Sonia Khosla vs Sameer Kudsia

I.A. No.189 of 2017 In Company Appeal (AT) No.36 of 2016 alongwith Company Appeals (AT) No.43 to 47 of 2016

IN THE MATTER OF:

Mrs Sonia Khosla ...Appellant

Vs

Mr Sameer Kudsia & Ors ...Respondents

Present: Mr. Deepak Khosla, Advocate for Appellant.

Mr. Anil Panwar, CGSC, Ms Natasha, Advocate and Mr Ajeet Kumar Srivastava (Prosecutor) Mr. Rishi Sood, Advocate for Respondent NO.5.

Mr.Anand M. Mishra, Advocate for Respondent Nos 2,3,4,6,7 and 8.

Judgement

1. An I.A. No.189/2017 has been filed by the Respondent No.10, Mr. R.P.

Khosla, with the following prayers:

i) Recall (simpliciter) the order dated 12.4.2017 on grounds of breach

of audi alterum partum, lack of jurisdiction, and fraud.

ii) Consequently, set down the appeal for fair hearing on its merits.

2. Appellant herein (Respondent No.10) has stated that the Appellate

Tribunal may exercise of inherent powers to act ex debito justitiae and recall

the order dated 12.4.2017 passed in breach of audi alterum partum and

without jurisdiction. Appellant has further stated that in the alternative,

application may be for review and recall of its order dated 12.4.2017.

Appellant herein has stated that the Appellate Tribunal has proceeded on the

erroneous premise that the appeal has been filed in respect of 7 orders when

the actual fact is that the appeal has been filed in respect of 6 orders passed

Company Appeal (AT) No.36 & 43 to 47 of 2016 2

on the 6 CAs. Appellant herein has further stated that the Appellate Tribunal

has not given a reasonable opportunity to be heard to the appellant and

proceeded against it. Appellant herein has stated that the Appellate Tribunal

did not allow any parties to led the arguments on the sole question of law as

to whether an application under Section 8 of the Arbitration and Conciliation

Act, 1996 can, at all, be filed to block the passage of a petition alleging

oppression and mismanagement. It is further stated that the Appellate

Tribunal did not allow substantive arguments to enter into any other area

other than the maintainability of an application under Section 8 of the

Arbitration and Conciliation Act, 1996. It is further stated that no reasoning

was given directing the parties to focus arguments only on the question of law

relating to Section 8.

3. The appellant has stated that he is seeking recall simpliciter on the

ground that they have not been heard while passing the order dated

12.4.2017. The other ground on which they are seeking recall is lack of

jurisdiction. The next ground on which they are seeking recall is the fraud

played upon the Tribunal, the aspect of the fraud been set out in a petition

for criminal contempt and perjury which is pending before the Tribunal for

hearing. The other point raised for recall of the order is that the order passed

by the Tribunal below were passed by a Bench composed of a single Learned

Member, when by law, they could have been passed only by a Division Bench

in accordance with Rule 64(2) of the NCLT Rules, 2016 and further stated that

the impugned orders were passed coram non judice and, therefore, all

subsequent proceedings including the present appeal, stand coram non

judice.

Company Appeal (AT) No.36 & 43 to 47 of 2016 3

4. The appellant herein further stated that if an order is void, then the

issue is not merely whether a court has the power to recall it as much as the

question that it is duty bound to do so. Therefore, the Tribunal is duty bound

to adjudicate CA No.418 of 2009.

5. The appellant herein, therefore, prayed for recall the order dated

12.4.2017 passed by this Appellate Tribunal.

6. Written arguments have been filed on behalf of the Respondent No.2 to

4 and Respondent No.6 to 8. These Respondents have stated that the

Company Appeal filed by the appellant through her legal heir Mr. Deepak

Khosla is against 6 impugned orders which was disposed of by this Hon'ble

Appellate Tribunal vide its order 12.4.2017 and the NCLT was directed to hear

the Company Petition CP No.114 of 2007 and this Appellate Tribunal had

dismissed the amendment application No.46 and 47 of 2016 filed by the

appellant before the NCLT. These Respondents have further stated that Mr.

