Sulochana Gupta Vs RBG Enterprises Pvt. Ltd. (Kerala High Court)
Writ petition filed under Article 226 of the Constitution of India, can be for the enforcement of fundamental rights or for any other purpose, as envisaged under Article 226 of the Constitution. There is no pleadings or materials to substantiate that the appellants are discharging public duties or public functions, and thus, amenable to writ jurisdiction under Article 226 of the Constitution of India.
On a scrutiny of the decisions extracted above, it is clear that insofar as challenge to the judicial acts of the Courts or the Tribunals, in exercise of the powers under Article 227 of the Constitution of India, the High Court exercises overall superintendence on such Tribunals under Article 227. Orders by Courts or Tribunals, as the case may be, can be challenged by way of filing a writ petition under Article 227 of the Constitution of India, and the administrative orders passed by the Courts, or the Tribunals, as the case may be, can be challenged under Article 226 of the Constitution. Administrative orders passed by the State, authority or instrumentality of the State, can be challenged by way of a writ petition under Article 226 of the Constitution of India, as they do not fall under the ambit of superintendence and control, in exercise of Article 227 of the Constitution of India.
Difference between the exercise of powers under Articles 226 and 227 of the Constitution of India has been explained in the foregoing paragraphs. Thus, in the case on hand, when none of the parties, State or authority or instrumentality of the State, or any private body, discharging public functions, have been arrayed as respondents, when the writ petition has been filed under Article 226 of the Constitution of India, having regard to the roster followed in listing the cases, writ court ought to have directed the respondents/writ petitioners to make necessary amendments, to the provisions under which the writ petition ought to have been filed, or in the alternative, directed that the writ petition be placed before the concerned court, dealing with the challenges made to the orders passed by Courts, or Tribunals, as the case may be. Admittedly, the order impugned in the writ petition (Exhibit-P1) is not an administrative order, passed by the National Company Law Tribunal.
Writ court, without drawing a distinction between a writ petition filed under Articles 226 and 227 of the Constitutions of India, has erroneously proceeded to entertain the writ petition under Article 226 against an interim order passed by the NCLT, Kochi Bench, in I.A. No.83/2020 in C.P.No.114/KOB/2019 dated 9.7.2020.
Reverting to the case on hand, it could be seen that when the Writ Appeal has been filed challenging the very maintainability of the writ petition, filed against an interim order of the NCLT, on the grounds of suppression of material facts, including remedy under Rule 49(2) of the NCLT Rules, 2016, error in exercising jurisdiction under Article 226 of the Constitution of India, and not under Article 227, availability of alternative remedy, writ petition filed under Article 226 of the Constitution of India for enforcing civil rights inter se the parties, who do not fall within the ambit of Article 12 of the Constitution of India, contention of the respondents that the matter has become infructuous, cannot be accepted. An order passed without jurisdiction is void and the same cannot be allowed to stand. In that context, let us consider a few decisions.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Instant writ appeal is filed by respondents 1 and 2, against the common judgment passed in W.P.(C) No.14341 of 2020 and other connected cases dated 22.07.2020, by which, a learned single Judge of this Court disposed of the writ petitions, by ordering thus:
“…………..It is an admitted fact that the company petitions nine in number were pending before the NCLT. In the impugned order itself, the NCLT refers to the prayers in the company petitions and post the matter for hearing of the I.A. to 7.8.2020. The learned counsel for the petitioners has submitted that the proper course of action is to file an appeal before the NCLAT. It is submitted that such a course of action is presently rendered impossible due to the prevailing pandemic situation in the country and the petitioners are disabled from travelling to Delhi to prefer the appeal in view of the restrictions and the rising number of cases in the country. Though it is contended by the learned counsel appearing for the respondents that the writ petitions are not maintainable without the NCLT on the party array, I am of the opinion that in the facts and circumstances of the instant cases, especially in view of Ext.P6 request for adjournment made by the counsel for the petitioners before the NCLT, the passing of an order interdicting all financial transactions by running companies would create serious prejudice to the company. The technical objection raised that the NCLT is not made a party to these proceedings, according to me, should not stand in the way of the consideration of these writ petitions in the peculiar circumstances prevalent at present.
