|
Advanced Search Options
Companies Law - Case Laws
Showing 141 to 160 of 15082 Records
-
2024 (10) TMI 402
Dismissal of application under Order VII Rule 11 of CPC - name of the respondent/plaintiff company had been struck off from the Register of Companies in terms of Section 248(5) of the Companies Act, 2013 - HELD THAT:- As per Section 248 (1) to (5) of the Act, a mechanism has been provided whereby the Registrar of Companies on finding the grounds which are enumerated under Section 248 (1), can issue notice to the company and its directors and after adopting the appropriate procedure, it may proceed to strike off the name of the company from the register under sub-section (5) thereof.
On a careful reading of the words in Section 250 of the Act by invoking the golden rule of construction that the words in the statute should be interpreted in their ordinary, normal and grammatical meaning, is that even if the name of a company is struck off from the register, it remains operational in so far as it can pursue legal remedies for realisation of the ‘dues’ of the said company against its debtors, which have either crystalised or remain uncrystallised, arising from any liability or obligation of its debtors to the company, but even the creditors can pursue legal remedies against the said company for the payment and discharge of its liabilities or obligations arising from any contract or statutory implications.
This Court finds that the mere striking-off of the name of the respondent-company from the register by the Registrar of Companies does not automatically invalidate or renders flawed the civil suit filed by the respondent/plaintiff. In the instant matter, apparently the cause of action existed on the day the suit was instituted. Accordingly, the respondent/plaintiff company can pursue its remedies in law even after its name being struck off from the register by the Registrar of Companies.
The present civil revision petition is dismissed.
-
2024 (10) TMI 296
Seeking to restore the name of the company in the Register of Companies maintained by the Registrar of Companies, Mumbai - company had failed to file its Financial Statements and Annual Returns for the Financial Years w.e.f. 31.03.2014 to 31.03.2018, i.e. for five years - HELD THAT:- In the present case, the company was incorporated in the year 2007 and admittedly, they had filed Audited returns/Accounts till 2013 and has an asset of Rs. 3 Crores, as on 20.04.2008 viz. 30,000 Convertible Preference Shares of Rs. 1000/- each as on 20.04.2008 and that the Appellant company would not be able to recover such amount from M/s Victoria Enterprises Limited in case the name of the Appellant company is not restored. The medical history of one of the Directors of the company showing the reason for not filing of the returns and for nil also gone through. operation of the company during the period from 2014 till 2019. Thus no prejudice shall be caused to anyone if the name of the company is restored.
The impugned order dated 14.10.2019 passed by the Ld. NCLT in CP No. 1437/2019 is thus set aside and the name of the said company M/s Aster Venture Pvt. Ltd. is restored in the Register of Companies as maintained by Registrar of Companies subject to fulfilment of compliances fulfilled - appeal allowed.
-
2024 (10) TMI 16
Sanction of scheme of compromise and arrangement filed under Section 230 of the Companies Act, 2013 - HELD THAT:- The applicants have referred the scheme of arrangement which was filed by the CD under section 230 of Companies Act, 2013. The counsel representing the Financial Creditors had already opposed the issuance of notice in the Intervention Petitions filed by the applicants and pressed for the dismissal of the applications, arguing that there are no provisions in the Insolvency and Bankruptcy Code (IB Code) for intervention at the pre-admission stage. The submissions of the Financial Creditors were also recorded in the order dated 15.02.2024. Hence, the allottees/ Financial Creditors who had filed the main Company Petition cannot be directed to consider the scheme of Arrangement proposed by the Corporate Debtor.
On an application filed under Section 7 of the IBC, 2016, this Adjudicating Authority merely has to ascertain existence of financial debt and its default. The issue of maintainability has already been concluded by Hon’ble Supreme Court. The submissions of the applicants, asserting that the admission of the company petition would severely impact and prejudice the rights of the applicant, leading to the corporate death of the company, cannot be entertained because there are no provisions in the IB Code that provide for intervention by a third party, especially at this stage where arguments of the Financial Creditor have concluded, and arguments of the Corporate Debtor are in progress and soon to be concluded.
