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Companies Law - Supreme Court - Case Laws
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- 2019 (7) TMI 1469
Reference to Arbitration - Compromise decree - Case of appellant is that the respondents refused to honour the terms and conditions of the compromise decree therefore, the appellant had filed Title Execution case No.4 of 2002 for execution of the compromise decree dated 24.12.2001 - diversion of stock by appellant's employee - it was also alleged that compromise decree was obtained by appellant by false inducement and misrepresentation and the same is vitiated on account of fraud. Whether the High Court was right in referring the parties to arbitration by observing that the appellant- Company admits the existence of arbitration clause in the agreement dated 01.05.1997? Whether the appellant is right in contending that the dispute raised in the Money Suit No.73 of 2003 is not covered by the arbitration clause and cannot be referred to ....... + More
- 2019 (6) TMI 332
Recasting and re opening of the accounts of IL&FS - suspension of Board of Directors of IL&FS - Whether in the facts and circumstances of the case, can it be said that the order passed by the learned Tribunal is illegal and/or contrary to Section 130 of the Companies Act? HELD THAT:- In the present case, the Central Government has already constituted SFIO and has also ordered investigation into the affairs of IL&FS and other group of companies and the investigation by the SFIO is under progress. It is also required to be noted that SFIO had also submitted its preliminary report. In the preliminary SFIO report, there are specific findings with respect to mismanagement of the affairs of the aforesaid companies, and also with respect to preparing fraudulent accounts. At this stage, it is also required to be noted that I....... + More
- 2019 (5) TMI 763
Oppression and mismanagement - allotment of shares - Declaration, cancellation and mandatory injunction against the requisition under section 169 of the Companies Act - allotment/transfer of shares - Sections 397/398 of the Act - voting rights - sections 286, 300 and 108 of the Companies Act - financial mismanagement or not - HELD THAT:- The Company Law Board as well as the High Court have found that the provision of notice under Section 286 of the Companies Act was not complied with. The High Court has observed that the interested Directors have participated in the meeting. Mr. R.P. Mittal and Mrs. Sarla Mittal were in a fiduciary capacity they could not participate in the decision where shares were transferred to their own group/company. Even if HQRL were a private limited company, the compliance with the provisions of section 300 of th....... + More
- 2019 (5) TMI 730
Offence of theft - oppression and mismanagement - Theft of documents - immovable property - respondents herein are alleged to have used the documents of appellant-Corporation without calling upon them to produce the documents in accordance with law - cognizance of the offence u/s 380 IPC - quashing of FIR u/s 482 Cr.P.C. HELD THAT:- The High Court, in our view, was not right in holding that the replication of the documents or use of information in the documents No.1 to 28 and the contents thereon are not corporeal property and would not amount to theft qua documents No.1 to 28. The documents and the replication of the documents and the contents thereon have physical presence and therefore, are certainly “corporeal property” and the same can be the subject matter of theft. In the present case, the documents are used in good fai....... + More
- 2019 (5) TMI 522
Applicability and construction of Section 396 of the Companies Act, 1956 - compulsory amalgamation of companies by a Central Government order - HELD THAT:- The Central Government’s satisfaction must be as to the conditions precedent mentioned in the Section as correctly understood in law, and must be based on facts that have been gathered by the Central Government to show that the conditions precedent exist when the order of the Central Government is made. There must be facts on which a reasonable body of persons properly instructed in law may hold that it is essential in public interest to amalgamate two or more companies. The formation of satisfaction cannot be on irrelevant or imaginary grounds, as that would vitiate the exercise of power. In the context of compulsory amalgamation of two or more companies, the expression “p....... + More
- 2019 (3) TMI 591
Principles of natural justice - case of appellant is that appellant’s right to be heard, audi alteram partem, one of the principles of natural justice, has been violated in as much as the appellant has neither been served with notice of appeal before the NCLAT nor been given a hearing before it - Held that:- In the instant case, the NCLAT, vide order dated 02.01.2019, issued notice both on the question of limitation as well as on the merit of the appeal. Subsequently, judgment was reserved vide order dated 08.01.2019 - It is to be noted that in the rejoinder affidavit before us the appellant has submitted that, pursuant to issuance of notice vide order dated 02.01.2019, neither did respondent no. 1 file process fee for issuance of summons in terms of the said order, nor was the same served upon the appellant. Thus the judgment which was r....... + More
- 2019 (2) TMI 971
Transfer of shares - Exercise of power under Section 111-A of the Companies Act, 1956 (as amended in 1988) and the Depositories Related Laws (Amendment) Act, 1997 - whether issued raised rightly or wrongly, has to be adjudicated by some forum – whether it be a civil suit or the exercise of jurisdiction by the then Company Law Board? Held that:- The effect of section 430 of Companies Act is that in matters in respect of which power has been conferred on the NCLT, the jurisdiction of the civil court is completely barred - It is not in dispute that were a dispute to arise today, the civil suit remedy would be completely barred and the power would be vested with the National Company Law Tribunal (NCLT) under Section 59 of the said Act. We are conscious of the fact that in the present case, the cause of action has arisen at a stage prior to th....... + More
