Satpal Bansal vs Union Of India & Anr

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH NEW DELHI Company Appeal (AT) No.110 of 2021 (Arising out of impugned order dated 31.08.2021 passed by the National Company Law Tribunal, Mumbai Bench in C.P. No.294/MB/2021)

In the matter of: Arvind Bali C-503, Palm Springs, Golf Course Road, Sector-54, Gurgaon 122002. ....Appellant

Vs

1. Union of India, Ministry of Corporate Affairs, Through Joint Directors in the Office Of Regional Director (Western Region 100, Everest, Marine Drive, Mumbai - 400002.

2. Videocon Telecommunications Limited (Through The Resolution Professional) Mr. Abhijit Guhathakurta, Flat No.701, A Wing, Satyam Springs, CTS No.272A/2/1, Opp BSD Marg, Deonar, Mumbai, Maharashtra - 400088. ....Respondents

For Appellant: Mr. S.N. Mookherjee, Senior Advocate, Mr. Jayant Mehta, Senior Advocate with Mr. Nakul Mohta, Ms. Misha Rohatgi Mohta, Mr. Akshansh Animesh and Mr. Devang Kumar, Advocates.

For Respondents: Mr. Sanjay Shorey (Director Legal, MCA), Mr. Rakesh Tiwari (Joint Director), Ms. Rupa Sutar, for R1.

Mr. Abhinav Vasisht, Senior Advocate with Ms. Meghna Rajadhyaksha, Mr. Vaijayant Paliwal, Mr. COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 1 | 40 Anoop Rawat, Ms. Zeeshan Khan, Ms. Priya Singh, Ms. Moulshree Shukla, Ms. Radhika Indapurkar, Advocates for R2.

With

COMPANY APPEAL (AT) No.111 of 2021 In the matter of:

Satpal Bansal Appellant Vs Union of India, Ministry of Corporate Affairs & Anr. Respondents

For Appellant: Mr. Jayant Mehta, Senior Advocate with Mr. Nakul

Mohta, Ms. Misha Rohatgi Mohta, Mr. Akshansh Animesh and Mr. Devang Kumar, Advocates.

For Respondents: Mr. Sanjay Shorey (Director Legal, MCA), Mr. Rakesh Tiwari (Joint Director), Ms. Rupa Sutar, for R1.

Mr. Abhinav Vasisht, Senior Advocate with Ms. Meghna Rajadhyaksha, Mr. Vaijayant Paliwal, Mr. Anoop Rawat, Ms. Zeeshan Khan, Ms. Priya Singh, Ms. Moulshree Shukla, Ms. Radhika Indapurkar, Advocates for R2.

J U D G E M EN T

(Virtual Mode)

M. VENUGOPAL (J) PREFACE The 'Appellants'/Respondent No.11 and 12 in (1) Comp. App. (AT)

No.110/2021 and Comp. App (AT) No.111/2021 in CP No.294/MB/2021(filed

by the First Respondent/Union of India) on the file of the 'National Company

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 2 | 40 Law Tribunal', Court No.1, Mumbai Bench, Mumbai have preferred these two

'Appeals' before this 'Tribunal' as 'Aggrieved persons' being dissatisfied with

the impugned order dated 31.08.2021 passed in CP No.294/MB/2021 by the

'National Company Law Tribunal', Mumbai Bench.

2. Earlier, the 'National Company Law Tribunal', Mumbai Bench by means

of an impugned order in CP No.294/MB/2021 (filed by the First Respondent

/Union of India) had attached and froze the moveable and immoveable

properties of the Appellants including Bank Accounts, Lockers, Demat

Accounts including the jointly held properties.

Appellants' Submissions

3. Challenging an 'Ex-parte' interim order passed by the 'Tribunal'

('National Company Law Tribunal', Mumbai Bench) dated 31.08.2021 in CP

No.294/MB/2021, the Learned Counsel for the Appellant/11th Respondent

submits that the order of the 'Tribunal' in directing the Freezing of Assets and

'Bank Accounts' of the Appellant without providing a single 'Opportunity of

Hearing' is per se an illegal one, because of the fact that the said ''order'' had

affected the livelihood of the 'Appellants' and brought their families into a

'penury position'.

4. According to the Learned Counsel for the Appellants, the Appellants

were not a party to the main Company Petition No.294/MB/2021, which was

filed on 28.8.2021 and further, an 'Interlocutory Application for Intervening'

was filed by the First Respondent /Union of India, to implead the 'Appellants'

on 31.8.2021 and in the said application, no notice was issued to them and COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 3 | 40 also orders were not passed except the allowing of impleadment of the

'Appellants' by means of an impugned order dated 31.8.2021.

5. The Learned Counsel for the Appellants contends that the application

for arraying the 'Appellants' as 'Respondents' was handed over by the First

Respondent/Union of India, before the 'Tribunal' during the arguments on

31.8.2021, and this implies, that the 'Application' was not even duly filed and

registered, yet the 'Tribunal' had passed the impugned order against the

'Appellants'.

6. The Learned Counsel for the Appellants submits that as seen from the

impugned order 31.8.2021 in the numerous Company Petitions that were

listed together with the instant Company Petition, several Respondents made

a request for an 'Adjournment', because of the non-service of the 'Petition' but

an 'Adjournment' was denied and in this regard, the 'Tribunal' had violated

the principle of 'Fair Play' and 'Natural Justice', all the more, when it was

brought to its notice that the 'Service' was not completed.

7. The Learned Counsel for the Appellants refers to Section 424 of the

Companies Act, 2013 read with Rule 23(5) of the NCLT Rules, 2016, it is

mandatory on the part of 'Tribunal' (National Company Law Tribunal) to fulfil

the requirements of the principles of 'Natural Justice', which were given a

complete 'go by' in the present case.

8. The Learned Counsel for the Appellants takes a stand that the First

Respondent's plea is that it filed the 'Company Petition' based on 'Auditor's

Report' dated 23.1.2018, but there was not even a 'whisper' of an allegation COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 4 | 40 against the 'Appellants' in the said 'Report'. Moreover, in the 'Avoidance

Application' filed by the 'Resolution Professional' of Second Respondent, on

the basis of the said 'Report', there is no allegation against the 'Appellants'.

Also, it is represented that no relief was claimed against the 'Appellants' and

no order was passed in the 'Avoidance Application'.

