Suvas Reality Private Limited vs Kailashchandra Ramgopal Lohiya & Ors

IN THE MATTER OF: 1. Vinod Kumar Anokhilal Jain 03, Aadinath Society, Behind Bank of Baroda, Station Road, Ankleshwar - 393002 ...Appellant No.1 2. Vijay Sobhalal Shah O-430, Aashirvad Palace, Near Mangalamchowlk, Bhatar Road Surat - 395007 ...Appellant No.2 3. Suvas Reality Private Limited Turning Point Ghod Dod Road, Bhatar Road Junction Surat GJ 390002 IN ...Appellant No.3 Versus 1. Kailashchandra Ramgopal Lohiya E-5, 601, Capital Greens Besides Poddar Residency Vesu, Bharthana, Surat - 395007 ...Respondent No.1 2. Manoj Sardasingh Kavadia R-1110, Rajtilak Apartment, Opp. Vaishali Bunglows, City Light, Surat - 395017 ...Respondent No.2 3. Ramesh Kumar Moolchand Bohra A-4, Ravi Raj Apartment, Near GIDC S.T. Depo, Valiachokdi, GIDC, Bharuch, Ankleshwar - 393002 ...Respondent No.3 4. Jayesh S. Shah O-430, Aashirwad Palace Near Mangalamchowk, Bhatar Road Surat - 395007 ...Respondent No.4 5. Narendra D. Garg B-304 Green Avenue Opp. Jogers Park, Ghod Dog Surat - 395007 ...Respondent No.5

Company Appeal (AT) No. 99 of 2021 1 of 9 6. Santosh N. Garg B-304 Green Avenue Opp. Jogers Park, Ghod Dog Surat - 395007 ...Respondent No.6 7. Raju Shah 229-230, Turning Point Complex Ghoddog Road, Surat - 395007 ...Respondent No.7 8. Ranu B. Chandak 407, 21st Century Ring Road, Near Udhna Darwaja Surat - 395002 ...Respondent No.8 9. B.K. Chandak 407, 21st Century Ring Road, Near Udhna Darwaja Surat - 395002 ...Respondent No.9 10. B.K. Chandak - HUF 407, 21st Century Ring Road, Near Udhna Darwaja Surat - 395002 ...Respondent No.10 11. Agarwal Roadlines Shop No. SB 7-8, Galaxy Complex Genda Circle, Alkapuri Vadodara - 390007 ...Respondent No.11 12. Registrar of Companies Gujarat ROC Bhavan, Opp. Rupal Park Society Behind Ankur Bus Stop, Naranpura Ahmedabad - 380013 ...Respondent No.12

Present: For Appellant : Mr. Arvind Kumar Gupta, Ms. Heena George, Ms. Shivani Sharma, Advocates For Respondent : Mr. Pulkit Deora, Mr. Harsh Gurbani, Ms. Aphune K. Kezo, Advocates.

(17th March, 2023)

KANTHI NARAHARI, MEMBER (TECHNICAL) Preamble:

The Present Appeal is filed by invoking provisions of Section 421 of the

Companies Act, 2013 against the order dated 03rd March, 2021 passed by the

Company Appeal (AT) No. 99 of 2021 2 of 9 National Company Law Tribunal, Ahmedabad Bench, Court-1 in C.P. No. 100

of 2018 whereby the National Company Law Tribunal (in short 'NCLT') allowed

the withdrawal pursis to withdraw Company Petition, thereby the C.P. No.

100 of 2018 filed by Respondents continue to be on the file of NCLT

Ahmedabad.

Brief Facts:

Appellant's Submissions:

2. The Learned Counsel for the Appellant submitted that aggrieved by the

aforesaid order, the Appellant preferred the present Appeal and narrated the

brief facts.

3. It is submitted that the Appellants are the Directors of the 3rd Appellant

Company and the Respondents filed CP No. 100 of 2018 before the

Ahmedabad, Bench alleging acts of Oppression and Mismanagement in the

Affairs of the Company. The Respondent claimed to be 50% shareholder of the

Company at the time of filing the C.P. On the other hand, the Appellants

claimed to be owners of 45% shareholding in the company. While so, the

Appellants also filed Company Petition being No. 07 of 2020 alleging acts of

Oppression and Mismanagement in the affairs of the Company by the

Respondents. The Appellants also lodged FIR against the 1st Respondent and

the 1st Respondent was arrested on 13.01.2021.