Deepak Khosla acting in malicious manner through his father Mr. R.P.

Khosla, Respondent No.11 had sought a review of the order dated 12.4.2007

on the ground that he was not heard by this Appellate Tribunal even though

Mr Deepak Khosla always represented Mr. R.P. Khosla both before Hon'ble

NCLT and Hon'ble NCLAT.

7. Written arguments have also been filed by Respondent No.5 and the

Respondent No.5 has taken the similar stand as stated in para 6 above.

IA No.419/2017

8. An IA No.419/2017 has been filed by the applicant/Respondent No.11

in pursuance to order dated 24.7.2017 of this Appellate Tribunal to place on

record the summoning order dated 22.6.2017 issued by the Learned

Company Appeal (AT) No.36 & 43 to 47 of 2016 4

Additional Chief Metropolitan Magistrate, Saket Courts, New Delhi in

Criminal Complaint CC No.2028 of 2017. The applicant has place a copy of

the CC No.2028 of 2017 and the position of the accused summoned and their

position in the Company Petition and in the present proceedings. Applicant

has submitted that the complaint was preferred for false evidence given in

judicial proceedings taking place before a Tribunal. It is stated that the

complaint is in respect of the falsehoods set out in pleadings support by

affidavits duly sworn under oath by the various accused before the Ld.

Arbitration Tribunal on 17.4.2008 in their application under Section 17 of the

Arbitration and Conciliation Act, 1996. The applicant has also placed alleged

forged documents in support of the relief prayed. Applicant herein has stated

that mere pendency of proceedings relating to adjudication of commercial

disputes between parties cannot act as a restraint on either party preferring

criminal prosecution against the other.

9. Applicant has further stated that as regards the issue of alleged transfer

of shareholding, the accused No.1, Vikram Bakshi, has kept changing his

stand before as many as 15 different judicial authorities including before this

Tribunal. Applicant has further stated that the relevance of the summoning

order to the present proceedings is that it puts the review petition in an even

stronger light. Applicant has cited the judgement of D.P. Chadha Vs Triyugi

Narain Mishra (AIR 2001 SC 457: (2001) 2 SCC 221, Lord Denning (1967,

1 QB 443), R Vs O'ConnelRoundel Vs Worsley 1969 1 AC 191, H.S. Bedi

Vs National Highway Authority of India, RFNo.784 of 2010, Seema

Thakur Vs Union of India, 223 (2015) DLT 132 relating to the conduct of

advocates. Applicant has also quoted Standards of Professional Conduct and

Company Appeal (AT) No.36 & 43 to 47 of 2016 5

Etiquette to be observed by Advocates. At last the applicant has prayed for

the following reliefs:

i) Advance the date in the present matter from 11.8.2017 to

1.8.2017, for the reasons set out in para 26-27 above, so as to

facilitate the present matter being heard alongwith Company

Appeal (AT) No. 220 of 2017 and Restoration Petition No.2 of

2017.

ii) Take on record the summoning order dated 22.6.2017 issued

by Addl. Chief Metropolitan Magistrate, Saket Courts, New

Delhi in CC No.2028 of 2017, and the complaint on which it

has been issued.

iii) Take on record the repeat incidents of egregious, criminally-

prosecutable conduct in the matter over the last 10 years.

iv) To pre-empt(iii) from being repeated further, allow recording

(or at least 100% transcription) of the proceedings in the

present review petition, so as to pre-attempt "making false

claims in Court", as well as to capture incontrovertible

evidence of the same (if made)

v) Issue an ex-parte order(s) and/direction(s) in terms of prayers

above; and

vi) Pass such other order(s) or direction(s) as may be deemed just

and proper in the facts and circumstances of the case.

