Shri Fidaali Moiz Mithiborwala & Anr vs Aceros Fortune Industries Pvt. Ltd. & ...

This appeal has been preferred by the appellant Shri Pidaali Mots Muhiborwala & Anr.. against the common order dated 25.8.2016, passed by the National Company Law Tribunal thereinafier referred to as Tribunal), Mumbai Bench, Mumbai in C.P No. 64 tm 88 of 8015. By the impugned order, the Tribune! rejected CA 12/2016 was rejected without costs. However, the Tibunal directed the appellant te nominate a member from their side, within 15 days after the order has been communicated to the appellant ar the appellant's counsel or else the Chairman is at Nberty ta praceed with the sale of the assets with the assistance of respondent's side and aleo to ensure that the sale prooeeds are put in an escrow account oN the same is paid towards one time settlement agreed upon. The chairman has been directed to ascertain the real value of the property before confirming the sale, if any, takes place,

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2 GP No. 64 to 68 of QO1S were fled by the appellant under fold) Section S47 and 398 of the Companies Act, 1986 Section 241 af the Campanios Act, 2013) alleging mismanagement and oppresaian by the respondents. By one common order dated 9° November 2015, the Tribunal, Mumbai Bench, Mumbai, allowed the appellant/petitioner fo earry out the inspection of the documents of the reapondent greup of companies and gave Hberty to the respondents ta proceed further to sell the Survey No. 609, Rangpar wiage, Morbi taluka, Rajkot District in the mame of M/s. Majolica Imipex Pet. Lie: survey No. 626, Pailelei-1, Rangper villages, Morbi Taluka, Rajkot district in the name of M/s, Majolica Properties (india) Pet Lid., & ard ors. and survey Ne. S36, Pakhi-?, Rangpar vilues, Morbi Tabika, Rajkot district in the name of Ms. Aoeros Fortune Industries Pyt. Lid, & Ors. to make payment tawanis the loans pending against these companies against the notice issued under SARPAS! Act.

3. By another arder dated 35.1.2018, Mr. Mukesh Trivedi, Chartered Accountant, was appointed as mediator-cum-faciiitator to reacive the iasue between appellants and respondents. It appears that Mr Mukesh Trivedi, Chartered Accountant, a commen family friend, submitted his preliminary report-cum-opinion wherein he requested the Hon'ble Bench to recuse him from the assignment. Thereafter, the Tribunal, with the intention to resolve the dispute, directed the partics

that purpose to mame a retired Judge of the High Court to chair the Gommitice with joni consensus. But mo agreement was reached. Subsequently, Mr Rohit Chowksi, Chartered Accountant, partner of M/s. GK. Chowksi & o., was appointed as Facilitator. According the appellant, the said Mr. Rohit Chowksi was appointed by the Tribunal without the consent of the parties, The appellant has raised objection with regard to the appoirimernt of said Mr. Rohit Chowlsi. In the meantime, anc or other application were fled before the CLS. Since 1.62018, after the constitution of the Tribunal, the matter was taken up by the Tribunal. The Tribunal by detailed impugned Common Order dated 23.8.2016, while referring to one or other order passed by the CLS and history and backerownd of the case, observed that partios have agreed to sell the properties and there was no question to recall any earlier order.

4. Barher when the matter was taken up by this Appellate Tribunal on S.10.2016, Mr Saurabh Kalia, Advocate, appearing om behall of the respondents, accepted the notice. He was asked to produce the consent order for sale of properties Wf any, passed by the C.L.B or the Tribunal in the impugned order. However, we find that there is neo such consent order passed by the CLS or by the Tribunal appointing Mr Rohtt Chawks!, Chartered Accountant, as Facilitator or Consent Grder to sel any property.

3 &, The grievance of the appellant is that there is mismanagement and oppression by the respondents. We have noticed that the appellant is the elder brother of respondents or in-laws. Though five companies are there, it is essentially family business. On hearing the parties, we find that there is less chance af any settlement between the parties. me of the griewance of the aopellant is that the two companies had mever taken any loan, therefore there was mo occasion to sell the properties of those companies to settle the debt amount of a third company. However, we are not inclined to deckie the question whether such sale is permissible or not or whether any such action on the part of the resporcienis amounts te oppression and mismanagement, which tay be decided by the Tribunal

&. As one of the party de not want to settle the dispute and have never agreed fo sell any property of the company through the Paciitater, we are of the view that the Tribunal shouk? not force the party to facilitate sale of company properties by an interim order.

F. Further, Scetion 422 of the Compares Act, 2013 deals with expeditious disposal of Petitions by Tribunal or Appellate Tribunal. As per the new low, every application or petition presented before the Triunal and every appeal fled before the Appellate Tribunal shall be dealt with and disposed of by it as expeditiously as possible armel every endeavour shall be marie by the Tribunal or the Annellate Tribunal, as the case may he, for the disposal of such apolication or petition or appeal within three months from the date of Ne presentation before the Tribunal or the Gling of the appeal before Che Appellate

&, Under sub-section @&@) of Section 422, where any application or petition or appeal is not disposed of within the period apectfied in eub- section {1}, the Tribunal or, as the case may be, the Appellate Tribunal, shall record the reasons for not disposing of the application or petition or the appeal, as the case may be, withm the period so specified; and the President or the Chairperson, as the case may be, may, after taking into aooount the reasons so recorded, extend the period referred to in sub-acction {7} by such period not exceeding ninety days as he may consider necessary.

g. That means uo the reason shown by Tribunal is not salisinetary, then in that case Ho is open to the President or the Chairperson to place the case before amy other Bench for its expeditious disposal,

10. Now more than three months have passed, there is nothing on 'record to suggest that sub-section {Q@} of Section 422 of the Companies Act, 2012 has been complied with by the Tribunal {Mumbai Bench} Mumbal. In this background, while we set aside the totality of bnpugned Common Order dated 23.8.2016 passed in GP No. &$ to GS of 2015 and remit the matter to the Tribunal,

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Mumbai Bench, Mumbai for final disposal of the Canrpany Petitions, direct the Bench to aot in termis of sub-section (2) af Section 422.

ii. In the meantime, the respondents are directed not to acl any immovable property of the respondent companies OH the final disposal of all the Company Petitions,

12. Parties are also directed to cooperate with the Tribunal for early disposal. of the Company Petitions and will meat ask for Wesessary adjwurnment af the case. Hf the parties do not cooperate, the Tribunal may proceed with the matter ex-purfe and pass final judgement. However, in the facts and circumstanoos of the cane, there shall he no arder as to cost.

(fastice 8.) Mukhopacdhaya) Chairperson

(Mb. Balvinder Singh} Member (Technical