9. Advancing his arguments, the Learned Counsel for the Appellants

comes out with a plea that even in the instant Company Petition

No.294/MB/2021 as well as in the ''Application'' for arraying the ''Appellants''

as 'Party Respondents', there is no averment/allegation that any business of

the Second Respondent was conducted wrongfully, within the knowledge of

the ''Appellants'' and as such, there was no justification on the part of the

'Tribunal' to pass an 'impugned'' order against the 'Appellants'.

10. The Learned Counsel for the Appellants contends that the ''Appellants''

had demitted the office of the Second Respondent w.e.f. 31.03.2017 and later,

had no control in respect of ''Affairs of the Second Respondent''. Apart from

this, it is projected on the side of the ''Appellants'' that the whole issue revolves

around the ''Writing Off from the Net Receivable'' of INR 21.18 crores from the

Books of the Accounts of ''Corporate Debtor'' which was supposedly effected

on 31.05.2018 (vide Note of Approval). Moreover, it is brought to the notice

of this 'Tribunal' that the Appellants had resigned from the employment of the

Second Respondent on 31.03.2017. Therefore, a plea is raised on behalf of

the Appellants, that no inference can be drawn that they were involved in the

said 'Writing Off'.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 5 | 40

11. It is represented on behalf of the Appellants that 'Writing Off' is only an

'accounting entry' and cannot be equated to a 'Transaction/Trading' which

concerns the 'Transfer of Funds'/Assets. Added further, the ''Write Off'' does

not bar recoveries and hence, it cannot be the foundation of action.

12. The Learned Counsel for the Appellants comes out with an argument

that the Second Respondent is under ''CIRP'' and the moratorium as per

Section 14 of 'I&B' Code, 2016 is continuing. As such, the Company Petition

filed by the First Respondent against the Second Respondent and other

persons is not maintainable, because of the express prohibition as per Section

14 read with Section 238 of the 'I&B' Code.

13. The Learned Counsel for the Appellants points out that to press into

service of the ingredients of Section 241(2) of the Companies Act, 2013 the

'Central Government' should be of the opinion that the ''Affairs of the

Company'' are being conducted in a manner prejudicial or oppressive to any

'Member'/'Public Interest' and in respect of previous events, the said Section

cannot be pressed into service, especially to the events which are three years

old. In this connection, the Learned Counsel for the Appellants refers to the

order of the Hon'ble High Court of Delhi dated 10.09.2020 in W.P. (Crl)

1285/2020 between B.D. Panwar Vs Union of India, through the Ministry

of Corporate Affairs and Anr. wherein the further proceedings under

Section 241 of the Companies Act, 2013 were stayed because of the fact that

the said provisions were invoked in respect of 'past events'.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 6 | 40

14. The Learned Counsel for the Appellants submits that the main

Company Petition is filed under Sections 241(2), 242(2)(m), 246 read with 339

of the Companies Act, 2013 and that there is no power in the said provisions

of the Companies Act, 2013, to pass an order freezing the 'Assets' and 'Bank

Accounts', 'Employees' or 'Ex-employees' of the 'Company'. In short, the stand

of the Appellants is that the ''Tribunal'' cannot exercise jurisdiction beyond

the 'strict letter of Law'.

15. The Learned Counsel for the Appellants contends that the 'impugned

order' is cryptic, unreasoned and non-speaking one. Further, the 'Tribunal'

had not applied its mind to the aspect as to whether the ''Appellants'' was a

''necessary'' or 'proper' party. At this juncture, the Learned Counsel for the

Appellants points out that the Appellants' case is squarely covered by an order

dated 13.11.2018 passed by the Hon'ble Supreme Court of India in the

matter of Gopal Krishna Karunakar Nair Vs Union of India (vide Civil

Appeal No. 7282-83 of 2018) and connected matters wherein likewise orders

of the 'Tribunal' was stayed, in so far as the 'Officers' who had resigned from

the Company in issue.

16. The Learned Counsel for the Appellants refers to the order of the

Hon'ble Supreme Court dated 14.9.2018 in Sujal Anil Shah Vs Union of

India (Civil Appeal No.8731-8732 of 2018) wherein, while admitting the

'Civil Appeal', in the meanwhile, an 'order of stay' of operation of the impugned

judgement and order of the 'National Company Law Tribunal', New Delhi was

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 7 | 40 granted and the matter was directed to be tagged with C.A. No.7282-7283 of

2018.

17. The other argument raised by the Learned Counsel for the Appellants

is that the impugned order is like an order of 'Attachment Before Judgement'

as per 'Order 38 Rule 5 of Civil Procedure Code'. Furthermore, the conditions

precedent for passing an order under Order 38 Rule 5 of C.P.C. are not even

pleaded or averred in the petition under Section 241 of the Companies Act,

2013 and in this regard, the Learned Counsel for the Appellants falls back

upon the decision of Hon'ble Supreme Court in Raman Tech & Process

Engg. Co and others V Solanki Traders (2008) 2 Supreme Court Cases

Page 302 wherein it is observed that "where particulars of the claim in the

plaint were not specific, no relief could be granted".

18. The Learned Counsel for the Appellants submits that the 'impugned

order' is 'penal' in character and that the Appellants' assets were freezed

without providing an 'opportunity of hearing'. Further, compliance with the

'principles of natural justice' are 'mandatory' and the ''impugned order'' is

nullity in the 'eye of Law', because the said 'order' was passed without

adherence to the 'principles of natural justice'.

19. The Learned Counsel for the Appellants contends that in view of proviso

to Section 241(2) of the Companies Act, 2013, the application under Section

241(2) filed by the 'Central Government' can lie only before the 'Principal

Bench' and the said proviso runs to the effect 'provided that the applications

under this sub-section in respect of such company or class of companies, as

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 8 | 40 may be prescribed, shall be made before the Principal Bench of the Tribunal

which shall be dealt with by such Bench' (Inserted by Act 22 of 2019, S.33(a)

(w.e.f. 15.08.2019). But, in the instant case, the order is passed by the

Mumbai Bench of the Tribunal. Hence, for ''coram non judice'' the ''impugned

order' is a nullity.

