Vintage Hotels Private Limited vs Km Ahmed Nizar
- CitationCOMPANY APPEAL (AT)(CH) No. 51/2023
Ratio decidendi
The rule this decision rests on
An interim direction restraining a company from withdrawing or transferring amounts from its current account, or altering its shareholding status quo, pending the next hearing, is an order that affects the rights of the party bound by it and must not be made without first providing that party an opportunity of being heard, consistent with the principles of natural justice; where such an interim direction is passed ex parte without that opportunity, it is liable to be set aside to that extent. The Tribunal may, in disposing of an appeal against such an unheard interim direction, decline to decide the merits of the underlying dispute and instead relegate the parties to the adjudicating forum, directing that forum to hear both sides and pass a fresh, just and equitable order on the facts and circumstances as they appear.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Against the Order dated 23.05.2023, passed by the Adjudicating Authority, (National Company Law Tribunal, Bengaluru Bench, Bengaluru) In the matter of:
Vintage Hotels Pvt. Ltd. & Anr. ...Appellants
V
KM Ahmed Nizar & 11 Ors. ...Respondents
Present :
For Appellant : Mr. P.H. Arvindh Pandian, Sr. Counsel For Mr.Sandeep Kumar & Mr. Ambalavanan Advocates
For Respondent : M/s. SPJ Legal Mr. Saji P John - For Caveator/R1
ORDER
(Virtual Mode) 23.06.2023:
Heard the Learned Counsel for the 'Appellants' and the Learned Counsel for the 1st Respondent in CA (AT)(CH) No.51 of 2023.
According to the Learned Counsel for the 'Appellants', the 'Appellants' are dissatisfied with the observations made in paragraph 3 of the 'Impugned Order' dated 23.05.2023 in CP No.40/BB/2023 on the file of National Company Law Tribunal, Bengaluru Bench, Bengaluru whereby and whereunder, it was observed as follows:
Para 3 "In the meanwhile R-1 Company is directed to maintain status quo with regard to the shareholding pattern of the Company save as directed by this 'Tribunal' vide its order dated 08.12.2022 in EP Page 1 of 3 CA AT (CH) No. 51/2023 No.01/BB/2022 in CP No.01 of 2016 (TP No.96 of 2016), and not to withdraw/transfer the amount from its Current Accounts, till the next date of hearing."
and a direction was issued to List the main Company Petition on 18.07.2023.
The Learned Counsel for the 'Appellant' contends that the 'Impugned Order' dated 23.05.2023 in CP No.40/BB/2023 pertaining to the observations made by this 'Tribunal', relating to Paragraph 3, mentioned supra, the said 'order' in directing "not to withdraw/transfer the amount from its current account, till the next date of Hearing" is harsh one besides being a burdensome and the said 'order', was passed, in negation of the 'principles of natural justice' and on this score alone, the said observations in paragraph 3 of the 'Impugned Order' dated 23.05.2023 in CP No.40/BB/2023 passed by the 'Tribunal' are to be setaside, for meeting ends of justice.
Conversely, it is the submission of Learned Counsel for the 1st Respondent/'Petitioner'] that the 'Tribunal' has the requisite wide powers under the Companies Act, 2013 to pass and make such 'observations', as made in paragraph 3 of the 'Impugned Order' and moreover, only after taking into the earlier facts and circumstances of the case, the present 'observations' and 'Impugned Order' came to be passed by the 'Tribunal', and the same is free from any infirmity in the 'eye of Law'.
This 'Tribunal' has 'Heard' the Learned Counsel's appearing for the parties and noted their contentions.
On a careful consideration of respective contentions and this 'Tribunal' keeping in mind of the fact that the 'Impugned Order' dated 23.05.2023 in CP No.40/BB/2023 was passed by the 'Tribunal', in the main Company Petition at the time of 'Admission' of the matter are being Listed for the first time, this 'Tribunal' is of the considered view that the observations made in paragraph 3, especially 'not to 'withdraw'/'transfer' Page 2 of 3 CA AT (CH) No. 51/2023 amounts from its current account till the next date of 'Hearing' ought to have been passed by the 'Tribunal' after providing due opportunity of 'Hearing' to the 'Appellant'/otherside and in the absence of the same, at this stage, this 'Tribunal' 'simpliciter' without expressing any opinion on the merits of the controversies/disputes centring around the parties and not displacing the 'Impugned Order' passed by the 'Tribunal' is inclined to dispose of the instant Company Appeal CA (AT)(CH) No.51 of 2023 by relegating the respective parties to appear before the 'National Company Law Tribunal' Bengaluru Bench on 03.07.2023 and on that day the 'Tribunal' shall take up the main case in CP No.40/BB/2023 and after providing due opportunity to the 'Appellants' and the other side, by adhering to the principles of natural justice, shall endeavour to pass necessary orders as deems fit and proper, of course, based on the representations' so made at an early date and it is open to the Learned Counsel's appearing for the parties, to raise all factual and legal pleas before the 'Tribunal' in main CP No.40/BB/2023 and the 'Tribunal' is taken into account of the same by dealing with it and is directed to pass just fair and an equitable 'order', based on the facts and circumstances of the case which float on the surface.
With the aforesaid observations the instant Company Appeal CA (AT)(CH) No.51 of 2023 stands disposed of. Connected IAs are closed.
[Justice M. Venugopal] Member (Judicial)
[Shreesha Merla] Member (Technical) SE/NG
Page 3 of 3 CA AT (CH) No. 51/2023
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