Sh. Shakti Bhushan vs M/S Titan Industries Ltd

3. SMT. VENNA BHUSHAN W/o. Shri Bhushan Kumar Bagga All Residing At. WZ -1377, Rani Bagh, New Delhi-110034 ... APPELLANTS VERSUS

1. M/S TITAN INDUSTRIES LTD. Regd. Off: 3, Sipcot Industries Estate, Hosur, Tamil Nadu-635126

2. M/S TSR DARASHAW LTD. Plot No NH-2, C-1 Block, LSC Near Savitri Market Janakpuri, New Delhi, Delhi-110058 (011-49411030) ...RESPONDENTS

Present : For Appellants : Mr. Shakti Bhushan (Party-in-person) For Respondents : Mr. PH Arvindh Pandian, Senior Advocate For Mr. Cyril Amarchand Mangaldas, Mr. Edward James, Ms. Vedantha Sai, Ms. Mansi Sethiya, Advocates for R1-R2

Comp App (AT) (CH) No.51/2024 Page 1 of 8 JUDGMENT

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

This Company Appeal, has been preferred by the Appellant, being

aggrieved against the Impugned Order dated 28.05.2024, as it has been passed in

the Application CA No.09/2023 in the Contempt Petition No. 154/BB/2019 by

the Ld. NCLT, Bengaluru. In the application, thus preferred before the learned

Adjudicating Authority, being CA No. 09/2023, which was filed by the

Respondent herein, that is, M/s. Titan Industries Ltd., prayer was made seeking

recall of the order dated 30.03.2021, which was passed by the Ld. Tribunal in

Contempt Petition No. 154/BB/2019. By virtue of the order passed on

30.03.2021, in the aforesaid Contempt Petition, the Ld. Tribunal has passed a

direction to the effect that, since the order of the Ld. Tribunal passed on

28.02.2019 in Suit No.365/2012 (TP No. 301/2017) has not been implemented in

full, which was that the directions issued therein will have to be complied with,

within a month of receipt of the copy of the order and failure to do so will carry

interest on the outstanding amount at the rate of 18% per annum, the Respondent

M/s. Titan Industries is to implement the said order dated 28.02.2019 in full and

to report compliance by 20.04.2021. The relevant portion of the order is extracted

hereunder:

"6. For the aforesaid reasons and circumstances of the case, and in the interest of justice, we hereby direct the Respondent to implement the said order

Comp App (AT) (CH) No.51/2024 Page 2 of 8 dated 28.02.2019, in full, and to report compliance by 20.04.2021, failing which, the Tribunal would pass appropriate orders in Contempt Petition."

At this juncture, when the observation made in Para 6 of order passed in

CP/154/BB/2019 is taken into consideration, the direction which has been issued

to the Respondents therein was to implement the order dated 28.02.2019, in its

totality and further to submit the report for compliance by 20.04.2021, failing

which the Ld. Tribunal was supposed to pass an appropriate order in the Contempt

Petition. This order was challenged by the Respondent herein M/s. Titan

Industries Ltd, under Rule 11 of NCLT Rules 2016, seeking its recall, citing

various grounds by filing the Application CA No. 09/2023 in CP/154/BB/2019.

CA No. 09/2023 stood decided by Ld. NCLT by the impugned order. While

deciding CA No.9/2023, the observations which have been made in the Impugned

Order, as contained in Para 9 onwards, now becomes relevant for consideration.

In the impugned order, Ld. NCLT after recording the various contentions of the

parties to the proceedings, with respect to non-prosecution of the Contempt

Petition and its consequent dismissal, filing of application to restore the same,

passing of order dated 30.03.2021 and filing of application by the Respondent

seeking its recall, has decided on the matter in accordance with provisions of Rule

48 of NCLT Rules, 2016. Rule 48(1) lays down as to how an application may be

dismissed on account of non-appearrance of the Applicant and Rule 48(2) lays

down the principles under which an application dismissed for default can be

Comp App (AT) (CH) No.51/2024 Page 3 of 8 restored Ld. NCLT, after detailed analysis of the implication of Rule 48 has

allowed the Application CA No. 09/2023 vide the impugned order dated

28.05.2024.

The learned counsel for the Respondent has submitted that, as far as the

order dated 28.05.2024 is concerned, as it was passed in CA No. 9/2023, that may

not be required to be interfered by this Appellate Tribunal for the reason being

that, the Principal order that was rendered in the proceeding of Suit No.365/2012

(TP No. 301/2017) under Section 108 of the Companies Act, 1956, was required

to be complied with, that owing to alleged non compliance of the same, the

Appellant initiated Contempt proceedings against the Respondent, in

CP/154/BB/2019 and the Contempt Petition was dismissed for default because of

non-appearance of the Applicant, the application for restoration of the same and

for condoning the delay in filing the Restoration Application were yet to be

decided, that order was passed in the same Contempt Petition on 30.03.2021

while it remained dismissed, that therefore the order dated 30.03.2021 was

without jurisdiction and hence the order of Ld. NCLT on his Application CA No.

09/2023, allowing the same and recalling the order of 30.03.2021 as a

consequence, cannot be faulted.

