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SUPREME COURT OF INDIA
Dhananjaya Y Chandrachud, CJI., J B Pardiwala, Manoj Misra, JJ.
Orbit Electricals Private Limited and Another – Appellants
Versus
Deepak Kishan Chhabria and Others – Respondents
Civil Appeal No 6108 of 2023 With Civil Appeal No 6176 of 2023
Decided On : 26-09-2023
Interim Relief - National Company Law Tribunal - The court vacated the interim direction issued by the NCLAT, subjecting the appointment of the Executive Chairperson to the outcome of the pending appeal before the NCLAT.
Fact of the Case:
The NCLT dismissed the application for interim relief, and the NCLAT reserved orders while directing the parties to maintain status quo. The AGM of the company was scheduled, and the court vacated the interim direction, subjecting the appointment of the Executive Chairperson to the outcome of the pending appeal.
Finding of the Court:
The court vacated the interim direction and allowed the appeals, setting aside the impugned order to the extent mentioned.
Issues: Interim relief, status quo, appointment of Executive Chairperson, pending appeal before NCLAT.
Ratio Decidendi: The court found no justification for the interim direction issued by the NCLAT, especially considering the absence of interim relief since the dismissal of the application before the NCLT and the Bombay High Court.
Final Decision: The court allowed the appeals, set aside the impugned order to the extent mentioned, and disposed of pending applications.
ORDER :
1. The National Company Law Tribunal1[“NCLT”] dismissed the application filed by the first respondent for the grant of interim relief by an order dated 31 December 2019. The first respondent is in appeal before the National Company Law Appellate Tribunal2[“NCLAT”]. Admittedly, no interim relief operated in favour of the first respondent during the pendency of the appeal.
2. The appeal has been heard and orders were reserved by the NCLAT on 21 September 2023. However, while reserving orders, the NCLAT has directed the parties “to maintain status quo as was available prior to EOGM dated 03.05.2019” till the judgement is delivered. No reasons have been indicated by the NCLAT even prima facie for issuing the interim order, particularly in the context of the fact that there was no interim relief operating since the dismissal of the application for interim relief on 31 December 2019. It is admitted that no relief was obtained by the first respondent in the proceedings before the Bombay High Court, as well.
3. In the circumstances, we vacate the interim direction as noted above. The Annual General Meeting (AGM) of the company, Finolex Cables Limited is to take place on 29 September 2023. Any action which is taken on proposed resolution No 4 pertaining to the appointment of the Executive Chairperson shall be subject to the outcome of the appeal which is pending before the NCLAT.
4. Subject to the aforesaid modifications, the appeals are allowed and the impugned order is set aside to the aforesaid extent.
5. Pending applications, if any, stand disposed of.
AI
The court emphasized the need for justification in issuing interim directions and linked the appointment of the Executive Chairperson to the outcome of the pending appeal before the NCLAT.
Appeal – Limitation stops running on e-filing of appeal before NCLAT and not on presentation of physical copy – Date on which limitation begins to run is intrinsically linked to date of pronouncement....
Points of law : Principle which has been propounded by the NCLAT is rather novel to civil jurisprudence and betrays a lack of comprehension of basic legal principles.
Supreme Court emphasizes jurisdiction to enforce orders and ensure compliance during appellate proceedings.
Writ petitions challenging interim orders of NCLT are not maintainable; aggrieved parties must appeal to NCLAT.
(1) Appeal – Period of limitation – Any party which is aggrieved by decision of NCLT can file appeal before NCLAT – Statutory time limit of 30 days within which appeal can be preferred, is extendable....
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