Appellants' Citations:

20. The Learned Counsel for the Appellants' cites the order dated

13.11.2018 of the Hon'ble Supreme Court in Civil Appeal No.(s) 7282-7283

of 2018 in Gopal Krishna Karunakaran Nair Vs Union of India & Ors.

wherein it is observed as under:-

"On 10.09.2018, this Court in CA No.7282-

7283 of 2018 (Gopal Krishna "Karunakaran

Nair Vs Union of India & Ors) and certain other

cases, while issuing notice stated that

pleadings be completed and the matters be

listed on 13.11.2018.

We clarify that this Court's order of 10.09.2018

granting stay cover only the appellants in the

Civil Appeal Nos. mentioned as they were

either independent directors, persons who had

resigned or persons who are not at all

concerned with the affairs of the Company.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 9 | 40 On 14.09.2018, Civil Appeal Nos 8731-8732 of

2018 (Sujal Anil Shah Vs Union of India & Ors)

we admitted the petition and stayed the

operation of the impugned judgment and order

of the NCLT, New Delhi.

We clarify that this stay order will operate only

in the case of Sujal Anil Shah."

21. The Learned Counsel for the Appellants refers to the order dated

02.08.2021 of the Hon'ble High Court of Delhi in B D Pawar V Union of

India through the Ministry of Corporate Affairs & Anr. wherein it is

observed as under:

"1. Learned senior counsel for the petitioner states that the question of

law, which arises in the present petition is still pending consideration

before the Hon'ble Supreme Court of India.

2. At request, list on 18th November, 2021.

3. Interim order to continue."

22. The learned Counsel for the Appellants refers to the judgment of this

Tribunal in Union of India, Ministry of Corporate Affairs vs. Gitanjali

Gems Ltd. and Ors. reported in (2018) SCC Online NCLAT 307 wherein at

paragraph 11 it is observed as under:

11. "The following reason was shown to pass restraint order:

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 10 | 40

24. But at the same time, it is the duty of this Court

to see that innocent people are not burdened by this

restraint order therefore as and when any innocent

comes before this Bench saying that he has no

involvement in the fraud spiraling from day to day to

day, this Bench has to diligently respond to the reliefs

sought by such people. Of course, it is true that this

Bench cannot decide who is innocent and who is

culprit, but to the extent order passed by this Bench, it

should not become helpless to vacate that order if no

material is found against whom this order is in force.

In view of the same, for there being neither an

averment nor any incriminating material placed

against this applicant, this applicant deserves

vacation of the restraint order in force against him,

accordingly this MA is disposed of vacating the

restraint order dated 23.02.2018 against this

applicant."

23. The Learned Counsel for the Appellants cites the decision of the Hon'ble

Supreme Court in Salim Akbarali Nanji vs. Union of India & Ors.

reported in (2006) 5 SCC at page 302 at special page 306 and 307,

wherein at paragraph 9 it is observed as under:

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 11 | 40

9. "It was further explained that the write-off is an

internal accounting procedure to clean up the balance

sheet of the Bank. Such write-off is resorted to even in

cases where the Bank has not exhausted all the

avenues for recovery of dues. Such write-off does not

affect the right of the Bank to proceed against the

borrowers to collect the dues. The legal proceedings

initiated by the Bank to recover the loans or to enforce

the security against the borrowers may continue. The

write-off does not bar the Bank from following up

recoveries. Further recoveries, if any, in these accounts

are credited to the income account, in turn improving the

net worth of the Bank. Replying to the petitioner's

allegation that Reserve Bank under the various

provisions of the Banking Regulation Act, 1949 to

restrain it from taking any steps or acting in furtherance

to write-off the secured debts of the sum of Rs. 120

crores, which is detrimental to the interests of the Bank,

its depositors, investors and shareholders, it was

submitted that the banking companies do not need

Reserve Bank's permission to write-off bad debts. As

mentioned earlier, the banking companies are also not

under statutory obligation to seek the Bank's approval

for appropriation of sums from their reserves. However, COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 12 | 40 as a matter of practice, the banking companies do

approach Reserve Bank for permission, before utilising

their reserves, for writing-off the bad debts and Reserve

Bank grants approval, if it is in order, on considering

their financial position and other related facts as stated

above."

First Respondent's Contentions:

24. According to the First Respondent/ Union of India, the Applicant/ State

Bank of India, preferred a petition in terms of Section 7 of the 'I&B' Code,

2016 against the 'Videocon Telecommunication Ltd.', which was admitted by

the 'Adjudicating Authority' in which an 'Interim Resolution Professional' was

appointed. Moreover, a 'Group Insolvency' order dated 08.08.2019 was

passed in respect of the 'Videocon Group'.

25. It is represented on behalf of the First Respondent that a reading of the

'Avoidance Transactions' pointed out in the 'Transaction Audit Reports'

conducted during 'CIRP' of 'Videocon Telecommunications Ltd.' and other

Group Companies exhibit and 'Avoidance Transactions', amounting to INR

5991 crores. Besides this, in terms of the 'Approved Resolution Plan' the total

realization of the 'Financial Creditors' is INR 200 crores upfront cash plus INR

2700 crores in 'Non-Convertible Debentures' and cash with company after

deduction of expenses. In addition to this, the lenders who received 8% equity

holding in the resolved entity.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 13 | 40

26. On behalf of the First Respondent, it is projected that resting upon the

opinion arrived at in the light of representation made and the material placed

by the 'Resolution Professional', the Ministry of Corporate Affairs as per

Section 212(1)(c) of the Companies Act, 2013 had among other things on

08.07.2021 had ordered an investigation by 'Serious Fraud Investigation

Office' into the affairs of 'Videocon Telecommunications Ltd.' and its Group

Companies with a view to unravel the whole web of transactions involving

Videocon Telecommunications Ltd. and to create entire picture of the

siphoning of funds - fraud and the said investigation is pending.

27. The stand of the First Respondent is that in order to make sure that the

ill-gotten gains by the perpetrators are not fritted away, the Union of India

had filed a Company Petition seeking 'Freezing of Assets' of the concerned

Appellants, pending investigation. However, at the time of preferring the

'Company Petition' before the 'Tribunal' the Appellants, were inadvertently left

out from the array of 'Respondents' and that the vital and necessary parties

being Key Managerial Personnel(s) viz: 'Chief Executive Officer' and 'Chief

Financial Officer', the error was sought to be corrected and their names were

added to the array of 'Respondents' in main 'Company Petition' through an

application CA 275 of 2021.

28. It is the version of the First Respondent that on 31.08.2021 the

'Tribunal' in CP NO.294/MB/2021 had passed an order in 'Union of India vs.