Furthermore, this application is filed by companies holding units in the Corporate Debtor project, whereas the main company petition is filed by individual allottees whose interests will also be prejudiced if we entertain the present application because it will lead to unnecessary delay.
The present application also appears to be similarly motivated, filed with the intention of delaying the proceedings which this Adjudicating Authority cannot entertain - petition dismissed.
-
2024 (9) TMI 1613
Seeking approval of the Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulation - HELD THAT:- All the requirements of Section 30(2) are fulfilled and no provision of law for the time being in force appears to have been contravened.
Section 30(6) of the Code enjoins the Resolution Professional to submit the Resolution Plan as approved by the CoC to the Adjudicating Authority. section 31 of the Code deals with the approval of the Resolution Plan by the Authority if it is satisfied that the Resolution Plan as approved by the CoC under section 30(4) meets the requirements provided under section 30(2) of the Code. Thus, it is the duty of the Adjudicating Authority to satisfy itself that the Resolution Plan as approved by the CoC meets the requirements.
The instant Resolution Plan meets the requirements of Section 30(2) of the Code and the Regulations 37, 38, 38(1A) and 39(4) of the CIRP Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law.
The Application is allowed and the Resolution Plan submitted by “Mr. Harry Dhaul” is hereby approved.
-
2024 (9) TMI 1612
Oppression and mismanagement - Illegal sale of land of the Company - illegal allotment of 17,29,000 equity shares - illegal appointment of Respondent No.4 as Director of the Company - illegal eemoval of Petitioner No.1 as Director - correctness of Amendment of Memorandum and Articles of Association - legality of Extra-ordinary General Meetings held and resolutions passed - Recovery of syphoned money with interest.
Whether the acts or conduct of respondents are prejudicial and oppressive to the petitioners or /and whether the affairs of the Company are being conducted in a manner prejudicial to the interests of the Company as alleged by the petitioners? - HELD THAT:- In view of the written and oral submission made by both the parties and after perusal of the records as mentioned, the petitioner has not pointed out any irregularity in the process of sale and the main contention of the petitioner is about the valuation of the land.
The Petitioners have failed to point out any irregularity in the sale of land assets but for the price at which they are sold. As far as the issue of selling properties at lower than market value is concerned, there are no illegality in it since the stamp duty has been paid at applicable valuation and rates. However, the moot question before us is whether this act of selling land at a price lower than the market rate is an act of oppression and mismanagement. Thus it is a common practice that many companies/ individuals take conscious decisions to sell property at a price lower than the market value in view of exigencies and other factors. It is clear from the facts produced before us that Company was in urgent need of funds at that point of time - keeping in view that consent of Petitioner no 1 was also there in fixing the cut off sale price, there are no act of oppression and mismanagement for selling the land parcels at a price lower than market price. Therefore, keeping in view the aforesaid facts, there are no act of oppression and mismanagement in the sale of two land parcels as aforesaid by the Company to Respondent No.29.
There are merit in the submissions made by respondents that though lease deed was signed to lease out the company to Messrs Padmavatahi Ispat but it was never put into action and ultimately the said lease deed was cancelled and advance lease rent was returned to lessee, therefore this can not be an act of oppression and mismanagement.
The acts or conduct of respondents are not prejudicial and oppressive to the petitioners and affairs of the Company are also not being conducted in a manner prejudicial to the interests of the Company.
Whether the alleged allotment of 17,29,000 equity shares made on 19th May 2008, 10th September 2008 and 13th October 2008 to the respondents is illegal and void ab initio and thus necessitate the need for rectification of Register of Members? - HELD THAT:- The alleged allotment of 17,29,000 equity shares made on 19th May 2008, 10th September 2008 and 13th October 2008 to the respondents is not illegal and void ab initio and thus does not necessitate any need for rectification of Register of Members.
The present petition being devoid of any merit or substance is liable to be dismissed - petition dismissed.