IA No.539 of 2017

10. An IA No.539 of 2017 has been filed by the applicant acting as LR of the

appellant/petitioner as well as in his own capacity as Respondent No.11

Company Appeal (AT) No.36 & 43 to 47 of 2016 6

under Rule 11 of the NCLAT Rules, 2016 and all other enabling provisions of

law, praying for grant of relief(s) relating to sole remaining grievance in CP

No.114 of 2007 which is assignment of rights to all lands within 500 metres

of the respondent No.1 company's project to it, so that there is no competing

business which is statutorily forbidden. The appellant stated that the

company petition was filed in 2007 under Section 397-398 of the Companies

Act, 1956 read with Sections 402 and 403 and 235. It is stated that the

Section 402 read with Section 403 of the Act are very relevant for the present

application i.e. the power to set aside or modify any agreement between

certain parties on just and equitable grounds. It is next stated that the

proceedings before this Tribunal are for review and recall of the order dated

12.4.2017 and consequently for allowing CA No.47 of 2016 in CP No.114 of

2007.

11. It is stated that the it is the case of the respondents that the pleadings

are erroneousness, as the pleadings contradict the documents and records

also of the respondents. Therefore, the respondents can have no possible

opposition to the amendment in pleadings being allowed by this Tribunal. It

is stated that the importance of allowing the amended pleadings can be

gauged also from the fact that the amendments in the pleadings prayed for

cannot possible be objected by the Respondent No.2, given that the erroneous

pleadings drafted by since discharged counsel in 2007 contradict even the

documents and records before all judicial forums. It is next that the

Respondent No.2 has filed pleadings before different judicial forums in which

he has constantly changed his stand as regards to alleged shareholding

transfers, thereby clearly proving that he himself is not in agreement that the

Company Appeal (AT) No.36 & 43 to 47 of 2016 7

contents of the Company Petition are correct. It is stated that in the amended

pleadings there are only 10 prayers and some of these 10 prayers are also

either redundant or are intended not to be pressed. It is stated that the only

relief remains to be granted is "Direct Respondent No.5 to transfer all its

rights to the land admeasuring 21 bighas and 10 biswas belonging to

Shri Prem Singh and his wife Smt. Kaushalya Dev, Respondent Nos.12

and 13 to the Respondent Company." It is stated that the basis of this sole

grievance is that both parties had a clear understanding that for a period of 5

years following the date fo their 2005 understanding to work together, neither

party would acquire any land that fell within 500 metres of the perimeter of

the proposed project of the Respondent No.1 company. It is stated that this

understanding only reflects statutory and/or equitable principles that

underline the ratio of non-compete/competing business, which even in the

absence of any written agreement between the parties, is a ground which, if

breached, gives rise to action for oppression and/or mismanagement under

Section 397-398 of the Companies Act, 1956 as it constitutes inter alia a

breach of the fiduciary duties of Directors and/or Members of the company.

It is stated that based on this understanding and acceptance of well settled

statutory and equitable principles the Respondent No.2 was able to induce

Respondent No.11 and the LR of the appellant/applicant to assign and

transfer all his rights in the lands under acquisition by Mr. Deepak Khosla in

his personal name to the name of Respondent No.1 company. It is stated that

after having induced the appellant's group, Respondent No.2 went and

surreptitiously executed the agreement for acquisition of the 21 bighas and

10 biswas of land (approx. 4 acres) that was practically adjoining/abutting

Company Appeal (AT) No.36 & 43 to 47 of 2016 8

the 110 bighas of land not in the name of Respondent No.1 company but in

the name of Respondent No.5 company. It shows that the conduct of the

Respondent No.2 was fraudulent and was based on dishonesty ab initio.

Respondent No.2 never had any intention of performing any of his own

obligations under the MOU executed on 21.12.2005 and/or the Agreement

executed on 31.3.2006. It is stated that had he disclosed on 31.3.2006 that

he had already violated the MOU dated 21.12.2005 on 12.1.2006, the

appellant would never have executed the Agreement on 31.3.2006. The

execution of the agreement to sell dated 12.1.2006 was a clear breach of the

fiduciary duties of the then Directors of Respondent No.1 company, intended

to wrongly injure the Respondent No.1 company and to wrongly benefit

Respondent No.2 and, his company, Respondent No.5.