In view of the fact that an appeal before the NCLAT is not practically possible, it would be for the petitioners to approach the NCLT seeking appropriate modification of the orders. However, till such time, in view of the present situation prevalent, I am of the opinion that the petitioners should be permitted to carry out the day-to-day financial transactions as are necessary for the conduct of the companies. It is made clear that general body meetings shall not be conducted and withdrawal of amounts from the accounts of the company shall not be made except for the carrying out of the day-today administration. The further financial transaction shall be subject to further orders to be passed either by the NCLT after hearing the parties or by the NCLAT in appeal.
These writ petitions are ordered accordingly.”
2. Facts leading to the appeal are that, appellants are the shareholders of RBG Enterprises Pvt. Ltd., Kochi, represented by its Managing Director, respondent No.1, owned by the members of a family consisting of the founder of the group named ‘RBG’, the husband of the 1st appellant; Radha Ballabh Gupta (HUF), their eldest son, Rajkumar Gupta, respondent No.2 herein, Ritu Gupta, wife of the 2nd respondent, Vishnukant Gupta, their son, and the 3rd respondent herein, Anika Gupta, wife of the 3rd respondent, Mahesh Kumar Gupta (HUF), their youngest son, the 4th respondent herein, and Minakshi Gupta, wife of the 4th respondent, the 2nd appellant herein. The company is a family enterprise and its management vests in the Board of Directors and not in any one individual, including the Managing Director, which is clearly stated in Clause 34 of the Articles of Association.
3. Appellants have further stated that as per Section 96(1) of the Companies Act, 2013, the company should hold its Annual General Meeting (AGM) every year and not more than 15 months shall elapse between the date of one AGM and of the next. The failure to hold the AGM attracts penalty provided under Section 99 of the Act. Furthermore, the financial statements, including the balance sheet and profit and loss account with the Auditor’s report and Director’s report, are to be laid before the AGM, as per Section 136 of the Act. In case of default, the company would be liable to pay penalty of INR 25,000/- and every Director of the Company, who was in default, would be liable to pay penalty of INR 5,000/-.
4. Appellants have further stated that the 2nd respondent has not obtained approval from them or the above mentioned majority shareholders on the financial statements for the years 2015-16, 2016-17 and 2017-18, which have been filed by the 2nd respondent before the Registrar of Companies (ROC), Ernakulam and the Income Tax authorities surreptitiously. Appellants apprehended that the 2nd respondent has either forged or has caused to be forged the signatures of the majority shareholders with the intention to suggest that the financial statements have been approved by the shareholders at the Annual General Meeting, in the respective years.
5. Appellants have further contended that the financial statements filed before the Registrar of Companies, Ernakulam, for the years 2015-16, 2016-17 and 2017-18 respectively, would disclose related party transactions, in contravention of the provisions of the Companies Act, 2013 and the transactions have not obtained the approval of the board of shareholders of the company. The majority shareholders, including the appellants, therefore, have sought intervention of the National Company Law Tribunal under Sections 96 and 97(1) of the Companies Act, for a direction to the 2nd respondent viz., the Managing Director of RBG Enterprises Pvt. Ltd., to convene the AGM through company petitions viz., 98/KOB/291, 99/KOB/2019, 100/KOB/2019, 101/KOB/2019, 102/KOB/2019, & 103/KOB/2019. As an interim relief, NCLT has passed an order dated 03.10.2019 in C.P. No.99/KOB/2019, to restrain respondents 2 and 3 from resorting to related party transactions in the bank accounts of the company.
6. Appellants have further stated that they have filed C.P No.114/KOB/ 2019 before the National Company Law Tribunal under Sections 130, 241 & 242 of the Companies Act, 2013, for mismanagement and oppression of majority shareholders by the 2nd respondent in the above mentioned company. In the said petition, the appellants have elaborated various instances of mismanagement of the company, including misappropriation of funds, related party transactions and violation of the Act, in respect of holding of the AGM for the years 2015-16 to 2017-18.
7. Appellants have further stated that on 10.10.2019, the 2nd respondent convened a meeting of the Board of Directors, to consider, inter alia, holding of the AGM for the year 2018-19 on 30.10.2019. The majority shareholders of the company, including the appellants herein, challenged the proposals of the 2nd respondent before the NCLT, among other grounds, for violation of statutory provisions relating to convening of such meetings. The National Company Law Tribunal, vide order dated 25.10.2019 in I.A. No.49/2019 in C.P. No.99/KOB/2019, directed that the decisions taken at the Board Meeting on 10.10.2019 and at the AGM on 31.10.2019 would be subject to its approval. The 3rd respondent has suppressed the said order in W.P.(C) No.14341/2019.