-
2024 (9) TMI 1611
Oppression and mismanagement of the Company - Issuing notice of EGM dated 01.10.2022 for the meeting to be held on 11.10.2022 - Removal of Petitioners as Directors and further of Petitioner No. 1 as Managing Director - HELD THAT:- Section 242 places a heavier burden on the complainant as he is required to prove that the affairs of the company are oppressive and prejudicial to any member or the interests of the company - The alleged acts of oppression are linked to the EGM dated 11.10.2022. The Companies Act, 2013 lays down procedure as how the meeting is to be convened. As far as removal of directors of the Company other than one appointed by Tribunal under section 169(1) of the Companies Act, 2013, simple majority is enough. In respect of notice for removal of director and appointment of new director in place of removed director, special notice is required to be issued under section 169(2) of the Companies Act 2013.
The Petitioners as per their own admission came to know about the said notice on 04.10.2022, which fulfills the requirements of law. Even otherwise, they were having knowledge of the EGM even prior to the said date and perusal of Annexure A-4 filed by the Petitioners reveals that the said notice was issued after complying with all the legal requirements. The stand of Petitioners that no such meeting was held on 11.10.2022 is without any basis as transpired from the record. The meeting was attended by five directors and this record was filed with the RoC. In the circumstances, there is no flaw in sending the notice of the meeting after complying all the requirements of law.
The decision of shareholders in the matter of appointing or removing the directors of the Company from the Board cannot be a subject matter of judicial scrutiny since the right to appoint or remove directors is supreme as a part of corporate democracy. It is emphasized that any inconvenience caused to the opposing party during the legal process will not negate the validity of the legal actions taken. Consequently, although the removal of the Petitioners from their directorial positions may be discomforting for them, the decision of the majority will prevail. From this standpoint, the removal of the Petitioners from the directorial posts does not amount to an act of oppression or prejudice against them.
It must further be shown that the conduct of the majority shareholders was oppressive to the minority as members and this require that events have to be considered not in isolation but as a part of a consecutive story. There must be continuous acts on the part of the majority shareholders, continuing up to the date of the petition, showing that the affairs of the company were being conducted in a manner oppressive to some part of the members. The conduct must be burdensome, harsh and wrongful and mere lack of confidence between the majority shareholders and the minority shareholders would not be enough unless lack of confidence springs from oppression of the minority by a majority in the management of the company's affairs, and such oppression must involve at least an element of lack of probity or fair dealing to a member in the matter of his proprietary rights as a shareholder.
As far as the act of mismanagement by Respondents, if any, in removing Petitioners from the position of directors of the Company is to be considered in light of Section 241(1)(b) as there is a change in the management of the Company resulting from such removal of Petitioners as Directors.
The phrase “affairs of the company are being conducted” in section 241 indicates a continuous wrong. It means that because of the change in the management of company, there is a likelihood that the affairs of the company will be conducted in a manner prejudicial to the interests of the company or members. Petitioners failed to show any act done by the management or the apprehension that the affairs of the Company in future are likely to be conducted in a prejudicial manner as a result of the removal of Petitioners from the position as directors.
Thus, in the absence of proof of oppression or mismanagement as alleged by Petitioners, this Tribunal finds no merit in the Petition to grant the reliefs as prayed for and hence, the present Petition is liable to be dismissed.
-
2024 (9) TMI 1610
Seeking direction to appoint an Inspector to carry out the Investigation into the affairs of the Respondent Companies in terms of the Section 213 (b) of the Companies Act, 2013 - fraud under Section 447 of the Companies Act, 2013 - HELD THAT:- The present Petition has been filed under sub-section (b) of Section 213 of the Companies Act, 2013 and as per the said Section the Petitioner is required to satisfy this Tribunal that there are circumstances suggesting that the business of the Respondent companies is being conducted with intent to defraud its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose.
The issue raised by Supertech does not warrant any intervention by RBI. Even otherwise, the issue essentially is a matter of reconciliation of accounts between lender-borrower and to be dealt with as per the grievance redressal mechanisms in place. However, Indiabulls is advised to complete the adjustment of Rs. 9.75 crore mentioned above and inform the position to Supertech with in 15 days of receipt of this order.
