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Companies Law - Case Laws
Showing 41 to 59 of 59 Records
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2020 (2) TMI 820 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Oppression and Mismanagement - siphoning of funds - alteration of shareholder's composition - HELD THAT:- The interim order having already passed, no further order is required to be passed and the impugned order dated 23rd August, 2019 passed by the Tribunal stands substituted by the interim order already passed by this Appellate Tribunal. The said interim order shall continue till the pendency of the petition under Sections 241-242 of the Companies Act, 2013 - So far as the impugned order dated 27th September, 2019 is concerned, the Tribunal has merely issued notice under Section 45 of the Arbitration & Conciliation Act, 1996.
The impugned order dated 27th September, 2019 need not be interfered with - Tribunal is required to decide the Interlocutory Applications filed under Section 45 after hearing the parties without being influenced by the order passed by the Tribunal or this Appellate Tribunal.
The question does not arise at this stage and may be raised and decided by the Tribunal at appropriate stage - appeal disposed off.
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2020 (2) TMI 819 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Oppression and Mismanagement - siphoning of funds - allegation that shares are not listed at Pune Stock Exchange, Siphoning of investors money, Company has not issued financial statement after 1995, Company changes registered office frequently - HELD THAT:- t is clear that in the terms of provisions of Section 62(1) of the Companies Act, 1956 the persons who are authorised to issue or prospectus of the public/persons to subscribe for shares in/or debentures of the company shall be liable to pay compensation to every person who subscribes any shares in/or debentures of the company on the faith of prospectus for any loss or damage. It is also found that the company came out with Initial Public Offer and issued prospectus to raise public funds on 10.10.1996. Thereafter the team of directors has completely changed. The initial promoters of the company are not
We have carefully examined the balance sheets and financial statements for the financial year 2014-15 and 2015-16 which shows that the company has not carried out any business. We have also found that the respondent company has not filed any statements before the ROC since its incorporation. However, the ROC has not taken any action against the company and its directors. We have also seen that the directors have siphoned the money between 1996 to 2004. However, the inspection was ordered on 20th March, 2017 and the report submitted on 10.5.2018 and supplementary report on 13.8.2018 and the Inspecting Officer is unable to trace out real culprits i.e. the then directors.
NCLT has passed the order against the appellant under 2nd proviso to sub- Section (5) of 140 of the Act which came into force on 1.6.2016. However, the appellant issued report for the FY 2014-15 and 2015-16 i.e. prior to the provision came into force. Therefore, NCLT cannot invoke jurisdiction retrospectively - The appellant was appointed on 12.3.2014 as statutory auditor of the Respondent No.2 company. The appellant issued audit report for the Financial Year 2014-15 and 2015-16 on 5.9.2015 and 05.09.2016 respectively. The appellant has issued the audit report for the FY 2015-16 on 5.9.2016 before that the 2nd proviso to sub-section (5) of Section 140 of the Act came into force with effect from 1.6.2016. Hence NCLT can exercise the powers in above referred provision.
The act of the appellant is certainly a negligent act but there is no material on record to infer that he has acted fraudulently and colluded with the directors of the company in relation to affairs of the company or he has misused his position as statutory auditor of the company - the findings of the NCLT are not sustainable in law as well as in facts.
Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 762 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Financial mismanagement - manipulation of annual financial statements - siphoning off of funds - HELD THAT:- Smt Shashi Gupta wife of appellant No.2 was appointed and was paid salary of ₹ 50000/- per month and before her appointment no prior approval was obtained. Appellants are unable to convince why her name is not mentioned in the list of employees of the appellant company.
NCLT has rightly held that there is deadlock in the company and there is no possibility that the deadlock can be resolved and the business can be operated with the shareholder agreement, MOA and AOA of the appellant company. As the NCLT has allowed the company petition and directed that the increase in authorised capital from ₹ 5 lacs to ₹ 40 lacs by Resolution dated 27.9.2013 is illegal and void. Consequently, Form II filed with the Registrar of Companies is cancelled. NCLT has further directed that there are instances regarding manipulation of annual financial statements and siphoning of funds from the appellant company, therefore, direct to appoint an independent auditor who can perform audit of the financial mismanagement and siphoning of the funds of the appellant company.
Appeal dismissed.
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2020 (2) TMI 761 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Principal of casus omissus - Amalgamation of the Limited Liability Partnership firm into Private Limited company - Section 421 of the Companies Act, 2013 - whether by applying the principal of casus omissus a Indian LLP incorporated under the LLP Act 2008 can be allowed to merge into a Indian Company incorporated under the Act, 2013?