8. Appellants have further stated that the majority shareholders have thereafter, adopted a number of resolutions, including one, to remove the 2nd respondent, as the Managing Director of the company. They have appointed the first appellant as the MD. The appellants have presented the resolutions to the NCLT for its approval in I.A. No.58/2019 in C.P. No.114/KOB/2019 and a transcript of the proceedings at the AGM in their rejoinder, in the same company petition. The National Company Law Tribunal referred the inter-party litigation to Retd. Justice C. N. Ramachandran Nair, for mediation. He submitted a failure report on 2.7.2020. Thereafter, the company petitions stand posted to 07.09.2020 for final hearing.
9. Appellants have further contended that in the meanwhile, the 2nd respondent has convened a meeting of the Board of Directors on 29.06.2020, without issuing notice, as required under the Act. Hence, the appellants approached the NCLT for the reliefs mentioned in I.A. No.83/2020 in C.P. No.114/KOB/2019. After issuing notice to respondents 2 and 3, NCLT heard the matter on 09.07.2020, and restrained the 2nd respondent from convening any meetings and further restrained the respondents 2 and 3 from making any financial transactions vide its order dated 09.07.2020. The I.A. stood posted to 07.08.2020, for further hearing.
10. Challenging the above said order of the NCLT in C.P.No.114/ KOB/2019 dated 09.07.2020, W.P.(C) No.14341/2020 has been filed by writ petitioners/ respondents 1 and 2 herein, seeking the following reliefs:
(i) Call for the records leading to Exhibit-P7 order dated 9.7.2020 in I.A. No.83/KOB/2020 in C.P. No.114/KOB/2019 passed by the National Company Law Tribunal, Kochi.
(ii) Issue a writ of certiorari or such other writ and quash Exhibit-P7 order dated 9.7.2020 passed by the NCLT, Kochi.
(iii) Direct the Tribunal to pass orders on Exhibit-P6 emails dated 9.7.2020 addressed to the Registrar, NCLT, Kochi, after giving an opportunity to file objections and after hearing the petitioners and other respondents therein;
(iv) Issue such other writ, order or direction that this Court may deem it fit in the facts and circumstances of the case.
(v) Award cost of this petition.
11. A learned single Judge of this Court allowed the writ petition in part, by judgment dated 22.07.2020, as extracted above. Against the impugned judgment, instant writ appeal is filed.
12. On the grounds raised Mr. Sukumar Nainan Oommen, learned counsel for the appellants, submitted that the cause title of the writ petition and the contents therein, indubitably establish the fact that respondents 2 and 3 have been canvassing a matter, which is in the nature of a civil dispute and is clearly outside the scope of writ jurisdiction under Article 226 of the Constitution of India.
13. He further submitted that the reliefs sought for in the writ petition establish, without any shadow of doubt, the fact that respondents 2 and 3 have been canvassing the matters in a dispute between the shareholders of the company, regulated by the provisions of the Companies Act, 2013 and that, a writ petition under Article 226 of the Constitution of India is not maintainable. On the above aspect, he invited our attention to the array of parties, the prayers made in the Company Petition, and the shareholdings of the parties thereto. Learned counsel for the appellants further submitted that to settle the scores of dispute between shareholders of a company, remedy under Article 226 of the Constitution of India is not a proper remedy. In support of his contention, he placed reliance on a decision in Shalini Shyam Shetty v. Rajendra Shankar Patil [(2010) 8 SCC 329].
14. He further submitted that a writ petition under Article 226 of the Constitution of India is maintainable only against the State or an Authority or instrumentality of State, or against a person discharging public duty and, in the case on hand, none of the party respondents, in the writ petition, filed against the interim order of the NCLT in CP No.99/KOB/2019 dated 03.10.2019 would fall in the ambit of Article 12 of the Constitution of India.