The averments made in the Petition by the Petitioners are not supported by any material documents in order to substantiate such allegations. The documents filed by the Petitioner along with the Petition would show that the allegations made by the Petitioner are not corroborated with the documents filed therewith. Prima facie, the Petitioner has miserably failed to make out a case under Section 213(b) of the Companies Act, 2013 and also failed to satisfy this Tribunal that the affairs of the Respondent Company have been conducted in a fraudulent manner or unlawful purpose and on the said count itself this Petition is liable to be dismissed.
On the perusal of the documents submitted by the Petitioner and the in view of the discussion made, the Petition as filed by the Petitioner under Section 213 of the Companies Act, 2013 stands dismissed in limine.
-
2024 (9) TMI 1609
Maintainability of the company petition under Section 399 of the Companies Act, 1956 - pre-condition envisaged under sub sections (1) and (3) of section 399 of the Companies Act, 1956 satisfied or not - amendments made to the Articles of Association and the declarations filed before Registrar of Companies, by the respondents were prejudicial to the interests of public, the 1st respondent company, and the petitioner or not - oppression and mismanagement.
Whether the Petitioners have satisfied the condition precedent envisaged under subsections 1 & 3 of section 399 of the Companies Act, 1956? If the answer is no, whether the company petition is maintainable? - HELD THAT:- Though there appears to be some controversy as to whether compliance of sub-section (a) of Section 399 which states that "not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less or any members or members holding not less than one-tenth of the issued share capital of the company," is mandatory or directory, in so far as the essential test that determines the eligibility in terms of sub-section (a) of section 399 of the Companies Act, 1956 is concerned, there is no ambiguity.
In the instant case, the petitioners even while contending that they have 1/10th share of the issued share capital of the Company at the time of filing the company petition, also on 20.03.2023 have filed the consent affidavits of 4 shareholders of the 1st respondent, namely, Mrs. Alka Sanghi, Aarthi Sanghi, Gaurav Sanghi and Aashish Sanghi, which were merely taken on record subject to the objection if any of the respondents but not under the liberty/direction dated 14/03/2023 of this Tribunal, as contented by the petitioners in their written submission - the purpose behind the consent affidavits is to “overcome” the pre-condition under Sub- clause (a) of Section 399. The language, in sub-section 3 of section 399, ‘having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them’, engaged by the Legislature, makes it abundantly clear that the written consent is a condition precedent for maintaining a petition under section 397 of the Companies Act 1956.
An affidavit filed after lapse of 15 years, that too at the far end of the proceedings even accepting that filing of the consent letters is not mandatory does not satisfy the test and hence it is overwhelmingly clear that here is a case of non-filing of written consent as contemplated under Sub-section (3) of Section 399 of the Act, Hence, the sub-section (3) of Section 399 of the Act, remains unsatisfied.
Whether amendments made to the Articles of Association and the declarations filed before Registrar of Companies, by the respondents were prejudicial to the interests of public, the 1st respondent company, and the petitioner, amounting to the acts of oppression and mismanagement? - HELD THAT:- Merely by stating that only upon perusal of the annual return for the financial year ending 2007, the petitioners gained knowledge of the alleged illegal transfer of shares, especially when it is not the case of the petitioners that the Annual Reports of the 1st respondent were not uploaded in the MCA web site as required under the statute, the Petitioners cannot get over the bar of limitation, as once the returns are uploaded in the MCA web portal, which is in the public domain, the same constitutes notice to public especially to all the directors and members of the company.
None of the allegations as made in the petition either survive the law of limitation or constitute the acts of oppression and mismanagement. Therefore, petition is thoroughly misconceived.
Petition dismissed.
-
2024 (9) TMI 1500
Maintainability of amended petition filed by the Respondent without a formal application for amendment - fresh petition in the guise of an amendment - complete redraft of the original petition with additional grounds - HELD THAT:- The amendments were substantial in nature though the learned counsel for the Respondent alleges it to be mere explanatory. Admittedly new reliefs have been added in the amended petition as also a new party being impleaded. Further the additional acts of oppression have also been added for which, of course, an opportunity ought to have been granted to the appellant to rebut such a move.