12. It is further stated that the Respondent No.2, hardly after a month after

31.3.2006, surreptitiously orchestrated the execution of sale deeds of 2 keys

parcels of land in the name of one Rajeev Puri, Respondent No.9, transferring

to his name lands under acquisition by Respondent No.1 Company from Kyalli

Ram and Dharam Dutt. It is further stated that due to FIRs being registered

against him in respect of this fraudulent act, he has sworn before the Hon'ble

Delhi High Court that the registration of these sale deeds in the name of

Respondent No.9 was for the sole benefit of Respondent No.1 Company.

13. The appellant has sought relief that the acquisition or registration of

lands that fall within 500 metres of the periphery of the perimeter of the

project of the Respondent No.1 company by Respondent No.2 to Respondent

No.9 in the name of any individual/entity other than the Respondent No.1

company since December, 2005 till date; adjudicate CA No.47 of 2016 and CA

Company Appeal (AT) No.36 & 43 to 47 of 2016 9

No.46 of 2016 filed before Ld. NCLT for amendment of pleadings and allow

the same; assign the rights in the lands covered by the Agreement to sell dated

12.1.2006 from Respondent No.5 company to the name of Respondent No.1

company; assign the rights in the lands covered by the Sale Deeds executed

on 1.5.2006 from Respondent No.9 to the name of Respondent No.1 company;

direct the recording of the proceedings of Hon'ble NCLT be allowed so as to

pre-attempt "making false claims in Court" as well as to capture

incontrovertible evidence of the same.

14. Reply/written submissions has been filed on behalf of Respondent No.2

to 4 and Respondent No.6 to 8. It is stated that the appellant with malafide

intention and only to create prejudice has mentioned the criminal cases

against the Respondent No.2. The Respondent has mentioned various orders

which has been passed against the appellant by the various courts. It is stated

that Respondent No.1 is a shell company and it is only after execution of MOU

dated 21.12.2005 and agreement dated 31.3.2016, Respondent No.2 entered

into the company and shares of Respondent No.1 were transferred from

appellant and thereafter Respondent No.2 has exclusively infused the entire

funds. It is stated on the basis of these funds, Respondent No.1 was able to

contract with various land owners for purchase of land. It is stated that the

appellant and his family or the original subscribers of the Articles of

Association of Respondent No.1 had invested a minuscule amount of only

Rs.44.5 lakhs which has already been repaid by Respondent No.2. The

appellant has made no investment whatsoever in Respondent No.1 other than

a meagre amount of Rs.3,650 as the shareholding amount invested by Mrs

Sonia Khosla. Respondent No.2 infused funds to the tune of Rs.7 crores

Company Appeal (AT) No.36 & 43 to 47 of 2016 10

approximately and once the said amount was infused by Respondent No.2,

appellant illegally attempted to grab the control of company which was

resisted by Respondent No.2.

15. 2nd to 4th Respondent has stated that the prayer seeking amendment of

the main Company Petition, that the prayers sought in CA No.539 of 2017

i.e. assignment of rights of land, were already sought by Late Mrs Sonia

Khosla (appellant herein) in the year 2007. It is stated that mere glance at

the reliefs sought by the appellant would indicate that the said arguments

advance by the appellant is incorrect and no such relief was sought with

respect to the land in the name of Respondent No.9. It is stated the prayer

for assignment of rights of land were alredy sought by appellant in main

company petition filed in the year 2007 then there is no requirement of

seeking amendment in the main company petition. The said company petition

is pending disposal before the NCLT. It is stated that by way of seeking

amendment of the company petition the appellant is trying to change the

colour and nature of the original petition filed in the year 2007.

16. It is stated that neither the appellant nor her legal heir has any right to

represent Respondent No.1. The appellant in malicious manner and unfairly

trying to wrest control of Respondent No.1 which they lost upon transfer of

over 51% shares in favour of Respondent No.1. It is stated that the agreement

dated 31.3.2006 executed between the prties not only the entire shareholding

of Respondent No.1 but even the control over the company was to vest in the

Respondent No.2. It is stated that the appellant has filed a petition u.s 397

and 398 of the Companies Act, 1956 as a minority shareholder and

Respondent No.1 and its majority shareholders wherein Respondent No.1 is

Company Appeal (AT) No.36 & 43 to 47 of 2016 11

represented by its majority shareholder and its nominees. It is next stated

that the Board of Directors of Respondent No.1 had never authorised the

appellant to represent it before any forum.