15. Placing reliance on the decision of the Hon’ble Supreme Court in Udit Narain Singh Malpaharia v. Additional Member, Board of Revenue, Bihar (AIR 1963 SC 786), learned counsel for the appellants further submitted that in the Writ Petition (C) No.14341/2020, filed by respondents 1 & 2, NCLT ought to have been impleaded as a necessary party, when there is a challenge to its order. Reference was also made to Rule 148 of the Rules of the Kerala High Court, 1971. But, the learned single Judge declined to consider the dictum in Udit Narain Singh Malpaharia’s case (cited supra) on the ground of “technicality”. According to the learned counsel, the writ court ought to have dismissed the writ petition, at the threshold itself, for the failure to implead National Company Law Tribunal, as a necessary party.
16. Learned counsel for the appellants further submitted that the reliefs sought for by respondents 1 & 2 in the writ petition is on the fallacious plea that NCLAT, Delhi was not conducting any hearing. But, this claim stands demolished by the documents presented by the learned counsel for the appellants, that at the time of hearing the writ petition on 15.07.2020, NCLAT was indeed hearing the appeals, but the writ court has failed to take note of the same. In this context, he produced the proceedings of NCLAT, to controvert the contention of the respondents/writ petitioners in this appeal.
17. Learned counsel for the appellants further submitted that before the writ court, 2nd respondent has filed a petition to receive documents. Along with the petition, he has attached the memorandum of appeal, preferred under Section 421 of the Companies Act, 2013, to the NCLT, presented on or around 15.07.2020 i.e., on the same date of hearing of the writ petition, wherein he had consciously and knowingly made the following affirmation in the memorandum of appeal. In para 10 of the appeal, he has affirmed thus:
“The appellant further declares that the appellant had not previously filed any writ petition or suit regarding the matter in respect of which this appeal is preferred before any court or any other authority nor any such writ petition or suit is pending before any of them.”
18. Knowing fully well that an appeal has been filed before the NCLAT, and is pending, on the date of hearing of the writ petition, i.e. on 15.07.2020, the respondents/writ petitioners have simultaneously pursued parallel remedies, challenging the very same interim order in CP No.99/KOB/2019 dated 03.10.2019, i.e.., one under Section 421 of the Companies Act, 2013, and another with under Article 226 of the Constitution of India, and that the same is not permissible in the light of the decision in New Saravana Stores Bramandamai v. The Assistant Commissioner (CT) [W.A. Nos. 1360 to 1362 of 2017 and CMP Nos. 18806 to 18808 of 2017 dated 03.11.2017 of High Court of Madras].
19. Placing reliance on the decision of the Hon’ble Supreme Court in C. Basappa v. T. Nagappa, [AIR 1954 SC 440] and Radhey Shyam and Ors. v. Chhabi Nath and Ors. [(2015) 5 SCC 423], learned counsel for the appellants further submitted that a challenge to an order of the National Company Law Tribunal does not fall under the scope of Article 226 of the Constitution of India. Such an order can be challenged only under Article 227 of the Constitution.
20. Sukumar Nainan Oommen, learned counsel for the appellants, further submitted that writ court ought to have taken cognizance of the fact that an efficacious remedy, to challenge the interim order of the NCLT, is provided under Rule 49(2) of the NCLT Rules, 2016, or in the alternative, according to the writ petitioners/respondents 1 & 2, under Section 421 of the Companies Act, 2013. The 2nd respondent, in “Ground J” of the writ petition, has admitted that a remedy under Section 421 of the Companies Act, 2013 is available.
21. On the aspect of alternate remedy and that a writ petition under Article 226 of the Constitution of India is not maintainable, learned counsel for the appellants relied on the decisions in ICICI Bank Ltd. and others v. Umakanta Mohapatra and others [(2019) 13 SCC 497] and Union Bank of India and Ors. v. K.B. Baby Saroja (WA No. 275 of 2020 dated 14.02.2020).
22. Learned counsel for the appellants further submitted that before the writ court, the 2nd respondent has placed reliance on a judgment dated 21.12.2017 of a learned single Bench of this Court in W.P.(C) No.41662/2017 (Exhibit-P8). According to the learned counsel for the appellants, the said judgment is opposed to the doctrine of binding precedents/stare decisis, especially in the light of the judgment dated 23.10.2017 passed by a Hon’ble Division Bench of this Court in Alexander Correya and Others v. Dominic Savio & Others [2017 (4) KLJ 650].
