Rachakonda Siva Kumar vs Zetatek Engineering Systems Pvt. Ltd. & ...

Company Appeal (AT) No. 141 of 2017

IN THE MATTER OF:

Rachakonda Siva Kumar .Appellant

Vs.

Zetatek Engineering Systems Pvt. Ltd. & Ors.

Respondents

Present: For Appellant:- Mr. D. Abhinav Rao, Advocate

For Respondents:- Mr. Y. Suryanarayana, Advocate

ORDER

19.05.2017- This Appeal has been preferred by the Appellant against

the order dated 1st March, 2017 passed by National Company Law

Tribunal, Hyderabad Bench at Hyderabad (hereinafter referred to as the

"Tribunal") in Company Petition No. 58 of 2015 (TP No. 80/HDB/2016),

whereby Ld. Tribunal has passed the following orders:

"13. We have considered all the contentions raised by

all the parties, and we are of the considered view that the

present petition is disposed of without going into the merits of

the case. Hence, we disposed of CP No. 58 of 2015 with the

following directions:

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i) We hereby appoint Shri T. Hanumantha Reddy,

Advocate & Senior Panel Counsel for Central Govt. &

Railway Panel Advocate in CAT/HYD, H.No. 6-1-72, Sri

Maha Laxmi Meadows, A-1501, Lakdikapool,

Hyderabad-4, as Chairperson to conduct Board

Meetings and Annual General Meetings for the year

2013-14, 2014-15 and 2015-16 of Zetatek Engineering

Systems Private Limited.

ii) We hereby appoint Seshachalan & Co., Chartered

Accountants, "Wall Street Plaza", 1-11-256, ICICI

Building, St. No.], Begumpet, Hyderabad-16, (Contact

Person: Partner Mr. K. Gout ham, Mobile

No. 9885773 752) as Auditor in the present case and his

fee will be decided in consultation with the Chairperson.

iii) The Learned Chairperson is directed to fix dates and

venues suitable, after discussing the issue with the

petitioner and the Respondent No.2 & 3 and give

advance notices to all the concerned parties;

iv) The petitioner as well as the Respondent No. 2 and 3

are directed to extend full co-operation to the Learned

Chairperson and Auditor to discharge their duties;

v) The learned Chairperson is also directed to take all

relevant records and make available those records to

the Respondent No.2 & 3 2

vi) The Lear ned Chairperson's fee is fixed at for

Rs.25,000/- for Board Meetings and Rs.50,000/- to

Annual/Extra Ordinary General Meetings which is to

be borne by Respondent No.1 Company apart from other

expenses;

vii) We direct the Auditor to take up auditing of all the

relevant records.

viii) We direct the Petitioner and the Respondents to make

available all the records as required by the s aid Auditor

as and when called for.

ix) The Petitioner as well Respondents are entitled to have

an access to records obtained by the auditor is directed

to furnish the copies as requested by the parties if the

copies are few in pages. If they are in voluminous the

parties are entitled to inspect those documents.

x) The Learned Chairperson and Auditor are directed to

complete the above exercise within a maximum period

of three months from the date of receipt copy of this

order;

xi) Both the Chairperson and Auditor are entitled to take

any professional service/ assistance required by them

depending on the nature of their assignment; and they

have to minute/ record all the proceedings and furnish

copies to both the parties;

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xii) Both the Learned Chairperson and Auditor should make

all efforts to settle the issue amicably;

xiii) The respondents are also directed to co-operate with the

newly appointed Auditor, if any services are required by

the C.A.

xiv) The Registry of NCLT is directed to forward a copy of

this Order to the Learned Chairperson and Auditor."

2. The brief facts of the case is that the Appellant preferred an

application under section 59 of the Companies Act, 2013 and Sections

81, 111, 397, 398, 399, 402, 403 read with Schedule XI of the Companies

Act, 1956, to declare 'the fake Board Resolutions uploaded with the Form

No.MGT-14 transferring 500 shares by the 2nd Respondent to 3rd

Respondent' as void and illegal and to declare the allotment of 90,000

shares solely to the 2d Respondent at the purported Board meeting dated

3rd September, 2014 as void and illegal. Prayer was also made to convene

and conduct the AGM for the year ending 3 1.03.2014 immediately for

approval of the annual accounts at the Board Meeting held on

03.09.2014.

3. The grievance of the Appellant is that the Ld. Tribunal without

deciding the case on merit passed the impugned order with certain

4 directions. The arguments were advanced by the Ld. Counsel for the

Appellant was neither noticed nor adjudicated by the Ld. Tribunal.

4. Ld. Counsel appearing on behalf of contesting respondents submits

that the impugned order was passed with the consent of the parties.

However, from bare reading of the impugned order it is clear that the said

order has not been passed on the consent of the parties.

5. From reading of the impugned order dated 1st March, 2017,

particularly Paragraph no. 13 as quoted above, we find that submissions

made by all the parties was not discussed. Ld. Tribunal without going

into the merits of the case passed certain orders and directions.

6. It is a settled that when a Court of law or a Tribunal do not decide

a case on merit has no jurisdiction to pass any specific order and

directions including interim order, though it is always open to the

Court/Tribunal to ask the parties to move before an appropriate forum.

As we have held that the Tribunal had no jurisdiction to pass any specific

order where it has not decided case on merit, we have no other option but

to set aside impugned order dated 01.03.2017 passed by NCLT. The said

order is set aside, accordingly. The case stands remitted to the Tribunal.

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7. Taking into consideration the fact that the case is pending before

Tribunal since long, we direct the parties to cooperate with the Tribunal

for early disposal of the Company Petition. The Tribunal in its turn will

decide the case expeditiously, without granting unnecessary

adjournment, preferably within two months.

8. The appeal is allowed with aforesaid observations and directions.

(Justice S.J. Mukhopadhaya) Chairperson

(Mr. Balvinder Singh) Member(Technical) Ar

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