w w w . L a w y e r S e r v i c e s . i n



Utkal Chamber of Commerce & Industries Ltd. & Others v/s Sanjeev Mahapatra & Others


Company & Directors' Information:- V I P INDUSTRIES LIMITED [Active] CIN = L25200MH1968PLC013914

Company & Directors' Information:- S R INDUSTRIES LTD [Active] CIN = L29246PB1989PLC009531

Company & Directors' Information:- K L R INDUSTRIES LIMITED [Active] CIN = U28939TG2002PLC038416

Company & Directors' Information:- B L A INDUSTRIES PRIVATE LIMITED. [Active] CIN = U10200MH1964PTC162314

Company & Directors' Information:- A G INDUSTRIES PVT LTD [Active] CIN = U27300HR1991PTC031378

Company & Directors' Information:- INDIA E-COMMERCE LIMITED [Active] CIN = L99999MH1968PLC014091

Company & Directors' Information:- M F B INDUSTRIES LIMITED [Active] CIN = U31401TN1989PLC018274

Company & Directors' Information:- E T C INDUSTRIES LIMITED [Active] CIN = U31200MP1995PLC009281

Company & Directors' Information:- AMP INDUSTRIES LIMITED [Active] CIN = L51909AS1985PLC002332

Company & Directors' Information:- H. V. R. INDUSTRIES PRIVATE LIMITED [Active] CIN = U27100DL2010PTC200428

Company & Directors' Information:- D V S INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1992PTC049221

Company & Directors' Information:- H N H INDUSTRIES LIMITED [Strike Off] CIN = U27203CH1995PLC017489

Company & Directors' Information:- S H COMMERCE PRIVATE LIMITED [Active] CIN = U51109WB2008PTC121420

Company & Directors' Information:- A. M. COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB2011PTC168744

Company & Directors' Information:- R & M INDUSTRIES PRIVATE LIMITED [Active] CIN = U24297TN1972PTC006185

Company & Directors' Information:- G R INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U34300PB1996PTC018671

Company & Directors' Information:- D G INDUSTRIES PVT LTD [Active] CIN = U36942WB1946PTC013526

Company & Directors' Information:- H M B INDUSTRIES PVT LTD [Active] CIN = U24297GJ1996PTC070418

Company & Directors' Information:- S. A. A INDUSTRIES PRIVATE LIMITED [Active] CIN = U01549TZ1997PTC007927

Company & Directors' Information:- H. D. INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U27310MH2011PTC216080

Company & Directors' Information:- G S E-COMMERCE PRIVATE LIMITED [Active] CIN = U52100KA2013PTC067567

Company & Directors' Information:- V G INDUSTRIES PRIVATE LIMITED [Active] CIN = U15139JK2015PTC004570

Company & Directors' Information:- V K COMMERCE PVT LTD [Amalgamated] CIN = U51109WB1984PTC037122

Company & Directors' Information:- P. R. COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB2008PTC122333

Company & Directors' Information:- M & P E. COMMERCE PRIVATE LIMITED [Active] CIN = U74300DL1999PTC099198

Company & Directors' Information:- N S INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U74120UP2012PTC053986

Company & Directors' Information:- R S COMMERCE PVT LTD [Converted to LLP] CIN = U51909WB1995PTC074372

Company & Directors' Information:- P S COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB1997PTC084487

Company & Directors' Information:- T S R I COMMERCE PRIVATE LIMITED [Strike Off] CIN = U65910TG1999PTC032173

Company & Directors' Information:- AND E-COMMERCE PRIVATE LIMITED [Active] CIN = U74120AP2015PTC096206

Company & Directors' Information:- P K A CHAMBER PRIVATE LIMITED [Strike Off] CIN = U26931TZ2014PTC020478

Company & Directors' Information:- D B S COMMERCE PRIVATE LIMITED [Active] CIN = U52190MH2009PTC190773

Company & Directors' Information:- P R INDUSTRIES PVT LTD [Active] CIN = U21014DL1971PTC005738

Company & Directors' Information:- A P COMMERCE LIMITED [Strike Off] CIN = U51909WB1981PLC033798

Company & Directors' Information:- G K S INDUSTRIES PVT LTD [Strike Off] CIN = U24119OR1982PTC001128

Company & Directors' Information:- T C G INDUSTRIES PRIVATE LIMITED [Converted to LLP] CIN = U13200MH1958PTC011079

Company & Directors' Information:- Y K INDUSTRIES PRIVATE LIMITED [Active] CIN = U19115UP2012PTC051151

