National Company Law Appellate Tribunal
J.K. Tyre And Industries Ltd vs Sri Krishna Tyres on 4 July, 2025
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
Comp. App. (AT) (Ins) No. 818 & 819 of 2025
IN THE MATTER OF:
J.K. Tyre and Industries Ltd. ...Appellant
Versus
Sri Krishna Tyres ...Respondent
Present:
For Appellant : Mr. Arun Kathpalia, Sr. Advocate along with Mr.
Milan Singh Negi, Mr. Pulkit Shrivastava, Mr.
Sumit Gaur, Mr. Nikhil Kumar Jha & Ms. Aakriti
Gupta.
For Respondent : Mr. Krishnendu Datta, Sr. Advocate along with Mr.
Yash Tandon, Ms. Stuti Vatsa, Mr. Vijayant Goel,
Mr. Ajay Kumar, Mr. Govind Gupta, Mr. Sandeep
Pathak & Ms. Vartika Mehra.
ORDER
(Hybrid Mode) [Per : Justice Rakesh Kumar Jain (Oral)] 04.07.2025 This appeal is directed against the order dated 09.05.2025 and 20.05.2025 passed by the National Company Law Tribunal, Jaipur Bench.
2. The brief facts of the case are that the Respondent/ Shri Krishna Tyres filed a Civil Suit bearing OS No. 235 of 1996 against M/s Vikrant Tyres before the Principal Senior Civil Judge, Vijayawada for the recovery of an amount of Rs. 8,13,387.88/- towards the settlement of accounts and amounts due towards the incentives, commissions and discount.
3. In the same year, M/s Vikrant Tyres also filed a Civil Suit bearing OS No. 237 of 1996 against Respondent/ Shri Krishna Tyres for the
1|Page recovery of an amount of Rs. 34,15,845/- before the Principal Senior Civil Judge, Vijayawada. While these suits were pending, M/s Vikrant Tyres was acquired by the present Appellant, namely, J.K, Tyre and Industries Limited which merged with the present Appellant in the year 2002.
4. The suit filed by Vikrant Tyre, now the present Appellant was dismissed as premature, whereas in the civil suit No. 235 of 1996, a preliminary decree was passed and Advocate Commissioner was appointed to ascertain the amount payable by the present appellant to the decree holder/ Shri Krishna Tyres.
5. The Appellant challenged the preliminary decree dated 16.09.2010 passed in the suit filed by the Respondent, by way of First Appeal No. 850 of 2010 in which the Hon'ble High Court of Andhra Pradesh at Hyderabad passed the following order :-
"There shall be interim stay of passing of final decree alone and till then, all other proceedings viz appointment of Advocate Commissioner, ascertaining the amounts payable in pursuance of the decree and such proceedings as are necessary and relevant for the purpose of deciding the final decree shall go on."
6. Since, the appointment of Advocate Commissioner and ascertainment of amount by him was not stayed, therefore, he submitted his report on 01.02.2013 for an amount of Rs. 70,69,81,446.66/- as payable by the Appellant to the Respondent.
7. On 20.02.2016 the parties entered into a Memorandum of Understanding ('MoU') for the settlement of all the issues and disputes
2|Page pending between them. Pursuant to the MoU, the deed of settlement dated 15.03.2016 was also executed as per which the parties had agreed to withdraw all the cases including the Civil Suit bearing OS No. 235 of 1996.
8. It is alleged that upon the settlement between the parties, the First Appeal No. 850 of 2010 was accordingly disposed of by the Hon'ble High Court of Andhra Pradesh at Amaravati on 19.05.2023 with the following order:-
"1. When the matter is taken up for hearing, learned counsel appearing on both sides are present.
2. Learned counsel for appellants/defendants filed a memo dated 10.03.2023 stating that both parties have settled their issues out of the Court.
3. Recording the memo dated 10.03.2023 filed by the learned counsel for appellants and in view of the submissions made on either side as there is no cause survives for adjudication in this appeal.
4. Accordingly, the appeal is closed, without costs.
5. Miscellaneous petitions pending, if any, in this appeal shall stand closed."
9. It is also alleged that the Appellant had already filed IA No. 356 of 2016 in IA No. 636 of 2011 in OS NO. 235 of 2019 under order 23 Rule-3 r/w Section 151 of the C.P.C. for setting aside the preliminary decree on the basis of compromise. However, the said application was dismissed by order dated 10.07.2023.
10. The Respondent alleged to have filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 ('Code') bearing CP No. (IB)-
3|Page 51/7/JPR/2023 on 11.09.2023 for the resolution of an amount of Rs. 1424,04,87,58.80/-.
