S John Rose vs The Tamilnadu Mercantile Bank Ltd

NATIONAL COMPANY LAW APPELLATE TRIBUNAL CHENNAI BENCH Company Appeal (AT) (CH) No.116/2023 IN THE MATTER OF: S John Rose, S/o. Soosai Nadar, Athivilai, Vencode Post Kanyakumari District-PIN:629 171 ... Appellant V 1. The Tamilnadu Meracantile Bank Ltd., 57, Victoria Extension Road, Thoothukudi 628 002.

2. Nadar Mahajana Bank Investors Forum, Represented by its President, Malai Murasu Building, No.712, Anna Salai, Thousand Light, Chennai-600006. ... Respondents

Present: For Appellant : Mr. T. Sathiyamoorthy, Advocate For Respondents : Mr. T. Poornam for Mr. B. Giridhara Rao, Advocates for R1 Mr. Derrick Sam for Mr. K. Mohanamurali, Advocates for R2

JUDGMENT

(Hybrid Mode)

[Per: Justice Sharad Kumar Sharma, Member (Judicial)]

A very short question which is involved in consideration in the instant

company appeal, is at the stage when the Restoration Application, was being

considered by the Hon'ble NCLT, Chennai Bench which ultimately stood

rejected by the Impugned Order of 02.08.2023, as rendered in TCP/221/2016.

Comp. App (AT) (CH) No. 116/2023 Page 1 of 6

The brief facts that engage our consideration are that a proceedings of

TCP/221/2016, stood to be instituted before the Hon'ble NCLT, Chennai, and

while it was pending consideration, the same was dismissed for want of

prosecution on 24.08.2022. The appellant while filing the restoration application,

submitted that, he could not present himself before this Tribunal because he was

tested COVID-19 positive and was infected by the COVID-19 virus, and thus he

was unable to attend the proceedings due to which, he was not able to present

himself before this Tribunal on 10.08.2022 and 24.08.2022, due to which the

company petition was dismissed for want of prosecution.

The appellant has filed Restoration Application being Restoration

Application No. CA/7/(CHE)/2023 before the Ld. Tribunal praying for the

recalling of its order dated 10.08.2022 and 24.08.2022 and to restore the appeal

to its original number. On the Restoration Application No. CA/7/(CHE)/2023, the

notices were issued, for hearing of the application and upon the same being

communicated to other side by e-mail on 11.04.2023, the application was listed

to be heard on 12.04.2023, but on the said date too, as the appellant contends,

inadvertent error chanced, since he could not notice the e-mail communication of

11.04.2023 and hence he could not appear and therefore the same was dismissed

for want of prosecution once again on 12.04.2023.

Seeking recall of the order dated 12.04.2023 (which is the second dismissal

in default) the appellant filed a Restoration Application No. (CA) 12/(CHE)2023,

praying to recall the order dated 10.08.2022 and to restore the Restoration

Comp. App (AT) (CH) No. 116/2023 Page 2 of 6 Application No. CA/7/(CHE)/2023. The application thus preferred being

Restoration Application No. (CA) 12/(CHE)2023, has been dismissed by the

Impugned Order dated 02.08.2023, on the ground that it is devoid of merits.

Hence the instant appeal.

A very short question of law is involved herein, that is, whether the

principle of Res Judicata would apply to the restoration application and

particularly when the restoration application, has been preferred under Rule 48(2)

of the NCLT Rules, 2016. The Restoration Application thus preferred being

Restoration Application No. CA/12/(CHE)/2023, was seeking to restore

CA/7/(CHE)/2023 which was dismissed by the Impugned Order of 02.08.2023,

on the ground that, despite the receipt of the e-mail communication dated

11.04.2023, the appellant did not appear on 12.04.2023, resulting in the dismissal

of the Restoration Application No. CA/7/(CHE)/2023. But what is important is

that the Learned Adjudicating Authority has dismissed the Restoration

Application No. CA/12/(CHE)/2023, on the ground, that the reason given in

second Restoration Application No. CA/12/(CHE)/2023 to recall the dismissal of

the first Restoration Application was akin to the ground, taken in the earlier

restoration application i.e. Restoration Application No. CA/7/(CHE)/2023. The

law in this field stands settled by the judgment of the full bench of Madhya

Pradesh High Court as reported in AIR 1977 Page 1131, wherein the full

bench of Madhya Pradesh High Court has observed that the principle of Res

Judicata would not apply, to the application preferred under Order IX Rule 9 of

Comp. App (AT) (CH) No. 116/2023 Page 3 of 6 C.P.C., where the proceedings are dismissed for want of prosecution and an

application filed subsequently, to recall the order dismissing the earlier

restoration application for default would be maintainable. The relevant paragraph

is extracted hereunder:.

