there is a prohibition against waiver of jurisdiction of the DRT by necessary implication. The legislation has overwritten the contractual right to arbitration."

42. When we look into the statutory scheme of the Companies Act in light of

the ratio of the above Judgements of Hon'ble Supreme Court it is clear that

specific remedy which is specific statutory remedy provided under Section 241,

242 clearly exclude arbitration of such disputes by an arbitrator. We may

further notice that the provisions of Section 430 of the Companies Act clearly

exclude the jurisdiction of Civil Court. Section 430 of the Companies Act is as

follows:

"Section 430: Civil court not to have jurisdiction.

430. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 50

the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal."

43. When there is a clear bar of jurisdiction to be exercised by the Civil Court

in respect of any matter which the Tribunal is empowered to determine under

the Companies Act, the bar is implicit to the arbitration proceeding on the

subject which is covered under Section 241 and 242. The view which we are

taking is fully supported by pronouncement by the Hon'ble Supreme Court in

[(2021) 4 SCC 379] "M/s. N.N. Global Mercantile Pvt. Ltd. Vs. M/s. Indo

Unique Flame Ltd. & Ors." Hon'ble Supreme Court had occasion to consider

the provisions of Arbitration and Conciliation Act, 1996 and the issue of

Arbitrability of dispute. While considering above question, Hon'ble Supreme

Court specifically referred the proceedings arising out of oppression and

mismanagement etc. in paragraph 41 to 43 held as follows:

"41. Traditionally, disputes relating to rights in rem are required to be adjudicated by courts and / or statutory tribunals. A right in rem is a right exercisable against the world at large. Actions in rem refer to actions which create a legal status such as citizenship, divorce, testamentary and probate issues,

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 51

etc. A lis in rem is not arbitrable by a private tribunal constituted by the consent of parties. Actions in personam determine the rights and interests of parties to the subject matter of the dispute, which are arbitrable.

42. The broad categories of disputes which are considered to be non arbitrable are penal offences which are visited with criminal sanction; offences pertaining to bribery / corruption; matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody and guardianship matters, which pertain to the status of a person; testamentary matters which pertain to disputes relating to the validity of a Will, grant of probate, letters of administration, succession, which pertain to the status of a person, and are adjudicated by civil courts.

43. Certain categories of disputes such as consumer disputes41; insolvency and bankruptcy proceedings; oppression and mismanagement, or winding up of a company; disputes relating to trusts, trustees and beneficiaries of a trust42 are governed by special enactments."

44. From the above discussion, it is clear that the remedy provided under the

Companies Act, 241 and 242 is a specific statutory remedy which has to be

decided by the Tribunal in accordance with law. The issues which has been

raised in Application under Section 241 and 242 are issues which are not

arbitrable and the Adjudicating Authority committed error in allowing Section 8

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 52

Application filed by the Respondent No. 1. We thus find the Order dated 31st

May, 2021 unsustainable due to this reason. Learned Counsel for the

Appellant has also raised various submissions questioning the order dated 31st

May, 2021 including the submissions that Bench passing the Order dated 31st

May, 2021 has no jurisdiction and was sans-jurisdiction bench. In Company

Appeal (AT) No. 31 of 2022 which we have considered above, we have held that

Bench consisting of Dr. Deepti Mukesh and Shree Hemant Kumar Sarangi has

jurisdiction to decide Company Petition No. 144 of 2016 and Company

Applications filed therein, we thus do not find any merit in the challenge of the

Appellant to the jurisdiction of the bench to decide the matter. The submission

of Learned Counsel for the Appellant that Judgment was nullity also does not

commend us. Adjudicating Authority had full jurisdiction to decide C.P. No.

144 of 2016 including the Applications and I.A. filed therein. Any order passed

by the Tribunal cannot be said to be nullity or without jurisdiction.