4. During the pendency of litigation, a Settlement Agreement dated

23.01.2021 was signed between the parties. After signing the Settlement

Agreement, the Appellants did not contest bail being granted to the

Company Appeal (AT) No. 99 of 2021 3 of 9 Respondent. Having abided by the Settlement Agreement, the Appellant group

had filed withdrawal pursis to withdraw their C.P. No. 07 of 2020 and the C.P.

stood withdrawn vide order dated 28.06.2021.

5. The Respondents also filed withdrawal pursis to withdraw their C.P. No.

100 of 2018. But in a mala fide manner they refused to withdraw C.P. No. 100

of 2018 and orally sought withdrawal of withdrawal pursis during the hearing

held on 03.03.2021. The NCLT allowed withdrawal of withdrawal pursis vide

impugned order dated 03.03.2021 in C.P. No. 100 of 2018.

6. The Learned Counsel for the Appellant submitted that the order passed

by the NCLT is a non-speaking order and passed without appreciating the

facts of the case. The Learned NCLT could not have been permitted to

withdraw the withdrawal pursis. By virtue of the said impugned order dated

03.03.2021 the Respondent No.1 herein obtained interim orders in C.P. No.

100 of 2018 on 17.01.2022 in a mala fide manner. It is submitted that the

impugned order dated 03.03.2021 is bad in law and passed without hearing

the other side and is in gross violation of the principles of natural justice.

Respondent's Submissions:

7. The Counsel appearing for the Respondents submitted that the present

Appeal is a misguided attempt to scuttle proceedings brought by the

Respondent before the NCLT. It is submitted that the withdrawal of the

withdrawal pursis was bona-fide because the withdrawal pursis to withdraw

C.P. No. 100 of 2018 was moved under duress. It is submitted that the 2nd

Appellant who is in control of the affairs of the company filed a false criminal

Company Appeal (AT) No. 99 of 2021 4 of 9 complaint on 13.01.2021 with allegations contrary to the Settlement

Agreement entered between the parties dated 11.08.2017 wherein it was

acknowledged that the Respondent No.1 herein holds 50% shares and agreed

to transfer 40% to Respondent No.5 upon certain terms. The Respondent No.1

herein under duress and coercion executed the Settlement Agreement dated

23.01.2021 to transfer 10,000 shares to Appellant No.2 and affixed his

signatures on a withdrawal application prepared by the Appellants. It is

submitted that on 27.01.2021 the 2nd Appellant reported settlement before

the Sessions Court and the Respondent No.1 was released from judicial

custody.

8. In view of the reasons as stated above, the Learned Counsel for the

Respondent submitted that there is no illegality in the order passed by the

NCLT and the Appeal is not maintainable and the same may be dismissed.

Analysis / Appraisal:

9. Heard the Learned Counsel appeared for the respective parties, perused

the pleadings and documents. The short point for consideration is whether the

order passed by the NCLT is legal or not.

10. The NCLT vide its order dated 03.03.2021 passed the following order:

"ORDER Learned Counsel Mr. Jaimin Dave appeared for the Applicant. Learned Counsel Mr. Arjun Sheth appeared for the Respondent.

Learned Counsel for the Applicant submitted that application for withdrawal of the main matter was filed but now he wishes to proceed with the main matter, hence, seeks permission to withdraw that withdrawal application.

Company Appeal (AT) No. 99 of 2021 5 of 9 The permission is granted.

In view of this, that withdrawal application stands disposed of.

The pleadings are complete in the matter.

The matter stands adjourned for hearing on 13.04.2021."

11. The genesis of the order passed by the NCLT in permitting withdrawal of

withdrawal pursis is assailed by the Appellants on the ground that the

Appellants have not afforded an opportunity to hear them before passing such

order.

12. It is an admitted fact that the Respondents filed C.P. No. 100 of 2018 and

the Appellant also filed C.P. No. 07 of 2020 before the NCLT alleging certain acts

of Oppression and Mismanagement by the rival parties in the affairs in the

Company. The matters were pending for adjudication. While matter stood thus,

there is an agreement entered between the 2nd Appellant and the 1st Respondent

dated 23.01.2021 and the copy of the said agreement annexed at Page 120 of

Volume-1 of the Appeal Paper Book.

