1 The appellants filed a petition under Sections 241 and 242 of the Companies’
Act 2013, complaining of oppression and mismanagement. An ex-parte order
was passed by the National Company Law Tribunal on 5 October 2020.
Instead of moving the NCLT for vacating the ad-interim order, the
respondents moved the National Company Law Appellate Tribunal in appeal.
The NCLAT by its impugned order dated 18 December 2020 set aside the
order of the NCLT on the ground that it was passed in violation of the
principles of natural justice. Having made this observation, the NCLAT has
also made certain observations on merits and remitted the matter to the
NCLT for de novo consideration on merits after providing an opportunity of
being heard to the parties.
2 We have heard Mr Rakesh Kumar, learned counsel appearing on behalf of the
Chetan Kumar
CA 418/2021
3 The appropriate course of action for the respondents, faced with an ex-parte
order of the NCLT would have been to apply to the NCLT for vacating or
modifying the ad-interim order. The NCLAT was not correct in coming to the
conclusion that the order of the NCLT has to be set aside on the ground that
it was passed without furnishing to the respondent an opportunity of being
heard. The essence of an ex-parte order is that it is passed without hearing
the other side, in a situation where the adjudicating authority is satisfied that
a case involving a grave urgency is made out. The adjudicating authority,
before issuing an ex-parte ad-interim order, must be satisfied of the
irretrievable injury which may be caused to the applicant if a protective order
is not passed. A prima facie case and the balance of convenience must also
be weighed in. The NCLAT has not dealt with the fundamental issue of
whether the respondents had established an urgent case for the grant of ex-
parte relief. The principle which has been propounded by the NCLAT is rather
novel to civil jurisprudence and betrays a lack of comprehension of basic
legal principles.
4 The NCLAT has remanded the proceedings back to the NCLT for fresh
consideration on merits. The grievance of the appellants is that this would
preclude them from applying for the grant of ad-interim relief during the
pendency of the proceedings before the NCLT and the final hearing of the
petition may take several years. The appellants should, in our view, be
granted liberty to apply afresh before the NCLT for interim relief on the basis
of the same application on which the NCLT passed its order. In order to
enable the respondents to have an opportunity to controvert the application CA 418/2021
for interim relief, we direct that they may file their reply, if any, within a
period of two weeks from today. The NCLT shall reconsider the application for
interim relief in terms of the above directions after hearing the parties. We
clarify that we have not expressed any opinion on the merits of the rival
contentions which shall be addressed before the NCLT. The order of the
NCLAT shall accordingly stand set aside and be substituted by the directions
which have been issued in the above terms. The NCLT shall take a final
decision on the application of interim relief within a period of four weeks from
the date on which a certified copy of this order is placed on its record.
5 The Civil Appeal is accordingly disposed of.
6 Pending applications, if any, stand disposed of.
[Dr Dhananjaya Y Chandrachud]
[M R Shah]
New Delhi; February 26, 2021 CKB CA 418/2021
ITEM NO.16 Court 6 (Video Conferencing) SECTION XVII
Civil Appeal No.418/2021
SURENDER KUMAR GUPTA & ORS. Appellant(s)
VERSUS
J.M. HOUSING LIMITED & ORS. Respondent(s)
(With appln.(s) for IA No.20490/2021-EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT and IA No.20489/2021-EX-PARTE STAY)
Date : 26-02-2021 This appeal was called on for hearing today.
CORAM :
For Appellant(s) Mr. Rakesh Kumar, Adv.
Mr. Saurabh Mishra, AOR
Ms. Preeti Kashyap, Adv.
For Respondent(s) Mr. Shaym Divan, Sr. Adv.
Mr. P.K. Mittal, Adv.
Mr. Praveen Mittal, Adv.
Mr. Rajesh Goyal, AOR
UPON hearing the counsel the Court made the following
1 The Civil Appeal is disposed of.
2 Pending applications, if any, stand disposed of.
(CHETAN KUMAR) (SAROJ KUMARI GAUR) A.R.-cum-P.S. Court Master
(Signed Reportable Order is placed on the file)