Videocon Telecommunications Ltd.', thereby restraining the Respondents

from alienating, creating third party rights, disposal etc. of the 'Personal

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 14 | 40 Properties', Assets against which the 'Appellants' (1) Shri Arvind Bali - (Comp.

App (AT) 110 of 2021), (2) Satpal Bansal - (Comp. App (AT) 111 of 2021)) were

added as Respondents in CA 275 of 2021, in the petition before the 'Tribunal'

and they had filed the present 'Appeals' before this 'Appellate Tribunal' by

taking a plea there was a violation of the 'Principles of Natural Justice' and

that the 'impugned order' was passed 'without hearing' them and 'without

effecting service' of the petition and the 'Impleadment Application'.

29. The submission made on behalf of the First Respondent/ Union of India

is that the Appellant (1) Arvind Bali (2) Satpal Bansal were serving as 'Chief

Executive Officer' and 'Chief Financial Officer' and they were the 'Key

Managerial Personnel' as per definition of Section 2(51) of the Companies Act,

2013, which reads as under:

Section (51) "Key managerial personnel", in relation to a company, means -

(i) the Chief Executive Officer or the managing director or the manager;

(ii) the company secretary;

(iii) the whole-time director;

(iv) the Chief Financial Officer; and

(v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and

(vi) such other officer as may be prescribed."

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 15 | 40

30. It is the contention of the First Respondent that a Company/ an

artificial person can act/ function through natural persons like (i) 'promoters',

(ii) Board of Directors, (iii) Manager or Key Managerial Personnel and these

individuals, are the 'mind and will of the company'. Furthermore, an

argument is raised on behalf of the First Respondent that in case, if any

'Fraudulent Transaction' occurs in a 'Company' then, such a decision could

have been taken only by the natural persons who had applied 'their mind' and

'will' to that act. Also that, the 'Chief Executive Officer' and 'Chief Financial

Officer' being a 'Key Managerial Personnel' and individuals in 'Authority', in

the Company have the 'necessary powers' and 'responsibilities' to perform its

functions and it is their duty, to prevent such fraudulent activities in their

Company, which they had failed to perform.

31. It is projected on the side of the First Respondent/ Union of India that

the 'Auditor' was assigned to perform a 'Transaction Review' and identify the

transaction undertaken by the First Respondent in the 'Petition' before the

'Tribunal' in respect of the period, which fall within any of the categories:

"(a) preferential transactions under Section 43 of the I&B Code, 2016;

(b) Undervalued transactions under Section 45 of the Code;

(c) Extortionate Credit Transactions in terms of Section 50 of the Code.

(d) Fraudulent transactions as per Section 66 of the Code."

32. On behalf of the First Respondent, it is brought to the notice of this

'Tribunal' that in regard to the subject company Videocon COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 16 | 40 Telecommunications Ltd. that an application for 'Avoidance Transactions' of

the undermentioned transactions is pending before the Tribunal. As a matter

of fact, the relevant particulars of alleged transactions stated in Section 66,

'Application' of the Code are shown below:

Sr. No. Date Particulars

1. 16/03/2016 Agreement between VTL and Airtel to transfer right to use spectrum to Airtel

2. 15/06/2016 Supplementary Agreement between VTL and Airtel to transfer of Rs. 145.65 Crore out of the total consideration in an Escrow Account for potential claims of DOT and any amount left after such adjustment to be subsequently remitted to VTL.

3. 16/01/2017 Mutual understanding recorded in a letter between VTL and Airtel that after deductions of DOT's claim from the balance amount, Airtel can adjust dues for services provided by it to Quadrant Televentures Ltd. (QTL)

4. 25/05/2018 Airtel informed VTL that it shall adjust INR 21.18 Crore outstanding from QTL towards SMS, NLD and Data charges.

5. 31/05/2018 Note prepared for writing off Rs. 21.18 Crore along with other recoverable and payables of QTL. The note was not put in system and not booked in SAP.

6. 11/06/2018 Commencement of CIRP

33. The clear cut stand of the First Respondent is that the 'Appellants' had

admitted that they had served/working as 'Key Managerial Personnel' in

respect of the period of 'Audit Review' and they resigned on 31.03.2021 i.e.

during the period of 'Transaction Audit Review' and hence they are necessary

and proper party to the litigation before the Tribunal because of the

'inadvertent error' the Appellants (in two Appeals) were left out and this was

sought to be corrected by filing of CA No. 275/2021, to array them as

'Respondents', by the First Respondent/ Applicant, before the 'Tribunal'.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 17 | 40

34. The Learned Counsel for the First Respondent adverts to the order of

the 'Tribunal' dated 08.08.2019 in the matter of State Bank of India vs.

Videocon Industries Limited. (vide C.P. 02 of 2018) wherein at paragraph

No.17, the learned Counsel had inter-alia stated as under:

"The Ld. Counsel for SBI Mr. Ravi Kadam submits that since

the Corporate Debtor have been running their business and

operations as if they were a single entity and a single

economic unit and all the lendings have been done on such

basis, therefore, the entire line of credit by Banks and

Financial Institutions to the Corporate Debtor was extended

relying upon their unity in business and operations. So the

loans were extended with the understanding that the

Corporate Debtors will 'jointly and severally' liable for the

obligation owed to the lenders."

35. Adverting to the above, on behalf of the First Respondent/ Union of

India, a contention is raised that the 'Lenders' to the 'Videocon Group' had

held them 'jointly or severally' liable and that the 'Appellants' who were

occupying their position of 'Key Managerial Personnel' in one group of entities

of 'Videocon Group' cannot shrug off or avoid the responsibility and hence,

they were included as 'Respondents'.

36. As regards the 'issue of jurisdiction' raised by the Learned Counsel for

the Appellant in Company Appeal (AT) No.111 of 2021 by placing reliance on

the proviso to Section 241(2) of the Companies Act, 2013, which reads as

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 18 | 40 'provided that the applicants under this sub-section, in respect of such company

or class of companies, as may be prescribed, shall be made before the principal

Bench of the Tribunal which shall be dealt with such bench' and as such the

application filed by the Central Government as per Section 241(2) of the

Companies Act, 2013 can only be filed before the Principal Bench and further

that in the instant case the impugned order was passed by the Mumbai Bench

and hence, on the principle of 'coram non-judice' the 'impugned order' is

nullity, the same is repelled on behalf of the First Respondent/ Union of India

by pointing out that the aforesaid proviso to Section 241(2) of the Companies

Act, 2013 shall come into force only when such company or class of

companies were prescribed to be covered by this proviso and till the time,

Central Government has not made any rule thereof, this proviso is

inapplicable.