45. Submissions of Learned Counsel for the Appellant that memo of parties

was sent by the Respondent No. 1 at 02:38 PM and on the same day, Order

was pronounced at 03:00 pm indicates that there was nexus with the

Respondent No. 2 and the Member of the Bench who passed the order also

deserved to be rejected. Learned Counsel for the Respondent has admitted that

by email at 02:38 pm the memo of parties in C.A. No. 553 of 2020 was sent by

Learned Counsel for the Respondent before the pronouncement of the Order.

Filing of copy of the Memo of Parties in Application or Petition is required for

convenience of court, and cannot be regarded as anything strange or non-

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 53

permissible. The fact that in the memo of parties sent by Respondent No.1

there are same mistake as contained in Company Petition is also irrelevant and

has no bearing. In view of the discussion, we are of the view that order dated

31st May, 2021 passed in Company Appeal No. 553 of 2020 is unsustainable.

46. Company Appeal (AT) No. 33 of 2022

This Appeal has been filed by Mr. Vineet Khosla challenging the Order

dated 11th February, 2021 passed by the NCLT, Special Bench, New Delhi,

rejecting Company Application No. 731 of 2020 in Company Petition No. 144 of

2016 by which Applicant/Appellant has prayed to be impleaded as Petitioner

No. 7 in the Company Petition.

47. Mr. Deepak Khosla, Learned Counsel for the Appellant submits that no

affidavit in opposition has been filed hence the Appeal be allowed. It is

submitted that the claim of Mr. Vineet Khosla as Shareholder as of today is

reflected from various materials on record. He was appointed as Director on

11.12.2007 and allotted share on 18.12.2007. Mr. Khosla submits that

Company Petition No. 114 of 2007 having been withdrawn with effect from

07.02.2020 it is clear that orders passed by a Judicial Forum including the

Hon'ble Supreme Court stand vacated which also includes the Order dated 31st

January, 2008. Mr. Vinnet Khosla has right to seek impleadment as co-

petitioner and Impleadment Application was not filed to delay the proceedings.

48. By noticing the background facts, we have noticed that Appellant-Vineet

Khosla was inducted as a Director on the strength of the Board Meeting dated

18.12.2007. Respondents have challenged the Board Meeting dated 18.12.2007

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 54

alleging the meeting illegal and not in accordance with law. The Company Law

Board had passed an Order on 31st January, 2008 directing for maintaining

status quo on the date of filing Application as on 13th August, 2007. The status

of directors and shareholding was thus directed to be maintained as on 13th

August, 2007 which order was unsuccessfully challenged by Ms. Sonia Khosla

and Mr. Deepak Khosla. With regard to the inducting another director Shri

R.K. Jain, the Delhi High Court has passed Interim Order dated 13th April,

2010 which was also challenged before the Apex Court. The Hon'ble Apex Court

by Order dated 08th May, 2014, without pronouncing any opinion with regard

to the correctness of Order dated 31st January, 2008 or the Order of the High

Court of Delhi dated 13th April, 2010 directed the parties to maintain status

quo. C.A. No. 731 of 2020 for impleadment of Mr. Vineet Khosla, the Appellant

as Petitioner No. 7 to the Company Petition which was filed on the strength of

board proceeding dated 18.12.2007, which fact is still under controversy

awaiting final adjudication in Company Petition No. 144 of 2016. The NCLT in

the Impugned Order has rejected the impleadment application and made

observations in paragraph 8 (i), (ii), (iv), (v) and (vi) as under:

"8. Knowing the background of the petition filed in the year 2007 and another petition filed in the year 2016, both filed by the petitioner, we observe as under:

i. The present petition is filed in the year 2016 and today almost after four years, the application is to add one party claiming to be shareholder/director

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 55

as petition, without any justification or reasons to show that how without adding the name of the applicant in the petition filed by the company along with its shareholders/Directors under Section 241- 242 of the Companies Act for the acts of oppression and mismanagement, the prejudice will be caused if, the applicant is not allowed to be impleaded or it is necessary for proper adjudicating of the petition.

ii. Further, there is no evidence or documents placed on record to support or prove that non-

inclusion of name of the present applicant will prejudice the adjudication of petition filed under Section 241-242 of the Companies Act.

