IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF APRIL 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.14107 OF 2019 (GM-RES) BETWEEN:
M/s Yashomati Hospitals Private Limited, Incorporated under the Companies Act, 2371/3, HAL Airport-Varthur Road, Munne Kolala, Marathahalli, Bangalore-560037 Represented by its Authorised Representative, Mrs.Umagiri … Petitioner (By Sri.Ajesh Kumar.S, Advocate) AND:
1. Pegasus Asset Reconstruction Pvt Ltd, 507, Dalamal House, Nariman Point, Mumbai-400021, Represented by its Authorised Signatory Mr Also at Pegasus Asset Reconstruction Pvt Ltd, 23, New No.13, McNichols Road, Chetpet, Chennai-600031 Represented by its Vice President Mr.V. Ganesan Pegasus Asset Reconstruction Pvt Ltd, 55-56, 5th Floor, Free Press, Nariman Point, Mumbai-400021 Represented by its Senior Manager & Company Secretary, Mr.Dhimant N Shah 2. South Indian Bank Limited “SIB” House, T.B.Road, Mission Quarters, Thrissur-680001, Kerala Represented by its Authorised Officer Also at South Indian Bank Limited, Niagra Apartments, No.1 Sterling Road, Nugambakkam, Chennai-600034, Represented by its Authorised Officer South Indian Bank Limited, Christ University Branch, Christ College, Hosur Road, Dharmaram College, Bangalore-560029 Represented by its Authorised Officer. … Respondents (By Sri. H.N.Vasudevan, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India, praying to quash the order dated 21.02.2019 passed by National Company Law Tribunal at Bangalore in CP(IB) No.144/BB/2017 as per Annexure-A and the Hon’ble Court may be pleased to direct the National Company Law Tribunal, Bangalore to decide the maintainability of the petition in CP(IB) No.144/BB/2017 pending before National Company Law Tribunal, Bangalore and etc.
This Writ Petition coming on for Orders, this day, the Court made the following:-
ORDER Sri.Ajesh Kumar.S, learned counsel for the petitioner.
Sri.H.N.Vasudevan, learned counsel for respondent Nos.1 and 2.
The petition is admitted for hearing. With the consent of learned counsel for the parties, the same is heard finally.
2. In this petition under Article 226 and 227 of the Constitution of India, the petitioner inter alia has assailed the validity of order dated 21.02.2019 passed by the National Company Law Tribunal, Bengaluru (hereinafter referred to as ‘the NCLT’ for short). The petitioner also seeks for a direction to the Tribunal to decide the issue with regard to the maintainability of the petition by a speaking order.
3. When the matter was taken up today, learned counsel for the petitioner submitted that the petitioner had filed objection with regard to maintainability of the Company Petition. However, aforesaid application has not been adjudicated by the NCLT and the consideration of the objection with regard to maintainability of the petition has been deferred on the ground that filing of the company application by seeking to dismiss the Company Petition is not at all oriented. It is further submitted that the impugned order is not only cryptic but suffers from the vice of non-application of mind.
4. On the other hand, learned counsel for the respondents has supported the order passed by the NCLT.
5. I have considered the submissions made on both sides.
6. It is well settled law that Supreme Court in the case of ‘S.N. Mukherjee v. Union of India’, (1990) 4 SCC 594, has held that:
“The decisions of this Court referred to above scold indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American courts. An important consideration which has weighed with the court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration.”
7. In the backdrop of well settled legal position, the relevant portion of the impugned order, which is reproduced below for reference reads as
alia, seeking to dismiss the Company Petition. The Corporate Debtor has already filed statement of objection dated 11.06.2018, by inter alia, containing to dismiss the main Company Petition with exemplary cost. Therefore, filing the instant Company Application by seeking to dismiss the Company Petition is not at all oriented. The Applicant/Respondent can argue the main Company Petition by taking available please in their support.”
8. From perusal of the aforesaid order, it is evident that the impugned order is not only cryptic but it suffers from the vice of non-application of mind. The NCLT is a creature of status and is quasi-
judicial authority and the NCLT is required to assign the reasons in support of its order. The impugned order has been passed in a cryptic manner. The impugned order is therefore, quashed and set aside. The NCLT is directed to decide the objections preferred by the petitioner with regard to maintainability of the Company Petition filed by the respondents by a speaking order within a period of three weeks from the date of receipt of the certified copy of the order passed today.
With the aforesaid directions, the writ petition is disposed of.
Sd/- JUDGE dn/-