37. On behalf of the First Respondent/ Union of India, a reference is made

to the judgment of this Tribunal, in the matter of 63 Moons Technologies

Ltd. v. Union of India, Comp. App. (AT) 03 of 2017 wherein it is held that

Benches, including the Principal Bench have territorial jurisdiction on the

companies exclusively, on the basis of location of the registered office of such

company and that the decision of the Principal Bench of National Company

Law Tribunal, New Delhi transferring the case from Principal Bench, National

Company Law Tribunal, New Delhi to NCLT Chennai and the relevant portion

of paragraph 25 and 26 of the judgment reads as under:

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 19 | 40 "25. Section 434(a) read with sub-section (1) of Section 419 of

Companies Act, 2013 and Notification dated 1st June, 2016 issued

by the Central Government under sub-section(1) of Section 419 and

Rule 64 of NCLT Rule it is clear the Benches, including Principal

Bench have territorial jurisdiction on the companies exclusively on

the basis of location of the registered office of such company. In

fact, this law is also being followed by the Principal Bench of NCLT,

New Delhi for placing all the petitioners before one or other Bench

and that Section 488-B of Act, 1956, cannot be exception of the

same.

26. For the reasons aforesaid we set aside the impugned order

dated 6th December 2016 passed by the "Principal Bench" of NCLT,

New Delhi in C.P. No.01/2015 with the direction to the Registry, if

the Principal Bench, NCLT, New Delhi to transfer the C.P.

No.01/2015 to the NCLT Bench at Chennai, where registered office

of the appellant company is situated."

38. The Learned Counsel for the First Respondent contends that the

'principles of natural justice' are 'paramount' but the same cannot be

'sacrosanct' when it becomes an 'impediment to justice'.

First Respondent's Decisions (in Both Appeals)

39. On behalf of the First Respondent judgment of the Hon'ble Supreme

Court in the matter of Union of India v. W.N. Chadha, (vide Criminal

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 20 | 40 Appeal 567 of 1992, reported in AIR 1993 SC at page 1082) wherein at

paragraph 80 to 83 it is observed as under:

80. "The rule of audi alterm partem is a rule of justice and its

application is excluded where the rule itself lead to injustice. In

S.A. de Smith's Judicial Review of Administrative Action (4 th Edn.)

at page 184, it is stated that in administrative law, a prima facie

right to prior notice and opportunity to be heard may be held to be

excluded by implication in the presence of some factors, singly or

in combination with another. Those special factors are mentioned

under terms (1) to (10) under the heading Exclusion of the audi

alteram partem rule.

81. Thus, there is exclusion of the application of audi alteram

partem rule to cases where nothing unfair can be inferred by not

affording an opportunity to present and meet a case. This rule

cannot be applied to defeat the ends of justice or to make the law

lifeless, absurd, stultifying and self-defeating or plainly contrary to

the common sense of the situation and thus rule may be jettisoned

in very exceptional circumstances where compulsive necessity so

demands.

82. Bhagwti, J. (as the learned Chief Justice then was) in

Maneka Gandhi speaking for himself, Untawalia and Murtaza

Fazal Ali, JJ. Has stated thus: Now, it is true that since the right to

prior notice and opportunity of hearing arises only by implication

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 21 | 40 from the duty to act fairly, or to use the words of Lord Morris of

Borth-Y-Gest, from 'fair play in action', it may equally be excluded

where, having regard to the nature of the action to be taken, its

object and purpose and the scheme of the relevant statutory

provision, fairness in action does not demand its implication and

even warrants its exclusion.

83. Thus, it is seen from the decision in Maneka Gandhi that

there are certain exceptional circumstances and situations

whereunder the application of the rule of audi alteram pattern is

not attracted."

40. Another decision of the Hon'ble Supreme Court in the case of Union

of India v. J.N. Sinha and Ors. reported in AIR 1971 Supreme Court 40,

wherein at paragraph 8 it is observed as under:

8. "Fundamental Rule 56(j) in terms does not

require that any opportunity should be given to the

concerned government servant to show cause against

his compulsory retirement. A government servant

serving under the Union of India holds his office at the

pleasure of the President as provided in Article 310 of

the Constitution. But this "pleasure" doctrine is

subject to the rules of or law made under Article 309

as well as to the conditions prescribed under this

Article 311. Rules of natural justice are not embodied

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 22 | 40 rules nor can they be elevated to the position of

fundamental rights. As observed by this Court in

Krapak and Ors. V. Union of India

MANU/Sc/0427/1969: [1970]1SCR457 "the aim of

rules of natural justice is to secure justice or to put

negatively to prevent miscarriage of justice. These

rules can operate only in areas not covered by any law

validly made. In other words, they do not supplant the

law but supplement it. "It is true that if a statutory

provision can be read consistently with the principles

of natural justice, the courts should do so because it

must be presumed that the legislatures and the

statutory authorities intend to act in accordance with

the principles of natural justice. But if on the other

hand a statutory provision either specifically or by

necessary implication excludes the application of any

or all the principles of natural justice then the court

cannot ignore the mandate of the legislature or the

statutory authority and read into the concerned

provision the principles of natural justice. Whether the

exercise of a power conferred should be made in

accordance with any of the principles of natural justice

or not depends upon the express words of the provision

conferring the power, the nature of the power COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 23 | 40 conferred, the purpose for which it is conferred and the

effect of the exercise of that power."

41. A reference is made on behalf of the First Respondent/ Union of India

to the decision of Hon'ble Supreme Court in Asha Kiran v. Union of India

(Civil Appeal Nos.2765-2766 of 2020) wherein it is observed that 'we do not

find any merit in these Appeals. The same are accordingly dismissed' on the

premise that the purview of Section 339 of the Act is much wider and covers

any person used in it under the order passed by the 'National Company Law

Tribunal' and the 'National Company Law Appellate Tribunal' were upheld.