.......

iv. The necessity of joining the applicant as Petitioner no. 7 on the ground only that he is a member/director is not acceptable, specially in the proceedings under Section 241-242 of the Companies Act, where any member and/or director, only on the ground of his or her membership, obtains right to join proceedings under Section 241-242 of the Companies Act, 2013. No specific acts or averments of oppression and mismanagement are made with respect to the proposed petitioner no. 7-application herein. The petition under Section 241-242 filed by any person qualifying under Section 244 not only decide the rights of the members (even though they are not party to proceedings) but also it decides the rights of parties in rem.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 56

v. Present petition is filed by the company along with members/directors or petitioner no. 1-company, which generally is not the case. Thus the interest of all members will be taken care of, albeit without being joined in the proceedings. If the arguments of the applicant are accepted that he has qualified to be impleaded as a party in proceedings under Section 241-242 of the Companies Act, 2013, merely because he is a member of the company as described under Section 2(55) of the Companies Act, 2013, then every member may need or file such application, at any stage of the proceedings and the main petition may not see the light of the day ever.

vi. There is no even a whisper about any instance/incident/any document to show that non-

joinder of the present applicant will prejudice the rights of the proposed petitioner or will prejudice the adjudication of the petition. The petition is filed in the year 2016 whereas the impleadment is filed in 2020 (though not barred) specially when applicant claims that his membership and/or directorship are of 2007- 08 and after rounds of litigations are upheld in the year 2014. So at the time of filing of present petition in 2016, the same could have been considered to make present applicant as a party or not."

49. We may further notice that NCLT while rejecting the Application has

made following observations in Paragraph 9 to 10:

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 57

"9. We further observe that the present petitioner no. 2 who is the acting force behind this petition and litigations arising therefrom, has been filing various applications at every step, in spite of the opinion formed by the Hon'ble Apex Court and Hon'ble National Company Law Appellate Tribunal, directing to restrain from filing frivolous applications.

10. The petitioner no. 2 is a Member of the Bar and a practicing Advocate. We expect that the observations of the Hon'ble Apex Court and Hon'ble National Company Law Appellate Tribunal will be taken serious note of and no further applications will be filed which may compel us to put heavy cost."

50. The Order passed by NCLT dated 11th February, 2021 gives ample reason

for rejection of impleadment application filed by the Appellant in the Company

Petition No. 144 of 2016. The Application for impleadment was filed after about

four years from filing of Company Petition. The claim of the Vineet Khosla

Director is a contentious issue between the parties which is yet to be decided in

Company Petition No. 144 of 2016. The Board Meeting in which Vineet Khosla

was inducted as Director is valid or not is yet to be adjudicated. No error has

been committed by the Adjudicating Authority in rejecting the impleadment

application. Further as observed by NCLT, non impleadment of Appellant as

Petitioner No. 7, there is no prejudice in prosecuting application under Section

241 and 242. Observations of the Adjudicating Authority in paragraph 8 as

noted above give sufficient reason for rejecting the Application.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 58

51. We do not find any infirmity in the Order dated 11th February, 2021

rejecting the impleadment application of the Appellant. There is no error in the

Order dated 11.02.2021.

Contempt Case (AT) No. 05 of 2019

52. This petition is styled as composite petition under Sub-section (2) and

Sub-section (1) of Section 340 of CRPC r/w Section 425 of the Companies Act,

2013. The applicant in this Contempt Application has prayed for initiation of

proceedings under Sub-section (2) of Section 340 of CRPC for perjury and for

initiation of Criminal Contempt under Section 425 of the Companies Act.

