Union Of India vs Hari Sankaran

IN THE MATTER OF: Union of India ...Appellants Versus Hari Sankaran ...Respondents

Present: For Appellant : Mr. Aditya Sikka along with Ms. Onshi Jakhar, Advocates. For Respondents : Mr. Shiraz Rustomjee Sr. Advocate with Mr. Prateek Pai, Ms. Priyamvada Singhania, Ms. Sneha Baranje and Mr. Varun Kalra, Advocates for R1. Mr. Vikrant Singh Negi and Ms. Ekta Tyagi, Advocates.

ORDER

(Hybrid Mode)

26.11.2025: Heard counsel for the appellant and Ld. Counsel appearing

for respondent.

2. This appeal has been filed by the Union of India challenging the order

dated 13.06.2024 passed by the National Company Law Tribunal (NCLT) in

Company Application No. 538 of 2022. Company Application No. 538 of 2022

was filed by the respondent herein praying for following reliefs:-

"In view of the aforesaid, the Applicant prays :-

(A) The Applicant be permitted to withdraw a sum of Rs. 31,35,000/-

from his bank accounts towards the outstanding legal fees and expenses set out in paragraph 9 above;

(B) The Applicant be permitted to withdraw an amount of Rs.

5,00,000/- per month or such amount as this Hon'ble Tribunal may deem fit, from his bank accounts, towards payment of legal fees and expenses in future;

(C) that the Applicant's Power of Attorney Holder, Ms. Deepa Sankaran be permitted to withdraw the said amount on behalf of the Applicant from the bank accounts of the Applicant; and (D) for such further and other relief as this Hon'ble Tribunal may deem fit in the facts and circumstances of the case."

The application was opposed by the Union of India and reply was filed

by the Union of India opposing the application. Adjudicating Authority heard

the applicant as well as Ld. counsel for the Union of India and by the

impugned order has allowed prayer-A and has refused to grant prayer-B.

Prayer-C was allowed permitting the applicant's Power of Attorney to

withdraw the amount as allowed in prayer-A.

3. Challenging the said order this appeal has been filed. We have heard

Shri Aditya Sikka, Ld. Counsel for the appellant and Shri Shiraz Rustomjee,

Ld. Counsel appearing for the respondent.

4. Ld. Counsel for the appellant submits that the by the impugned order

the NCLT has allowed Rs.31,35,000/- for clearing outstanding legal fees

whereas several legal proceedings which was mentioned by the applicant were

already long disposed of and it is further submitted that applicant was

already in receipt of the amount Rs. 2 Lakhs per month as per order passed

by NCLT on 24.02.2023.

5. It is submitted that, in the reply of Union of India has given the detailed

facts which has not been considered by the NCLT. Ld. Counsel for the

2 of 7 Company Appeal (AT) No. 356 of 2024 respondent submitted that in so far as the payment of Rs. 2 Lakhs per month

that was allowed to all the applicants and the applicant was in the judicial

custody for 05 years and is now not in the custody from the year 2024. He

submits that the legal expenses in various proceedings were borne by sister

Ms. Deepa Sankaran and mother Smt. Saraswathi Sankaran and all details

have been given in the application which was filed by the applicant with

details of the cases in paragraph-7 of the application. It is submitted that in

fact the amount which was spended was much more than the amount

claimed in the application and the Adjudicating Authority after considering all

aspects in the matter has allowed the prayer. It is submitted that no grounds

have been made out to interfere with the order of NCLT.

6. We have considered the submissions made by the parties and perused

the records.

7. When we look into the application which was filed by the applicant in

para-7 details of the cases which have been referred to which applicant

required to be represented by Advocate. In para-7 of the application following

has been pleaded:-

Sr. No. Forum Proceeding

1. Supreme Court Special Leave Petition (Crl) No. 002559 of

2020 for challenging the order of the Bombay High Court dated April 21, 2020.

2. Supreme Court Special Leave Petition (Crl) No. 005267 of 2021 for expediting the hearing of Criminal Application (L) No. 7582 of 2020 before the Bombay High Court (cogizance)

3. Supreme Court Civil Appeal No. 3747 of 2019 filed on

3 of 7 Company Appeal (AT) No. 356 of 2024 behalf of the Applicant challenging the order dated January 31, 2019 passed by NCLAT.

4. Supreme Court Special Leave Petition (Crl) No. 009855 of 2021 filed by 63 Moons Technologies Limited on November 17, 2021.

5. Bombay High Criminal Application (L) No.7582 of 2020:

Court Application under S.482 CrPC for quashing of the remand orders passed without cognizance

6. Bombay High Suit No. 98 of 2022:

Court Suit for damages filed by 63 Moons Technologies Limited 7. Chennai High Writ Petition No. 4095 of 2021 filed by the Court Applicant for quashing of FIR registered

before EOW Chennai (upon complaint by M/s. 63 Moons Technology Limited).

