Indian Kanoon - Search engine for Indian Law

Delhi High Court - Orders

Iyogi Technical Services Private ... vs Unknown on 29 May, 2020

Author: C. Hari Shankar

Bench: C. Hari Shankar

$~3   (company matter)

*     IN THE HIGH COURT OF DELHI AT NEW DELHI
+     C.A. No. 221/2020 in CO. APPL.(M)135/2016
      iYOGI TECHNICAL SERVICES
      PRIVATE LIMITED                         ... Petitioner
                    Through: Mr. Gaurav Duggal and Ms.
                             Aakansha Kaul, Advocates.

                                       Mr. Rohit Kumar Aggarwal and
                                       Ms. Gunjan, Advs. for Non-
                                       Applicants

      CORAM:
      HON'BLE MR. JUSTICE C. HARI SHANKAR

                          ORDER

% 29.05.2020 C.A. 221/2020 (under Rules 6 & 9 of Company (Courts) Rules, 1959) in CO. APPL.(M)135/2016

1. This matter has been taken up for hearing via video- conferencing.

2. Mr. Gaurav Duggal instructed by Ms. Aakansha Kaul, learned counsel for the applicant, has advanced arguments in support of the application.

3. Mr. Rohit Aggarwal, learned counsel appearing for the NSDC, is presently responding thereto.

4. The allegation, of the NSDC, that the applicant had breached the terms of the grant provided by them is, presently in seisin before CO.APPL.(M)135/2016 Page 1 of 4 the Economic Offences Wing (EOW) and prima facie, in my view, this Court is not required to adjudicate thereon, at least till the EOW arises at a decision on the issue.

5. Mr. Rohit Aggarwal, however, submits that the applicant cannot legally pray for the stay of the aforesaid proceedings, as they are "criminal proceedings", stay whereof, under Section 391(6) of the Companies Act, 1956, has specifically been held to be impermissible, by a Division Bench of this Court in Krishna Texport Industries Ltd. v. DCM Ltd1.

6. Mr. Aggarwal has taken me to paras 26, 33 and 34 of the said decision.

7. A prima facie reading of Krishna Texport1 reveals that, in that case, a complaint had been filed under Section 138 of the Negotiable Instruments Act, 1881 before the competent criminal court, thereby setting the criminal law process in motion.

8. In the present case, the complaint, dated 15th February, 2019, submitted by the NSDC to the EOW, merely requests that an FIR be registered against the applicant. Prima facie, there appears to be substance, in the submission of Mr. Duggal, that there is no reason to believe that the explanation given by his client, in response to the Show Cause Notice, issued by the EOW pursuant to the said complaint, would not be accepted, and the proceedings dropped.

9. Mr. Aggarwal, however, submits that, with the submission of the aforesaid complaint, dated 15th February, 2019, by the NSDC to the EOW, and the consequent issuance, by the EOW, of a Show Cause Notice to the applicant, "criminal proceedings", within the meaning of the decision of this Court in Krishna Texport1 , had necessarily to be taken to have commenced, thereby rendering the present application not maintainable under Section 391(6) of the Companies Act. I may note, at this juncture, though para 9 of the application avers that a Show Cause Notice was, indeed, issued to the applicant, pursuant to the complaint, dated 15th February, 2019 (supra) of the NSDC, the said Show Cause Notice is not on record. The reply, to the present application, as filed by the NSDC, refers to the Show Cause Notice issued by the EOW but does not place the Show Cause Notice on record.

10. The parties are directed to place on record, under the cover of an index, the Show Cause Notice issued to the applicant by the EOW, if any.

11. Reverting to the submission of Mr. Aggarwal, the issue that would arise for consideration is whether the submission of the complaint, dated 15th February, 2019 (supra), by the NSDC to the EOW and the issuance of Show Cause Notice, if any, by the EOW consequent thereupon, would tantamount to commencement of "criminal proceedings" against the applicant, within the meaning of Krishna Texport1. Mr. Aggarwal initially placed reliance on Section 1 2008 (104) DRJ 101 (DB) CO.APPL.(M)135/2016 Page 3 of 4 154 of the Code of Criminal Procedure, 1973; later, he seeks time to address his submissions on the aforesaid aspect, with authoritative judicial precedents, if any.

12. In order to enable him to do so, renotify on 2nd June, 2020, as part heard, to be taken up as the first matter on the company side. Till the next date of hearing, no action would be taken by the EOW consequent to the aforesaid complaint dated 15 th February, 2019.

13. Copy of this order shall be uploaded on the website positively within 24 hours and also forwarded to learned counsel for the parties via email.

C. HARI SHANKAR, J.

MAY 29, 2020 r.bararia CO.APPL.(M)135/2016 Page 4 of 4