In Aurosagar Estates Private Limited and Ors Vs M.C. Davar Holdings Private Ltd [2017 (8) TMI 867 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, MUMBAI] this Tribunal held 'as the amendment sought with regard to a fresh cause of action which has taken place more than three years back on 15th October, 2012, prayer made in amendment petition being barred by limitation, the Tribunal was not competent to allow the amendment.'
Thus, for such substantial amendments, an application ought to have been moved with such proposed amendments and with a liberty to the appellants to rebut such proposed amendments and only thereafter, the amended petition ought to have been brought on record. The impugned order does not adhere to the principles of natural justice as it did not give an opportunity of being heard to the appellant - appeal disposed off.
-
2024 (9) TMI 1426
Oppression and mismanagement - whether the Appellants are entitled to the waiver of requirements under Sections 244(1)(a) and (b) of the CO Act 2013 so that they can apply under Section 241 of the Act for a case of oppression and mismanagement? - HELD THAT:- While dealing with an application for a waiver under Section 244, the NCLT is very much empowered to make a preliminary assessment to determine whether the Petition falls within the purview of Sections 241 and 244. While the NCLAT in the Cyrus Investments [2017 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] case did hold that the merits of the case should not be considered at the waiver stage, but this does not preclude the NCLT from determining whether the Petition falls within the ambit of Sections 241 and 244.
In the instant case, the waiver was refused based on the finding that the Petitioner has no prima facie case as the primary complaint in the petition relates to the directorship of the Petitioner, and hence the complaint is directorial.
The important question is whether such a removal tantamounts to an oppressive or prejudicial conduct. The Hon’ble Supreme Court in Tata Consultancy Services [2021 (3) TMI 1181 - SUPREME COURT] has made it clear that mere removal/termination of the Director cannot be projected as something that would trigger the just and equitable Clause (2) to grant relief under Sections 241 and 242 of the Act. It is noted that the removal of the CEO / Executive Director at the AGM was not a motion by the management of the Company, but by another shareholder of the Company i.e. Respondent No.21.
In this case, it is noticed that there are ongoing complaints and counter-complaints between the Appellants and the Respondents even prior to the filing of the Company Petition. But the Company Petition was filed by the Appellants around the time when a proposal was in circulation for the removal of Appellant No.1 as Director / Executive Director along with a notice for AGM. Even the interim relief sought in IA No. 5855 of 2023 in this Appeal is for staying the decision taken in the Annual General Meeting (AGM) dated 30.09.2023 with respect to removal of the Appellant No.1 as an Executive Director of the Respondent No.1, apart from various other interim reliefs.
Appellant relies upon the conclusion in Cyrus Investments Private Limited vs Tata Sons Limited and Ors. [2017 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], that there is a situation in the instant case also, that until and unless the minority shareholders join together, shareholding will not come up to 10% of the issued share capital of the Company and the threshold for filing a Petition under Section 241 of the Companies Act, 2013 will not be met.
The Appellants with a total shareholding of 5.83%, do not meet the requirement as per Section 244(1)(a) and 244(1)(b). The Appellant’s argument that this case presents exceptional circumstances meriting the grant of a waiver is not convincing. Perusal of the materials on record and the circumstances of the petition and the Appeal do not indicate any exceptional circumstances. The threshold for granting a waiver under Section 244 is high and is intended to be an exception rather than the rule. The NCLT’s decision indicates that the Appellant has not demonstrated such exceptional circumstances that would justify bypassing the statutory requirement of a minimum shareholding for the filing of a petition under Section 241.
The Petition revolves significantly around the Appellant’s removal as a Director and the related grievances. Section 241 is not intended to address such personal grievances, but is meant to protect the interests of the company and its shareholders against genuine acts of oppression and mismanagement. The NCLT was, therefore, correct in refusing the waiver based on its assessment that the Petition does not substantiate a case of oppression and mismanagement as envisaged under the Companies Act.