23. It is the submission of the learned counsel for the appellants that the Hon’ble Division Bench in the above decision, has unambiguously concluded that a writ petition would not lie against an interim order of the NCLT, which has also been followed by a Coordinate Bench of this Court in O.P(C) No.733 of 2020. According to the learned counsel, in terms of Raman Gopi and another v. Kunju Raman Uthaman [2011 (4) KLT 458 (FB)] and Ehvees v. The District Collector, Malappuram and Others (W.A. No. 706 of 2020 dated 08.06.2020 – Kerala High Court), the decision of the Hon’ble Division Bench is binding on the judgment of the learned single Judge.
24. Learned counsel for the appellants further contended that 2nd respondent filed the writ petition and obtained a favourable order by suppressing the crucial documents viz., Annexures-A1 and A2 orders of the NCLT dated 3.10.2019 and 25.10.2019, which form part of the company petition CP/114/KOB/2019 on the files of the NCLT, Kochi Bench.
25. Learned counsel for the appellants further submitted the learned single Judge ought to have taken cognizance of the fact that a fraud has been committed by respondents 2 and 3, which constitutes offences under Sections 447 and 448 of the Companies Act, 2013. He further submitted that the order made in I.A. No.49/2019 in C.P. No.99/KOB/2019 dated 25.10.2019 and I.A.No.58/2019 in C.P. No.114/KOB/2019 have been suppressed in the writ petition. He also submitted that the writ petition is a sheer abuse of judicial process, forum shopping, suppression of material facts, presented with unclean hands, and, therefore, the writ petition ought to have been dismissed with exemplary costs.
26. Inviting our attention to paragraph No.13 of the Statement of facts and Ground (J) raised therein, learned counsel for the appellants submitted that the contention of the respondents/writ petitioners that the only remedy available to the writ petitioners is to file a writ petition, is an incorrect statement, when Rule 49(2) of the NCLT Rules, 2016 provides for an alternate remedy by moving NCLT, Kochi. He further submitted that when W.P(C). No.14341 of 2020 came up for admission on 15.07.2020, it was adjourned to 17.07.2020 and thereafter to 22.07.2020 for orders. Writ court ought to have granted time to the appellants for filing counter affidavit. Referring to the materials to be furnished to the appellants, he submitted that the entire papers, filed in the writ petition, were not served by the respondents/writ petitioners and, therefore, counter affidavit could not be filed. He also submitted that the writ court failed to consider as to whether, denial of furnishing the entire papers, has deprived the right of the appellants to file a counter affidavit.
27. Attention of this Court was also invited to contend that on 15.07.2020, when the matter was heard, materials were produced by the appellants before the writ court to substantiate that on 15.07.2020, the respondents had already filed an appeal before the NCLAT, and that, the same was pending. Cause list on 16.07.2020, on the file of the NCLAT, was also produced before the writ court, to substantiate the contention that on 16.07.2020, a case from the State of Kerala, was also listed before NCLAT and that the contention to the contrary, by the respondents/writ petitioners, was factually incorrect.
28. Per contra, to sustain the impugned judgment dated 22.07.2020 in W.P.(C) No.14341/2020, Mr. P. Sanjay, learned counsel for the respondents/ writ petitioners submitted that, orders of the NCLT in I.A. No.83/KOB/2020 in CP/114/KOB/2019 dated 09.07.2020, has completely paralyzed the three companies of the writ petitioners. Running business of the companies was stopped and export commitments were at stake. On coming to know of this catastrophe, writ petitioners have rushed to meet the learned counsel and to somehow keep the order in abeyance immediately, because the next two days were holidays.
29. Enquiries with NCLT revealed that it would be difficult to file applications and get the same posted urgently before the Bench. Initial enquiries made by the writ petitioners/respondents 1 & 2 revealed that NCLAT, New Delhi, was not functioning at all. Even immediate filing of appeal was not possible, because there was no e-filing procedure before the NCLAT. This is the reason, as to why the subject writ petition and other connected cases were filed in a tearing hurry on 10.07.2020 before this Court under Article 226 of the Constitution of India. There were voluminous records and that only the writ petition under Article 226 of the Constitution of India is the only remedy. But, even the same did not get listed on the next working day, i.e. 13.07.2020, due to certain defects noted by the registry. After curing the defects, the writ petition was listed on 15.07.2020, along with the W.P.(C) Nos. 14369 & 14380 of 2020.
