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2025 Supreme(Online)(NCLAT) 273
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Justice Sharad Kumar Sharma (Member(Judicial)) , Hon'ble Mr. Jatindranath Swain (Member (Technical)) ,
M/s. Bhagyodayam Company represented by its Administrator Mr. Jinan K.R. – Appellant
Versus
Mrs. Hyma Joseph – Respondent
14/CN/2023 COMPANY APPEAL(AT)
Tribunal's orders under Companies Act are enforceable as decrees but do not constitute decrees per CPC, limiting their judicial authority to formulate decrees.
Headnote:(A) Companies Act, 2013 - Sections 241, 242, 424(3) - Company Appeals challenging the Impugned Order dated 02.12.2022 regarding the execution of orders for recovery of funds allegedly diverted - The Tribunal held that its orders are enforceable as a decree but do not constitute a decree as defined under the CPC. (Paras 17, 22, 24)
(B) Decree - Definition and enforcement - The Tribunal clarified that while its orders can be executed like a decree, they do not possess the characteristics of a decree under the CPC, and thus cannot be formulated as such. (Paras 19, 24)
(C) Judicial authority - The Tribunal emphasized that its powers do not extend to formulating decrees in the manner prescribed under civil law, and applications seeking such formulations were dismissed. (Paras 26, 36)
Facts of the case:
A series of Company Appeals were filed challenging an order regarding the appointment of an Administrator to recover funds alleged to have been misappropriated by the company’s directors. The Tribunal found the applications for drawing a decree were not maintainable.
Findings of Court:
The Tribunal concluded that it could not formulate a decree as requested in the applications, but affirmed that its orders could be executed under Section 424(3).
Issues: The main issues included whether the Tribunal's orders could be treated as decrees and whether the applications for drawing a decree were maintainable.
Ratio Decidendi: The court reasoned that while its orders are enforceable as decrees, they do not meet the definition of a decree under the CPC, thus applications for decree formulation were dismissed.
Result: Appeals disposed of with directions for execution under Section 424(3).
JUDGMENT
(Hybrid Mode)
Per : Justice Sharad Kumar Sharma, Member (Judicial):
1. These are bunch of 18 Company Appeals, which had been preferred under Section 421 of the Companies Act, 2013, wherein the Appellants in each of these Company Appeals put challenge to the Impugned Order dated 02.12.2022, which almost happens to be akin in nature in all the Company Appeals. Besides that, since these Company Appeals engage consideration of a common question of fact and law, for the purposes of brevity, they are being decided together.
2. As far as, Company Appeal (AT) (CH) No. 05 / 2023, the Company Appeal (AT) (CH) No. 06 / 2023, Company Appeal (AT) (CH) No. 21 / 2023 & Company Appeal (AT) (CH) No. 22 / 2023, the notices have been sent by this Tribunal, to the respective Respondent and ever since, the institution of these Company Appeals, none has appeared for the Respondents, despite service of notice. Hence, these four Appeals are being proceeded exparte.
3. Because of the fact that in each of the Company Appeals, there were different Interlocutory Applications, which were considered and decided, we feel it apt to summarily describe each of the Appeals, qua the order, which has been put to challenge under it:-
(a) Company Appeal (AT) (CH) No. 04 / 2023, it challenges the Impugned Order dated 02.12.2022, as it has been passed by the learned Adjudicating Authority in MA (C/ACT)/42/KOB/2022, preferred in TCP/21/KOB/2019, which was earlier carrying the Number as CP No. 29/2017.
In this Company Appeal, an Application was filed, under Rule 11 to be read with Rule 102 of the NCLT Rules, 2016, as well as Section 424 (3) of the Companies Act, 2013, in which the prayer was made for drawing a ``Decree’’ for recovery of money, which is said to have been illegally diversified, and later on it stood adjudicated.
4. Consequent to the proceedings drawn by the Appellant in each of these Company Appeals, the same has been adjudicated upon resulting into, passing of an order which is under challenge in the instant Appeal.
(b) Challenge in this Appeal being Company Appeal (AT) (CH) No. 05 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/43/KOB/2022 in TCP/21/KOB/2019.
(c) Challenge in this Appeal being Company Appeal (AT) (CH) No. 6 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/44/KOB/2022 in TCP/21/KOB/2019.
(d) Challenge in this Appeal being Company Appeal (AT) (CH) No. 7 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/45/KOB/2022 in TCP/21/KOB/2019.
(e) Challenge in this Appeal being Company Appeal (AT) (CH) No. 12 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/46/KOB/2022 in TCP/21/KOB/2019.
(f) Challenge in this Appeal being Company Appeal (AT) (CH) No. 13 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/47/KOB/2022 in TCP/21/KOB/2019.
(g) Challenge in this Appeal being Company Appeal (AT) (CH) No. 14 / 2023, is to the Impugned Order dated 02.12.2022,as it was passed in MA (C/ACT)/48/KOB/2022 in TCP/21/KOB/2019.
(h) Challenge in this Appeal being Company Appeal (AT) (CH) No. 15 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/49/KOB/2022 in TCP/21/KOB/2019.
(i) Challenge in this Appeal being Company Appeal (AT) (CH) No. 16 / 2023, is to the Impugned Order dated 02.12.2022,as it was passed in MA (C/ACT)/50/KOB/2022 in TCP/21/KOB/2019.
(j) Challenge in this Appeal being Company Appeal (AT) (CH) No. 17 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/51/KOB/2022 in TCP/21/KOB/2019.
(k) Challenge in this Appeal being Company Appeal (AT) (CH) No. 18 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/52/KOB/2022 in TCP/21/KOB/2019.
(l) Challenge in this Appeal being Company Appeal (AT) (CH) No. 19 / 2023, is to the Impugned Order dated 02.12.2022, as it was passed in MA (C/ACT)/53/KOB/2022 in TCP/21/KOB/2019