13. It is the contention of the Appellant that pursuant to the Settlement

Agreement, the Appellant filed an application / withdrawal pursis in C.P. No. 07

of 2020 annexed at page 277 of Volume-2 of the Appeal Paper Book, whereby it

is stated as under:

"Withdrawal pursis on behalf of the petitioner. That in view of the settlement arrived at between the contesting parties, vide this pursis, I am here by withdrawing the present petition.

Company Appeal (AT) No. 99 of 2021 6 of 9 In light of the aforesaid, it is humbly prayed that this Hon'ble Tribunal be pleased to permit withdrawal of the present petition.

Yours sincerely,

Vijay Shobhalal Shah Petitioner Dated 26.06.2021"

14. Basing the above withdrawal pursis made by the Appellant, the Tribunal

passed the following order dated 28.06.2021 annexed at Page 288, Volume-2

"ORDER The Learned Counsel for the Petitioner appeared and made statement that he has filed a withdrawal pursis. We recorded the statement. The petitioner is permitted to withdraw the petition.

Accordingly, the petition stands withdrawn and disposed of."

15. The Respondent also filed withdrawal pursis dated 25.01.2021 at Page

172, Volume-1 of the Appeal Paper Book wherein a request was made to the

Registrar, NCLT, Ahmedabad requesting to withdrawal the C.P. No. 100 of 2018.

The letter thus read as under:

"To The Registrar, NCLT, Ahmedabad

Dear Sir, Re: Company Petition no. 100 of 2018 Kailashchandra Ramgopal Lohiya Vs. Suvas Reality Pvt. Ltd. & Ors.

NCLT, Ahmedabad (Ahmedabad Bench)

Company Appeal (AT) No. 99 of 2021 7 of 9 Sub: Withdrawal pursis

In light of the settlement arrived at between the parties, I am hereby seeking permission to withdraw the present petition.

This Hon'ble Tribunal, be pleased to permit withdrawal of the present petition.

Yours sincerely, Kailashchandra Ramgopal Lohiya Petitioner"

16. It seems that the NCLT has not acted upon on the withdrawal pursis

seeking withdrawal of C.P. No. 100 of 2018 made by the 1st Respondent.

However, the NCLT vide order dated (impugned) 03.03.2021 permitted

withdrawal of withdrawal pursis without there being any written application

seeking withdrawal of withdrawal pursis.

17. This Tribunal is not inclined to go into the merits of the case at this stage.

However, this Tribunal makes a note of cautious whether the NCLT before

allowing the Respondent to withdraw the withdrawal pursis had afforded any

opportunity to hear the other side and passed a reasoned order. In our opinion

the NCLT ought to have afforded an opportunity to the Respondent to C.P. No.

100 of 2018 before passing the order dated 03.03.2021. The NCLT ought to have

followed the principles of Audi alteram partem before passing such order the

reason being that the Appellants have made a specific averment that in view of

agreement dated 23.01.2021 they also withdrew their C.P. being No. 07 of 2020

and the C.P. filed by the Respondents being No. 100 of 2018 also should have

been withdrawn. However, the Appellants contend that the Respondents did not

adhere to the agreement and instead of proceeding to withdrawal of the C.P. No.

Company Appeal (AT) No. 99 of 2021 8 of 9 100 of 2018, continued to prosecute the C.P. No. 100 of 2018. According to the

Appellants is in violation of principles of estoppel and constructive res-judicata.

18. It is made clear that this Tribunal has not gone into any merits of the case.

Having considered that the NCLT ought to have afforded an opportunity to the

Appellants, who are affected parties to the proceedings before passing the order

dated 03.03.2021.

Conclusion:

19. For the foregoing reasons, this Tribunal sets aside the order of the NCLT

dated 03.03.2021 with the following directions:

(a) The NCLT Ahmedabad Bench, Court-1 is hereby

directed to hear the withdrawal of withdrawal pursis dated

25.01.2021 and pass a speaking order in accordance with

law expeditiously.

20. Resultantly, the Company Appeal is allowed. No order as to costs.

[Justice Anant Bijay Singh] Member (Judicial)

[Kanthi Narahari] Member (Technical) pks

Company Appeal (AT) No. 99 of 2021 9 of 9