53. There is checkered history of dispute between the two warring groups,

Khosla Group and Bakshi Group as noticed above. The original applicant -

Ms. Sonia Khosla has filed Company Petition No.114 of 2007 of oppression and

mismanagement against the Bakshi Group in which various applications were

filed and matter travelled to Delhi High Court and then to Hon'ble Supreme

Court. The prayers for initiating proceedings under Section 340(1) and (2) of

CRPC are being made for in the application on following basis:-

i. For perjury in terms of the falsehoods set out in CA No. 01 of 2008

filed on 01.01.2008 before the NCLT;

ii. For perjury in terms of the falsehoods set out in the affidavit dated

20.02.2017 filed before this Appellate Tribunal.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 59

54. The proceedings for initiating criminal contempt under Section 425 of

the Companies Act is prayed for on the basis of:

i. The falsehoods set out in the affidavit dated 20.02.2017 filed

before this Appellate Tribunal, reiterated in the Written

Submissions dated 01.10.2018;

ii. For the act of continuing to insist before this Appellate Tribunal on

acting as, and claiming to be a Director of Respondent No.1

Company, despite having been specifically injuncted by the Delhi

High Court vide contempt-notice-cum-injunction dated

26.04.2010.

55. The Contempt Application indicates that there are two basis for initiating

proceedings. Firstly, on the basis of averments made by the Respondent in CA

No. 01 of 2008 filed on 01.01.2008 before the NCLT. The CA No. 01 of 2008

was filed by Respondent No.1 and 2 in the Company Petition No. 114 of 2007,

where following prayers were made:-

"PRAYER

18. In the facts and circumstances of the present case, it is most humbly prayed that this Hon'ble Board may be pleased to:-

(i) recall the order dated 24th December, 2007;

(ii) pass ex parte ad interim orders in terms of prayer (i) above; and

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 60

(iii) pass such other and further orders as this Hon'ble Board may deem fit and proper in the facts and circumstances of the present case."

56. Averments in Para 7 of the application have been specifically pointed

out, which reads as follows:-

"7. The application filed under instructions of the Petitioner is on the premise that the Respondents No. 2 to 4 have been disqualified from acting as directors of the company. While reserving right to submit a detailed reply to the assertions made in this regard by and on behalf of the Petitioner, it is submitted that Respondents No. 3 and 4 have been validly appointed as directors of the company and their appointment as director s was validly affirmed and confirmed at the annual general meeting held on 30th September, 2006. The notice convening the AGM also reflected the said confirmation of appointment as an agenda item. The minutes however inadvertently do not record the approval/election as directors. However, it is an accepted fact that Respondents No. 3 and 4 have been acting as directors of the Company and have been discharging functions as such and the said fact is known and approved by all including the petitioner herein."

57. We have noticed that Company Petition No. 114 of 2007 was the genesis

of all disputes between the parties and filing of different applications before the

NCLT, initiation of proceedings before the Delhi High Court and before the

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 61

Hon'ble Supreme Court. The Hon'ble Supreme Court vide its judgment dated

08.05.2014 had clearly mentioned that the Company Law Board where

Company Petition No. 114 of 2007 was pending will decide application under

Section 340 of CRPC filed by Ms. Sonia Khosla. Hon'ble Supreme Court

directed for considering the Company Petition No. 114 of 2007 by the Company

Law Board and all applications under Section 340 of the CRPC were also

directed to be considered by the Company Law Board. The Supreme Court

clearly mentioned that it is Company Law Board which will decide application

under Section 340 of the CRPC and the Delhi High Court may not proceed with

Criminal Misc. (Co.) No. 3 of 2008. Para 21 of the judgment of Hon'ble

Supreme Court notices submissions of the parties, various proceedings

between the parties and observations of the Courts, which is to the following

effect:-

"21. In fact, though the learned Senior Counsel for the parties had argued the matters before us at length on the previous occasions, at the stage of conclusions of the arguments, the learned Senior Counsel Mr. Cama appearing for Khosla Group suggested for an early decision of the Company Petition before the CLB as a better alternative so that at least main dispute between the parties is adjudicated upon at an early date. He was candid in his submission that the issues which are subject matter of these two Special Leave Petitions and arise out of the proceedings in the High Court, have their