Company & Directors' Information:- A K S INDUSTRIES PVT LTD [Active] CIN = U27201WB1946PTC013433

Company & Directors' Information:- K P INDIA COMMERCE PRIVATE LIMITED [Strike Off] CIN = U51909AS2001PTC006701

Company & Directors' Information:- CHAMBER OF COMMERCE LIMITED [Strike Off] CIN = U67120RJ1944PLC000259

Company & Directors' Information:- UTKAL INDIA PRIVATE LIMITED [Strike Off] CIN = U74210MH2000PTC128583

Company & Directors' Information:- V N R INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U21090AP2012PTC081525

Company & Directors' Information:- Y S E-COMMERCE PRIVATE LIMITED [Active] CIN = U72200MH2000PTC126344

Company & Directors' Information:- B AND D E-COMMERCE PRIVATE LIMITED [Strike Off] CIN = U74999HP2015PTC000945

Company & Directors' Information:- I P E-COMMERCE PRIVATE LIMITED [Active] CIN = U52399CH2012PTC033585

Company & Directors' Information:- J INDUSTRIES PVT LTD [Strike Off] CIN = U18101OR1960PTC000388

Company & Directors' Information:- COMMERCE & INDUSTRIES LTD [Strike Off] CIN = U51109WB1958PLC023756

Company & Directors' Information:- B M K INDUSTRIES PVT LTD [Active] CIN = U99999MH1948PTC006393

Company & Directors' Information:- THE CHAMBER OF COMMERCE [Active] CIN = U91110UP1923NPL000361

Company & Directors' Information:- CHAMBER OF COMMERCE [Active] CIN = U91110KL1940NPL000215

    W.P.(C) Nos. 23128 & 12645 of 2021

    Decided On, 04 October 2021

    At, High Court of Orissa

    By, THE HONOURABLE MR. JUSTICE BISWANATH RATH

    For the Appearing Parties: M.K. Mishra, Senior Advocate, P.K. Parhi, Asst. Solicitor General, M/s. A.Ch. Swain, L. Mishra, S. Acharya, Advocates.



Judgment Text

1. Writ petition bearing W.P.(C) No.12645 of 2021 is filed by the elected executive members of the Company, Utkal Chamber of Commerce & Industrial Limited, W.P.(C) No. 23128 of 2021 has been filed by Utkal Chamber of Commerce & Industrial Limited, as the company involved herein.

2. Bare perusal of the pleadings involving both the writ petitions, it appears, both writ petitions almost run parallel, except very minimal changes maintaining the same framework.

Prayer made in W.P.(C).No. 12645 of 2021 reads as follows:

“It is, therefore, most humbly prayed that this Hon’ble Court may graciously be pleased to:

(i) Issue a writ in the nature of “certiorari”, mandamus” or any other writ(s), order(s)/ direction(s) quashing the proceeding in C.P.No.11/CB/2021 pending before the NCLT, Cuttack;

(ii) Pass as such other or further order as this Hon’ble Court may deem fit and proper.

And for such act of kindness, the petitioners as in duty bound shall ever pray.”

3. Similarly, prayer made in W.P.(C).No.23128 of 2021 reads as follows:

“It is, therefore, most humbly prayed that this Hon’ble Court may graciously be pleased to:

i) Issue a writ in the nature of “certiorari”, mandamus” or any other writ(s), order(s)/ direction(s) quashing the proceeding in C.P.No.11/CB/2021 pending before the NCLT, Cuttack;

ii) pass as such other or further order as this Hon’ble Court may deem fit and proper.

And for such act of kindness, the petitioners as in duty bound shall ever pray.”

Through both the writ petitions it is again observed that there is almost a common relief sought for.

4. Common background involved in both the cases is that both the cases appear to be aiming with challenge to the initiation of the Company Proceeding No.11/CB/2021 pending before the National Company Law Tribunal (for short “NCLT”), Cuttack on the premises of issues raised in the Company Act proceeding is pending consideration of the suit bearing C.S.No.1182 of 2020, both sets of Petitioners claimed, the Company Proceeding in the circumstance is not maintainable. Looking to the nature of dispute and keeping in view a clear undertaking, this Court here also takes into account the prayer in C.S.No.1182 of 2020 as well as prayer in C.P.No.11/CTB/202 which runs as follows.