HELD THAT:- It is apparent that as per Section 232 of Act, 2013 a company or companies can be merged or amalgamated into another company or companies. The Act, 2013 has taken care of merger of LLP into company. In this regard Section 366 of the Act, 2013 provides that for the purpose of Part I of Chapter XXI the word company includes any partnership firm, limited liability partnership, cooperative society, society or any other business entity which can apply for registration under this part. It means that under this part LLP will be treated as company and it can apply for registration and once the LLP is registered as company then the company can be merged in another company as per Section 232 of the Act, 2013 - Section 55 to Section 57 of Chapter X of Limited Liability Partnership Act,2008 provides conversion from firms, private company and unlisted public company into limited liability partnership.
NCLT rightly held that Act 1956 provides that any body corporate can merge into a company. However Act 2013 provides that foreign company or body corporate incorporated outside India can be merged into a Indian company.
Applicability of principal of casius omissus - HELD THAT:- On reading of the provisions of Act 2013 as a whole in reference of conversion of Indian LLP into Indian company there is no ambiguity or absurdity or anomalous results which could not have been intended by the legislature. The principal of casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself. There is no such occasion to apply the principal of casus omissus.
Thus we are unable to convince with the interpretation of NCLT.
The legislature has enacted provision in the Companies Act, 2013 for conversion of Indian LLP into Indian Company and vice versa in the Limited Liability Partnership Act, 2008. Thus there is no question infringement of any constitutional right of the Respondent - impugned order is not sustainable in law - Appeal allowed.
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2020 (2) TMI 639 - CALCUTTA HIGH COURT
Dismissal of suit - suit dismissed on the ground that the cause of action of the suit is barred under the provisions of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Code of 2016 deals not only with corporate entities but also with individuals. Therefore, Section 231 of the Code of 2016 takes into account a situation where the proceeding may be pending under the Code of 2016 against an individual also. Section 231 of the Code of 2016 is in Part-5 dealing with miscellaneous matters. Section 231 encompasses both a situation where there is an insolvency proceeding against a corporate entity as also against a person who is not a corporate entity. Section 231 of the Code of 2016 also prescribes a bar on the Civil Courts to assume jurisdiction in respect of any matter in which, the Adjudicating Authority or the Board is empowered by or under the Code of 2016 to pass any order - In view of the provisions of Sections 63 and 231 of the Code of 2016, the instant suit is barred by law.
Suit dismissed.
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2020 (2) TMI 610 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Striking off the name of the Appellant Company from the Register of the Companies - failure to file due returns under the provisions laid down under Section 403(1) proviso-1 of Companies Act r/w Companies (Registration of Offices and Fees) Rules, 2014 - HELD THAT:- The Appellant Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant Company is not carrying on any business or operations. Hence, we are of the opinion that the order passed by the NCLT, Kolkata Bench as well as ROC, Jharkhand is not sustainable in law.
The name of the Appellant Company be restored to the Register of Companies subject to the specific compliances - appeal allowed - decided in favor of appellant.
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2020 (2) TMI 501 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Striking off of name of the appellant company from the Register of Companies - proceedings under Section 560 of the Companies Act 1956 - HELD THAT:- Undisputedly the appellant company has not filed the financial statements and returns since 2006 onwards. Therefore, ROC after serving the notice on appellant company has struck off the name of the company assuming that the company is not carrying on any business or operation - Except the failure to file the financial statements and returns, there is no complaint against the appellant company. Appellant has placed on record the annual returns for the year 2006 onwards till 2017.
The appellant company is having asset and due to personal difficulties of the Directors they could not start business. In such circumstance, the order passed by National Company Law Tribunal is not sustainable in law - name of the appellant company be restored to the Register of Companies subject to the following compliances.
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2020 (2) TMI 479 - BOMBAY HIGH COURT
Whether respondent No.3-Mr. Himanshu Patwa, director of Nak Engineering Company Private Limited, knowingly and intentionally had sworn false affidavits in Notices of Motion so as to say that respondent No.2-Company was the successor of respondent No.1Firm under Part IX of the Companies Act, 1956 which tantamounts to giving or fabricating false evidence at any stage of judicial proceedings?
HELD THAT:- The answer is in the affirmative for the reasons to follow.
It is quite clear that after having gone through the entire material on record, prima facie opinion can be formed that an inquiry needs to be initiated into an offence/s referred to in clause (b) of sub section (i) of section 195 Cr. P.C. It must be noted that an inquiry contemplated in sub section (i) is not for finding whether the respondents are guilty or not but it is restricted only to the extent as to whether it is expedient in the interest of justice to inquire into the offence which appears to have been committed.