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 62

origin in the orders dated 31.1.2008, which is an interim order passed by the CLB. He thus, pointed out that once the Company Petition itself is decided, the issues involved therein namely whether Board meeting dated 14.12.2007 was illegal or whether Board meeting dated 30.9.2006 was barred in law would also get decided. In the process the CLB would also be in a position to decide as to whether minutes of AGM of the Company allegedly held on 30.9.2006 are forged or not and on that basis application under Section 340 Cr. PC which is filed before the Company Law Board would also be taken care of by the CLB itself. Learned Senior Counsels appearing for the Bakshi Group immediately agreed with the aforesaid course of action suggested by Mr. Cama. We are happy that at least there is an agreement between both the parties on the procedural course of action, to give quietus to the matters before us as well. In view of the aforesaid consensus, about the course of action to be adopted in deciding the disputes between the parties, we direct the Company Law Board to decide Company Petition No. 114 of 2007 filed before it by Ms. Sonia Khosla within a period of six months from the date of receiving a copy of this order. Since, it is the CLB which will be deciding the application under Section 340 Cr. PC filed by Ms. Sonia Khosla in the CLB, High Court need not proceed further with the Criminal Misc. (Co.). No. 3 of 2008. Likewise the question whether Mr. R.K. Garg was validly inducted as a Director or not would be gone into by the CLB,

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 63

the proceedings in Co. Appeal No. (SB) 23 of 2009 filed by Mr. R.K. Garg in the High Court, also become otiose.

58. We have also noticed that Company Petition No. 114 of 2007 was

subsequently withdrawn by the Khosla Group on 07.02.2020 with liberty to

refile within three days. We have already noticed the prayers made in CA No.

01 of 2008, which was filed for recall of the order dated 24.12.2007.

Subsequent to order dated 24.12.2007, Company Law Board passed an order

on 31.01.2008, afterwards which order was unsuccessfully challenged by Ms.

Sonia Khosla and Mr. R. P. Khosla in Delhi High Court. The averments in CA

No. 01/2008, as noticed above, on basis of which the applicant is claiming

initiation of proceedings under Section 340 of CRPC against the Respondent

are essentially the case of the Respondent which was taken before the

Company Law Board by the Respondent. The Respondents have claimed in

Para 7 that they were validly appointed as directors of the company, which was

confirmed in the Annual General Meeting held on 30.09.2006. The Appellants'

case in its various affidavits and pleadings is to challenge the holding of

Annual General Meeting dated 30.09.2006. It is strenuously contended by the

Appellant that Ms. Sonia Khosla was not present in the meeting and her

presence was wrongly shown. Whether the case of the Respondent as taken in

CA No. 01 of 2008 is correct or the allegations of the Appellant regarding the

Annual General Meeting dated 30.09.2006 are correct are the issues which

have to be finally adjudicated in the Petition under Section 397-399 of the

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 64 Companies Act, 1956/ Section 241-242 of the Companies Act, 2013. The

applicant by this application wants the Court to initiate criminal proceedings

on the case of Respondent set up in its pleadings and the affidavit which are

yet to be tested and decided on the merits.

59. We have noticed that Company Petition No. 114 of 2007 was withdrawn

and another Company Petition No. 144 of 2016 under Section 241-242 of

Companies Act, 2013 has been filed by MRPL, the Company against the Bakshi

Group which is pending before the NCLT. The pleadings and affidavit in the

Company Petition No. 144 of 2016 are more or less the same as were made in

Company Petition No. 114 of 2007. We have already taken view that the

Company Petition No. 144 of 2016 is to be decided on merits. Hence, we do

not find any good ground to accept prayer of the Appellant/Applicant to initiate

proceedings under Section 340 of CRPC.

60. Now coming to the affidavit dated 20.02.2017, on the basis of which it is

alleged by the applicant that perjury has been committed by the Respondent

before this Tribunal. The affidavit dated 20.02.2017 has been sworn by Mr.

