Sridhar Somashekar vs M/Svinayas Construction Pvt Ltd

NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI (APPELLATE JURISDICTION) Company Appeal (AT) (CH) No. 09 / 2025 In the matter of: Mr. Sridhar Somashekar, Director & Shareholder of M/s. Vinyas Constructions Private Limited, No. 994/A, 4th Cross, Ashok Nagar, Banashankari 1st Stage, Bengaluru - 560050, Karnataka, India ... Appellant No.1 Mr. Ramesh S, Shareholder in M/s. Vinyas Constructions Pvt. Ltd. No. 994/A, 4th Cross, Ashok Nagar, Banashankari 1st Stage, Bengaluru - 560050, Karnataka, India ... Appellant No.2

V M/s. Vinyas Constructions Pvt. Ltd. Registered Office Address: No. 4, Anjaneya Nagar, Ittamadu, Padmanabha Nagar, Bengaluru - 560083, Karnataka, India ... Respondent No.1

Sreenivasa Garudanahalli Thimmappagowda, No.1102/25, 8th Cross, 9th Main Road, Ashok Nagar, Banashankari 1st Stage, Bengaluru - 560050, Karnataka, India ... Respondent No.2

Nagaraja Venkatappa Reddy, No.225, Koppa Village, Anekal Taluk, Bengaluru - 560105, Karnataka, India ... Respondent No.3

Anand Gowda Vadlegowdanagdoddi, Sathanur Hobli, Achalu Achalu, Kanakapura, Ramanagara, Bengaluru - 562117, Karnataka, India ... Respondent No.4

Comp App (AT) (CH) No.09 / 2025 Page 1 of 8 Present : For Appellants : Mr. K. Gaurav Kumar, Mr. Kishandan & Mr. Sreekumar, Advocates & Ms. Alpa Jain, PCS For Respondents : Mr. Jerin Asher Sojan & Mr. Samarth Shreedhar, Advocates for R3 Mr. N. Alagu Narayanan, Advocate for R4

JUDGMENT

(Hybrid Mode)

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

1. The instant Appeal is against the Impugned Order dated 23.08.2024. The

Appellants herein happen to be the Applicants to the proceedings in CP / 34 /

BB / 2019, which was preferred under Section 241, 242 read with Section 244

of the Companies Act, 2013.

2. When the aforesaid proceedings came up for consideration before the Ld.

NCLT, the nature of the relief, which was sought for therein, among other

things, pertained to the declaration of the Board's Resolution dated 28.09.2018

and DIR 12 filed on 02.10.2018, as to be illegal and void and also for the

declaration of the Board's Resolution of 29.09.2016 and DIR 12 as filed on

14.10.2018 as to be illegal.

3. However, when the aforesaid proceedings came up for consideration

before the Tribunal, the Ld. Tribunal observed that the parties were already

under litigation in a criminal proceedings, and deriving its logic from the

Comp App (AT) (CH) No.09 / 2025 Page 2 of 8 Judgment of Capt M. Paul Anthony V. Bharat Gold Mines Ltd., as reported

in 1999 Vol III SCC Page 679 held that, since there happens to be a criminal

proceeding already pending consideration before the competent Criminal Court

qua the same set of allegations / the charges, the proceedings under Section 241

& 242 read with Section 244, is to be kept in abeyance till the Criminal Court

decides the controversy at hand.

4. After having heard the Ld. Counsel for the Parties, this Appellate

Tribunal is of the view that, the ratio as propounded in the matters of Capt M.

Paul Anthony, was arising from a service jurisprudence, where, there were

disciplinary proceeding and criminal proceedings too against the same set of

allegations, which were being carried against the delinquent employee.

5. The issue came up for consideration in the matter of Capt M. Paul

Anthony was that, as to whether, both the proceedings criminal and disciplinary

proceedings can simultaneously go on, for the reason, as it was argued, that

finding if any, is recorded in the criminal proceedings, it may have an adverse

bearing on the disciplinary proceeding, which was being held on the service

side and hence, it was observed that, the disciplinary proceedings was required

to be kept in abeyance till the criminal proceedings was brought to an end or

vice versa.

6. The ratio as propounded therein is in regard to the implications of the

Civil and the Criminal proceedings, as to whether at all they could

Comp App (AT) (CH) No.09 / 2025 Page 3 of 8 simultaneously be carried. This ratio may not be a precedent, which could be

borrowed to be applied in the instant case, because, service jurisprudence is

based upon a consideration of altogether different issues and aspects which are

required to be considered. The principles laid down in the matters of Capt M.

Paul Anthony, may not be applicable in the instant case because, in Capt M.

Paul Anthony's case, it was a comparative analysis, which was being made qua

the disciplinary proceedings vis-a-vis its implications on the criminal

proceedings.

7. There is another aspect which is required to be considered is that, under

the Indian jurisprudence, criminal law or a criminal proceedings are basically

aimed at, to be reformative in nature, which ultimately leads to a consequential

action of imposition of a penalty or a punishment as contemplated under the

provisions of the Indian Penal Code in relation to the respective offences which

would have been the subject matter of the criminal proceedings.