30. On 15.07.2020, learned counsel for the appellants appeared before the learned single Judge and made a mention, even before the calling of the cases, and submitted that a caveat had been filed, but they were not served with copies. Learned single Judge reminded the learned counsel that there is no provision for a caveat in writ petitions, but said that he would be heard at the time of hearing the writ petitioners.
31. When the case was called, appellants opposed the grant of any interim order and sought for time to file counter, whereas writ petitioners pressed for an interim order. Learned Single Judge did not grant interim order, as sought for, but posted all the three cases together on 17.07.2020 for counter affidavits, if any. Writ petitioners were also told by the learned Single Judge that the writ petitions will not be considered, if appeals are not filed before the NCLAT. Accordingly, the writ petitioners filed appeals to NCLAT with respect to all three companies and sent them by email, hoping that the matter will be entertained in view of the Hon’ble Supreme Court’s order. When the matter came up on 17.07.2020, the appellants did not file counter, but instead, filed copies of certain judgments as regards maintainability, to oppose the writ petitions. In abundant caution, writ petitioners also filed hard copies of the appeals, after serving copies on the appellants. The requisite fees were also paid by way of demand drafts enclosed therein. The appeals along with a covering letter and email to prove that the appeals were filed, were produced along with I.A. No.1/2020 in the writ petition.
32. All the cases were heard and after writ petitioners’ arguments, the learned counsel for the appellants argued in detail, opposing the grant of any interim order. The only objection raised by the appellants was that the writ petitions are not maintainable without the NCLT being on the party array, and the decision reported in Udit Narain Singh Malpaharia’s case (cited supra) was produced, in support of the said argument. It was also argued that the Hon’ble Apex Court held that when there is an efficacious alternate remedy of appeal before NCLAT, writ petition would not be maintainable. It is contended that the 2nd respondent has been removed from the post of Managing Director on 31.10.2019 and that he could not, therefore, continue. It was further contended by the appellants before the writ court that though the decisions in the so-called meeting on 31.10.2019 were produced before the NCLT along with I.A. No.58/2019, for its approval, there were no orders on the same, and the said fact was conveniently suppressed by the writ petitioners/respondents 1 & 2 in this appeal. The appellants further contended that the appeal preferred before the NCLAT by the writ petitioners/respondents contains an undertaking that no challenge has been made to the order under appeal, which is a false statement. Appellants have also stated that the case stands posted to 07.08.2020 before NCLT, on which date, writ petitioners would be free to raise all contentions against the orders passed. All the contentions raised by the appellants are noted in paragraph 5 of the impugned judgment by the learned Single Judge.
33. Respondents/writ petitioners have not suppressed any material facts before the writ court. Immediately, after the hearing, learned counsel for the appellants submitted that he had received missed calls from Delhi. Respondents’ colleague also called, to state that officials of the NCLAT registry had called the learned counsel too. Because of the video conferencing and sensing the urgency, she had sent text messages copying the number from which she received the call, as evident from Annexure R1(k). Writ petitioners’ counsel immediately called back and found that it was indeed an official from NCLAT registry. The said official confirmed that the appeals are received, but said that they will not be listed for hearing. The official further said that as per NCLAT Rules, the registry cannot receive appeals by emails or through post. The same will have to be delivered directly to the registry, either by the learned counsel or clerk. Request of the respondents’ counsel before the NCLAT’s registry, citing the Covid-19 situation, was in vain. By this time, the lunch recess was almost over and, therefore, respondents’ counsel thought it appropriate to bring it to the notice of the learned single Judge, by making a mentioning, after intimating the other side. It was under the above circumstances, after hearing the learned counsel for both sides, learned single Judge passed the impugned judgment.
34. Learned counsel for the respondents/writ petitioners submitted that learned single Judge has not set aside the order of the NCLT, Kochi, in I.A. No.83/KOB/2020 in C.P.No.114/KOB/2019 dated 09.07.2020 and all that is done is to make a temporary arrangement, to ensure that the functioning of the companies are not affected till 07.08.2020. No prejudice has been caused to the appellants, in any manner, due to the impugned judgment. It is contended that the writ petitioners have already filed objections to I.A. No.83/2020 in C.P. No.114/KOB/2009, as evident from Annexure-R1(m).