The learned trial Judge has erred not only in fact but also in law to take into consideration the true scope and ambit of Part IX of the Companies Act, 1956 as well as clause (b) of sub section (i) of Section 565 of the said Act by reaching an erroneous conclusion in the impugned order. The impugned order, therefore needs to be quashed and set aside and as such, it stands quashed and set aside.
Thus, there is a prima facie case and deliberate falsehood on a matter of substance. There is an adequate foundation for framing a charge. It is, therefore, expedient in the interest of justice that there should be a complaint - impugned order set aside - appeal allowed.
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2020 (2) TMI 407 - DELHI HIGH COURT
Approval of the proposed Scheme of Compromise and Arrangement - Mobilisation of funds - HELD THAT:- When a company is ordered to be wound up, the assets of it are put in possession of the Official Liquidator. The assets become custodia legis. The follow-up, in the absence of a revival of the company, is the realisation of the assets of the company by the Official Liquidator and distribution of the proceeds to the creditors, workers and contributories of the company ultimately resulting in the death of the company by an order under Section 481 of the Act, being passed. But, nothing stands in the way of the Company Court, before the ultimate step is taken or before the assets are disposed of, to accept a scheme or proposal for revival of the Company. In that context, the court has necessarily to see whether the scheme contemplates revival of the business of the company, makes provisions for paying off creditors or for satisfying their claims as agreed to by them and for meeting the liability of the workers in terms of Section 529 and Section 529A of the Act. Of course, the court has to see to the bona fides of the scheme and to ensure that what is put forward is not a ruse to dispose of the assets of the company in liquidation.
In the present case, the Scheme as a whole is just, fair and reasonable. There is no violation of any statutory provisions. It is in the interest of justice that the Scheme is approved subject to supervision of this court through a retired Judge of this Court.
The scheme is approved - application allowed.
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2020 (2) TMI 406 - DELHI HIGH COURT
Bail application - investigation by SFIO - Section 212 (6)(ii) of the Companies Act, 2013 - HELD THAT:- The present bail application has to be decided on the basis of its own facts and keeping in mind the proposition of law that economic offences constitute a class part and need to be visited with a different approach in the matter of bail and since these kind of offences cause irreparable harm to the economic system and, therefore, required to be considered seriously.
Perusal of Section 212 (7) of the Companies Act, 2013 reveals that limitation on granting bail is in addition to the Limitation provided under Section 439 Cr.P.C. This court has now to decide the bail application in the light of the provisions of bail enunciated in the Companies Act as well as Cr.P.C. This court has, thus, to be satisfied that there are reasonable grounds for believing that petitioner is not guilty of the offences alleged against him and that he is not likely to commit any offence while on bail. It is a settled law that at the time of consideration of bail application, it is neither necessary nor desirable to weigh the evidence meticulously to arrive at a positive finding as to whether or not the accused has committed offence. What is to be seen is whether there is reasonable ground for believing that accused is not guilty of the offence(s) he is charged with.
There are serious allegations against the petitioner regarding manipulation and fabrication of financial documents by way of which, the fund was siphoned off to other companies and therefore, it cannot be held that there are no reasonable grounds to believe that accused is not guilty of the offences alleged against him - in view of the allegations appearing on record and active participation of the petitioner in alleged commission of the offence i.e. in fabrication of documents in opening LCs and discounting of the same, manipulation of accounts and siphoning of the funds worth several crores and keeping in mind the fact that all fraudulent activities were allegedly planned in advance and executed carefully and with deliberate design and further taking overall view of the matter, it is difficult to hold that petitioner will not commit any offence under the Act while on bail.
On the basis of allegations appearing on record, it cannot be held that there are no reasonable grounds to believe that the accused is not guilty of the offences alleged against him and that he is not likely to commit any offence under the Act while on bail and thus, twin conditions for grant of bail as envisaged under Section 212(6) (ii) are not satisfied.
This court is of the opinion that offences alleged against the petitioner are serious in nature which involve fraud to the tune of several crores and the offence being an economic one which affects the economy of the nation, the petitioner is not entitled for bail under Section 439 Cr.P.C. - Petition dismissed - decided against petitioner.