42. On the side of the First Respondent, reliance is placed upon the decision

of the Hon'ble High Court of Delhi in Padmini Technologies Ltd. v. Union

of India, (CO (Appeal) No.31 of 2005) wherein an interim order was passed

against the persons who were not even respondents and at paragraph 24 it is

observed as under:

"However in the meanwhile, interim order is required to be passed.

The allegations made, as discussed above, against the appellant

are very serious. Prima facie merit in the allegations has been

examined and discussed. 70% shares in the appellant company

are held by the general public and the management only holds 15%

shares. Interest of general public is required to be protected.

Balance of convenience requires some restraint and embargo on

the powers of the management. The appellant company and its

officers are restrained from encumbering, selling, transferring,

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 24 | 40 alienating, creating any third-party-rights, inducting any person,

parting with possession in any of their properties or assets

including immovable properties and fixed assets till the matter is

disposed of by the Company Law Board. However, the appellant

company will be entitled to deal with, sell and dispose of the stock

in trade, raw material and finished products in usual course of

business. This interim order will be subject to the rights of the

secured creditors and also subject to order(s) passed by Debt

Recovery Tribunal."

43. It is represented on behalf of the First Respondent/ Union of India that

on 27.09.2021 the Hon'ble High Court of Bombay in W.P. No.21058 of

2021 between Chandrashekhar Ashok Nagarkar v. Union of India and

in Major General Sudhir Chintamani Nilakanth Jathar v. Union of India

in W.P. No.20882 of 2021 had sustained the interim order dated 31.08.2021

of the 'Tribunal'.

Second Respondent's Decision (in Both Appeals)

44. On behalf of the Second Respondent, a reference to the order of the

Hon'ble High Court of Bombay dated 27.09.2021 in the matter of Major

General Sudhir Chintamani Milkanth Jatar & Ors. V. Union of India &

Ors. in W.P.(L) No. 20882 of 2021 is made wherein at paragraph 12 to 21 it

is observed as under: -

12. "We have already noted the reliefs claimed

by Union of India in the Petitions filed before the

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 25 | 40 Tribunal and the order passed by the Tribunal on

31/08/2021 under sections 241 and 242 of the

Companies Act, 2013.

13. At the outset we would like to extract a portion

from the order dated 31/08/2021 which deals with

service of notice and hearing of the Respondents. The

said portion reads as under: -

"Before we proceed to discuss the merits of the

Petition, we would like to make it clear that the Union

of India had made all the possible efforts to serve the

copy of this Petition, also with regard to the other

companies to all the Respondents either by email or by

delivering physical copies or by post. Some of the

Respondents have received the copy and some have

not received the entire paper book and hence they have

stated to be not in a position to defend the matter in

any manner, as of now and requested for the

adjournment. Adjournment denied."

14. From the above we find that Union of India

had made all possible efforts to serve copies of the

Petitions to the Respondents either by email or by

delivering physical copies or by post. Tribunal recorded

that some of the Respondents had received copies and

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 26 | 40 some had not received entire paper book. Therefore,

they had stated that they were not in a position to

defend the matter in any manner. Though on this count

adjournment was not sought for, the same was denied.

15. Thus there is no finding recorded by the Tribunal

as to which of the Respondents were served and as to

which of the Respondents did not receive entire paper

book.

16. Tribunal is the adjudicating authority and

it discharges judicial functions. Proceedings before a

Tribunal while discharging judicial functions must be

conducted in just, fair and judicious manner. Notice is

the first point of fair hearing. Even a person against

whom there are most serious allegations is also

entitled to a notice and hearing. That apart, the

adjudicating authority, in this case the Tribunal,

should not be seen to be in hurry or in haste to decide

a case or to pass an order.

17. At this stage we may refer to section 424

of the Companies Act, 2013 which says that though the

Tribunal is not bound by the procedure laid down in the Code of Civil Procedure, 1908, nonetheless it shall

be guided by the principles of natural justice.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 27 | 40

18. It is fundamental to the judicial system

which we follow that before adverse order is passed

against a party it is required to be duly served and a

reasonable opportunity of hearing should be granted to

it. Failure to do so will strike at the very root of the

justice delivery system.

19. That being the position, we are of the view

that it is a case for remand.

20. We make it clear that we have not

expressed any opinion on the merits of the matter. All

that we have stated is that the Petitioners were entitled

to a fair hearing which they have complained they were

not afforded. In such circumstances relegating the

Petitioners to the forum of alternative remedy of appeal

would not be just and proper.

21. Consequently and having regard to fact

that the order dated 31/08/2021 is interim in nature,

we direct the Tribunal to hear the Petitioners afresh and

thereafter pass appropriate order (s) in accordance with

law. Order dated 31/08/2021 qua the Petitioners

would be subject to such decision that the Tribunal may

arrive at after hearing the Petitioners. As stated above,

all contentions are kept open. Tribunal shall pass

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 28 | 40 appropriate order (s) after hearing the Petitioners within

a period of four weeks from the date of receipt of a copy

of this order."

Natural Justice

45. It must be borne in mind that the 'Rules of Natural Justice' are not the

edicts of a statute. As a matter of fact, the rudimentary requirement is that

(i) Fair play (ii) a Determination/An Adjudication is to be made after ascribing

necessary reasons in a fair, just, and objective manner of course, based on

the relevant facts/materials in a given case.

46. In reality, an opportunity of hearing is to be afforded to an 'individual'

to air / put forward is point of view by either contradicting or raising objection,

in regard to the claim which is 'Detrimental' to him. No wonder, the 'Rules of

Natural Justice' do supplement the Law and they do not 'Supplant the Law'.

47. It cannot be forgotten that the 'Tribunal' has the trappings of a 'Court'

and its powers are limited to the ingredients of the Companies Act, 2013 in

that behalf and exercised in specified matters mentioned therein. The

'Tribunal' and the 'Appellate Tribunal' are to be guided by the 'Principles of

Natural Justice'.

48. In this connection, this Appellate Tribunal makes a significant mention

that whether a certain 'Principles of Natural Justice' is applicable to a

particular situation or whether in a given case there is violation of 'Principle

of Natural Justice' is to be judged on the facts and circumstances of each case,

which float on the surface.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 29 | 40 Necessary Party / Proper Party

49. It is an axiomatic principle in Law that a 'necessary party' is a person /

Respondent who should have joined and without whom no order can be

passed in an efficacious and effective manner. However, a 'proper party' /

Respondent is one without whom no effective order can be passed, but whose

presence is very much essential for a complete and ultimate decision of the

issues/controversies revolving/centering around the 'proceedings' in a given

case.