17. It is stated that the present appeal was disposed of by the Appellate

Tribunal vide its order dated 12.4.2017 and the review of the same is sought

by Respondent No.11, therefore, without deciding the said review, this

appellate Tribunal is functous officio and is acting without jurisdiction to

entertain any other application filed by the parties before deciding the review

application. It is argued that while adjudicating an appeal preferred before

Appellate Tribunal, this Hon'ble Tribunal has the jurisdiction to confirm,

modify or set aside the order challenged in appeal in the manner it deems fit.

However, its jurisdiction would not extend to passing orders on matters not

even before it in a particular.

18. Reply has been filed by the Respondent No.5 company. It is stated that

the Respondent No.5 company is in existence since 1994 and is well

established hospitality company operating high end hospitality properties

across North India as compared to Respondent No.1. It is stated that

Respondent No.1 came into existence in 2005 and is still a shell company.

Respondent No.1 holds no assets in its name apart from some agreement to

sell in its name and that also from the funds introduced entirely be

Respondent No.2 or his associate companies. It is stated that the Respondent

No.5 by its funds had purchased 21 bighas and 10 biswas of land from the

original land owners after due deliberation on its own for a hospitality project

without any involvement of LR of appellant and Respondent No.1. The

appellants are neither the shareholders nor directors or officer of Respondent

Company Appeal (AT) No.36 & 43 to 47 of 2016 12

No.5. Respondent No.5 has duly applied and received in principal approval

by the State Government of Himachal Pradesh for use of property for a hotel

project which is different from the Real Estate project of Respondent No.1. It

is stated that it is wrongly argued by the appellant that Respondent No.5 was

indebted to Respondent No1 and Respondent No.5 instead of repaying to

Respondent No.1 had purchased the land for running a competing business

as to Respondent No.1. It is stated that this was not pleaded in the Company

Petition filed by the appellant at all and a new fact has been introduced which

in any case is denied and disputed by Respondent No.5. It is stated that

Respondent No.1 is heavily indebted to Respondent No.5. It is next stated

that the purpose and scope of land purchased by Respondent No.1 is resort

and real estate whereas of land purchased by Respondent No.5 is hospitality

which is totally independent of each other. It is stated that Clause 17 and 18

of the agreement dated 31.3.2006 between the parties state clearly and in

unambiguous terms that the appellant family was to get only 5% sale of the

Real Estate project. The appellant family were not to get any part from the

resort part of the project to be developed on the Respondent No.1 purchased

land.

19. It is wrongly argued by the appellant that the land in the name of

Respondent No.5 is crucially required for Respondent No.1 as it would form

the entrance of the entire project. It is reiterated that both the lands are

independent of each other having separate ingress an exits. It is next stated

that even at the time Respondent No.5 had purchased its 21 bighas and 10

biswas of land there were 3 to 4 houses of 3rd parties in existence. It is next

stated that even as per Agreement dated 31.3.2006 executed between the

Company Appeal (AT) No.36 & 43 to 47 of 2016 13

parties, it unambiguously states that if any additional land is acquired by

either of the parties within the vicinity of 500 meters the appellant family is

entitled to 5% of the gross sales proceeds of the real estate development only.

20. It is next stated that the Hon'ble Apex Court has time and again held

that the parties are not allowed to resile from the admission made by them in

the petition under the garb of amendment. It is stated that the appellant

under the garb of seeking amendment is allegedly trying to resile/wriggle out

of admission made by his wife in the CP No.114 of 2007. It is further stated

that the Hon'ble Apex Court has nowhere directed the adjudication of the

amended company petition or granted appellant to seek the amendment of

the main Company Petition filed by his wife in the year 2007.

21. It is next argued that the power of setting aside or modifying any

agreement between certain parties on just and equitable ground cannot be

granted on standalone basis but it can only be granted after a case of

oppression or mismanagement, if any, made out by the petitioner in a case.

