Partly allowed

Serum Institure of India v. Orchid Chemiclas and

Madras HC11 Apr 2014COM APEL/4/2014

Case brief

AI extract

What is this about?

The High Court disposed of a Company Appeal challenging an order refusing to stay Corporate Debt Restructuring proceedings. The Court set aside a prior direction regarding hearing dates and remanded the interlocutory applications under the Companies Act, 1956 to the Company Law Board for final disposal on 30.04.2014, allowing respondents to file counter affidavits by 25.04.2014.

What did the court decide?

Remand of the matter to the Company Law Board to dispose of all interlocutory applications for final hearing on 30.04.2014 after filing counter affidavits by 25.04.2014.

Serum Institure of India Vs Orchid Chemiclas and — Corruption | Madras HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 11.04.2014

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CORAM:

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THE HONOURABLE MR. JUSTICE K.K.SASIDHARAN

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Company Appeal No.4 of 2014
& M.P.Nos.1 and 2 of 2014
1. Serum Institute of India Limited
212/2, Off Soli Poonawalla Road
Hadpsar
Pune 411 028
2. Adurjee & Bros.Pvt.Ltd.,
Sarosh Bhavan
16-B/1
Dr.Ambekar Road
Pune 411 001
3. Chakan Investment Private Limited
Sarosh Bhavan
16-B/1
Dr.Ambekar Road
Pune 411 001
4. Fortune Intercontinental Private Limited
Sarosh Bhavan
16-B/1
Dr.Ambekar Road
Pune 411 001
5. Poonawalla Shares and Securities Private Limited
Sarosh Bhavan
16-B/1
Dr.Ambekar Road
Pune 411 001
6. Dr.Cyrus Poonawalla
11, Gidney Park
Salisbury Park, Swargate
Pune 411 001
.. Appellants
Vs.

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Orchid Chemicals and Pharmaceuticals Limited Órchid Towers' 313, Valluvar Kottam High Road Nungambakkam Chennai 600 034 2. Orchid Health Care Private Limited No.1, 6th floor, Crown Court No.128, Old No.34, Cathedral Road Chennai 600 086

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Raghavendra Rao 4. Vijayalakshmi 5. Divya R 6. Sowmna. R 7. S.Krishnan 8. S.Yuvaraj

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Hospira Health Care (India) Private Limited Plot No.B3, Sipcot Industrial Park Irungattukottiai, Sriperumbudur 602 117 10. Allahabad bank Adyar Branch, No.19, 1st Street Padmanabha Nagar, Adyar Chennai 600 020

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Federal Bank 61, Anna Salai Chennai 600 002

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Indian Overseas Bank Cathedral Branch 762, Anna Salai Chennai 600 002

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City Union Bank No.48, Mahalakshmi Street T.Nagar Chennai 600 017

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State Bank of Mysore Corporate Accounts Branch No.18, Ramanashree, Arcade, Midford Gardens

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https://hcservices.ecourts.gov.in/hcservices/

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MG Road Bangalore 560 001 15. Export Import Bank of India Centre One building, Floor 21 World Trade Centre, Cuffe Parade Mumbai 400 005 16. Union Bank of India Industrial Finance Branch "Riaz Garden", No.12, Kodambakkam High Road Nungambakkam, Chennai 600 034 17. State Bank of Hyderabad 488-489, Anna Salai Nandanam Chennai 600 035 18. State Bank of Travancore No.556, Jeevan Anand Teynampet, Anna Salai Chennai 600 018 19. Andhra Branch Mount Road Branch 95, Anna Salai Chennai 600 002 20. IDBI Bank Ltd., 115, Anna Salai P.B.No.805, Saidapet Chennai 600 015 21. Bank of Baroda Corporate Financial Services Branch 21, Gopalakrishnan Street T.Nagar, Chennai 600 017 22. Bank of India 4th floor, Tarapore Towers, 826/6, Anna Salai Chennai, Tamil Nadu 600 002 India

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Canara Bank Prime Corporate Branch, Spencer Tower 1, Ground Floor, 770, Anna Salai Chennai 600 002 24. Central Bank of India International Business Branch, 48/49, Montieth Road Egmore, Chennai, Tamil Nadu 600 008 India 25. ICICI Bank Landmark, Race Course Circle Vadodara 390 007 Gujarat, India 163, Backbay Reclamation Mumbai 400 020 Maharashtra, India 26. ING Vysya Bank 185, Anna Salai, Near TVS Chennai, Tamil Nadu 600 006 27. Punjab National Bank Unit 1003, 10th floor, Lipo Chun Chambers, 189, Des Voex Road Central, Hong Kong - 000000 Hong Kong (also at) Large Corporate Branch Rayala Towers, 781-785 Anna Salai, Chennai Tamil Nadu 600 002, India 28. State Bank of India Corporate Accounts Group Branch 18/3, Rukmani Lakshmipathi Road Egmore, Chennai, Tamil Nadu 600 008, India (also at) Corporate Accounts Group Branch, 18/3,

