MR.SURENDER KUMAR GUPTA AND OTHERSversusJ M HOUSING LIMITED AND OTHERS

644                        [2021]
                SUPREME COURT     1 S.C.R. 644
                               REPORTS                     [2021] 1 S.C.R.


A              MR. SURENDER KUMAR GUPTA AND OTHERS
                                        v.
                   J M HOUSING LIMITED AND OTHERS
                         (Civil Appeal No. 418 of 2021)
B                           FEBRUARY 26, 2021
               [DR. DHANANJAYA Y CHANDRACHUD AND
                              M.R. SHAH, JJ.]
              Order/Judgment:
             Ex-parte ad-interim order – By National Company Law
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      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
D     – 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
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      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
F     – 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.
G           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.
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                                       644
    MR. SURENDER KUMAR GUPTA AND OTHERS v. J M                                645
            HOUSING LIMITED AND OTHERS

      Shyam Divan, P. K. Mittal, Praveen Mittal, Rajesh Goyal, Advs.          A
for Respondents.
      The following Order of the Court was passed:
                                ORDER
      1. The appellants filed a petition under Sections 241 and 242 of        B
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           C
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             D
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            E
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   F
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          G
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    H
646             SUPREME COURT REPORTS                          [2021] 1 S.C.R.


A     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 several years. The appellants should, in
      our view, be granted liberty to apply afresh before the NCLT for interim
      relief on the basis of the same application on which the NCLT passed its
      order. In order to enable the respondents to have an opportunity to
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      controvert the application for interim relief, we direct that they may file
      their reply, if any, within a period of two weeks from today. The NCLT
      shall reconsider the application for interim relief in terms of the above
      directions after hearing the parties. We clarify that we have not expressed
      any opinion on the merits of the rival contentions which shall be addressed
C     before the NCLT. The order of the NCLAT shall accordingly stand set
      aside and be substituted by the directions which have been issued in the
      above terms. The NCLT shall take a final decision on the application of
      interim relief within a period of four weeks from the date on which a
      certified copy of this order is placed on its record.
D            5. 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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