35. Learned counsel for the respondents/writ petitioners further contended that on 07.08.2020, both appellants and the 3rd respondent, through their respective learned counsel, were ready for hearing in I.A. No.83/2020. Despite waiting from morning, the link for video conferencing was not received by email from the NCLT. When contacted over phone, NCLT registry informed that an email has been received from the appellants’ counsel seeking adjournment and, therefore, the matter will not be called in VC. This information seemed strange because earlier on 09-07-2020, when requests for adjournment were made by the learned counsel for the respondents, the appellants were alone heard in the VC. Neither the appellants and the 3rd respondent nor their respective learned counsel/representatives had received the email link. But, it can be seen from Exhibit-P7 that the appellants’ counsel alone has been heard on that day.
36. It was later understood that the appellants’ counsel alone appeared during video conferencing on 09.07.2020, which is evident from Exhibit-P7 order dated 9.7.2020 in I.A. No.83/KOB/2020 in C.P. No.114/2019, and the Tribunal considered the interim application and posted the case on 07-08-2020 for the counter of the respondents therein. It was also observed that the main prayer and the interim prayer are the same. I.A. No.83/2020 filed by the appellants did not have any new facts or reasons for grant of any order in the application. In fact, there is no prayer for not holding meetings or stopping financial transactions. However, without considering any of these aspects, in I.A. No.83/KOB/2020 in C.P.No.114/2019 dated 9.7.2020, a direction has been issued not to conduct any board meetings and also curtailing further financial transactions. Even before receipt of the order in I.A. from the NCLT, appellants have addressed emails to all the banks of the three companies, to immediately stop the financial operations, on the basis of the order. However, no bona fide shareholder would have done so because such an act hinders the functioning of the company. This brought the functioning of the company to a grinding halt and petitioners were completely helpless.
37. Learned counsel for the writ petitioners/respondents further contended that since the NCLT has not extended the interim order dated 09.07.2020, the above appeal has already become infructuous. IA No.83/ KOB/2020 and the objection filed to the same will have to be heard in detail and orders passed on the same. Hence, it is only just and fair that the matter is heard, on the next posting date. Respondents 1 & 2 had approached the writ court only to save themselves when the entire business had come to a standstill due to the sudden passing of the order dated 9.7.2020 in I.A. No.83/KOB/2020 in C.P.No.114/KOB/2020.
38. On the merits of the case, learned counsel for the respondents further contended that after the AGM held on 31.10.2019, at the behest of the 4th respondent, who is sailing with the appellants, a claim was made that they have conducted an AGM and unilaterally had taken a decision to remove the 2nd writ petitioner from the post of Managing Director. Styling this, as a resolution, I.A. No.58/2019 was filed seeking approval of the NCLT. However, no such approval has been granted by the NCLT and Exhibit-R1(i) is already filed and it is for the NCLT to take a final decision in the matter.
39. Despite a clear division of the family into two groups, each of the groups carried on the management of the companies that were being under their control. While so, in the year 2016, at the instance of friends and relatives, both groups were brought to the table and after prolonged discussions and deliberations, for months together, a Memorandum of Understanding (MoU) dated 15-09-2016 was signed between all, as evident from Annexure R1(a). In the said MoU, the role of the 2nd respondent, in establishing the companies, was duly recognised and he was given 2% extra share. There is also a clause that gives preference to the person and management of the company while partitioning the businesses.
40. Learned counsel for the respondents/writ petitioners further stated that the companies under the control of the 2nd respondent flourished making profits by leaps and bounds, while those under the control of Mahesh Kumar Gupta, initially did well, but later did not do well. He, therefore, became instrumental in not having the MoU implemented. Since any further delay would have resulted in limitation, the 2nd petitioner approached the Hon’ble Munsiff’s Court, Kochi, by way of O.S. No. 310/2019, and an injunction order was passed in I.A. No.2023/2019 dated 08.08.2019. Finding that his game plan will not work, Mahesh Kumar Gupta started filing cases after cases, through the father, mother and his wife, with the aim of ousting his elder brothers. The parents are mere puppets in his hands. All the cases are listed for final hearing on 07.09.2020. The following are the list of cases filed:-