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Rukmani Lakshmipathi Road, Egmore, Chennai, Tamil Nadu 600 008, India

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(also at) Corporate Account Group Branch, 64, Greams Road Chennai, Tamil Nadu, 600 006 India

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Indian Bank Thousand Lights Branch Kannamal building, 611, Anna Salai, Chennai Tamil Nadu, 600 006, India .. Respondents

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Appeal filed under Section 10F of the Companies Act, 1956 to set aside the impugned order dated 24.3.2014 passed by the Company Law Board at Chennai in C.P.No.16 of 2014.

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For appellants .. Mr.AR.L.Sundaresan, Senior counsel for Mrs.Chitra Narayan For respondents .. Mr.P.S.Raman, Senior Counsel for Mr.T.K.Bhaskar for R1, R3 to R7 Mr.Vijay Narayanan, Senior Counsel for Mr.T.K.Bhaskar for R2 Mr.K.Murari, Senior Counsel for Mr/s.Udayarkar Rangarajan for R9 J U D G M E N T

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This Company Appeal is directed against the order dated 24.3.2014 on the file of the Company Law Board, Chennai, whereby and whereunder the Southern Regional Bench was pleased to reject the request made by the appellants for an interlocutory order to stay the Corporate Debt Restructuring (CDR) proposal till the disposal of the Company Petition.

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The appellants filed the Company Petition bearing No.C.P.16 of 2014 before the Company Law Board, Chennai under Sections 397 and 398 of the Companies Act, 1956 alleging certain acts of oppression and mismanagement in the affairs of the company arrayed as first respondent in this appeal.

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The appellants along with the Company Petition filed a Company

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Application No.1 of 2014 to pass an order of temporary injunction to restrain the respondents from implementing the CDR proposal duly accepted by the CDR Empowered Group, till the disposal of the Company Petition. However, after hearing the learned counsels on either side, the Company Law Board was pleased to pass a brief order dated 24.3.2014, declining to grant the interim order and posted the matter for hearing on 30.4.2014 at 2.30 p.m. The present appeal is directed against the said order.

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Thiru AR.L.Sundaresan, learned senior counsel appearing for the appellants took me through various proceedings, Auditors' Report and Balance Sheet, in his attempt to convince that the appellants have made out a prima facie case to stay all further proceedings pursuant to the CDR till the disposal of the Company Petition.

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Thiru P.S.Raman, Thiru Vijay Narayanan and Thiru K.Murari, learned senior counsels appearing on behalf of the respective respondents opposed the Company Appeal and raised substantial contentions, even with regard to the maintainability of the Company Petition.

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After hearing the learned senior counsel for the appellants and the learned senior counsels appearing on behalf of the respondents, I have suggested them as to whether the matter could be relegated to the Company Law Board to take up the Interlocutory Application for injunction at an early date after giving an opportunity to the respondents to file counter affidavit.

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The learned counsel for the appellants fairly submitted that in case the respondents agree to file their counter affidavit by 22.4.2014 and ready to take up the matter on 23.4.2014, he is agreeable for remanding the matter to the Company Law Board.

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Mr.P.S.Raman, learned senior counsel expressed his difficulty to argue the matter on 23.4.2014. According to the learned counsel, the pleadings would be exchanged by 22.4.2014 and the matter could be taken up on 25.4.2014. The learned senior counsel for the appellants is also agreeable for taking such a course.

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The respondents are directed to file counter affidavits in the Interlocutory Application filed in the Company Petition by 22.4.2014 so as to enable the appellants to file their response well before the date of hearing.

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The Company Law Board is directed to post the Interlocutory Application No.1 of 2014 in Company Petition No.16 of 2014 (which is the subject matter of this Company Appeal) for final hearing on 25.4.2014. The appellants and the respondents are directed to

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cooperate with the Company Law Board for an early disposal by arguing the matter on 25.4.2014 itself without taking adjournment. In view of the urgency expressed by the appellants, the Company Law Board is requested to dispose of the Interlocutory Application as expeditiously as possible, after concluding the arguments on 25.4.2014.