The appellant have so far not made out any case of oppression or

mismanagement against the Respondent No.1 company and its directors and

majority shareholders. Thus granting the relief as prayed by appellant

through her legal heir would lead to violation of natural justice and travesty

of justice.

22. We have heard the learned counsel for the parties and perused the

record. During the course of arguments learned counsel for the appellants

submitted that majority of relief has already been availed/received through

operation of law or orders passed by other courts in favour of the appellant

Company Appeal (AT) No.36 & 43 to 47 of 2016 14

except some of the reliefs as claimed in the company application. The

following reliefs has been claimed in the IA No.539 of 2017:-

"i) Condone the present application exceeding 5 pages.

ii) Take on record that in the event of amended pleadings being allowed by this Hon'ble Tribunal, the sole remaining issue intended to be pressed by the applicant/appellant (Mrs Sonia Khosla acting through LRs) in CP No.114 of 2007 is the acquisition or registration of lands that fall within 500 meters of the periphery of the perimeter of the project of the Respondent 1 company by Respondent No.2 to Respondent No.9 in the name of any individual/entity other than the Respondent No.1 company since December 2005 till date.

iii) Adjudicate CA No.47/2016 and CA No.46 of 2016 filed before Ld. NCLT for amendment of pleadings and allow the same, in exercise of the powers of this appellate Court.

iv) Consequent to prayer (ii) read with prayer (iii), pass orders under Section 402 and 403 of the Companies Act, 1956 and in exercise of the powers of this appellate court, assign the rights in the lands covered by the Agreement to Sell dated 12.01.2006 (Annexure 6 (page 161 hereto) from Respondent No.5 Company to the name of Respondent No.1 company.

v) Consequent to prayer (ii) read with prayer (iii), pass orders under Section 402 and 403 of the Companies Act, 1956, and in exercise of the powers of this appellate Court, assign the rights in the lands covered by the Sale Deeds executed on 01.05.2006 (Annexure 8 (page 191 hereto) from Respondent No.9 (Rajeev Puri) to the name of Respondent No.1 company.

vi) To pre-empt abuse from being repeated further, direct that recording (or at least 100% transcription) of the proceedings of Hon'ble NCLT be allowed, so as to pre-attempt "making false claims in Court", as well as to capture incontrovertible evidence of the same (if made).

vii) issue an ex parte order(s) and/or direction(s) in terms of prayers above: and

vii)Pass such other order(s) or direction(s) as may be deemed just and proper."

23. We have noted that these issues have not been decided by the NCLT

and the Company Petition No.114/2007 is still pending and the appellants

Company Appeal (AT) No.36 & 43 to 47 of 2016 15

have filed CAs for amendment of pleadings. The petition is not proceeded

further but the issues rising in relation to this have been agitated in the

various forums. It is also noted that no worthwhile progress in the matter

has been made on account of related issues filed by one party or the other

party and agitated before the various forums. As the appellant is intending

to press the acquisition or registration of lands that fall within 500

meters of the periphery of the perimeter of the project of 1st respondent

by 2nd to 9th respondent in the name of any individual/entity other than

the 1st respondent since December, 2005 till date, therefore, in the interest

of justice, we hereby direct the Tribunal to hear the Company Petition on

priority basis and decide the same under Section 422 of the Companies Act,

2013 expeditiously. NCLT is directed to give one opportunity to both the

parties to file any document/information related with this matter before the

NCLT, which they feel is necessary for adjudication of the company petition.

NCLT is directed to consider the record, CA No.47/2016 and CA No.46/2016

including further documents/information given by the parties and decide the

Company Petition expeditiously under Section 422 of Companies Act, 2013.

Interim order passed, if any, is vacated. Parties are directed to appear before

the Tribunal on 26.11.2018

(Justice S.J. Mukhopadhaya) (Mr. Balvinder Singh) Chairperson Member (Technical)

New Delhi Dated:02-11-2018

bm

Company Appeal (AT) No.36 & 43 to 47 of 2016