MR.SURENDER KUMAR GUPTA AND OTHERS versus J M HOUSING LIMITED AND OTHERS

Citation: [2021] 1 S.C.R. 644 · Decided: 26-02-2021 · Supreme Court of India · Bench: D.Y. CHANDRACHUD, M.R. SHAH · Disposal: Disposed off
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Judgment (excerpt)

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MR. SURENDER KUMAR GUPTA AND OTHERS
v.
J M HOUSING LIMITED AND OTHERS
(Civil Appeal No. 418 of 2021)
FEBRUARY 26, 2021
[DR. DHANANJAYA Y CHANDRACHUD AND
M.R. SHAH, JJ.]
Order/Judgment:
Ex-parte ad-interim order – By National Company Law
Tribunal (NCLT) – In a petition u/ss. 241 and 242 of Companies
Act, 2013 – Appeal to National Company Law Appellate Tribunal
(NCLAT) – Order of NCLT was set aside by NCLAT on the ground
that it was passed in violation of principles of natural justice and
the matter was remitted to NCLT for de novo consideration on merits
– Appeal to Supreme Court – Held: The essence of an ex-parte
order is that it is passed without hearing the other side – The
adjudicating authority, before issuing an ex-parte ad-interim order,
must be satisfied of the irretrievable injury which may be caused to
the applicant if a protective order is not passed – A prima facie case
and balance of convenience must also be weighed in – NCLAT has
not dealt with the fundamental issue whether the petitioners had
established an urgent case for the grant of ex-parte relief –
Consideration of the matter on merit by NCLT as per the direction
of NCLAT, would preclude the petitioners from applying for grant
of ad-interim relief during pendency of the proceedings before NCLT
– Therefore, the petitioners are granted liberty to apply afresh for
interim relief on the basis of same application, on which NCLT had
passed its order – Appeal disposed of.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 418 of
2021.
From the Judgment and Order dated 18.12.2020 passed by the
National Company Law Appellate Tribunal, New Delhi in Company
Appeal (AT) No. 182 of 2020.
Rakesh Kumar, Saurabh Mishra, Ms. Preeti Kashyap Advs. for
Appellants.
   [2021] 1 S.C.R. 644
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Shyam Divan, P. K. Mittal, Praveen Mittal, Rajesh Goyal, Advs.
for Respondents.
The following Order of the Court was passed:
ORDER
1. The appellants filed a petition under Sections 241 and 242 of
the Companies’ Act 2013, complaining of oppression and mismanagement.
An ex-parte order was passed by the National Company Law Tribunal
on 5 October 2020. Instead of moving the NCLT for vacating the ad-
interim order, the respondents moved the National Company Law
Appellate Tribunal in appeal. The NCLAT by its impugned order dated
18 December 2020 set aside the order of the NCLT on the ground that
it was passed in violation of the principles of natural justice. Having
made this observation, the NCLAT has also made certain observations
on merits and remitted the matter to the NCLT for de novo consideration
on merits after providing an opportunity of being heard to the parties.
2. We have heard Mr Rakesh Kumar, learned counsel appearing
on behalf of the appellants and Mr Shyam Divan, learned senior counsel
appearing for the first respondent with Mr P K Mittal.
3. The appropriate course of action for the respondents, faced
with an ex-parte order of the NCLT would have been to apply to the
NCLT for vacating or modifying the ad-interim order. The NCLAT was
not correct in coming to the conclusion that the order of the NCLT has
to be set aside on the ground that it was passed without furnishing to the
respondent an opportunity of being heard. The essence of an ex-parte
order is that it is passed without hearing the other side, in a situation
where the adjudicating authority is satisfied that a case involving a grave
urgency is made out. The adjudicating authority, before issuing an ex-
parte ad-interim order, must be satisfied of the irretrievable injury which
may be caused to the applicant if a protective order is not passed. A
prima facie case and the balance of convenience must also be weighed
in. The NCLAT has not dealt with the fundamental issue of whether the
respondents had established an urgent case for the grant of ex-parte
relief. The principle which has been propounded by the NCLAT is rather
novel to civil jurisprudence and betrays a lack of comprehension of basic
legal principles.
4. The NCLAT has remanded the proceedings back to the NCLT
for fresh consideration on merits. The grievance of the appellants is that
MR. SURENDER KUMAR GUPTA AND OTHERS v. J M
HOUSING LIMITED AND OTHERS
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this would preclude them from applying for the grant of ad-interim relief
during the pendency of the proceedings before the NCLT and the final
hearing of the petition may take
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