Telangana High Court
Embassy Commercial Projects ... vs Prem Jain on 30 January, 2025
THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL
AND
THE HON'BLE SMT. JUSTICE RENUKA YARA
WRIT APPEAL No.118 of 2025
JUDGMENT:(Per the Hon'ble the Acting Chief Justice Sujoy Paul) Sri S. Niranjan Reddy, learned Senior counsel appears for Sri Tarun G. Reddy, learned counsel for the appellants; Sri Avinash Desai, learned Senior Counsel appears for Sri Veedendra Joshi, learned counsel for respondent No.1, Sri A. Venkatesh, learned Senior Counsel appears for respondent No.10 and Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent Nos.2 and 3.
2. With the consent, finally heard.
3. This intra-Court Appeal takes exception to the order passed in W.P.No.30273 of 2024, dated 09.01.2025.
4. Learned Senior Counsel for the appellants submits that this is second visit of the appellants to this Court. Earlier the Writ Court by order dated 07.11.2024 allowed the writ petition without putting the present appellants to notice, who is respondent Nos.17 and 15 in the writ petition. Aggrieved, W.A.Nos.1315 and 1317 of 2024 were filed by the appellant and other parties, who were not put to notice. The Division Bench by order dated 22.11.2024 set 2 aside the order dated 07.11.2024 and restored the writ petition for hearing. Thereafter, the writ petition came-up for hearing. On the question of interim relief, learned Writ Court has passed impugned direction to Regional Director/respondent No.2 to correct the error in the impugned order dated 22.08.2023 with regard to the fact of payment made by respondent No.7 on behalf of the petitioner.
5. Learned Senior Counsel for the writ petitioner submits that the petitioner prayed for following relief in the writ petition:
"74. For the reasons mentioned above, it is humbly prayed that this Hon'ble Court may be pleased to issue any order, direction or Writ more particularly:
(a) Issue a Writ of Certiorari quashing and setting aside the order dated 22nd August 2023, passed by the Respondent No.2 i.e. the Regional Director, South East Region, Ministry of Corporate Affairs, Hyderabad to the limited extent that it records that the Petitioner has paid the compounding fee vide SRN No.X49453590 from his own sources.
(b) Remand the matter back to Respondent No.2 for fresh consideration allowing the Petitioner an opportunity to be heard for (i) correction of the patently erroneous facts recorded in the Impugned Order and
(ii) payment of the compounding fee in the manner prescribed.
(c) Pass appropriate directions for correction/ amendment of the Annual Report and the Auditor's Report.
(d) Pass such other order or orders as are deemed fit and proper in the circumstances of the case.3
75. Pending disposal of the writ petition, direct the Respondent No.2 to remove the Impugned order from the public access.
76. Pending disposal of the writ petition, direct removal of the Annual Report and Auditor's Report from MCA website."
(Emphasis Supplied)
6. A minute reading of the relief prayed for shows that the writ petitioner prayed for setting aside the compounding order dated 22.08.2023 to the extent it records that the petitioner has paid the compounding fee from his own sources. Consequently, the relief is prayed for to remand the matter back to respondent No.2 for fresh consideration allowing the petitioner an opportunity to be heard for twin purposes mentioned in the prayer clause. Learned counsel for the writ petitioner by taking this Court to the impugned order urged that without hearing the matter finally and deciding the legality, validity and propriety of compounding order dated 22.08.2023, learned Single Judge has passed the interim order which gives consequential relief to the writ petitioner. More than main relief is granted by way of interim relief. Putting it differently, it is urged that as per the prayer of writ petitioner itself, the matter could have been remanded back to respondent No.2 for fresh consideration after setting aside the order dated 22.08.2023. Withstanding the said order, the question of remand 4 and correction of error by way of interim order does not arise. Apart from this, it is submitted that the petitioner approached the Writ Court with a pair of unclean hands. There exists material suppression of fact, because the writ petitioner neither pleaded with accuracy and precision that he authorized respondent No.6 to represent the petitioner in compounding the matter. The said authorization dated 23.08.2022 is filed with the counter as Annexure R-3. The genuineness of this authorization letter given by the petitioner was not questioned before the writ Court. There exists material suppression of fact which could not have been ignored. The writ petitioner should have approached the Court with clean hands, clean mind, clean heart and clean objective. Learned Single Judge has not considered the aforesaid aspect. Learned Senior counsel further submits that apart from suppression of fact, the writ petitioner approached the Court with delay and such delay has not been explained. The Court has drawn prima facie satisfaction from its previous order dated 07.11.2024 which cannot sustain scrutiny. Thus, for all these counts, the interim order is liable to be interfered with. The writ petition is fixed on 10.02.2025 and the appellants are ready to argue the matter finally.