50. It is to be pointed out that the settled legal proposition is that plaintiff

/ petitioner / Applicant in a given 'Proceeding' is the Dominus Litis he / it

may elect person(s) against whom he/it desires to 'litigate'. Furthermore, with

a view to completely, effectively and comprehensively to settle once for all

issues / questions concerned in a given proceedings of a case, either on an

application / petition being filed or without filling of the same by either party,

an impleadment of parties can be ordered, by a 'Tribunal'.

51. It cannot be brushed aside that the 'Tribunal' has the requisite power

to add not only 'persons' who are 'necessary parties' on the date of filing of

the 'main petition' but also persons who will be subsequently added (as

necessary parties) for the purpose of final adjudication and they were

originally / initially were omitted to be impleaded in the main petition. Even

at a belated stage of a 'given proceeding' or at an 'Appellate stage', a proper

party can be arrayed as a Respondent, in the considered opinion of this

Tribunal.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 30 | 40 The Government's power (To notify)

52. The Government's power to notify any other individual in the category

of 'Key Managerial Personnel' rests with the Government. In fact, Section 170

of the Companies Act, 2013 requires that every Company shall keep at its

registered office of the Company, a register containing such particulars of its

Directors and 'Key Managerial Personnel' as may be prescribed.

53. In terms of Section 189(2) of the Companies Act, 2013, the 'Key

Managerial Personnel' within a period of 30 days of his appointment or

relinquishment of his Office are required to disclose to the Company the

particulars of contracts were or arrangements in which they are directly or

indirectly concerned or interested and particulars of which are required to be

included in the register of 'Contracts' or 'Arrangements'.

Evaluation

54. At the outset, this Tribunal, relevantly points out that in CA 275 of 2021

in C.P. 294/MB/2021 (filed by the First Respondent/Union of

India/Applicant), at paragraph 2 to 4 it is averred as follows: -

"2. That a Company Petition no. 294 of 2021 has

been filed under Section 241, 242 and 246 read with

section 339 of the Companies Act, 2013 and is fixed for

hearing today i.e. 31.08.2021.

3. That in the petition Sh. Arvind Bali as Respondent

no. 11 and Sh. Sat Pal Bansal as Respondent no.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 31 | 40 12, has been inadvertently left out from the array of

respondent(s).

4. That it is most humbly prayed that Shri Arvind

Bali and Sh. Sat Pal Bansal are necessary parties as

they were CEO and CFO respectively, therefore, may

kindly be added as respondent No. 11 and 12 in the

petition and also interim orders and final orders as

sought in the petition may also be allowed to be

applicable against them."

55. The plea of the Appellants is that they were added as Respondent No. 11

and 12 in the main petition on the very same day itself on 31.08.2021 the

subject petition in the said case was listed before the 'Tribunal' together with

other petitions.

56. It is to be pointed out that Rule 37(1) of the 'National Company Law

Tribunal' Rules, 2016 enjoins that: -

(1) 'Tribunal' shall issue notice to the Respondent to

show cause against the application or petition on a

date of hearing to be specified in the notice. Such

notice in Form No. NCLT5 shall be accompanied by a

copy of the application with supporting documents.

(2) If the respondent does not appear on the date

specified in the notice in Form No. NCLT-5, the

Tribunal, after according reasonable opportunity to COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 32 | 40 the respondent, shall forthwith proceed ex parte to

dispose of the application.

(3) If the respondent contests to the notice received

under sub-rule (1), it may, either in person or

through an authorised representative, file a reply

accompanied with an affidavit and along with

copies of such documents on which it relies, with

an advance service to the petitioner or applicant, to

the Registry before the date of hearing and such

reply and copies of documents shall form part of

the record."

57. Further, Rule 38 of the 'National Company Law Tribunal Rules', 2016

pertains to 'Service of notices and processes'. Rule 39 deals with 'production

of evidence by affidavit'. Rule 40 pertains to 'production of additional evidence

before the Bench'. Rule 41 provide for 'filing of reply' and other documents by

the Respondents'. Rule 42 concerns with filing of rejoinder.

58. Apart from the above, Rule 44 of the 'NCLT' Rules, 2016 pertains to

hearing of petition or applications. Rule 45 deals with 'rights of a party to

appear before the Tribunal'. Rule 49 speaks of Ex parte hearing and disposal.

Rule 51 refers to 'Power to regulate the procedure'. Rule 55 says that 'No

pleadings subsequent to the reply, shall be presented except by the leave of

the Tribunal upon such terms as the Tribunal may think fit.

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 33 | 40

59. There is no two opinion of a primordial fact that the 'Tribunal' in a given

case is not to pass an order in a flurry manner and of course, it is to pass an

order with utmost care, caution and circumspection. Ordinarily, no man shall

be condemned without being heard. 'Notice' is the initial element and integral

part of the principle of natural justice.

60. In this connection, it is worthwhile for this Tribunal to refer to Section

424(1) of the Companies Act, 2013 which reads as under: -

"The Tribunal and the Appellate Tribunal shall

not, while disposing of any proceeding before it or,

as the case may be, an appeal before it, be bound

by the procedure laid down in the Code of Civil

Procedure, 1908(5 of 1908), but shall be guided

by the principles of natural justice, and, subject to

the other provisions of this Act (or of the

Insolvency and Bankruptcy Code, 2016(31 of

2016) and of any rules made thereunder, the

Tribunal and the Appellate Tribunal shall have

power to regulate their own procedure."

61. In the instant case on behalf of the First Respondent / Union of

India it is represented before this Tribunal that the application for

impleadment was served on e.mail and that copy of the application was

also served. However, the Appellants have taken a stand that (i)

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 34 | 40 'without notice', (ii) 'without hearing them' and (iii) recording no finding

against them the impugned order was passed.

62. A mere running of the eye of the impugned order dated

31.08.2021 in CP 294/MB/2021 passed by the 'National Company

Law Tribunal' Court No. I, Mumbai Bench, indicates that there was no

mentioning / noting as to the particular 'Respondent' being served and

which of the Respondent had not received the Paper Book(s) (materials)

together with annexures.

63. In the instant case the First Respondent / Union of India has

come out with a specific plea that the Appellants were inadvertently

left out from the array of Respondents in the main CP 294/MB/2021

on the file of the NCLT, Mumbai and, therefore, CA 275/2021 was filed

by the First Respondent / Union of India which was allowed on the

same day.

