2021 (12) TMI 1484 - HC - Companies Law

Violation of a principle of natural justice - no opportunity to explain and tender the proof that at the time of its striking off the Company was in operation, was given to his client - HELD THAT - Petitioner might approach the Tribunal to contend that impugned order be amended on the Tribunal not having allowed his client to adduce evidence of the company being in operation, in context of the report having said that his client may be put to strict proof. If the Tribunal is satisfied, it may amend impugned order. The amendment can be made within two years from date of order, so there is still time. Petitioner has not preferred appeal and, therefore, still entitled to approach the Tribunal. The writ petition is disposed of.

Summary

Issues involved:
Challenge to order passed by National Company Law Tribunal regarding striking off a company's name and restoration of the application for explanation and proof of company's operation at the time of striking off. Violation of natural justice in not providing an opportunity to explain and tender proof. Interpretation of Sections 420 and 421 of the Companies Act, 2013 regarding orders of the Tribunal, amendment of orders, and appeal process.

Analysis:
The judgment pertains to a challenge against an order passed by the National Company Law Tribunal (NCLT) regarding the striking off of a company's name and the subsequent application for restoration based on proof of the company's operation at the time of striking off. The petitioner, represented by Mr. Mohapatra, sought to set aside the impugned order dated 21st August, 2020, which referenced a report from the Registrar of Companies questioning the company's operation status at the time of dissolution. The petitioner's client, a Director of the company, wanted the NCLT to allow an explanation and provide proof of the company's operation.

During the proceedings, Mr. Mohapatra highlighted the lack of opportunity for his client to explain and provide proof, citing a violation of the principle of natural justice. The petitioner had not availed the statutory remedy of appeal, prompting the move to seek interference in writ jurisdiction from the Court. The relevant legal provisions under scrutiny were Sections 420 and 421 of the Companies Act, 2013, which govern orders of the Tribunal, amendment procedures, and the appellate process.

Section 421 of the Companies Act, 2013 provides for appeals from orders of the Tribunal to the appellate Tribunal, with further appeal options to the Supreme Court. Section 420 outlines the powers of the Tribunal to pass orders after giving parties a reasonable opportunity to be heard, amend orders within two years to rectify mistakes, and send copies of orders to all concerned parties. The petitioner was advised to approach the Tribunal to request an amendment of the impugned order based on the failure to allow the presentation of evidence regarding the company's operation status, as indicated in the report calling for strict proof.

The judgment emphasized that the petitioner still had the option to approach the Tribunal within two years from the date of the order for possible amendment, as no appeal had been preferred yet. The Court disposed of the writ petition with the aforementioned observations, providing guidance on the available legal recourse and the timeline for seeking redressal within the statutory framework of the Companies Act, 2013.