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2020 (2) TMI 401 - PATNA HIGH COURT
Quashing of FIR - allegation is that the accused persons have with an intention and conspiracy planned to cheat the people and after opening branch offices and collecting money from the customers they have fled away with some of ₹ 5 Crores approximately - HELD THAT:- Matter referred to the Hon’ble Division Bench of this Court for consideration:
Whether sub-section (2) of Section 50 of the Bihar Self Supporting Co-operative Societies Act, 1996 may be interpreted to mean and understand that the words “other legal proceedings” occurring thereunder create a bar in lodgment of a first information report against the co-operative society registered under the said Act, its Director(s), Officer(s), Manager(s) or a member of the society and that it would also cover “the criminal proceeding” against them?
Let the records be placed before Hon’ble the Chief Justice for referring the aforesaid questions to the Hon’ble Division Bench of this Court.
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2020 (2) TMI 393 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Restoration of name of the Company in the Register of Companies - name was struck off due to defaults in statutory compliances, namely, failure to file Financial Statements and Annual Returns from financial year ended 31.3.2015 to 31.3.2017 i.e. for three years - HELD THAT:- On hearing the submissions of the Ld. Counsel appearing on behalf of Petitioner, perusal of the Report of Registrar of Companies, Mumbai and the documents submitted, it is clear that the Company is in operation, company has its Assets & Current Liabilities, unless otherwise the relief sought is granted to the company, grave hardship and irreparable loss and damage shall be caused to the said company - we are satisfied that the prayer sought by the Petitioner company deserves to be allowed.
The name of company is restored in ROC - appeal allowed - decided in favor of appellant.
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2020 (2) TMI 390 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Jurisdiction - siphoning of funds - power of Adjudicating Authority to direct the SFIO to investigate about the fraud or siphoning of funds, if any, committed by the Company (Corporate Debtor) - HELD THAT:- Similar issue decided in the case of LAGADAPATI RAMESH AND M/S. COMMUNE PROPERTIES INDIA PVT. LTD. & ORS. VERSUS SMT. RAMANATHAN BHUVANESHWARI & ORS. [2019 (9) TMI 1316 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that the Adjudicating Authority was not competent to straight away direct any investigation to be conducted by the 'Serious Fraud Investigation Office'. However, the Adjudicating Authority (Tribunal) being competent to pass order under Section 213 of the Companies Act, 2013, it was always open to the Adjudicating Authority/Tribunal to give a notice with regard to the aforesaid charges to the Promoters and others, including the Appellants herein and after following the procedure as laid down in Section 213, if prima facie case was made out, it could refer the matter to the Central Government for investigation by the Inspector or Inspectors and on such investigation, if any, actionable material is made out and if the Central Government feels that the matter requires investigation through the 'Serious Fraud Investigation', it can proceed in accordance with the provisions as discussed above. Impugned order shows parties have been heard on the charges claimed by the 'Resolution Professional'.
The matter remitted to the Central Government for investigation through 'Inspector' or 'Inspectors' to find out whether one or other promoter or officer or employee or any other person related to the company or companies in question have violated the provisions of Section 70 of the 'I&B Code' - The matter is referred to the Secretary, Ministry of Corporate Affairs to get the matter investigated by 'Inspector' or 'Inspectors' following the procedure in terms of Section 213 of the Companies Act, 2013 read with Section 70 of the 'I&B Code' and Section 447 of the Companies Act, 2013 or any other offence punishable under Chapter VII of the 'I&B Code'.
Appeal disposed off.
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2020 (2) TMI 382 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Rectification of register of members - transfer of shares - restoration in the post of directorship of the petitioner - HELD THAT:- No doubt certain share certificates carries two directors signatures excluding authorised signatory and signatures on back side transfer of shares is also signed by one authorised signatory and sometime by two authorised signatories - In any case appellant itself is telling that some of the share certificates are forged.
Any member of a company can redress their relief in cases of oppression vide Chapter XVI of the Companies Act, 2013. NCLT order not to alienate the assets of the company is till further order only.
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2020 (2) TMI 381 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Striking of the name of the appellant company from Register of Companies - HELD THAT:- The Appellant has replied vide its letter dated 29.3.2017 (Page 290 of the appeal) and the said letter has the acknowledgement of ROC, Pune. Therefore, it can not be said that the appellant has not replied - Further there is nothing on record that the compliance of Section 248(6) of the Companies Act, 2016 has been made by the Respondent. This fact has also not been noted in the NCLT order. Without complying this provision the ROC vide FORM No.STK5 dated 7.4.2017 has struck off the names of the various companies including the appellant No.2 company. We note that the company is having FDR with the Bank and Performance guarantee has been given and income tax is being deposited on the interest of income.
The name of the appellant No.1 company shall be restored to the Register of Companies subject to the following compliances - Appellants shall pay costs of ₹ 25,000/- to the Registrar of Companies, Pune within 30 days - Appeal allowed.