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The learned senior counsel for the appellants by placing reliance on the observation made by the Company Law Board in paragraph 4 of the order, submitted that the Bench has already observed that there is no prima facie case either in the main petition or in the application. According to the learned senior counsel, the Company Law Board must consider the matter independently.

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12.The Company Law Board appears to have made an observation in paragraph 4 of the order for the purpose of deciding the emergent relief prayed for by the appellants. The Company Law Board is directed to dispose of the Interlocutory Application in Company Petition No.16 of 2014 purely on merits and as per law without in any way being influenced by the observation made in its order dated 24.3.2014. It is also made clear that this order is made without prejudice to the contentions taken by the appellants and the defence taken by the respondents including the question regarding maintainability of the very Company Application filed before the Company Law Board.

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The Company Appeal is disposed of with the above direction. No costs. Consequently, the connected Applications are closed.

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11.04.2014

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This Matter having been listed under the Caption 'for being Mentioned ' on 22.04.2014 pursuant to the order of this Court dated 11.04.2014 and made herein in the presence of the aforesaid counsels on the either Side, the Court made the following order:

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This Company Appeal is posted today under the caption 'for being mentioned' at the instance of the appellants.

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The Company Appeal bearing No.4 of 2014 was disposed of by this Court by order dated 11.4.2014, on the basis of the understanding arrived at between the parties that counter affidavits would be filed in all the Interlocutory Applications on or before 22.04.2014 so as to enable the Company Law Board to take up the applications on 25.4.2014. However, the order dated 11.4.2014 indicated as if the direction was to dispose of only the Company Application No.1 of 2014. However, it is a matter of record that arguments were heard by this Court in respect of all the Interlocutory prayers made in the Company Petition.

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The learned counsel for the appellants by taking me through the interim reliefs claimed in the Company Petition No.16 of 2014, contended that the appellants herein have prayed several interim prayers in the Company Petition and as such the understanding was to take up all the applications. The learned counsel wanted a direction should be issued to the Company Law Board to dispose of all the Interlocutory Applications pursuant to the order dated 11.4.2014.

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Mr.Vijay Narayanan, learned Senior Counsel representing Mr.T.K.Bhaskar, learned counsel for the second respondent submitted that the second respondent has already prepared the counter in Application No.1 of 2014. According to the learned senior counsel, in case all the Interlocutory Applications should be disposed of, the second respondent would require one week time to prepare the counter affidavit in the other Interlocutory Applications.

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The learned counsel appearing for the ninth respondent submitted that the ninth respondent has already filed counter in respect of all the Interim prayers and there would be no difficulty to take up the matter as scheduled.

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There is no dispute that the appellants have prayed several interim reliefs in Company Petition NO.16 of 2014. It is also a matter of record that reference was made with regard to the interim reliefs claimed by the appellants in the order impugned in this appeal. However, there was specific reference only about Application No.1 of 2014 and the same resulted in indicating in the final order, which was passed on 11.4.2014 that the said Interlocutory Application requires to be decided by arguing the matter on 25.4.2014. The appellants wanted all the Interlocutory Applications to be taken up together. There would not be any difficulty to take up all the interim prayers. However, the difficulty expressed by the second respondent also should be looked into in view of the limited time available for filing counter affidavit in all the Interlocutory Applications. Therefore, I am of the view that appropriate order should be passed in this matter taking into account the contentions taken by the appellants.

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The respondents are given time upto 25.4.2014 to file counter in all the Interlocutory Applications/reliefs claimed in the Company Petition No.16 of 2014. The Company Law Board will now take up all the Interlocutory Applications for final disposal on 30.4.2014 instead of 25.4.2014. The parties are directed to cooperate with the Company Law

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Board for an early disposal of the Interlocutory Applications by arguing the matter on 30.4.2014.

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-s/d-

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Assistant Registrar(CsIII)
Dated:23/4/2014
/True Copy/
Sub Asst.Registrar
ajr
To
The Company Law Board,
Regional Bench, Chennai.
+1cc to M/s. Chitra Narayan, Advocate Sr 19140
+1cc to Mr.T.K.Bhaskar, Advocate Sr 19184
+1 cc to Mr.R.Murari, Advocate sr.19062
Comp. Appeal No.4 of 2014
aa23/4/2014

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Serum Institure of India v. Orchid Chemiclas and

Case brief

What is this about?

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Serum Institure of India v. Orchid Chemiclas and

Case brief

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