8. We are of the considered view, that the conclusion drawn in the criminal

proceedings cannot be borrowed for the purposes of deciding a civil

proceedings. Civil Proceeding has to be independently decided, even if both

proceedings deal with same set of charges / allegations and will require

production of evidence which would be more or less common and therefore, a

corresponding criminal proceedings for the same set of allegations may not be a

Comp App (AT) (CH) No.09 / 2025 Page 4 of 8 reason to stall or keep on hold the civil proceedings at hold, until and unless the

criminal proceedings are decided.

9. There is yet another logic, if that be the situation and civil proceedings

are kept pending because of a corresponding criminal proceeding, then it will be

very easy for the rival party to stall the civil proceedings by registering a FIR or

a criminal complaint and then taking a plea that as a consequence of the

registration of the FIR or a criminal complaint, since there happens to be a

pending criminal investigation or a criminal trial, the civil proceedings may be

kept on hold.

10. It cannot be the prescription of law to hold the civil proceedings, to be

suspended sine-die, merely on the pretext that, there happens to be a pendency

of a criminal case, because, if that is permitted to be perpetuated, it will be

leading to an absolute abuse of process of law and that too particularly, when it

is a settled principle that, any finding that is recorded in a criminal proceedings

at the stage of determining of an act, the criminal liability of an act for offences

covered under the IPC or any other law requiring criminal trial, is only intended

to award punishment for the purpose of creating an example in the Society

which will then act as a deterrent for the rest to refrain from engaging

themselves, in commission of such acts. But, this is not the objective of civil

proceedings which aim to adjudicate inter-se rights of the parties to the

Comp App (AT) (CH) No.09 / 2025 Page 5 of 8 proceedings. Therefore, findings of a criminal case would not have any

relevance on civil proceedings which have to be independently decided.

11. The reason behind the same is that, the scrutinization of evidence in both

the proceedings have a different gravamen. In the criminal proceedings, the

textual evidence which is led, is in relation to the establishment of a commission

of an act complained of and therefore, it requires a different parameter for

assessment as to whether an accused person is liable to be punished. The same

is not the case in a civil proceedings.

12. Hence, merely because of the fact that, a criminal case is pending

consideration, it will be absolutely irrational to keep the civil proceedings on

hold for an indefinite period, by observing thereof, that the civil proceedings

are premature and it could only revive back when the criminal proceedings are

brought to an end.

13. This would be contrary to the basic percept of Justice Dispensation

System, for the reason being that, a prolonged pendency of the criminal

proceedings, genuine or otherwise should not be utilised as an instrument or a

tool to stall the civil proceedings, which ought to be decided in accordance with

the procedure laid down for the conduct of the civil proceedings as per the

applicable law.

14. Thus, the conclusion which has been drawn by the Tribunal while passing

the Impugned Order observing thereof that, the Company Petition itself is

Comp App (AT) (CH) No.09 / 2025 Page 6 of 8 disposed of because of the fact that, there happens to be a criminal case pending

and reserving the liberty to the Petitioner / Appellant herein, to re-approach the

Ld. Tribunal after conclusion of the criminal proceedings would be absolutely

an abuse of process and it would be also an instrument to delay the redressal of

a grievance, which may have only a civil consequences for which the

proceedings have been initiated.

15. Thus, the reasoning adopted by the Ld. Tribunal in the instant case in the

light of the ratio of Capt M. Paul Anthony's Judgment (supra), may not be

applicable because, there are different pedestals which govern the aspects

pertaining to the civil jurisdiction and the service jurisprudence and to reiterate,

the principles of Capt M. Paul Anthony will not apply for this instant case.

16. Apart from it, M. Paul Anthony's Judgment has been subsequently

considered in various other Judgments of the Hon'ble Apex Court where

clarification has been made by the Hon'ble Apex Court itself, while considering

the implications emanating from the Judgment of Capt M. Paul Anthony, which

is to the effect that, both the proceedings can simultaneously go on, since they

do not have any bearing on each other and that the set of evidence which is

required to be considered in a criminal proceedings, cannot be borrowed to be

applied in a civil case. Therefore, the analogy drawn by the Ld. Tribunal while

passing the Order holding the proceedings of the Company Petition to be pre-

Comp App (AT) (CH) No.09 / 2025 Page 7 of 8

mature, by applying a wrongful principles based upon the ratio of Capt M. Paul

Anthony's Judgment (supra), is contrary to law.

17. Accordingly, the Impugned Order is considered to be not tenable and is

hereby quashed. The matter is remitted back to the Ld. Tribunal to decide the

Company Petition No. 34 / BB / 2019 in the matters of Sridhar Somashekar &

Anr. V. M/s. Vinyas Constructions Pvt. Ltd. & 3 Ors., exclusively on its own

merits, without being influenced with any finding or evidence which has been

recorded in the criminal proceedings as it cannot be borrowed to be applied

when the Company Petition proceedings are revived back to be decided on its

own merits.

18. Hence, the Company Appeal (AT) (CH) No. 09 / 2025 is allowed. The

Impugned Order is quashed. All pending Interlocutory Applications, if any,

would stands closed.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical) 30/06/2025

SR/MS

Comp App (AT) (CH) No.09 / 2025 Page 8 of 8