64. It is to be remembered that in an application for impleadment

the 'Tribunal' is to determine whether the presence of the prospective

Respondent(s) before it, is just and necessary with a view to 'enable the

Tribunal' to completely and comprehensively decide and settle the

controversies concerned in the proceeding. In this regard, as far as

possible and keeping in view Rule 37 of the 'NCLT' Rules, 2016 it is

palatable/desirable to put the other side 'on notice' so that the

procedural wrangle cannot be allowed to be shaked or shackled with,

much to the detriment / prejudice of the 'opposite side'. However,

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 35 | 40 by such determining, the merits of the claims of the parties are not

decided. Viewed in that perspective, and also bearing in mind that

some parties are omitted to be added or arrayed in the main company

petition (at the time of its filing) and later, when they were sought to be

arrayed through an application in a 'Bonafide Manner', for the purpose

of effectively and completely adjudicating the controversies involved,

then, the same may not be fatal, to save an honest and bonafide

petitioner on technical ground.

65. After the impleadment of the Appellants as Respondent No. 11

and 12, in main CP 294/MB/2021 on the file of the National Company

Law Tribunal, Mumbai, they are necessarily to be permitted to file the

Reply/Response/Counter, in the considered opinion of this Tribunal.

66. In the main CP 294/MB/2021 (filed u/s 241(2) r/w 242(2)(m)

r/w Section 246 r/w 339 of the Companies Act, 2013) by the First

Respondent/Union of India, against the Videocon Telecommunications

Ltd., Aurangabad, Maharashtra & Ors., as main relief, an attachment

of moveable and immoveable properties of Respondent No. 2 to 10

therein is sought for an encashment and that the Petitioner (Union of

India/ First Respondent) may be allowed to pay the victims of the

fraud.

67. Continuing further, the First Respondent / Petitioner / Union of

India in the main CP 294/MB/2021 had sought the following interim

reliefs: -

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 36 | 40

1. "That the Petitioner be permitted to serve

the Respondents through post, publication in the

newspapers, email, WhatsApp messaging

wherever required, in order to ensure due service

of notice to all Respondents present in India and

overseas;

II. That the Respondent Nos. 2 to 10 be

immediately directed to disclose on affidavit their

moveable and immoveable properties/assets,

including bank accounts, owned by them in India

or anywhere in the world;

III. That the Central Depository Services Ltd.

(CDSL) and National Securities Depository Ltd.

(NSDL) be directed that securities owned/held

by the Respondent nos. 2 to 10 in any

company/society be frozen, and be prohibited

from being transferred or alienation and details

thereof be shared with the Petitioner;

IV. That the Central Board of Direct Taxes (CBDT)

may be directed to disclose information about all

assets of the Respondent Nos. 2 to 10, in their

knowledge or possession, for the purpose of

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 37 | 40 freezing and restrain on alienation of such

assets;

V. That the Reserve Bank(RBI) and the Indian

Banks Association(IBA) be directed to facilitate

disclosure of the details of the remaining bank

accounts, lockers owned by the Respondent Nos.

2 to 10 and such bank accounts and lockers also

be frozen with immediate effect;

VI. That the State Government and the Union

Territories be directed to identify and disclose all

details of immovable properties owned/held by the

Respondent Nos. 2 to 10;

VII. The Petitioner seeks the leave of the Hon'ble

Tribunal to enlarge the scope of the reliefs sought

and prayers made in this petition by filing any

other documents or applications in view of the

extraordinary nature of the circumstances

pertaining to the present petition."

68. To be noted, that Section 241(2) of the Companies Act, 2013 empowers

the Central Government, if it is of the opinion that the affairs of the Company

are being conducted in a manner prejudicial to public interest, it may itself

apply to the Tribunal for an order etc. under the Companies Act, there is no

restriction on the generality of the power of a Tribunal. Section 242 of the COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 38 | 40 Companies Act is verbatim similar to that of Section 402 of the Companies

Act. As per Section 242(m) of the Companies Act, 2013, the Tribunal, for

any other matter, in its opinion it is just and equitable that a provision should

be made can pass orders on just and equitable ground.

69. Be that as it may, keeping in mind of the fact that the impugned order

dated 31.08.2021 in Company Petition No.294/MB/2021 on the file of

'National Company Law 'Tribunal' (Mumbai Bench) is an interim one, the

Appellants (Respondent No. 11 and 12) are permitted by this Appellate

Tribunal to file their Reply/Response to the main Company petition filed by

the First Respondent / Union of India and that the 'National Company Law

Tribunal', is directed to pass necessary fresh recent orders in a fair, just,

dispassionate manner on merits, afresh (because of the fact that there was a

'negation of principles of natural justice' in not adhering to the 'National

Company Law Tribunal' Rules, 2016, in so far as the

Appellants/Respondents 11 and 12 are concerned) within a period of five

weeks from the date of receipt of the order, of course, in the manner known

to Law and in accordance with Law, uninfluenced and untrammelled with

any of the observations made by this 'Tribunal' in this 'Appeal'. It is made

crystalline clear that the impugned order dated 31.08.2021 of the 'National

Company Law Tribunal', Mumbai Bench in C.P. No.294/MB/2021 in so far

as the Appellants/Respondents 11 and 12 are concerned it is subject to the

fresh determination which the 'Tribunal' will arrive at after taking into

account of the pleadings/Reply/Response/Counter of the Appellants /

Respondents No. 11 and 12 in main Company Petition, after providing COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 39 | 40 'opportunity of hearing' and following the principles of natural justice.

Liberty is granted to the respective parties to raise all factual and legal pleas

in the subject matter in issue before the 'Tribunal'. Before parting with the

case, this 'Tribunal' makes a pertinent mention that it has not delved in deep

and also not expressed any opinion on the merits of the matter.

Result

With the aforesaid observation(s) and directions the instant Company

Appeals (AT) No.110 & 111 of 2021 stand disposed of. No Costs.

[Justice M. Venugopal] Acting Chairperson

[V.P. Singh] Member (T)

[Dr. Ashok Kumar Mishra) Member (T)

21st October, 2021

Shashi

COMPANY APPEAL (AT) NO.110 OF 2021 COMPANY APPEAL (AT) No.111 of 2021 P a g e 40 | 40