Further, it is seen that Ld. Tribunal, while considering the Contents of the

Application being CA No.9/2023 has observed that, since M/s Titan Industries

Ltd, Respondent herein has complied in fall with the order passed in the principal

Comp App (AT) (CH) No.51/2024 Page 4 of 8 proceedings, which could be seen from the records too that, 4000 sub-divided

shares that were lying with the IEPF has been transferred to the Petitioners on

23.03.2021 and the dividend amount lying with the IEPF in respect of the above

shares has also been transferred to the Petitioners on 19.04.2021, that it has

clarified that it had pursued the matter with IEPF regarding the claim of the

Appellant herein on a constant basis and enabled dematerialization of the shares

in spite of several discrepancies and therefore there is no case for payment of any

interest by M/s. Titan Industries Ltd/Respondent herein to the Application in

terms of the order dated 28.02.2019 as the delay in transferring the shares &

dividends to the Petitioner is not attributable to it.

It is not in controversy that the Principal proceedings under Section 108 of

the Companies Act, 1956, stood decided by the order rendered on 28.02.2019 and

that its compliance, the Contempt Proceeding, was filed by the Appellant, which

stood dismissed for want of prosecution on 30.08.2021. Prior to it, the Appellant

had filed an Application before the Ld. Tribunal contending there of that since

the main issue has been decided on 28.02.2019, in Suit No.365/2012 (TP

301/2017) filed by Sh. Shakti Bhushan & Ors., being the proceedings which were

held under Section 108 of the Companies Act, 1956, the order passed thereon

may be executed. Accordingly, the Ld. Tribunal passed an order 30.03.2021 that

since the Tribunal's Order dated 28.02.2019 has not been implemented in its

totality, it is to be complied in full before 20.04.2021. This order was sought to

Comp App (AT) (CH) No.51/2024 Page 5 of 8 be recalled, by Respondent No. 1 herein on an application being CA No.9/2023.

On this recall application, the Ld. Tribunal proceeded to pass the impugned order,

observing thereof that, as far as the relief sought by the Respondent No.1 (M/s.

Titan Industries Ltd), in CA No.9/2023, with regards to the recall of the order

dated 30.03.2021 issued by the Ld. Tribunal in the Contempt Petition No.

154/BB/2019 is concerned, the order dated 30.03.2021, ought not to be permitted

to be enforced because that order has been passed without restoring the Contempt

Petition and deciding the same on merits, because the Contempt Petition has

already been dismissed for want of prosecution by an order dated 30.08.2019, the

Ld. Tribunal has observed in the impugned order as under:

"18. As regards the prayer sought by the Applicant in CA No.09 of 2023, filed by M/s. Titan Industries Limited under Rule 11 of the NCLT Rules, 2016, it is noticed that the Order dated 30.03.2021, issued by this Tribunal in Contempt Petition No.154/BB/2019, was made without first restoring the Contempt Petition, which had previously been dismissed for default by this Tribunal due to non- compliance with office objections as per the Order dated 30.08.2019. Considering that the Order dated 30.03.2021 was issued in a dismissed proceeding without considering the restoration application and condonation of delay thereto, this Bench believes it should be recalled as it occurred due to technical oversight. Considering the aforesaid, the Order dated 30.03.2021 is recalled. However, on perusal of the records it is noted that M/s. Titan Industries Limited (now known as Titan Company Limited) has already complied with the

Comp App (AT) (CH) No.51/2024 Page 6 of 8 Order of this Tribunal dated 28.02.2019; since it is seen from the records that the 4000 sub-divided shares that were lying with the IEPF were transferred to the Petitioners on 23.03.2021 and the dividends lying with the IEPF in respect of above shares were also transferred to the Petitioners on 19.04.2021. Moreover, it was also clarified in the explanation furnished by M/s. Titan Industries Limited/Applicant in CA No.09 of 2023 that they had pursued the matter regarding the claim of the Applicant in the CP No. 154 of 2019 with the IEPF and only after constant follow-up, the IEPF has taken necessary steps for transferring the unclaimed dividend amounts pertaining to the sub-divided shares to the Petitioners. It is further contended that the Applicant Company has gone ahead and enabled the dematerialization of the shares of the Petitioners, in spite of various discrepancies along with the passing of requisite documents which were to be filed by the Petitioners. Accordingly, it is contended that there was no case of payment of any interest by the Applicant Company i.e. M/s. Titan Industries Limited. Therefore, the Petitioners' prayer of passing a decree against M/s. Titan Company Ltd. in the Contempt Petition to transfer the interest @18% per annum amounting to Rs.87,56,210/- to the Petitioners cannot be acceded to, as the delay in transferring the shares and dividends to the Petitioners is not attributable to any fault on the part of the M/s. Titan Company Limited."

Owing to the fact that, when the impugned order was passed, there were

no pending Contempt proceedings as such and therefore, the directions as given

in Para 18, rejecting the prayer for passing of a decree against the Titan Industries

Comp App (AT) (CH) No.51/2024 Page 7 of 8 in the Contempt Proceedings for payment of interest, on the ground that the delay

which has chanced in transferring the shares and the dividends to the Appellant

is not attributable to any fault on part of the Respondent No.1, is not required to

be ventured into at this stage by us and the said directions will abide by the

decisions to be taken on the Contempt Petition, which has been directed to be

restored by the order as passed in the connected Company Appeals being

Company Appeal (AT) (CH) No.50/2024 & Company Appeal (AT) (CH)

No.55/2024.

Thus, for the aforesaid reasons, the Company Appeal (AT) (CH)

No.51/2024 lacks merit and the same is accordingly dismissed.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical)

20.06.2025 GKJ/PA/MS

Comp App (AT) (CH) No.51/2024 Page 8 of 8