Prayer made in C.S.No.1182 of 2020 reads as follows:

“Under the aforesaid facts and circumstances, this Hon’ble Court may be graciously pleased to award decree in favour of plaintiffs as follows:

a) Let a decree be passed declaring the Executive Committee is the only and final authority to take decision on confirmation of Balance Sheets, Annual General Meeting and the Office Bearers / directors be part of Executive Committee not a separate body;

b) Let a decree be passed directing defendants to perform duties in accordance with the Article of Association (AoA) of the Chamber,

c) Let a decree be passed in favour of the plaintiffs permanently restraining defendants taking decisions of Balance Sheets and AGM;

d) Any other further or other order(s)/direction(s) may be passed as this Hon’ble Court may deem fit and proper under the circumstance of the case.

Prayer made in in C.P.No.11/CTB/202:

“In the facts and circumstances, the Petitioners humbly pray for the following reliefs:

(a) A scheme be framed for management and administration of the Company.

(b) Declare the decision of the board of Directors vide resolution dated 12.1.2021 as absolute and binding;

(c) The purported cessation of the Petitioners as Director of the Company be adjudged null and void;

(d) The Petitioners and other ex-Directors be forthwith reinstated as Director of the Respondent No.1 Company;

(e) The Respondent Nos.3-7 be removed as Directors of the Respondent No.1 Company and be restrained from holding themselves out as Directors of the company;

(f) Mandatory Injunction restraining the Respondents from transferring and movable or immovable property of the company, conducting the affairs of the Company or intermeddling with the affairs of the Company or from operating the bank accounts of the Company in any form or manner whatsoever;

(g) The Petitioners be permitted to solely and exclusively operate the bank accounts of the company;

(h) Mandatory injunction upon the respondents to forthwith disclose upon oath books, records and accounts of the company;

(i) Quash the election process held in pursuance to the Executive Committee dated 14.01.2021 for holding the election on and from 20.01.2021 to 22.01.2021, as well as the subsequent resolution passed, in consequence to the same;

(j) Declare as illegal all such decisions taken by the Executive Committee against the interests of the Company;

(k) A Special Officer/Administrator be appointed to take charge and custody of any records or accounts of the Company that may presently be in the custody of the Respondents and to make over the same to the Petitioners and ex-Directors consisting the Board of Directors as on 12.01.2021;

(l) Direct an enquiry into the affairs of the Company as regarding the decisions taken by the Respondents for the acts of mismanagement and oppression;

(m) Appropriate reliefs be passed in accordance with Sections 241 and 242 of the Companies Act, 2013;

(n) Costs of and incidental to this application be paid by the respondents;

(o) Such further orders be passed and/or directions be given as this Hon’ble Tribunal may deem fit and proper.”

5. Advancing his submission, Mr. A.Ch. Swain, learned counsel along with Mr.L.N. Rayatsingh, learned counsel focused on the maintainability of the Company Proceeding thereby jurisdiction of Civil Court vis--vis NCLT. Mr. Swain, learned counsel appearing for the petitioner contended that on 11.12.2020 notice for adjourned was issued to be held on 20.12.2020 for declaration of the election to the post of Office Bearers involving vacancy occurred on expiry of tenure disclosed therein. On 16.12.2020 notice inviting nomination was published on the disclosure of details of vacancies due to expire of tenure. It is claimed that opposite party nos.1 and 2 in the writ petition were due to retire for expiry of their tenure and thus both of them filed nomination for the post of Vice President and Honorary Joint Treasurer respectively. It is, in the meanwhile, on 14.1.2021 when the Executive Committee passed a resolution suspending five members for their involvement in indiscipline work as per the provision of AoA and new Returning Officer was appointed to conduct the election of the Governing Body, keeping in view resignation of the previous Returning Officer. On 23.1.2021 the result of the election was published declaring the successful candidates, which discloses opposite party nos.1 and 2 failed to be elected to their contested post. On 15.2.2021, the opposite pastries filed C.P.No.11/CTB/2021 under Section 241 and 242 of the Companies Act, 2013 alleging oppression and mismanagement involving the Company.

6. In the above background, in their common challenge to the maintainability of the Company Proceeding in the pendency of the Civil Suit, Mr.Swain, raised the following grounds:

A) For that the O.P.Nos.1 & 2 suppressing the material facts are making an ill attempt to subterfuge the order of the Ld. Civil Judge in the I.A. and further, where no economical right of any member is violated;

B) For that there is no cause of action arose for filing a petition under section 241 & 242 of the Company’s Act, 2013 in favour of the O.P.-1 & 2.

C) For that Section 241 and 242 only concern with the issue of Oppression of mismanagement by majority share holders against the minority share holders. Here is a company having no share holder and hence, the question of majority or minority do not arise. The facts. issue, as alleged in the Company Petition by the OP.-1 & 2 do not pertain to any oppression or mismanagement by the majority against any minority./ No financial irregularity was ever noticed or agitated upon in any forum speaks of smooth running of the organization.

