National Company Law Appellate Tribunal
K. Muthusamy vs N. Sankaranarayana & Ors on 23 March, 2017
WATHONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Company Appeal (AT] No.7 7 of 2017
{IN THE MATTER OF:
K. Muthusamy . Appellant
Va
N. Sankaranarayanan & Ors «Respondents
Present: Mr. Ramakrishnan Viraraghavan, Sr. Advocate with Ms Uttara
Babbar, Advocate for appellants.
Mr. Soumik Ghosal, Advocate for Respondent No.1.
ORDER
23.03.2017- This appeal has been preferred by the appellant agaimst te x Chennai in TCA No.li of 2O18 in CUP, Ne.G@s of 2000 pursuant to an application for exeention of the decree passed by Company Law Baarc. in the impragned order the Tribunal made observations and passed the plowing directians:
a plew of fhe above, though is Ried thot the Applicant' 'BS is entitled to fle the application under on SOSA af the Companies Act, £856, yet thus mantication is prematiee. Therefore, the TC. a Nts J i 2076 ts Hable fo be rejected. The same i there is re arder as fo costs, Homener, the applicant? RS is at Hberty te Ale the Company Application af fhe nme when the onder of the CLE dated 85.2.2:
exsention, Rus, the Chartered Ace. Aghoramurthy is divectted fo subnut Ais report: Rench in the light of the dimections giver Dy lies Rs onder dated SS.O2.9009, uxthin twve months date the comy af order is receives. mary i divected to send a copy of this arder by speed 3 poet along Fed with the onder of the CLS dated 25.02.2009 to the Cherfered Accountant SAN Rk. Agheramurthy for ernplarce. "
2 Phe brief facts of the case ig that the Company Petition No.G4 of 2006 wnder Sections S@7, S88, 402 and 405 read with Sectian 2.9 Schedule NI of the Companies Act, 1956 was Hed by one Shri 8 Relasubramanian and four others. is Respandernt, N. Sankarangrayanar was GS Respondent in the said Company Petition. The Carmpany Law Board vide arder dated 25,028. 2009 pasend a detailed order, the partion af which reads as follows:
' eetio aap FC Vs Sovereign Dairy iP lee : :
view fo bringing fo an ond the ¢ acts comple bert ned of by the aggrieved shareholde ars, thereby regu lating of the Company's affairs, 2 is ordered as folk i The present Board of Directors comprn aing af fas petitioners ull continue fo carry an NRULAGEMEN! af affairs of the Go par Uy, COUPEE with the articles Sere fo the shpulations (fa fe imposed an thas dated O9.08. 2007 made in © » No. a2 af SOG?
iy Shari RB. Aghor am Accounta e peri iodl from OL @ books of aon omaohers end other corner Company and on Rearing sul connected parties. The CRarered Aecount an aubmuit a report on the Anaricial frarteactions of the Company for the relevant period, which shall include al the receipts, payments . inourred on behalf? af ty the Mend wiiiisation ther f gd "ipres suuleorit ii ig : 3 any, ard seree copies of the report an all the parties, who are bound by the report of the tie chartered accuuniant. The whole Proce. ees shall be completed By 30.04, 2009, ue : x the Cherteral Accountant's sent ; tcrnannds this end, an initial amount of Rs.S $0,000) be may be paid by 32.03.2009. Phe matter will be heard on PS.OS8 2009 at 02.90 BAL for issue of appropriate consequential directions, after hearing the parties connenied, fo sufeguand the interests 0 the comporgy and iis mombers.
B vn a a' Wet the ahoue dirs HONS, the Company Petition and all the connected a ipplicati ans stand di f neserning the right £0 issue Necessary ¢ 'directions, » in terms of thes onder. ° "y 3 'Nye aforesaid order was challenged before the Madras High Court in Cempany Appeal No.8 of 2009 which vide order dated 21.2. 2901 1 confirmed ~ the order passed by the Conmpeny Law Seard, refewant af which reads ax '4. Eweeoute the ander af the Han "bl dated 27.02. 207] im Compuiny Apnea al Na, 6 "ol confirming the order of tus Hon'ble Board dated 28.02 2008 in the ahove CP.
BO initete summfuirge Proceedings Respanderie 2 to 4 herein 2 SGG-S45 rend with Schedule ATo thus render pushes.