- 2019 (1) TMI 1443
Right of a secured creditor to file a winding up petition after such secured creditor has obtained a decree from the Debts Recovery Tribunal [“DRT”] and a recovery certificate based thereon - Held that:- One of three instances in which a company shall be deemed to be unable to pay its debts. If the fact situation fits sub-clause (b) of Section 434(1), then a company may be said to be deemed to be unable to pay its debts. However, this does not mean that each one of the sub-clauses of Section 434(1) are mutually exclusive in the sense that once Section 434(1)(b) applies, Section 434(1)(a) ceases to be applicable. Also, on the facts of this case, we may state that the company petition was filed only on 03.07.2015, pursuant to a notice under Section 433 of the Companies Act, 1956 dated 15.04.2015. This petition was filed under Section 433(e)....... + More
- 2019 (1) TMI 1442
Winding up petition - financial creditor's application which has been admitted by the Tribunal - Held that:- Section 11 of the Code specifies which persons are not eligible to initiate proceedings under it. This Section is of limited application and only bars a corporate debtor from initiating a petition under Section 10 of the Code in respect of whom a liquidation order has been made. From a reading of this Section, it does not follow that until a liquidation order has been made against the corporate debtor, an Insolvency Petition may be filed under Section 7 or Section 9 as the case may be, as has been held by the Appellate Tribunal. Hence, any reference to Section 11 in the context of the problem before us is wholly irrelevant. We decline to interfere with the ultimate order passed by the Appellate Tribunal because it is clear that the....... + More
- 2018 (12) TMI 674
Transfer winding up proceedings pending before HC to the National Company Law Tribunal (“NCLT”) refused - Held that:- If there is any inconsistency between Section 434 as substituted and the provisions of the Code, the latter must prevail. We are of the view that the NCLT was absolutely correct in applying Section 238 of the Code to an independent proceeding instituted by a secured financial creditor, namely, the Alchemist Asset Reconstruction Company Ltd. This being the case, it is difficult to comprehend how the High Court could have held that the proceedings before the NCLT were without jurisdiction. On this score, therefore, the High Court judgment has to be set aside. The NCLT proceedings will now continue from the stage at which they have been left off. Obviously, the company petition pending before the High Court cannot be proceede....... + More
- 2018 (12) TMI 178
Arbitration proceedings - parties to the Arbitration agreement, being a body corporate, incorporated in Malaysia - why “an association” cannot be read with “body of individuals” - no “international commercial arbitration” as defined under Section 2(1)(f) of the Act for the petitioner to come to this Court - Held that:- Prior to the deletion of the expression “a company or”, there were three sets of persons referred to in Section 2(1)(f)(iii) as separate and distinct persons who would fall within the said sub-clause. This does not change due to the deletion of the phrase “a company or” for the reason given by the Law Commission. This is another reason as to why “an association” cannot be read with “body of individuals” which follows it but is a separate and distinct category by itself, as is understood from the definition of “person” as de....... + More
- 2018 (11) TMI 1408
Territorial jurisdiction - whether High Court of Madras has the territorial jurisdiction to entertain the suit filed by the appellants herein? - correctness of the order granting leave to the plaintiffs permitting them to institute the suit in Chennai, under Clause 12 of the Letters Patent - Held that:- Grant of leave is discretionary and for granting leave the Court is governed by the principle of forum conveniens. In the instant case, having regard to the fact that the holding company (defendant No.11) as well as the company on whose behalf the suit was filed (defendant No.2) were situated in Dubai and the shareholders of defendant No.2 were having disputes inter se, who were also residents of Dubai, the Courts in Dubai were better equipped to deal with such a dispute. It is the dispute between the plaintiffs and Defendant nos. 3 to 7 w....... + More
- 2018 (11) TMI 937
Offences involving serious financial frauds or economic misdemeano - offences punishable under the Companies Act, 2013 - Constitutional validity of the provisions of the Companies Act, 2013 - Held that:- The observations made in the impugned order may have far reaching consequences and deprive the Competent Authority or the Statutory Authority to proceed in the matter in accordance with the provisions of the Companies Act, 2013 in respect of investigations and including filing of complaint/police report concerning the offences involving serious financial frauds or economic misdemeanor, the impugned order, therefore, deserves to be stayed. We order accordingly. The operation of the impugned order of the High Court is stayed but the interim relief granted to Respondent No.1/Neeraj Singal limited to his release on personal bond shall remain ....... + More
- 2018 (10) TMI 1316
Interest on outstanding dues - Insolvency application pending before the NCLT - appellant submits that all amounts have been paid to the depositors within the extended period of time - Held that:- Learned counsel appearing on behalf of the respondent submits that penal interest is also attracted under Rule 17 at the rate of 18% per annum. Since the appellant has paid within the extended period of time, we do not agree to the same. It is, therefore, made clear that all amounts of interest at the rate of 12/12.5% per annum from the date of maturity till the actual payment should be released to the depositors notwithstanding any other impediment in the way. The amount to be disbursed to the depositors should be made within a period of twelve weeks from today. The insolvency application pending before the NCLT will be disposed of on its own merits without reference to the impugned judgment of this Court.