D) For that entire allegations in the Company Petition pertain to the power/ jurisdiction/ authorities/ duties/ functions of directors, Executive Committee and office bearers, election, suspension of members, retirement of office bearers and directorial issues accordingly fall beyond the scope of Section 241 and 242 of the Company’s Act, 203;

E) For that the AGM/adjourned AGM, EC, Meeting, Directors Meeting and election of the petitioner Company are direct out come of the order in I.A. No.1 of 2020 in C.S.No.1182 of 2020 and cannot be questioned before NCLT, Cuttack,. Except the statutory appeal;

F) For that the allegation in the Company Petition 11 of 2021, even if accepted for the sake of argument, it disclose a dispute, which is civil kin nature being election dispute and the Civil Court has only the jurisdiction to try the same and not the NCLT as no corporate right is violated;

G) For that the Company Petition is barred by acquiescence/ waver/ estoppels and at no point of time the O.P.-1 & @ have ever objected to the Article of Association of the petitioner Company;

H) For that the remedy sought in the Company Petition is worse than the disease- not just and equitable to wind up petitioner Company, which is primarily for non-profit making and none of the office bearers draws salary/remuneration towards their service, which is honorary;

I) For that no pecuniary/economic rights of any members involved in this case and there is no question of minority being oppressed by the majority as all member have only lone voting rights only;

J) For that the allegations in the Company Petition are all personal in nature and to feed fat to the grudge of the O.P.-1 & 2, particularly when they failed in the election process to be elected have filed the Company Petition under the guise of Section 241 and 242 of the Company’s Act, 2013, which is not maintainable;

K) For that Hon’ble Supreme Court of India in catena of cases held that the issue pertaining to Directorial are outside the scope of the petition under Section 241 and 242 of the Company’s Act, 2013;

L) For that it is only the civil court have the jurisdiction on the issue at hands and the O.P.-1 & 2 be directed to pursue in civil court in C.S.No.1182 of 2020 pending before Civil Judge, Sr.Div., Bhubaneswar and not in the NCLT.

7. It be stated here that both the writ petitions involve almost same ground except there is little bit of change here and there not making any effect ultimately. It is not a material. Mr.Swain, learned counsel submitted that the attempt of opposite party nos.1 and 2 in filing the Company Petition is not only in suppression of the material fact but is an ill attempt to softer fuse the order of the Civil Judge in the I.A. involving the suit and further without making these petitioners as party to the alleged proceeding in the NCLT. Mr.Swain, learned counsel also raised the question of Company Proceeding having no cause of action under the provisions of Section 241 and 242 of the Companies Act, 2013. It is further contended that for the clear provision in Sections 241 and 242 of the Companies Act, 2013 concerning with the issue of oppression and mismanagement by a majority share-holder against the minority shareholder, for the Company involved having no share-holder, it is claimed that there is no question of majority or minority. It is thus alleged that the Company Act Proceeding did not involve any oppression or mismanagement by the majority against any minority. Mr.Swain, learned counsel, therefore, contended that the entire allegation in the Company Petition is curtail to the power/ jurisdiction, authorities/ duties/ functioning of directors, Executive Committee and Office Bearers, election, suspension of members, retirement of Office Bearers and directorial issues, which undoubtedly fall beyond the scope of Section 241 and 241 of the Companies Act, 2013. Mr.Swain, learned counsel also pointed out that the AGM,/ adjourned AGM, E.C. Meeting, Directors Meeting and election of the petitioner Company are the direct outcome of the order in I.A.No.1 of 2020 arising out of Civil Suit No.1182 of 2020, which cannot be questioned before the NCLT, Cuttack as only requires to be questioned before the Appellate Authority having jurisdiction to sit over Civil Court order. Mr. Swain, learned counsel further contended that even assuming the allegation involving the Company Petition and accepting the same for the sake of argument since it discloses a dispute of civil nature, a Civil Court has only jurisdiction to try the same but not before the NCLT which has nothing to do involving such issues. Mr.Swain, learned counsel further also contended that the Company Petition is barred by acquiescence/ waver/estoppels as at no point of time neither the opposite party no.1 nor opposite party no.2 nor through proxy litigants are ever objected to the article of Association. Mr.Swain also contended that for the allegation in the Company Petition are all personal in nature and to feed fat to the alleged grudge of the opposite party nos.1 and 2 after both of them remained unsuccessful in the election. Mr.Swain, learned counsel taking this Court to the catena of decisions contended that apart from factual background, the grounds narrated hereinabove, there is also support of law to the case at hand and Mr.Swain thus relied on the decisions in the cases of Tata Consultancy Services Ltd. Vs. Cyrus Investments Pvt. Ltd. & Ors : 2021 SCC Online SC 272, Union of India (UOI) Vs. Tarachand Gupta & Bros. : (1971) 1 SCC 486, Shashi Prakash Khemka (Dead) through legal representatives and Anr. Vs. NEPC MICON (Now NEPC India Limited) & Others : (2019) 18 SCC 569, SAS Hospitality Pvt. Ltd & Anr. Vs. Surya Constructions Pvt. Ltd. & Ors : 2019 (212) Comp. Cas. 102, Naresh Dayal and Ors. Vs. Delhi Gymkhana Club Ltd. and Ors. : (2021) 225 Comp. Cas. 259, Jai Kumar Arya & Ors. Vs. Chhaya Devi and Anr. : 2017 SCC Online Del. 11436.