Vinod Surha, who was Respondent No. 3 in Company Petition No. 114 of 2007.

The affidavit again is reiteration of the claim and case set up by the

Respondent - Bakshi Group. As observed above, various contentious issues

between the parties being yet to be resolved in the Company Petition which is

pending consideration before the NCLT, no grounds have been made out to

initiate any proceedings under Section 340(2) of the CRPC or contempt

proceedings under Section 425 of the Companies Act, 2013.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 65

61. The case set up by the Khosla Group in its petition under Section 241- 242 of the Companies Act, 2013 is yet to be adjudicated by the NCLT to find

out truth of allegations. The attempt of Khosla Group to initiate criminal

proceeding only on the basis of pleadings and averments made by Bakshi

Group in their affidavit cannot be accepted, which according to us appears to

be an attempt to side track the main dispute between the parties and to

unnecessarily engage the Respondents in litigation. We, thus, are of the view

that no grounds have been made out to accept Contempt Case (AT) No. 05 of

2019. Contempt Case (AT) No. 05 of 2019 is rejected.

62. We have noticed that in contempt application, the applicant has

impleaded Respondent No. 4 and 5, who were appearing as advocates for the

Respondent Group. The Respondent No. 4 and 5 have been termed to be

Proforma Respondents/Prospective Accused/ Non-Applicants. We are of the

view that impleadment of Respondent No. 4 and 5 in the contempt application

was wholly inappropriate and uncalled for. We direct deletion of names of

Respondent No. 4 and 5 from the array of parties of the Contempt Application.

Contempt Case (AT) No. 12 of 2019

63. This Contempt application has been filed by Mr. R. P. Khosla praying for

initiation of proceedings under Section 340 Sub-section (1) of CRPC in terms of

falsehoods set out in the affidavit dated 20.02.2017 filed before this Appellate

Tribunal and the Written Submissions filed by the Respondent. Further,

prayer has been made to initiate criminal proceedings under Section 425 of the

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 66 Companies Act, 2013 on allegations of falsehoods set out in the affidavit dated

20.02.2017 filed before this Appellate Tribunal.

64. We have already noticed the averments of the affidavit dated 20.02.2017

while deciding Contempt Case (AT) No. 05 of 2019. The averments in the

affidavit are in support to case set up by the Bakshi Group which

averments/pleadings are yet to receive adjudication by the NCLT. The Hon'ble

Supreme Court in its order dated 08.05.2014 had observed that application

under Section 340 of the CRPC be considered by the Company Law Board

while deciding the Company Petition No. 114 of 2007. For the reasons as given

in Contempt Case (AT) No. 05 of 2019, this contempt application being

Contempt Case (AT) No. 12 of 2019 also deserves to be dismissed and is hereby

dismissed.

65. We further notice that in Contempt Application the applicant has

impleaded the Counsels who have been appearing for the Respondent - Bakshi

Group before the Company Law Board and NCLT. Respondent No. 1, 2 and 3

to the Contempt Application are the advocates appearing for Bakshi Group.

We are of the view that making party the advocates who are appearing for

Bakshi Group in Contempt Case is wholly inappropriate and uncalled for. We

direct deletion of names of Respondent No. 1, 2 and 3 from the array of parties

of the Contempt Application.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 67

Contempt Case (AT) No. 08 of 2021

66. This Contempt application has been filed by Ms. Sonia Khosla under

Section 425 of the Companies Act, 2013 alleging deliberately violating the

directions in the order dated 12.04.2017 r/w order dated 22.12.2016 passed

by the Appellate Tribunal.

67. We may first notice the contents of orders dated 22.12.2016 and

12.04.2017 contempt of which is alleged by the applicant. Order dated

22.12.2016 passed by this Tribunal in Company Appeal (AT) No. 36 of 2016 is

to the following effect:-

"ORDER

22.12.2016 Issue Notice. Requisites if any, if not filed be filed in the course of the day along with requisite fee for Speed Post. Ensure that the Notice on the respondent is issued by tomorrow. Also sent notice through e-mail address, if available.

