The court upheld restrictions on fraudulent management actions under the Companies Act, affirming severe penalties for misconduct by judicial officers involved in usurping company assets.

ORDER

(Hybrid Mode):

Oral Judgment : Justice Sharad Kumar Sharma, Member (Judicial):

1. These are three connected company appeals, out of which;

(A) Company Appeal (AT) (CH) No. 45 / 2021and

(B) Company Appeal (AT) (CH) No. 5 / 2022, engage consideration of the same facts and circumstances and hence, for the purposes of brevity, they are being decided together, prior to venturing to decide the

(C) Company Appeal (AT) (CH) No. 3 / 2022 which too emanates from the common Impugned Order, which is under challenge in the aforesaid two Company Appeals.

2. The Company Appeal (AT) (CH) No. 45 / 2021 is accompanied with a Condone Delay Application being IA No. 549 / 2021, wherein the Appellant has sought a condonation of 603 days of delay, which has chanced in preferring the appeal by taking recourse to Section 433 of the Companies Act , to be read with Section 14 of the Limitation Act , on the ground that, as against the Impugned Order of 30.12.2019, initially he has approached the Writ Court, by filing a Writ Petition (C) No. 3175 / 2020, which was disposed of on 29.09.2021, with a direction and liberty granted to the appellant for preferring of an appeal and hence, the delay has been sought to be condoned was on the ground that, it was a bonafide opinion, which was extended to the Appellant, because of which he has preferred the Writ Petition and hence, he would be entitled for an exclusion granted under Section 14 of the Limitation Act . For the purposes to take a pragmatic view, we are not technically venturing into the question of limitation. Thus, the delay of 603 days which has chanced in preferring the appeal would stand condoned, in the light of the provisions contained under Section 433 of the Companies Act , to be read with Section 14 to be read with Section 5 of the Limitation Act . Accordingly, IA No. 549 /2021, would stand allowed.

3. The Company Appeal (AT) (CH) No. 5 / 2022 too, is accompanied with a Condone Delay Application in IA No.42/2022, in which the condonation of delay of 5 days has been sought by the appellant, on grounds, almost identical to that of the Company Appeal (AT) (CH) No. 45 / 2021. Since the delay is of 5 days only which has chanced in preferring the appeal, and since it falls to be within an ambit of Section 421 of the Companies Act 2013, the same would stand condoned and accordingly, IA No. 42 / 2022, would stand disposed of.

4. Before dealing with the issue as it is involved in the instant appeal, challenging the Impugned Order dated 30.12.2019, which has been passed in the proceedings under Section 425 of the Companies Act , by drawing a Contempt proceedings and the consequential order which has been issued, thereafter by the learned Adjudicating Authority, we need to dwell upon the facts of the cases.

5. The facts which engage consideration in the Company Appeal (AT) (CH) No. 45 / 2021 and Company Appeal (AT) (CH) No. 5 / 2022, almost happen to be akin in nature and hence, they are being decided together.

6. The basic facts are, that on 30.07.2003, a Company Petition, being CP No. 43 / 2003, was instituted before the High Court of Kerala, for the purposes of the reliefs sought, wherein, the proceedings were drawn under Section 391 (2) of the Companies Act 1956. The Appellant therein, has sought a relief to the effect, that the compromise arrangement, as made between the parties may be sanctioned by the Court, so as to give it a binding effect on all the shareholders of the Company and on its Secured and Unsecured Creditors. The nature of relief as modulated in the said Company Petition which stood instituted on 30.07.2003 was of the following nature:

``(1) That the said compromise or arrang