Pradip Banik &Anr vs Ajit Banik & Ors

For Appellant: Ms Malvika Trivedi, Sr. Advocate, Mr. Kuldeep Rai, Advocate. For Respondent: Mr. Abhijeet Sinha, Mr. Soumya dutta, Mr Arijit Dey, Mr. Aditya Shukla, Mr. akash Chatterjee, Mr. Siddhant Upmanyu, Advocates.

JUDGEMENT

(27th APRIL, 2023)

JUSTICE RAKESH KUMAR, MEMBER (JUDICIAL)

The present appeal has been preferred under Section 421 of

the Companies Act, 2013 against an order dated 23.02.2022

passed by Learned National Company Law Tribunal, Kolkata

Bench, Kolkata (hereinafter referred to as NCLT) in Misc A.

No.1065/KB/2018 in CP No.30/2014.

2. By the said order learned NCLT has issued directions for

implementation of order dated 3rd August, 2017 passed by the

NCLT in CP No.30/2014. The operative part of the order is quoted

hereinbelow:-

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"25 Heard the Ld. Counsel appearing on behalf of the Applicant and perused the records. It is pertinent to mention that no appeal was preferred by the Judgment Debtors against the Order dated August 3, 2017.

26. This is an application for urgent hearing of M.A No.1065/KB/2018, which was filed under Section 424(3) of The Companies Act. 2013 by the Applicant. for implementation of an Order dated August 3, 2017. passed by this Adjudicating Authority in C.P. No.30 of 2014. The applicant instituted C.P. No.30 of 2014 under Sections 397 and 398 of the Companies Act, 1956, challenging the acts of oppression and mismanagement perpetrated by the Judgment Debtor Nos. 2-4 who are directors and hold 14.25%, 12.53% and 12.53% shareholding, respectively, in the company. The Adjudicating Authority vide order dated August 3, 2017 finally disposed of C.P. No.30 of 2014, where this Adjudicating Authority was pleased to set aside the illegal allotment of shares made by the Judgment Debtor Nos. 2-4 on December 20, 2013.

27. In the light of the violation of the Order dated August 3, 2017, by the Judgment Debtor Nos. 2-4, we direct the Company to convene and hold a meeting of its Members through VC/OAVM and/or physically on or before March 31, 2022 at its registered office to transact the ordinary business of approval and adoption of the Audited Financial Statements of the company for the Financial Years 2013-2014. 2014-2015, 2015-2016, 2016-2017, 2017-2018, 2018-2019, 2019-2020, 2020-2021. Such a meeting shall be deemed to be an AGM of the Company for the Financial Years 2013-2014, 2014-2015, 2015-2016, 2016-2017, 2017- 2018, 2018-2019, 2019-2020, 2020- 2021:

28. The quorum shall consist of one shareholder present either in person or by proxy Attendance at such meetings shall be recorded in the minutes of the meetings.

29. Notice shall be issued to all the shareholders in accordance with section 101 of the Companies Act, 2013.

30. Covid-19 protocols and precautions in terms of directions issued by the Government and other public authorities shall be strictly adhered to at such meeting. Since the AGM could not be held in time due to the non-cooperation on the part of the Judgment Debtor Nos. 2-4, the default in not conducting the AGM within the stipulated time is hereby condoned and the Company and the petitioner being its officer shall not be visited with any adverse consequences in this regard.

4 31. Leave is granted to the Applicant to make all statutory compliances by filing the financial statements including Balance Sheet, Annual Returns and Profit & Loss Account from March 31, 2014 onwards and apply for renewal of license before the Deputy Director of Agriculture, West Bengal to resume the operation of the factory.

32. The applicant is allowed to convene board meeting with the quorum of only I director so that 3 more directors representing the applicant's interest can be appointed in the board of the company in accordance with Section 196 of The Companies Act, 2013

33. The Judgment Debtor Nos. 2-4 are directed to to co-operate with the applicant with respect to operation of the bank accounts and for statutory compliances of the company including filing of Income Tax Returns of the company for the Financial Years 2013-

2014: 2014-2015:2015-2016:2016-2017:2017-2018; 2018-2019:

2019-2020 and 2020- 2021.

34. It is pertinent to note that there has been no representation on behalf of the Judgment Debtor No.2-4 during the last two hearings. However, the reply affidavits filed on behalf of the Judgment Debtors/Respondents has been taken into consideration.

35. According, Misc a. No.1065/KB/2018 in CP No.30/2014 is disposed of."

3. The short fact of the case is that the earlier Respondent No.1

of the present appeal had filed an application under Section 58

and 59 of the Companies Act, 2013 and Sections 235, 397, 398,

399, 402, 406 and 407 of the Companies Act, 1956 alleging

oppression and mismanagement of the company namely

Respondent No.3/ Teesta Torsa Chemicals Pvt Ltd. The said

petition was finally decided in favour of the applicant (Respondent

No.1 herein). By an order dated 3rd August, 2017 the learned 5

NCLT while setting aside of the allotment of shares and removal of

the applicant/Respondent No.1 herein from the Board of Directors

directed the appellant herein to cooperate with the

applicant/respondent in operation of bank account and filing

statutory compliances of the company in question. It is further

evident that since the order passed by the NCLT was not

implemented the Respondent No.1 herein filed an application

under Section 424(3) of the Companies Act, 2013 for

implementation of the order by way of granting following reliefs:-

a) A direction allowing the applicant to convene a Board

Meeting with the quorum of only one director.

b) Allowing the applicant to appoint three directors on the

Board of Directors and to hold Board Meeting as such date

fixed by this Adjudicating Authority and for holding Extra-

Ordinary General Meeting.