Post the matter on 5th January, 2017."

In the meantime, the NCLT, New Delhi Bench (Tribunal) shall not hear or decide the Petition under Section 8 of the Arbitration and Conciliation Act, 1996 filed by the respondent. However, it will be open to the Tribunal to expedite the hearing of the Company Petitions and other applications, if any, pending before it and may decide on merit."

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 68

68. It is relevant to notice that the order dated 22.12.2016 was an interim

order which culminated into final judgment by order dated 12.04.2017. By

order dated 12.04.2017 this Tribunal issued various directions to the NCLT for

hearing Company Petition expeditiously and other Company Applications

pending in the Company Petition No. 114 of 2007. With regard to application

filed under Section 8 of the Arbitration and Conciliation Act being CA No. 362

of 2007, this Appellate Tribunal held that application under Section 8 which

was filed in the year 2007 has become infructuous and it is not necessary for

the Tribunal to pass an order under Section 8 of the Arbitration and

Conciliation Act. In Para 19 of the order following has been stated:

"19. From the aforesaid fact what we find is that though the petition under Section 8 of Arbitration and Conciliation, 1996 Act is pending since 2007, but in the meantime parties moved before the Hon'ble Delhi High Court under Section 11 of the Arbitration and Conciliation Act, 1996 and pursuant to Order dated 28th February, 2008, the arbitrators were appointed and Tribunal started functioning. In view of such appointment of arbitrators already made under section 11, the petition under Section 8 which was filed in the year 2007 prior to filing of petition under Section 11 of the Arbitration and Conciliation Act, 1996 has become infructuous. For the reasons aforesaid, it is not necessary for the Tribunal to pass an order under section 8 of the Arbitration and Conciliation Act, 1996."

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 69

69. Now, we come to the averments made in the present Contempt

Application. It is stated in the Contempt Application that orders passed on

22.12.2016 and 12.04.2017 were in reference to Company Petition No. 114 of

2007. Contempt Application further states that CA 553 of 2020 in Company

Petition 144 of 2016 under Section 8 of the Arbitration and Conciliation Act

has been filed by the Respondent. It is pleaded that the Respondent No. 1 has

violated the undertaking recorded by the Hon'ble Supreme Court in its order

dated 08.05.2014 that parties shall confine to the dispute resolution by the

Company Law Board. The contempt of Court is alleged due to the reason that

Respondent No.1 filed application under Section 8 of Arbitration and

Conciliation Act in Company Petition 144 of 2016 which according to the

applicant is disobedience of the directions contained in orders dated

22.12.2016 and 12.04.2017.

70. In the contempt application, applicant has also made parties,

Respondent No. 2 and 3, who appeared as advocates for the Respondent before

the NCLT. The order dated 22.12.2016 and 12.04.2017 passed by this

Tribunal did not contain any directions to the Respondent restraining filing of

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

Application under Section 8 has been filed being CA No. 553 of 2020 by the

Respondent subsequent to passing of the aforesaid order and subsequent to

Company Petition No. 114 of 2007 having been withdrawn by the Khosla

Group in February, 2020. Observations made by the Appellate Tribunal in

order dated 12.04.2017 with regard to Section 8 application filed in the year

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 70

2007 in Company Petition No. 114 of 2007 were to the effect to the said

application has become infructuous. This Appellate Tribunal did not issue any

directions restraining the Respondent from filing any Section 8 application in

Company Petition No. 144 of 2016. A party can be held guilty of contempt of

court when he willfully violates any order passed by the Court.

