The court reiterated that interim orders protecting rights pending final adjudication are crucial, and only appealable orders determining rights of parties fall under the Companies Act, 2013.

ORDER

(Hybrid Mode)

[Oral Judgment: Justice Sharad Kumar Sharma, Member (Judicial)] 24.12.2024:

These are two company appeals, which arise out of Company Petition No.66/241/HDB/2024. Though the said company appeals are in relation to, the orders passed in two different Interlocutory Applications, being IA No. 376/2024 and IA No. 375/2024, for the sake of convenience, they are being decided together. In Company Appeal (AT) (CH) No.87/2024, the Appellant, questions the propriety of the impugned orders passed on IA No. 376/2024 in the aforesaid company petition. By virtue of the Impugned Order, the application preferred under Rule 11 of the NCLT Rules of 2016 has been decided, and as a consequence of the decision thus rendered, the Ld. Adjudicating Authority, has ruled that, any decision which is to be taken on basis of the resolution taken by EGM on 17.12.2024, would be subject to final outcome of the company petition.

2. In the connected company appeal, being the Company Appeal (AT) (CH) No.88/2024, the decision which is under challenge is the order passed in IA No. 375/2024 preferred under Rule 11 of the NCLT rules of 2016. By the said order, the resolution which was passed by the EGM on 17.12.2024, appointing five new directors, has been directed to be kept in abeyance till 17.01.2025. It has further been directed that the Respondent No. 01, 02 & 03 to the said company petition may file their Counter Affidavit to the petition itself.

3. There are various multifaceted arguments which have been extended by the Ld. Senior Counsel for the Appellant, while putting a challenge to the Impugned Orders, contending thereof, that (a) the orders are outside the ambit of Section 59 (3) of the Companies Act, and therefore not tenable.

a) The orders are contrary to the principles of natural justice,

b) The Impugned Orders, have not considered the objections raised by the Appellants, thus violating the basic guiding factors to be followed in deciding a case, that is, the existence of a prima facie case, balance of convenience and irreparable injury.

c) The said orders apparently happen to be contrary to, the very relief, which was sought for and modulated, in the IA No. 376/2024, and therefore it has been considered to be bad in the eyes of the law.

4. We would consider the respective arguments raised above at a later stage. But looking from a legal perspective, we have to be conscious of the fact that, at this stage, we are exercising our Appellate jurisdiction, under Section 421 of the Companies Act, 2013 . Though section 421 of the Companies Act, grants the right of appeal to ‘any aggrieved person’ against an ‘order’ of the Tribunal, the question to be answered would be, as to up to what extent, the principles enunciated under Rule 11 of the NCLT rules of 2016, could be expanded to make all types of orders including orders that are essentially interim in nature passed in proceedings under Sections 241, 242, 59, and 244 of the Companies Act, appealable under of the Companies Act.

5. Rule 11 of the NCLT Rules of 2016, grants an inherent power to the Tribunal, to pass an appropriate order depending upon the facts and circumstances of the case before it. Rule 11 is extracted hereunder:-

“11. Inherent Powers.- Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.”

6. If the implications of Rule 11 are taken into consideration, it only leaves the scope, open for the Tribunal which would have the power to pass an appropriate order, which may be necessary to meet the ends of justice and not to abuse the process of the Tribunal. Rule 11 of the NCLT Rules