8. Similarly, in reference to the jurisdiction of the Civil Court vis-vis provision under Section 9 of the C.P.C., limiting to Section 9 of the CPC vis--vis a restriction contained in Section 430 of the Companies Act, Mr.Swain, learned counsel taking this Court to both the provisions also attempted to rely on the decisions in the cases of Secretary of State Vs. Mask & Co. : AIR 1940 PC 105, Dhulabhai and Ors. Vs. The State of Madhya Pradesh & Ors. : AIR (1969) SC 78 and in the case of Union of India (UOI) Vs. Tarachand Gupta & Bros. : AIR 1971 SC 1558.

9. Mr. M.K. Mishra, learned Senior Advocate being assisted by Mr. L. Mishra, learned counsel and Mr. S. Acharya, learned counsel for the contesting Opposite Party Nos.1 & 2 in both the writ petitions giving a common response involving both the writ petitions contended that the two Petitioners in the writ petition bearing W.P.(C) No.12645 of 2021 being elected as the Executive Members of the Company i.e. M/s. Utkal Chamber of Commerce and Industries Ltd. having no authorization on behalf of the Company to pursue such remedy, are not competent to pursue such litigation. Further, so far as the other writ petition bearing No.23128 of 2021 is concerned, Mr. Mishra, learned Senior Advocate contended that the person filing the writ petition one Brahmananda Mishra claiming to be the President of the Company has also no authorization of the Board of Directors of the Company to undertake such exercise. It is, in the premises, Mr. Mishra, learned Senior Advocate submitted that the authorization to pursue such litigation on behalf of the Company since is a mandatory requirement and in absence of such authorization as well as also required resolution of the Company, the W.P.(C) No.23128 of 2021 itself is also not maintainable in the eye of law. It is, on the ground of maintainability of the writ petition bearing W.P.(C) No.23128 of 2021, Mr. Mishra, learned Senior Advocate drawing the attention of this Court to a judgment of the Hon’ble Apex Court in the case of State Bank of Travancore Vrs. Kingston Computers India Pvt. Ltd. : (2011) 11 SCC 524 and in same analogy another judgment of this Court in the case of Eimco Elecon (India) Ltd. Vrs. Mahanadi Coal Fields Ltd. : 2010 SCC Online Ori. 415 submitted that for the decision of the Hon’ble Apex Court as well as of this Court through the above judgments contended that the question of maintainability of the subsequent writ petition bearing W.P.(C) No.23128 of 2021 on the grounds stated hereinabove, has also support of law through the above judgments. Mr. Mishra, learned Senior Advocate raising a question on the maintainability of the proceeding before the National Company Law Tribunal hereinafter in short be referred to as “NCLT” vide C.P.11/C.B/2021, contended that there has been deliberate concealment of material facts in approaching through the writ petitions indicated hereinabove and both the writ petitions appear to have been filed with unclean hands. In elaborating his such grounds Mr. Mishra, learned Senior Advocate taking this Court to different paragraphs involving the C.P. proceeding and on reading through the same, attempted to justify that the Petitioner herein has not only twisted the fact, but the grounds involved herein are also contrary to the material facts available on record and further also in clear suppression of the factual aspect involved in the Company Petition. Referring to the provision at Section 241 and 242 of the Companies Act, 2013 hereinafter in short be reflected as “the Act, 2013”, Mr. Mishra, learned Senior Advocate made an attempt to justify his above submission and contended that for the clear disclosures in the C.P. proceeding involved herein the proceeding U/s.241 & 242 of the Act, 2013 is very much maintainable and further the issue raised therein are within the competency of the “NCLT”. It is next, taking this Court to the dispute involved in the suit and the dispute involving the Company Act proceeding and resisting the claim of Mr. Swain, learned Counsel that for the pendency of Civil Suit the Company Act proceeding remains not maintainable, Mr. Mishra, learned Senior Advocate contended that there is complete distinction between both the disputes aiming for completely different outcome. On reading both the plaints involving the civil suit and the Company Petition under the Act, 2013, Mr. Mishra, learned Senior Advocate attempted to demonstrate his contention through the same that there is clear distinction between both the proceedings and submitted that there is no overlapping and/or overstepping of one proceeding over the other. Further, on the submission of Mr. Swain, learned counsel that for the dispute already involved in the civil suit and the issue raised in the Company proceeding since are available to be considered in the Company Petition by the “NCLT”, Mr. Mishra, learned Senior Advocate here in clear objection to the submission of Mr. Swain, learned counsel, contended that not only there is factual difference, but for the difference in the claim in both the proceedings, it is wrong to claim that for pendency of the civil suit, the proceeding under the Act, 2013 is not maintainable. Mr. Mishra, learned Senior Advocate further taking this Court to the plea and the relief sought, argued that for the dispute involving the Company proceeding and the prayer requiring to be adjudicated in the suit involving such issue, the civil proceeding is prohibited through Section 430 of the Act, 2013. Mr. Mishra, learned Senior Advocate in reference to a decision in the case of Shashi Prakash Khemka (dead) through Legal representatives and Another Vrs. NEPC MICON (Now NEPC India Limited) and Others as reported in (2019) 18 SCC 569 contended that the claim of the Opposite Party Nos.1 & 2 also gets support of law through the above judgment. In the above background of the case Mr. Mishra, learned Senior Advocate contended that since a serious matter involving the issue involved is pending for consideration of the “NCLT”, interference in such proceeding at this stage in any manner will affect the Petitioner therein seriously and thus accordingly, prayed for dismissal of both the writ petitions also on the above ground.