11. The Appellant, besides contesting the application filed under Section 7 of the Code, had also filed a Revision Petition bearing CRP No. 2461 of 2023 against the dismissal of IA No. 356 of 2016 filed in the First Appeal bearing AS No. 527 of 2023 in which the Hon'ble High Court of Andhra Pradesh had passed the order of stay on 19.12.2023 which read as under :-
"Heard reply arguments of learned Senior Counsel, Sri D. Prakash Reddy, representing Sri Narasimha Rao Gudiseva, learned counsel for appellants in A.S. No.527 of 2023, and learned Senior Counsel, Sri A. Satyanarayana, representing Sri Narasimha Rao Gudiseva, learned counsel for petitioners in C.R.P. No.2461 of 2023. It is submitted by the learned Senior Counsel Sri. D. Prakash Reddy that the respondents herein filed CP No. (IB)-51/7/JPR/2023 before NCLT, Jaipur Bench, and the matter is posted to tomorrow i.e., 20.12.2023 and if for any reason, the said CP is admitted, the petitioners herein may have to face so much of financial hardship and their credibility may also be at stake. On this Submission, the learned Senior Counsel sought for interim stay of execution of the final decree in O.S.No.235 of 1996 till orders are passed by this Court in the present petition.
Learned Senior Counsel for respondents, Sri V.S.R. Anjaneyulu, would submit that the matter is coming up only for filing counter tomorrow before NCLT and if the petitioners herein file their counter and the matter is posted for enquiry, both parties will represent that they will not press for further proceedings before NCLT, till the orders are passed by this Court in the stay application as well as petition under Order VII
4|Page Rule 11 of CPC.
Recording the submissions of both the learned Senior Counsel, the matters are reserved for orders."
12. According to the Appellant, on the basis of the order dated 19.12.2023, the Learned Tribunal, seized of the application filed under Section 7 bearing CP No. (IB)-51/7/JPR/2023, kept on adjourning the proceedings and on 17.03.2025, at the request of counsel for both the parties, adjourned the matter sine die till the final disposal of AS No. 527 of 2023.
13. However, it is submitted by Respondent that the undertaking given by it that it will not proceed before the NCLT in the application filed under Section 7 was withdrawn on 01.04.2025.
14. This fact is recorded in the order dated 01.04.2025 passed by the Hon'ble High Court of Andhra Pradesh which is reproduced as under :-
"Sri A. Satyanarayana, learned Senior Counsel representing Sri Narasimha Rao Gudiseva, learned counsel for the appellant, appearing through virtual mode, submits that the C.R.P. should be heard first.
2. On the other hand, Sri V.S.R. Anjaneyulu, learned Senior Counsel appearing for the respondents in the said C.R.P., submits that A.S. No. 527 of 2023 should be heard first. He contends that the question of valuation and the maintainability of the appeal is involved and, therefore, it should take precedence.
3. O.S. No. 235 of 1996 was filed by the plaintiff/respondents seeking accounts, and the suit was preliminarily decreed. During the pendency of the proceedings for the final decree in I.A. No. 636 of 2011, the
5|Page petitioners in the C.R.P. (appellants in A.S.) filed I.A. No. 356 of 2016, seeking to record a compromise and pass the final decree in terms of the compromise. However, the said application was rejected on 10.07.2023.
4. Challenging the rejection of I.A. No. 356 of 2016, the C.R.P. has been filed. After the rejection of the application, the final decree was passed. Challenging the final decree, A.S.No.527 of 2023 has been filed.
5. On 05.03.2025, we passed an order to consider the question of the maintainability of the appeal, particularly on the ground raised without depositing the Court fee, ad valorem, though the appellant deposed the Court fee as was deposed by the plaintiff/respondent in the suit, as well as the question of the maintainability of the application under Order 7 Rule 11 of the Code of Civil Procedure, 1908, filed by the plaintiffs/respondents in the appeal to reject the memorandum of appeal.
6. Referring to the order dated 05.03.2025, learned counsel for the respondents submits that the appeal should be heard first.
7. By the said order, it was not held that the appeal should be considered and decided first. On the points as raised on 05.03.2025 by the learned counsels for the parties, and in that context, we found it appropriate to hear the learned Government Pleader as well.
8. Upon considering the aforesaid submissions, as also that the order of rejection of I.A. No. 356 of 2016 may be a relevant factor determining whether the appeal filed against the final decree, would require to be proceeded further or not, we provide that the C.R.P., shall be heard first. Both the matters will, however, be listed together on the same date.
6|Page
9. Sri A. Satyanarayana, learned Senior Counsel, prays for extension of the undertaking given in the appeal by the learned counsel for the respondents.
10. Sri V.R.S. Anjaneyulu, learned Senior Counsel for the respondents, submits that he is not extending the undertaking given earlier.
11. Sri A. Satyanarayana, learned Senior Counsel, prays that the application for interim relief pending in the C.R.P., may be considered.
