AA’s Order Allowing Amended Petition on Oppression & Mismanagement Without Giving Chance to Be Heard Was to Be Overturned | NCLAT

Case Details: Kochar Sungup Acrylic Ltd. v. Sunny Kochar - [2024] 168 taxmann.com 171 (NCLAT-New Delhi)

Judiciary and Counsel Details

• • Justice Yogesh Khanna, Judicial Member & Ajai Das Mehrotra, Technical Member

Facts of the Case

In the instant case, the respondent filed the Company Petition under Sections 241 and 242 of the Companies Act 2013, alleging oppression and mismanagement in the affairs of the appellant company.

The Respondent filed an application seeking to place on record an amended petition directly. The NCLT vide the impugned order allowed the said application. The appellant vide instant appeal alleged that the impugned order was passed contrary to principles of law relating to the amendment of pleadings contained in Order VI Rule 17 of CPC applicable to proceedings before the NCLT.

According to the appellant, the amended petition was filed by completely redrafting the original petition with additional grounds, and thus, it was a fresh petition in the guise of an amendment. Further, no opportunity was granted to the appellant to respond to the amended petition.

It was noted that amendments were substantial in nature. Admittedly, new reliefs had been added in the amended petition as also a new party being impleaded. For such substantial amendments, an application ought to have been moved with such proposed amendments and with liberty to appellants to rebut such proposed amendments and only thereafter, amended petition ought to have been brought on record.

NCLAT Held

The NCLAT held that since the impugned order did not adhere to principles of natural justice, it did not give an opportunity of being heard to the appellant. Thus, the impugned order was to be set aside. One more opportunity be given to the respondent to move an application for amendment, inclusive of proposed amendments with liberty to the appellant to respond to such application and thereafter the NCLT to decide it as per law. Thus, the instant appeal was to be allowed.

List of Cases Reviewed

• Judgement and order dated 07.06.2024 passed by National Company Law Tribunal, Chandigarh Bench II in CP/24(24(CH)2024 [2024] 167 taxmann.com 616 (Chad.) (Para 13) reversed