Crl M.P. No. 818 of 2021 Bail Application filed by the Applicant.

8. SFIO- Special Criminal Complaint No. 20 of 2019 Court, Sessions Criminal complaint filed by the SFIO against Court, Mumbai inter alia the Applicant. The Applicant has filed several proceedings thereunder for various reliefs, including bail applications, miscellaneous applications, etc.

9. PMLA- Special PMLA Spl. Case No. 6 of 2019 Court, Sessions Criminal prosecution launched by the Court, Mumbai Directorate of Enforcement against inter alia the Applicant. The Applicant has filed several proceedings thereunder for various reliefs, including bail applications, miscellaneous applications, etc. 10. PMLA O.C. No. 1191 of 2019 Adjudicating Adjudication proceedings launched by Authority Directorate of Enforcement against inter alia the Applicant attaching his flats.

11. PMLA- Appellate FPA PMLA 3562 of 2020 Tribunal Appeal filed by the Applicant against Adjudicating Authority's order dated June 10, 2020.

12. EOW Delhi FIR No. 253/2018 dated 06.12.2018

13. NCLT/ NCLAT Union of India, MCA filed Company Petition 4 of 7 Company Appeal (AT) No. 356 of 2024 No.3638/2018 under Sections 242(4), 246 read with Section 339 of the Companies Act, 2013 against inter alia the Applicant alleging oppression and management in the affairs of IL&FS (i.e. the present proceedings).

14. Refund of salary IL&FS issued a notice dated July 9, 2021 notice by IL&FS seeking refund of alleged excess remuneration for FY 2018-19.

15. Wilful Default Several banks have issued show cause notices Proceedings to the Applicant to declare him as a wilful defaulter. The Applicant is required to respond to these notices and undertake certain proceedings before various banking forums and also file applications' in court, so that he can get permission to attend the hearings.

8. It is the case of the applicant that legal expenses on behalf of the

applicant were borne by sister Ms. Deepa Sankaran and mother Smt.

Saraswathi Sankaran. The said facts have been noted by the NCLT in para-6

of the order which is as follows:-

"6. The Applicant further submitted that an amount of Rs.2,95,75,587/- has already been spent by the Applicant's mother Mrs. Saraswathi Sankaran and his sister, Ms. Deepa Sankaran and updated amount spent by them as on 12.11.2023 is Rs.3,73,19,080/-, the details of which are provided in the annexures attached to the application. These details are in nature of certificate from the Bankers about the payment of money to the arrears of Advocate/Legal Firms."

9. The NCLT after hearing the parties has accepted the prayer for

withdrawal of Rs.31,35,000/- reasons stated by the NCLT is contained in

paragraph-8 of the order which is as follows:-

5 of 7 Company Appeal (AT) No. 356 of 2024 "8. We have considered the submissions. We note that the number of legal proceedings is either being defended or prosecuted by the Applicant and Applicant is only entitled to withdraw a sum of Rs. 2 Lakhs per month and funding of these litigations were met from the resources available with his Mother and Sister. The Applicant has stated that even their resources stand exhausted and it is imperative to seek withdrawal of money form the Applicant's account under the restraint order to make outstanding payment to the Lawyers/ Legal Firms. Though the learned Counsel for the Union of India vehemently opposed allowing the withdrawal of sum of Rs.31,35,000/- for clearing the outstanding legal fees as set out in the application, we are of the considered view that in the absence of free legal services available to the Applicant he has right to defend himself in the matter being prosecuted against him. Accordingly, it would be in the interest of justice to allow the Applicant for withdrawal of sum of Rs.31,35,000/- to clear these dues. However, we do not find any substance in the prayer seeking withdrawal of Rs.5 Lakhs per month for meeting his legal expenses. The Applicant has also prayed for operation of his bank account by Applicants Power of Attorney Ms. Deepa Sankaran, in view of his medical condition. Accordingly, we allow his Power of Attorney Ms. Deepa Sankaran to withdraw the said sum from the bank account and pay the same to the Lawyers/ Law Firms to settle their accounts."

10. The submission of the appellant that several cases were disposed of

long back is not relevant to deny that amount spended in the legal

proceedings. In the legal proceedings expenses were borne by Sister and

mother of the applicant the fact that it was disposed of long ago cannot be

6 of 7 Company Appeal (AT) No. 356 of 2024 reason to deny the expenses which was already spended. The submission of

the appellant that the reply which was given by the Union of India has not

been noticed and considered is not correct. The Counsel for the appellant

vehemently opposed the application which was recorded in the order itself.

The NCLT after considering the application and being satisfied with the

amount has passed the order to withdraw of Rs.31,35,000/-. We are of the

view that in exercise of the Appellate jurisdiction it is not a case warranting

any interference. The appeal is dismissed.

We, further make it clear that the order passed in the present case

which is under appeal was passed in facts of the said case and cannot be

treated as precedent.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) harleen/MD

7 of 7 Company Appeal (AT) No. 356 of 2024