10. Considering the submissions of both the parties, this Court first takes up the preliminary objection of the Opposite Party Nos.1 & 2 that the writ petition bearing W.P.(C) No.23128 of 2021 being filed by one Sri Brahmananda Mishra claiming to be the president of the Utkal Chamber of Commerce & Industries Ltd., is not maintainable. This Court here finds, there is no doubt that if the writ petition at the instance of the Institution is initiated, there must be a resolution or an authorization in favour of the person undertaking such litigation. On entire reading of the pleadings involving the said writ petition, this Court nowhere finds, Brahmananda Mishra the Petitioner representing the Company has any authorization or support of any resolution of the Board of the Company at least authorizing him to initiate such litigation. Furthermore, looking to the law of the land on this aspect, this Court here taking into account the case of State Bank of Travancore (supra) finds, the Hon’ble apex Court in similar situation in paragraph nos.14 & 15 therein has come to observe as follows:

“14. In our view, the judgment under challenge is liable to be set aside because the respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointed as a Director of the Company and a resolution was passed by the Board of Directors of the Company to file a suit against the appellant and authorized Shri Ashok K. Shukla to do so. The letter of authority issued by Shri Raj K. Shukla, who described himself as the Chief Executive Officer of the company, was nothing but a scrap of paper because no resolution was passed by the Board of Directors delegating its powers to Shri Raj K. Shukla to authorize another person to file a suit on behalf of the Company.

15. In the result, the appeal is allowed, the impugned judgment is set aside and the one passed by the trial court dismissing the suit of the respondent is restored. The appellant shall be free to withdraw the amount deposited by it in the trial court in terms of this Court’s order dated 24.07.2009. Since the respondent has not appeared to contest the appeal, the costs are made easy.”

11. In another case decided by a Division Bench of this Court, in the case of Eimco Elecon (India) Ltd. (supra), this Court finds, in deciding similar issue the Division Bench of this Court in paragraph nos.6 & 7 has come to hold as follows:

“6. This writ petition has been filed by a company being represented by its sales manager on the basis of a power of attorney given by the director. The board of directors of the petitioner-company passed a resolution authorizing the director to represent the company to institute the proceedings on behalf of the company. Therefore, the director has no further authority to execute the power of attorney in favour of the sales manager to act on his behalf in the court proceedings. The power can only be given by the board of directors of the company in exercise of its statutory power by passing the resolution under the provisions of Section 291 of the Companies Act in favour of a director or principal officer of a company who is well versed with facts to speak, sign and verify the same in the pleadings.