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2020 (2) TMI 377 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Jurisdiction - power of SFIO to investigate the matter - diversion/siphoning of funds - HELD THAT:- When there is siphoning and diversion of funds running into crores, directions issued to the SFIO to investigate should have been followed rather than filing of application for recalling the order, on account of any technical issue of obtaining permission from the Central Government. The same could be done by the SFIO itself as the siphoning of funds is in respect of public money which is noticed in the order dated 04.02.2019 and extracted in the aforesaid order.
Needless to say that when huge public money and public interest are involved, Tribunal should in the interest of justice iron out procedural/Technical objections to advance substantial justice - Application dismissed.
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2020 (2) TMI 300 - BOMBAY HIGH COURT
Maintainability of petition - alternate equally efficacious remedy of filing an appeal - sections 32 and 61 of the IBC - HELD THAT:- In the present case, to consider the grievance of the petitioners that the impugned order is a nullity and the contra version that it is not a nullity, but at best vitiated by a irregularity, we would be required to go through the facts in detail. On the records being summoned and perused by us, we realised that there is indeed a serious factual dispute. A Writ Court would ordinarily abstain from going into and deciding such disputes, when parties are not prejudiced and the law provides for an appeal. In IBC, the (NCLAT) Appellate Authority is empowered to consider and decide all questions of fact and law. No general rule can be said to be laid down in the judgments brought to our notice. We do not think that we should, therefore, entertain the present petition.
The preliminary objection raised to the maintainability of the Writ Petition and proceed to dismiss it on the ground that the petitioners have alternate and equally efficacious remedy of filing on Appeal to the National Company Law Appellate Tribunal and in that appeal, it can raise all grounds, including the one raised in the Memo of the present petition.
The original record and proceedings be returned by the Registry to the advocate appearing for the Union of India.
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2020 (2) TMI 295 - GUWAHATI HIGH COURT
Winding up of company - inability to pay the admitted debts - HELD THAT:- The law regarding scope and ambit of the Company Court whhile exercising jurisdiction under Section 433(e)(f), 434 and 439 of the Companies Act has been summed up by the Hon’ble Supreme Court of India in the case of IBA HEALTH (I) (P.) LTD. VERSUS INFO-DRIVE SYSTEMS SDN. BHD. [2010 (9) TMI 229 - SUPREME COURT], wherein it has been held that where there is a substantial dispute as to the liability and obligation, petition for winding up should not be entertained. It was observed that, a dispute to be substantial and genuine, has to be bona fide and not spurious.
The issue raised in this petition pertains to the liability of the respondent company and not the inter se liability of the two groups over their right on the shares of the respondent company. The respondent company is a legal entity and an existing company within the meaning of Companies Act, 1956. The claim in this petition is against the respondent company and not the DCBL group or the BW group, as the case could be - the respondent company cannot deny its liability to pay the dues of the petitioner firm by seeking refuge under clause 14.15.1 of the agreement dated 16/01/2012.
Having regard to the peculiar facts and circumstances of the case, more particularly the fact that there is an ongoing dispute between the DCBL and the BW Group pertaining to the implementation of share holders agreement, the respondent company is granted 60 (sixty) days’ time, with effect from the date of this order, to discharge its admitted debt by paying the amount of ₹ 1,77,03,540.68 to the writ petitioner - It is made clear that in the event of failure on the part of the respondent company to make full and final payment of ₹ 1,77,03,540.68 to the writ petitioner within the time frame provided by this Court, necessary order as per law shall be issued for advertising the petition.
Let this petition be listed again, after 60(sixty) days, for necessary orders.
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2020 (2) TMI 194 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Oppression and mismanagement - diversion of funds - siphoning of funds - right to subscribe additional shares - HELD THAT:- Through the various submissions made by both the parties and finally reached the conclusion that the minority shareholders are requiring exit from the Company but that cannot provide a ground for denying their right to subscribe additional shares in proportion to their share holding vis-à-vis that of the total paid up capital of the Company as required under Section 81 of the Companies Act, 1956 (Part III).
There are certain oppression and mismanagement. The relationship between the Majority Shareholders & Minority Shareholders are strained. Hence, there is a need for valuation report to be done by Registered valuer and the majority shareholders are free to buy the shares of the minority shareholders or otherwise - the Balance Sheet from 2005 to 2008 reflects Reserve and Surplus is getting strengthened. However, parties have not submitted updated audited Balance Sheet, so that it can be commented upon.
Appeal dismissed - decided against appellant.
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