Supreme Court of India
MR.SURENDER KUMAR GUPTA AND OTHERS versus J M HOUSING LIMITED AND OTHERS on 26 February 2021
644
SUPREME COURT REPORTS
[2021] 1 S.C.R.
AMR. SURENDER KUMAR GUPTA AND OTHERS
v.
J M HOUSING LIMITED AND OTHERS
(Civil Appeal No. 418 of 2021)
BFEBRUARY 26, 2021[DR. DHANANJAYA Y CHANDRACHUD ANDM.R. SHAH, JJ.]
Order/Judgment:
Ex-parte ad-interim order – By National Company LawCTribunal (NCLT) – In a petition u/ss. 241 and 242 of CompaniesAct, 2013 – Appeal to National Company Law Appellate Tribunal(NCLAT) – Order of NCLT was set aside by NCLAT on the groundthat it was passed in violation of principles of natural justice andthe matter was remitted to NCLT for de novo consideration on meritsD– Appeal to Supreme Court – Held: The essence of an ex-parteorder is that it is passed without hearing the other side – Theadjudicating authority, before issuing an ex-parte ad-interim order,must be satisfied of the irretrievable injury which may be caused tothe applicant if a protective order is not passed – A prima facie caseand balance of convenience must also be weighed in – NCLAT hasEnot dealt with the fundamental issue whether the petitioners hadestablished an urgent case for the grant of ex-parte relief –Consideration of the matter on merit by NCLT as per the directionof NCLAT, would preclude the petitioners from applying for grantof ad-interim relief during pendency of the proceedings before NCLTF– Therefore, the petitioners are granted liberty to apply afresh forinterim relief on the basis of same application, on which NCLT hadpassed its order – Appeal disposed of.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 418 of2021.GFrom the Judgment and Order dated 18.12.2020 passed by theNational Company Law Appellate Tribunal, New Delhi in CompanyAppeal (AT) No. 182 of 2020.
Rakesh Kumar, Saurabh Mishra, Ms. Preeti Kashyap Advs. forAppellants.H
MR. SURENDER KUMAR GUPTA AND OTHERS v. J MHOUSING LIMITED AND OTHERS
Shyam Divan, P. K. Mittal, Praveen Mittal, Rajesh Goyal, Advs.for Respondents.
The following Order of the Court was passed:
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ORDER
1. The appellants filed a petition under Sections 241 and 242 ofthe Companies’ Act 2013, complaining of oppression and mismanagement.An ex-parte order was passed by the National Company Law Tribunalon 5 October 2020. Instead of moving the NCLT for vacating the ad-interim order, the respondents moved the National Company LawAppellate Tribunal in appeal. The NCLAT by its impugned order dated18 December 2020 set aside the order of the NCLT on the ground thatit was passed in violation of the principles of natural justice. Havingmade this observation, the NCLAT has also made certain observationson merits and remitted the matter to the NCLT for de novo considerationon merits after providing an opportunity of being heard to the parties.
2. We have heard Mr Rakesh Kumar, learned counsel appearingon behalf of the appellants and Mr Shyam Divan, learned senior counselappearing for the first respondent with Mr P K Mittal.
3. The appropriate course of action for the respondents, facedwith an ex-parte order of the NCLT would have been to apply to theNCLT for vacating or modifying the ad-interim order. The NCLAT wasnot correct in coming to the conclusion that the order of the NCLT hasto be set aside on the ground that it was passed without furnishing to therespondent an opportunity of being heard. The essence of an ex-parteorder is that it is passed without hearing the other side, in a situationwhere the adjudicating authority is satisfied that a case involving a graveurgency is made out. The adjudicating authority, before issuing an ex-parte ad-interim order, must be satisfied of the irretrievable injury whichmay be caused to the applicant if a protective order is not passed. Aprima facie case and the balance of convenience must also be weighedin. The NCLAT has not dealt with the fundamental issue of whether therespondents had established an urgent case for the grant of ex-parterelief. The principle which has been propounded by the NCLAT is rathernovel to civil jurisprudence and betrays a lack of comprehension of basiclegal principles.
4. The NCLAT has remanded the proceedings back to the NCLTfor fresh consideration on merits. The grievance of the appellants is that A
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Athis would preclude them from applying for the grant of ad-interim reliefduring the pendency of the proceedings before the NCLT and the finalhearing of the petition may take several years. The appellants should, inour view, be granted liberty to apply afresh before the NCLT for interimrelief on the basis of the same application on which the NCLT passed itsorder. In order to enable the respondents to have an opportunity toBcontrovert the application for interim relief, we direct that they may filetheir reply, if any, within a period of two weeks from today. The NCLTshall reconsider the application for interim relief in terms of the abovedirections after hearing the parties. We clarify that we have not expressedany opinion on the merits of the rival contentions which shall be addressedCbefore the NCLT. The order of the NCLAT shall accordingly stand setaside and be substituted by the directions which have been issued in theabove terms. The NCLT shall take a final decision on the application ofinterim relief within a period of four weeks from the date on which acertified copy of this order is placed on its record.
D5. The Civil Appeal is accordingly disposed of.6. Pending applications, if any, stand disposed of.
Kalpana K. Tripathy
Appeal disposed of.
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