c) Directions be issued to the ROC to allow/permit the

Company to hold the AGM to approve and adopt the Annual

Accounts, Directors Reports, Auditors Reports for the year

ended on March 31, 2014 to March 31, 2018.

d) Directions on Income Tax authorities to accept the filing of

the Income Tax Returns and Tax Audit Reports for the 6

financial year ended on March 31, 2014 to March 31, 2018

relevant to the Assessment Year 2014-15 to 2018-19 of the

Company.

e) The applicant be entitled to transfer from his shareholding

5,3 and 2 number of shares in favour of Nabanita Banik, wife

of the applicant, Priyanka Banik, daughter of the applicant

and Subrata Roy, family friend of the applicant.

f) Directing the Judgement Debtor 2 to 4 to immediately

cooperate with the applicant for various statutory

compliance.

g) Directions be passed on the Deputy Director of Agriculture

for renewal of fertilizer license required for running a fertilizer

company.

h) Directing State Bank of India to release the collateral

securities as the Company has no outstanding due against

the Cash Credit Account and Term Loans.

4. Before the NCLT after filing of the petition which was

numbered as Misc A. No.1065/KB/2018 the appellants herein

appeared and filed reply. However, Finally they did not participate

in the proceeding before the NCLT. However, finally the learned 7

NCLT allowed the application by its order dated 23.02.2022 which

we have already quoted hereinabove.

5. Aggrieved with the impugned order the present appeal has

been preferred by the appellants.

6. In appeal it has been reiterated that the impugned order was

passed ex-parte against the appellant. It has further been claimed

that in a petition filed under Section 424(3) of the Companies Act,

2013, learned NCLT exceeded its jurisdiction in granting reliefs

which were more than the reliefs which were granted in the main

petition i.e. CP No.30/2014.

7. Ms Malvika Trivedi, learned senior counsel while pressing the

present appeal has argued that ex-facie the impugned order is an

ex-parte order and without affording any opportunity of hearing

the learned NCLT has passed the impugned order. She further

submitted that learned NCLT has committed error in entertaining

relief in Misc A. No.1065/KB/2018 which were far beyond the

scope and purport of the main order dated 3rd August, 2017. It

has been argued that the Learned NCLT travelling beyond the main

order i.e. order dated 03.08.2017 has granted relief which is

required to be interfered with.

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8. In the present appeal Respondent No.1 has filed a detailed

reply. It has been pleaded that the prayer for setting aside the

impugned order is now not sustainable in view of the fact that the

impugned order i.e. 23.02.2022 passed in Misc A.

No.1065/KB/2018 has already been given effect to and same has

been fully complied with. It has been stated that pursuant to order

dated 23.02.2022 the Respondent No.3 company convened and

held meeting of its members in the AGM held on 31st March, 2022

for the financial years 2013-14, 2014-15, 2015-16, 2016-17,

2017-18, 2018-19, 2019-20 and 2020-21 with a quorum of one

shareholder present in person. The appellant herein had received

proper notice well in advance of the said AGM was duly held on

31.03.2022.

9. Mr Abhijit Sinha, learned counsel for Respondent No.1

besides referring to facts stated in the reply of Respondent No.1

has vehemently argued that it is not a case in which ex-parte order

was passed. From the order impugned it is reflected that learned

NCLT has considered the submission of all the parties and

thereafter impugned order was passed. He further submitted that

in the proceeding before the NCLT in Misc A. No.1065/KB/2018

the appellants herein appeared and filed their reply. They 9

participated in the proceeding, however, subsequently to the

reasons best known to them at the time of final hearing they did

not appear and as such it cannot be inferred that the impugned

order was ex parte order. He further submits that in the petition

the relief which was sought for was virtually in relation to

implementation of order passed on 3rd August, 2017 in CP

No.30/2014. In sum and substance it has been argued that in

compliance with the impugned order since subsequent

development had already been taken place which has been

elaborated hereinabove there is no reason to interfere with the

impugned order at this belated stage.

10. Besides hearing we have perused the material available on

record. It is true that in the present proceeding after reply filed by

the Respondent the appellant have also filed rejoinder but facts

remains that in compliance with the impugned order subsequent

development had already been taken place which has been

elaborated in the reply filed by Respondent No.1. It is further

evident that in the present case impugned order which was passed

by the Learned NCLT exercising jurisdiction under Section 424(3)

of the Act was exercised only with a view to implement the order

passed in CP No.30/2014. Moreover, repeatedly it has been 10

asserted in the Memo of Appeal as well as during argument also

that the impugned order was passed ex-parte but facts remains

that after filing of the Misc A. No.1065/KB/2018 the appellants

participated in the proceeding. They filed reply and thereafter

abstained in participation on the date of final arguments. In such

case one may not be allowed to take a plea that the order was

passed ex-parte. It is also not in dispute that the order dated 3 rd

August, 2017 had attained its finality since it is admitted fact that

against the said order no appeal was filed which is reflected from

the record itself. Once in a proceeding initiated on an allegation of

oppression and mismanagement of a company a final order is

passed, it is the duty on the part of the NCLT/Appellate Authority

to see implementation of the said order if request is made by the

judgement holder. The Respondent No.1 being judgement holder

and noticing the fact that even after expiry of the period of

limitation the order was not being implemented, he was

constrained to file an application under Section 424(3) of the

Companies Act which was numbered as Misc A.

No.1065/KB/2018. Learned NCLT after considering the

submission of both the parties has passed the reasoned order

which requires no interference. Moreover, in view of subsequent 11

development which has taken place after the impugned order

there is no reason to interfere with the impugned order. We do not

find any ground to pass any favour order.

11. The appeal having no merit is accordingly dismissed without

cost.

(Justice Rakesh Kumar) Member (Judicial)

(Dr. Alok Srivastava) Member (Technical) bm