12. Post on 08.04.2025.
13. The application for interim relief will be considered on the next date."
15. The Hon'ble High Court of Andhra Pradesh then passed a detailed order on 30.04.2025. The relevant part of the order is reproduced as under:-
"Keeping in view the fact that there has been a stay of proceedings from December, 2023 till 01.04.2025 and keeping in view the fact that the absence of a stay of proceedings, would cause irreparable loss and damage to the defendants in as much as any admission of the application before the NCLT Bench would result in total revamp of the defendants apart from a change in the managing of the defendants, and keeping in view the fact that a delay of two months would not in any manner cause irreparable loss or damage to the interests of the plaintiffs, this Court deems it appropriate to stay further proceedings pursuant to the final decree dated 10.07.2023 in I.A. No. 636 of 2011 in OS No. 325 of 1996. Accordingly, there shall be stay of further proceedings in I.A. No. 636 of 2011 in OS No. 325 of 1996, dated 10.07.2023, on the file of Principal Senor Civil Judge, Vijayawada for a period of eights weeks. Post on 23.06.2025."
7|Page
16. Thereafter on 09.05.2025 the Learned Tribunal again started proceedings in the application filed under 7 suo-moto without any application alleged to have been filed by the Respondent. The said order is also reproduced as under :-
"Vide order dated 17.03.2025, the present matter was adjourned sine die. Both the counsels are stating that the matter be adjourned till final sposal of Case No. A. S. No. 527 of 2023. We are informed that vide order dated 30.04.2025, the Hon'ble High Court of Andhra Pradesh has been pleased to hold as under: -
"Accordingly, there shall be stay of further proceedings in IA No. 636 of 2011 in O.S. No. 325 of 1996, dated 10.07.2023, on the file of Principal Senior Civil Judge, Vijayawada, for a period of eight weeks.
Post on 23.06.2025."
Keeping in view of the fact that there is no stay granted of NCLT proceedings, we are constrained to proceed with the matter. Rather, we shall be failing in our duty in not proceeding any further in the absence of any stay of the present CP. The abovesaid order says that there shall be stay of further proceedings in IA No. 636 of 2011 in OS 325/1996. On the request of the Ld. Counsel for the applicant, posted to 20.05.2025."
17. The Appellant had also challenged the order on 20.05.2025 which was passed immediately thereafter which reads as under :-
"Both the counsels jointly submit that pleadings are complete in this case and the case be posted before the regular Bench for arguments. Posted to 08.07.2025."
8|Page
18. The present appeal has been filed to assail the aforesaid two orders dated 09.05.2025 & 20.05.2025 on the strength of the order dated 30.04.2025.
19. The appeal was filed on 23.05.2025. It came up for preliminary hearing on 30.05.2025 and the following order was passed :-
"List the appeal on 02.06.2025".
20. On 02.06.2025, this court passed the following order :-
"This appeal is filed against two orders i.e., dated 09.05.2025 and 20.05.2025.
Issue notice. At this stage, Mr. Ajay Kr. accepts notice on behalf of the Respondent/FC.
Let the reply be filed within two weeks. Rejoinder, if any, may be filed within two weeks thereafter. List on 02nd July, 2025 to be shown in the fresh cases."
21. On 02.07.2025, this matter could not be taken up because the Counsel was not available, therefore, the case is now listed today for hearing.
22. During the course of hearing, Counsel for the Appellant has produced an order dated 23.06.2025 passed in First Appeal No. 527 of 2023 and C.R.P. No. 2461 of 2023 to contend that the order dated 30.04.2025 has since been modified by the Hon'ble High Court of Andhra Pradesh at Amaravati which includes the proceedings before the NCLT also therefore, the NCLT should not have proceeded with the application filed under Section 7 of the Code.
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23. On the other hand, Senior Counsel appearing on behalf of the Respondent has submitted that the order dated 23.06.2025 has been passed in favour of the Appellant during the pendency of this appeal, which cannot be looked into for the purpose of passing any order because the present appeal has been filed on the ground that the order passed by the Hon'ble High Court of Andhra Pradesh at Amaravati on 30.04.2025 which the Tribunal could not have proceeded with the application filed under Section 7 of the Code. He has also submitted that the present appeal has become infructuous but in case the Appellant still has any grievance then he may approach the NCLT instead of making the prayer before this Court.
24. Faced with this argument, Counsel for the Appellant prays for withdrawal of this appeal for filing an appropriate application before the Learned Tribunal. He has further submitted that the application will be filed within a period of 15 days from today and the Tribunal may be directed to pass the order as early as possible.
25. At this stage, Counsel assisting the Learned Senior Counsel has submitted that the application filed under Section 7 is now listed before the Tribunal on 08.07.2025 itself, therefore the application may be filed by the Appellant so that it may be listed on 08.07.2025.
26. Keeping in view the aforesaid facts and circumstances but without making any observation on the merit of the case, the present appeal is hereby disposed of as having been withdrawn but with the liberty to the Appellant to file an appropriate application in terms of the order passed by the Hon'ble High Court of Andhra Pradesh at Amaravati dated 23.06.2025.
10 | P a g e It is further directed that if any such application is filed by the Appellant then the Tribunal shall make all endeavour to decide the same as early as possible.
[Justice Rakesh Kumar Jain] Member (Judicial) [Justice Mohammad Faiz Alam Khan] Member (Judicial) [Mr. Naresh Salecha] Member (Technical) Sim/RR 11 | P a g e