"We may now sum up the conclusions we have reached on the above discussion:--

(i) When application ('A') under Order 9, Rule 9, C.P C. is itself dismissed for default of the plaintiff/petitioner's appearance, an application ('B') lies under Order 9, Rule 9, read with section 141 of the same Code, for restoration of the application ('A').

In order to succeed in this proceeding ('B'), the petitioner has to satisfy the Court that he was prevented by sufficient cause from appearing on the date when the application ('A') hearing. was called on for hearing.

(ii) The order of dismissal for default of the application ('A') is appealable under clause (c) of Rule 1, Order 43, C.P.C.

(iii) Both the above remedies, i.e., application under Order 9, Rule 9, and appeal under Order 43, Rule 1(c) are concurrent. They can be resorted to simultaneously. Neither excludes the other. The scope of each of the above proceedings is, however, different.

(iv) When an appeal (second remedy) is decided, one way or the other, the order of dismissal for default appealed from gets merged in the order of the appellate Court, so that thereafter the application ('B') under Order 9, Rule 9, becomes infructuous. When it comes to the notice of the appellate Court that an application has also been made under Order 9, Rule 9, for restoration, the appellate Court may do well to postpone the hearing of the appeal until the decision of the application under Order 9, Rule 9, С. Р. С.

(v) No appeal lies from an order rejecting an application ('B') for restoration of application ('A'), which latter application was for restoration of the suit.

(vi) As observed by their Lordships of the Supreme Court in Mahadeolal Kanodia v. The Administrator General of West Bengal Comp. App (AT) (CH) No. 116/2023 Page 4 of 6 (1) and Jaisri v Rajdewan (2), if a Division Bench does not agree with another Division Bench in a decision rendered earlier, the Second Division Bench must either follow the earlier decision or place the matter before the Chief Justice for being referred to a larger Bench. But, the second Division Bench cannot take upon itself the task of holding that the decision of the first Division Bench was wrong".

Apart from it, in the instant case, the Learned Adjudicating Authority has

rejected the second restoration application on the ground that it has been preferred

on akin or similar reasons as it was pleaded in the earlier restoration applications.

This cannot be a justifiable reason to reject the restoration application, because

both applications have got their independent legal existence and they have to be

decided independently on their own merits, that is, on the grounds taken therein

each application separately. The decision on a restoration may not be based upon

the reading or rejection of earlier restoration applications and, this has been

settled by the Single Judge of Allahabad High Court, in the judgment reported

in 1996 Volume 28 ALR Page 397 (Qaiser Sibtain Vs. District Judge,

Allahabad and Ors). the relevant paragraph is extracted here under:-

"5. In exercise of revisional jurisdiction, High Court never interferes with the concurrent findings of facts unless the same appears to be perverse. The above proposition is well established proposition with which there is no scope for any two opinion. In the present case, the facts have been found by both the courts below against the petitioner, and, therefore, I refrain from interfering with the fact so found. But the fact remains that while considering the question, the revisional court has dealt with the past conduct of defendant No. 11. It is established principle of law that while considering the question of grant of adjournment or recalling of an order, the past conduct is immaterial. The court has to look

Comp. App (AT) (CH) No. 116/2023 Page 5 of 6 into the merit of the case confining to the date of the order sought to be recalled was passed. The court has to look out whether sufficient ground has been made out for the default on the very date or not. Looking into the past conduct would be an extraneous consideration which the court should not go into. In that view of the matter, taking into account the past conduct does not seem to me to be fair and correct approach adopted by the learned court below".

Thus the later restoration application, filed for restoration of the earlier

restoration application has to be independently considered, specifically on the

basis of the pleading raised therein and it should not be influenced by either the

earlier dismissal or by the grounds taken for the earlier recall of the first dismissal.

In this light, the reasons assigned by the Learned Adjudicating Authority, in

rejecting the subsequent restoration application being Restoration Application

No. CA//12(CHE)/2023, is not sustainable. Hence, the Impugned Order dated

02.08.2023, as well as 24.08.2022, would hereby stand quashed. The 'Appeal'

would stand 'Restored' and as a consequence there to the proceedings of

TCP/221/2016, in the matters of S. John Rose Versus the Tamil Nadu Mercantile

Bank Limited and Anr., would stand restored to its original number. The Hon'ble

NCLT Chennai Bench is requested to decide the company petition itself on its

own merits, as per law.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical) 29.10.2024 SN/TM/MS

Comp. App (AT) (CH) No. 116/2023 Page 6 of 6