7. Therefore, the documents, namely, power of attorney and the resolution passed by the board of directors of the company giving authority to its director to sue in the court of law on its behalf, produced by Mr. Das, learned senior counsel will not support the case of the petitioner. Hence, the contention urged in this regard by learned counsel for the petitioner is wholly untenable in law. Further, the Constitution Bench decisions of the Supreme Court cited by learned counsel for opposite party No.4 in the case of Charanjit Lal Chowdhury Vrs. Union of India, AIR 1951 SC 41; State of Orissa Vrs. Madan Gopal Rungta, AIR 1952 SC 12 and Calcutta Gas Co. (Proprietary) Ltd. Vrs. State of West Bengal, AIR 1962 SC 1044, are aptly applicable to the fact situation of the case.

12. Looking to the above decisions and further for the support of both the decisions hereinabove to the case of the Opposite Party Nos.1 & 2, this Court finds, Sri Brahmananda Mishra is not duly authorized to institute such litigation and as such the writ petition bearing W.P.(C) No.23128 of 2021 is not maintainable. The writ petition bearing W.P.(C) No.23128 of 2021 stands dismissed as not maintainable. This Court since finds, the other writ petition bearing W.P.(C) No.12645 of 2021 is filed at the instance of the elected Executive Members in their personal capacity being elected as the Executive Members of the Company i.e M/s. Utkal Chamber of Commerce and Industries Ltd. in the meantime and the same is maintainable. This Court proceeds to consider the merit involving such writ petition as hereunder.

13. For a question being raised on the entertainability of the proceeding before the “NCLT” in absence of satisfying that the case falls for consideration under the provisions of Section 241 & the relevant provisions at Section 242 of the Act, 2013, this Court here takes note of both the above provisions, which read as follows:

Section 241. Application to Tribunal for relief in cases of oppression, etc. – (1) Any member of a company who complains that –

(a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or

(b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the Company’s share, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interest or its members or any class of members,

may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter. (2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter.

Section 242. Powers of Tribunal – (1) If, on any application made under section 241, the Tribunal is of the opinion-

(a) that the company’s affairs have been or are being conducted in a manner prejudicial or oppressive to any member or members or prejudicial to public interest or in a manner prejudicial to the interests of the company; and

xx xx xx

(2) Without prejudice to the generality of the powers under sub-section (1), an order under that sub-section may provide for- (a) the regulation of conduct of affairs of the company in future;

xx xx xx

(e) the termination, setting aside or modification, of any agreement, however, arrived at, between the company and the managing direction, any other director or manager, upon such terms and conditions as may, in the opinion of the Tribunal, be just and equitable in the circumstances of the case;

(f) the termination, setting aside or modification of any agreements between the company and any person other than those referred to in clause (e): Provided that no such agreement shall be terminated, set aside or modified except after due notice and after obtaining the consent of the party concerned;

xx xx xx

(h) removal of the managing director, manager or any of the directors of the company;

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(m) any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision should be made.

xx xx xx”

14. From the provision at Section 241 of the Act, 2013, this Court finds, this provision of the Act, 2013 authorizes any member of the company to complain under the provision of oppression & mismanagement. Similarly section 242 of the Act, 2013 gives power to the “NCLT” to opine that the company affairs have been or are being conducted in a manner prejudicial or oppressive to any member or members and also on other aspect, which are of course not relevant here. Section 242(2) particularly deals with the matter involving regulation of conduct of affairs of the Company in future apart from also several other aspects included therein. It is, at this stage of the matter, this Court going through the provision at the Companies Act, 2013 and on reading through the company petition appended to W.P.(C) No. 12645 of 2021 at Annexure-8 and on reading through the document at page 146 therein finds, the Petitioner has the following:

“The concerned members of the Executive Committee in connivance with the respondent No.2 (Ex-President) deliberately did not amend the Articles of Association to bring it in compliance with the Companies Act, even though the Executive Committee has the power to amend the same.”

Similarly on reading of the document at page 148 internal page 27 this Court finds as follows

“Election held during 20.01.2021 to 22.01.2021 is not as per the Articles of Association nor as per the Companies Act, 2013 and thus the result of the said Election is voidab-Initio.”