71. This Tribunal under Section 425 of the Companies Act is to exercise

powers under the provisions of the Contempt of Courts Act, 1971. In filing

Section 8 application by the Respondent being CA No. 553 of 2020 in Company

Petition No. 144 of 2016, we do not find any violation of directions of this

Appellate Tribunal dated 22.12.2016 and 12.04.2017. The order dated

22.12.2016 was an interim order which stood merged when final directions

were passed on 12.04.2017. There is no direction in the order dated

12.04.2017 restricting the Respondent from filing Section 8 application. This

contempt application is wholly misconceived and deserves to be rejected. We

further notice that Applicant has impleaded Respondent No. 2 and 3 as alleged

contemnors who were the counsel appearing for the Respondent before the

NCLT. We are of the view that impleadment of Advocates of the Respondent as

Contemnors was wholly inappropriate and uncalled for. The Contempt Case

No. 08 of 2021 is rejected.

72. From the facts and discussion as above it is clear that Hon'ble Supreme

Court in its order dated 08.05.2014 has directed for disposal of Company

Petition No. 114 of 2007 which decision would have decided all the disputes

between the parties relating to application filed for oppression and

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 71

mismanagement. In spite of the direction issued by the Hon'ble Supreme

Court, the Company Petition could not be decided for one or other reason. One

of the main reason which is reflected from the materials on the record is filing

of several CAs and IAs especially by the Khosla Group which prevented the

Company Law Board / Adjudicating Authority from deciding the Company

Petition on merits. As observed above, the Khosla Group have been filing

various application under Section 340 of the CRPC, Contempt Application and

several applications for interim relief and other applications which consumed

considerable time of the Adjudicating Authority and this Tribunal, derailing the

hearing in the main Company Petition No. 114 of 2007. The Company Petition

No. 114 of 2007 was subsequently withdrawn by Khosla Group in February,

2020, after which Company Petition No. 144 of 2016 with almost same

allegations under Section 241-242 of CRPC was filed by the Company MRPL,

which is pending consideration before the Adjudicating Authority.

73. While deciding Company Appeal (AT) No. 32 of 2022, we have taken a

view that the Adjudicating Authority committed error in allowing application

under Section 8 of the Arbitration and the Conciliation Act and order dated

31.05.2022 is unsustainable. The order dated 31.05.2022 needs to be set

aside and the Adjudicating Authority to be directed to decide the Company

Petition No. 144 of 2016 on merits. However, we are of the view that the

decision in Company Petition on merits shall not be possible unless the parties

are restrained from filing any further affidavits, company applications and

interlocutory application in the Company Petition No. 144 of 2016. The

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 72

Adjudicating Authority has to decide the Company Petition No. 144 of 2016 on

merits on the basis of materials already on the record. No fresh affidavit,

application or any other materials by permitted to brought before the

Adjudicating Authority by the parties.

74. In view of the foregoing discussion and our reasons and conclusions, we

dispose off Company Appeal (AT) No. 31 of 2022, 32 of 2022 and 33 of 2022

and Contempt Case (AT) No. 05 of 2019, 12 of 2019 and 08 of 2021 in

following manner:-

(i) The Company Appeal (AT) No. 31 of 2022 and Company Appeal

(AT) No. 33 of 2022 are dismissed.

(ii) The Company Appeal (AT) No. 32 of 2022 is allowed. The order

dated 31.05.2022 allowing application under Section 8 of the

Arbitration and Conciliation Act, 1996 is set aside. Further,

following directions are issued:

a. The Company Petition No. 144 of 2016 be decided by the

Adjudicating Authority on merits at an early date

preferably within six months of the date on which copy of

this order is produced before the Adjudicating Authority.

b. Both the parties are retrained from filing any Company

Application, Affidavit or Interlocutory Application in the

Company Petition No. 144 of 2016 henceforth.

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021 73

c. The Adjudicating Authority shall decide the Company

Petition No. 144 of 2016 on the basis of materials already

on record.

(iii) The Contempt Case No. 05 of 2019, 12 of 2019 and 08 of 2021 are

dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Naresh Salecha] Member (Technical)

New Delhi 25th August, 2022

Basant & Archana

Company Appeal (AT) No. 31, 32, 33 of 2022 Contempt Case (AT) No. 05, 12 of 2019 and 08 of 2021