- 2018 (10) TMI 484
Taking contrary stand in the proceedings - Substitution in place of IFCI as a secured creditor - After the claim of the appellant of being a secured creditor was rejected by the Company Judge, and the appellant realised the unsustainability of its claim in the law, it made a complete volte face from its earlier stand and surprisingly, contrary to its own pleadings, now contended that it had never sought the status of a secured creditor under the SARFAESI Act. Held that:- The contention of the appellant that it had never sought substitution as a secured creditor under the SARFAESI Act is additionally belied from the recitals contained in the order dated 07.09.2015. Time and again this court has held that the recitals in the order sheet with regard to what transpired before the High Court are sacrosanct. A litigant can take different stands....... + More
- 2018 (10) TMI 229
Cartilisation - Bid rigging - Violation of provisions of Section 3(3)(d) of the Competition Act, 2002 - appellants/suppliers of Liquefied Petroleum Gas (LPG) Cylinders to the Indian Oil Corporation Ltd. (for short, ‘IOCL’) had indulged in cartilisation, thereby influencing and rigging the prices - penalties inflicted on the suppliers stand reduced - collusive tendering - situation of oligopsony - Held that:- 12 new entrants cannot be considered as entry of very few new suppliers where the existing suppliers were only 50. Identical products along with market conditions for which there would be only three buyers, in fact, would go in favour of the appellants. The factor of repetitive bidding, though appears to be a factor against the appellants, was also possible in the aforesaid scneario. The prevailing conditions in fact rule out the poss....... + More
- 2018 (9) TMI 402
Properties situated in Aamby Valley City not in a position to be auctioned - no response with regard to the notice inviting tender - respondent-contemnor submitted that it has entered into negotiation with M/s. Sai Rydam Realtors Pvt. Ltd. and M/s. Prime Downtown Estates Pvt. Ltd. Mr. as rep resented by Paras Kuhad - Held that:- As accepted by Mr. Kuhad that a Demand Draft amounting to ₹ 99 crores has been handed over to Mr. Pratap Venugopal, learned counsel assisting Mr. Arvind P. Datar, learned senior counsel appearing for SEBI. Be it noted, the agreed amount is ₹ 982.80 crores. He further submits that a sum of ₹ 200 crores shall be deposited in the SEBI-Sahara Refund Account on or before 24.07.2018 and another sum of ₹ 200 crores shall be deposited on or before 16.08.2018. The balance amount shall be deposited o....... + More
- 2018 (8) TMI 836
Transfer of shares - fraudulent activity of registrar of company - forging the appellant’s signature for issue of duplicate share certificates in 2012 - The appellant, sometime in 2014, came to know through the Company Secretary of Respondent No.1 that duplicate share certificates had been given to somebody else who had subsequently transferred them to a third party. As soon as she became aware of the fraud that was perpetrated on her, the appellant requested the Company to issue revalidated fresh share certificates for the said 903 equity shares on 17.09.2014. Since this was not done, despite repeated reminders for the same, a Company Petition was filed on 31.07.2015 before the Company Law Board, which was then taken up under the Amended Act by the National Company Law Tribunal. Held that:- the Appellate Tribunal in relegating the appell....... + More
- 2018 (5) TMI 1921
Appellant offers to furnish Irrevocable Bank Guarantee - HELD THAT:- In view of offer of the appellant that the bank guarantee will be furnished within three weeks from today, the NCLAT may consider the matter afresh in the light of the said bank guarantee. In the meantime, further proceedings will remain stayed.
- 2018 (5) TMI 931
Satyam Scam - Penalty for insider trading - Prohibition of Insider Trading Regulations, 1992 - appellant was roped in by the Whole Time Member of the SEBI as well as the Appellate Tribunal as he happened to be an executive director of SCSL from 1993 upto 31.8.2000 and a non-executive director from 1.9.2000 to 23.1.2003. He also happens to be the “co-brother” of B. Ramalinga Raju as the two of them have married two sisters - Held that:- We are of the view that from the mere fact that the appellant promoted two joint venture companies, one of which ultimately merged with SCSL, and the fact that he was a co-brother of B. Ramalinga Raju, without more, cannot be stated to be foundational facts from which an inference of reasonably being expected to be in the knowledge of confidential information can be formed. The fact that the appellant was t....... + More
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