In a writ petition challenging an order passed by NCLT on an application under section 242(4) of the Companies Act, 2013, within a Company Petition filed under Sections 241-242 of the Companies Act, 2013, where the NCLT had allowed the application and granted an injunction against the petitioner, the Hon’ble High Court of Karnataka, set aside the order of the NCLT’s order. The High Court held that an order that is ex-facie unreasoned, cryptic, laconic and non-speaking order without application of mind, is subject to writ jurisdiction.
In the present case, an application moved by the respondent for interim relief, under section 241& 242 of the Companies Act, 2013, in response to a company petition filed under section 241& 242 of the Companies Act, 2013, was allowed by the NCLT, granting interim injunction against the Petitioners.
The petitioners being aggrieved by the said order, filed a writ petition under article 226 before the Hon’ble High Court, instead of filing an appeal under section 421 of the Companies Act, 2013 contending that the NCLT granted injunction in favour of respondent against the petitioners without assigning any reasons.
The Hon’ble High Court while setting aside the order of the NCLT noted that the impugned order is an unreasoned, cryptic, laconic and non-speaking order, lacking application of mind, thus violating the principles of natural justice and warranting interference by the Court under Articles 226 and 227 of the Constitution of India. The Court further stated that the respondent’s argument regarding the availability of equally efficacious alternative remedy by way of an appeal under Section 421 of the Companies Act, 2013, the does not hold as violation of principles of natural justice in the impugned order justifies the Court’s intervention despite the availability of an appeal.
Byju Raveendran v. General Atlantic Singapore TL Pte. Ltd.
[2024] 164 taxmann.com 172 (Karnataka)
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