& direct the Respondents Respondent a sum of Rs. 214, four lakhs and seven UY) eusand ont suffered by the .
the et ae the "tose is peapondaernt, due to PuONAR agenient oF the sani by the Respemdents 2 to 4° D. Suck Srther or ofher orders rat te is Har ae Boared may deom fit in the facts and cirewnn < and tus sender fushiics. "
4, As the order passed by the Company Lew Board on 23,05 st affirmed by the Madras High Court was not executed, 1% Respondent who was eh Respondent before the Campany Law Board sreferred an apolloation ¥ A i BE wider Section 634.4 of the Companies Act, 1956 before the erstwhile Company Law Board. The said petition under Section 944 remained pending and alter conanitution of the Tribunal, the petition was transferred and re-rrumbered as TOA Nal 1/2016 for execution of the decree. Therem, ihe Trtsanal passed the bropugned order as quoted above.
a Learned Conanse] appearing ca behalf of the appellant submitted that the applicant, who was 6° Respondent before the Company Law Board and % Respondent herein is mot the beneficiary of the Jud passed by the Company Law Roard on 35.23.2000. Therefore, he cannot Me an appioation under Sectien SS4A of the Companics Act, 1956 Gre sab- section (8) of Section 429 of Companies Act, SO1G). This was apposed by Learned Counsel for the 18 Reapondent/apglicant, who was &° Respondent before the Company Lew Board.
Ps &, For defermination of issue, is desirable to mole the reisvant w provisions of the Seotian GQtA af Companies Act, 1956 (aw sub-section (3) af Companies Act, 424), which reads as lows "§34.4-Enforcement of order of Company Law Board was Any onder made by the Company daw Board may be enforced by thar Beard in fue Same Manner as if waesre a devres miade by a Cot in @ auit pending therein, and shall be lowe for {het Board io sere, in the cuse of ie inmbility fo execute such order, fo the Court within the focal Hilts of whose Auriediction.
al dn the case registered of ie ATL Yh the i} Eresiness or personally + works S ee gain, Bare reading af Section GOS4A of Companies Act, 1958 it ig clear that the pmwer was vested with the Company Law Board now National Company Law Trifsanal) to enferce its order im the same manner as Hit were a decree made by a Cort in a sai pending therein, and ft shall be lawfal for that Soard te aend, in the case of iis Inabillty to exenute such order, to the Car local limite of whose jurisdiction. [fis onfy in the case the Board is urnible ts execute ifs owen arder, the Company Law Board was Hable to enforce the order through the Court where the registered office oompany is stluated. &. Now sub-sacction (2) of Section 424 of the Companies Act, S010 empuwers the Tribunal te get fs order executed. The provision does not nanfine Heelf only te the beneficlary of the order. Hf any of the party to the Company Petition whether petitiener or the respondent brings it to the notices af the Company Law Board (now Tribumal) that the order passed by it has mot been enforced, it is always open to the Campany Law Board (new Tribunal) to get the eames executed in the same manner as i it were a decree made by a ewurt ina auit, and if is lawful! for the Company Lew Board or this Tribunal to send the order for execution to the competent court within the local limits af whose farisdiction the registered office af the company is situated.
g. In view of the aforeasid provision af law, we hold that the Tribunal by the imeugned order dated 20.1.2017 has rightly held that the apphcation preferred by 18 Respondent/applicant (8 Respondent in Company Pelion) is entitled ip file the appliosiion wider Section GSs4 of Companies Act yet the apmication is pre-matiure. However, the applioant/ Respondent No.6 has Goon § granted Nberty to le the Company Applicetion at the time when the order of CHR PARY Law Board is all act for execution, The Tribunal ha s rightly directed the Chartered Accountant ta submits its report, in the fight of the directions eiv en by the erstwhile Company Law Board 1Q, Learned counsel appearing on behalf of the appellant next submitted tthe Chartered Accountant is not proceeding in the manner in whieh i shoukl proceed and has iseucd a motins to the apoellant, Ef that be so the appellant should submit its reply and may point out the defect to the Chartered Avcountant and thereafter, f necessary to the Tribunal. in this gard, we do not want to express any opinion regarding the Aincedening of the Chartered Ancountant, who have been directed to submil his report in the leht af the directions given by the Company Law RBoare, ii. We Sind mo merit in this appeal. [tis acoordingly dismissed. No cost.
iJustice 8. Mukhopadhaye} Chairperson ae "ete iMr. Balvinder Singh Member (Technical dm