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7. Sri A.Venkatesh, learned Senior Counsel for respondent No.10 submits that he is sailing with the present appellants and the impugned order is vulnerable one.
8. Learned Senior Counsel for respondent No.1/writ petitioner submits that the learned Single Judge has passed a detailed order by considering the rival contentions. In the last paragraph of the impugned order, it was clarified that none of the parties shall use this order in any collateral proceedings involving respondent No.17-Company.
9. The appellants are unable to show how they are aggrieved by the impugned order which directs correction of entry in relation to the writ petitioner only.
10. Learned Deputy Solicitor General of India for the Government submits that he will file counter before the Writ Court.
11. We have heard the parties at length.
12. During the course of hearing, it is gathered that the only anxiety and grievance of writ petitioner is that the compounding order dated 23.08.2022 passed by showing acceptance of the 6 amount paid on behalf of the petitioner, but, amount has not been paid from petitioner's own sources. Instead, it was paid by one Pratiksha Amblekar on behalf of the writ petitioner. The writ petitioner's anxiety is that in view of Section 441 (b) of the Companies Act, 2013, such payment ought to have been paid by the writ petitioner and it cannot be by anybody else. Considering the aforesaid anxiety, the Court proposed that there can be a quietus to this litigation. If it is agreed that the compounding order shall be treated to have been passed on the basis of payment made by the writ petitioner from his own sources and for all practical and future purposes it shall be treated as such. The said entry for all practical purposes and for all future proceedings shall be read as such and payment for compounding shall be treated to had been made by the writ petitioner himself.
13. Learned counsel for the appellants and learned counsel for the Government stated that they have no objection if such an order is passed. Learned Senior Counsel for respondent No.1 did not agree with the said proposition/observation by contending that the corresponding correction should also be made in the annual and audit report. A plain reading of Annual Report for Financial Year 2022-23 shows that compounding fee is treated to 7 be duly paid and the name of the petitioner finds place in the Annual Report. We wonder why the writ petitioner is not agreeing with the proposition which can put quietus to the entire proceedings and takes care of his grievance.
14. We find substance in the argument of learned Senior Counsel for the appellants that for the purpose of drawing prima facie satisfaction, learned Writ Court has relied on its previous order dated 07.11.2024, which was set aside by the Division Bench. By no stretch of imagination, the said order can form basis for drawing prima facie case in favour of the writ petitioner.
15. We also find substantial force in the argument of learned Senior Counsel for the appellants that if the impugned order is examined in juxtaposition to the relief claimed in the writ petition, it will be clear that the writ petitioner got consequential relief by way of interim order without deciding the validity of the order dated 22.08.2023.
16. So far the argument of Sri Avinash Desai, learned Senior Counsel for respondent No.1 that the appellants cannot be treated to be 'person aggrieved' is concerned, suffice it to say that when in the previous round without putting the appellants to notice the 8 order dated 07.11.2024 was passed by learned Single Bench, at the instance of the appellants in W.A.Nos.1315 and 1317 of 2024 the order dated 07.11.2024 was set aside. Since the order dated 07.11.2024 was set aside at the instance of the appellants by the Division Bench, we are unable to persuade ourselves with the line of argument that appellants cannot be treated to be 'person aggrieved' by the impugned order.
17. Considering the aforesaid fact, the impugned order dated 09.01.2025 passed by the learned Single Judge is set aside.
18. Accordingly, the Writ Appeal is disposed of, without expressing any view on the merits. Any observation made hereinabove shall not be treated as expression of view of this Bench on merits. No order as to costs.
Miscellaneous petitions pending, if any, shall stand closed.
_________________________ SUJOY PAUL, ACJ __________________________ RENUKA YARA, J 30.01.2025 Nvl