Further in paragraph Nos.64, 66 & 69 of the C.P. proceeding, this Court finds as follows:

“64. That without prejudice to the aforesaid, it is pertinent to mention herein that as per the Section 179 (4) r/w Section 180 of the Companies Act, 2013 even the Board of Directors of a Company have restrictions on its power and the concerned Company can control the power of the Boards, but in the present case the Executive Committee have no restrictions on its power, which is evident from the following clause of the Article of Association, and thus the said Article of Association can in no point be said to be in compliance of the Companies Act, 2013.”

66. That further as per Section 169(3) on receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director, whether or not he is a member of the company, shall be entitled to be heard on the resolution at the meeting. But in the present case no resolution at the first place was ever received to remove the Petitioners and other Ex-Directors, and the said action was taken by the EC with mala fide intention and without giving any chance for opportunity of being heard.

ILLEGAL AND MALA FIDE ACTIONS UNDERTAKEN BY THE RESPONDENT NO.2 WITH THE CONNIVANCE OF OTHER RESPONDENTS.

69. That in furtherance of the aforesaid it is also mentioned herein that the Respondent No.2 with connivance of other Respondents has also issued orders barring entry of the Petitioners to office premises of Respondent No.1 Company. Prior to the said direction also the Respondent No.2 had issued a written direction to Respondent No.1 office staff barring access of any office papers and documents to all members including office bearers without his permission.

RESPONDENTS CAN BE TERMED TO BE OFFICERS IN DEFAULT UNDER SECTION 2 (60) OF THE COMPANIES ACT, 2013.”

15. It is, at this stage of the matter, on reading of the factual background of the case involving the suit referred to hereinabove and the prayer made therein alongwith the factual aspect involving the company petition and the prayer made therein, this Court not only finds, both the proceedings are aimed with different directions, but keeping here in view the prohibition U/s.430 of the Act, 2013, this Court finds, subject involving the proceeding vide C.P.11/CTB/2021 cannot be undertaken by a Civil Court as the NCLT has the authority and competency to decide such aspect. The issues involving the C.P. proceeding are clearly barred for being undertaken in exercise of a suit before the Civil Court. This Court here takes into consideration a decision of the Hon’ble apex C

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ourt in the case of Shashi Prakash Khemka (Dead) through Legal representatives and another Vrs. NEPC MICON (Now NEPC India Limited) and others reported in (2019) 18 SCC 569, in which case the Hon’ble Apex Court in paragraph nos.4, 5, 6 & 7 has observed and held as follows: “4. The learned counsel for the appellants has drawn our attention to the view expressed in Ammonia Supplies Corpn. (P) Ltd. V. Modern Plastic Containers (P) Ltd., to canvass the proposition that while examining the scope of Section 155 (the predecessor to Section 111), a view was taken that the power was fairly wide, but in case of a serious dispute as to title, the matter could be relegated to a civil suit. The submission of the learned counsel is that the subsequent legal developments to the impugned order have a direct effect on the present case as the Companies Act, 2013 has been amended which provides for the power of rectification of the Register under Section 59 of the said Act. 5. The learned counsel has also drawn our attention to Section 430 of the Act, which reads as under: “430. Civil court not to have jurisdiction. – No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate tribunal.” The effect of the aforesaid provision is that in matters in respect of which power has been conferred on NCLT, the jurisdiction of the civil court is completely barred. 6. It is not in dispute that were a dispute to arise today, the civil suit remedy would be completely barred and the power would be vested with the National Company Law Tribunal (NCLT) under Section 59 of the said Act. We are conscious of the fact that in the present case, the cause of action has arisen at a stage prior to this enactment. However, we are of the view that relegating the parties to civil suit now would not be the appropriate remedy, especially considering the manner in which Section 430 of the Act is widely worded. 7. We are thus of the opinion that in view of the subsequent developments, the appropriate course of action would be to relegate the appellants to remedy before NCLT under the Companies Act, 2013. In view of the lapse of time, we permit the appellants to file a fresh petition within a maximum period of two months from today.” Looking to the contest in the above case and involved herein, this Court finds, above decision has direct application to the case at hand. This Court at this stage taking into account the citations shown by Mr. Swain, learned counsel, finds, none of the decisions are applicable to the case at hand at this stage of the matter. Even though the writ petition involves some other aspect, this Court since finds, same are to be left for consideration of the NCLT dependent on the claim and counter of both the parties involved, touching these aspects at this stage of the matter will be amounting to encroaching upon the jurisdiction of the NCLT. In the circumstance, this Court is not inclined to enter into any other area and leaves all these open to the parties to agitate and get adjudicated by the NCLT concerned. 16. In the circumstance, since both the writ petitions involved herein don’t have any merit, are thus dismissed. No cost.
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