It is concluded that the NCLT acted within its jurisdiction and in accordance with the principles of law while denying the waiver under Section 244 of the Companies Act, 2013 - there are no infirmity in the orders of the NCLT - appeal dismissed.
-
2024 (9) TMI 1325
Imposition of moratorium u/s 14 of the IBC, 2016 during CIRP - stay of the moratorium imposed - HELD THAT:- There is a clear distinction between a direction not to take further steps pursuant to the order dated 16 October 2023 and stay of the moratorium imposed by the said order. Had the learned NCLAT decided to stay the moratorium, it could have done so. There is no stay of the moratorium imposed by the learned NCLT, in the order dated 9 November 2023 of the NCLAT.
Reliance on the judgment of a coordinate Bench of this Court in SSMP Industries Ltd v Perkan Food Processors Pvt Ltd [2019 (8) TMI 916 - DELHI HIGH COURT] where it was held that 'this court is of the opinion that the Plaintiff's and the defendant's claim ought to be adjudicated comprehensively by the same forum. At this point, till the defence is adjudicated, there is no threat to the assets of the corporate debtor and the continuation of the counter claim would not adversely impact the assets of the corporate debtor. Once the counter claims are adjudicated and the amount to be paid/recovered is determined, at that stage, or in execution proceedings, depending upon the situation prevalent, Section 14 could be triggered. At this stage, due to the reasons set out above, the counter claim does not deserve to be stayed under Section 14 of the Code. The suit and the counter claim would proceed to trial before this Court.'
This decision is of no avail to the petitioner. It holds that the counter claims by the company which is facing insolvency is maintainable even during the currency of the moratorium. This decision is clearly in terms of the moratorium imposed, as the moratorium restrains actions being instituted or taken against the corporate debtor, whereas a counter claim is a counter claim by the corporate debtor.
The moratorium imposed by the NCLT specifically restrains institution and continuation of any proceedings including arbitral proceedings against the respondent. The prayer in this petition is specifically for institution of arbitral proceedings against the respondent. It cannot, therefore, be granted while the moratorium is in place.
As such the petition is adjourned sine die, awaiting the proceedings before the NCLAT or any order modifying or lifting the moratorium issued by the NCLT.
-
2024 (9) TMI 1256
Oppression and mismanagement - Tribunal's authority to order the purchase of shares under Section 242(2)(b) of the Companies Act, 2013 - Section 421 of the Companies Act, 2013 - HELD THAT:- Under Section 242(2)(b) of the Act, the Tribunal has a power to direct the purchase of shares of any member by the Company and per impugned order the Tribunal has exercised such power.
In MSDC RADHARAMANAN VERSUS M. SD CHANDRASEKARA RAJA [2008 (3) TMI 471 - SUPREME COURT], the Hon’ble Supreme Court referred to Samgramsinh P. Gaekwad vs. Shantadevi P. Gaekwad [2005 (1) TMI 409 - SUPREME COURT], wherein the Hon’ble Supreme Court held in a given case the court despite holding that no case of oppression has been made out may grant such relief so as to do substantial justice between parties.
Though the appellant has contended the Impugned Judgement does not give reasons for passing the order but a perusal of the Impugned Judgement would reveal the submissions of both the parties and the case law(s) cited by them were considered by the Ld. NCLT and only thereafter the impugned order was passed under Section 242(2)(b) of the Act.
Admittedly the respondent cannot sell his shares in open market, it being a private company and not a listed one, hence the path chosen by the Ld. NCLT to end controversy amongst directors/shareholders is not prejudicial to anyone and would rather be helpful for smooth running of the company.
There are no illegality in the impugned order and accordingly appeal is dismissed.
-
2024 (9) TMI 710
Petition dismissed on the ground that the delay cannot be condoned - seeking extension of ‘Companies Fresh Start Scheme, 2020 (CFSS 2020) by letter/notification dated 15th January, 2021 - whether the benefits of a particular scheme brought into force by the respondents as an exemption notification could be applicable to the appellant in the fact situation obtaining in the present case, it would be appropriate to consider the law in this regard?
HELD THAT:- It is trite that a notification granting benefit of exemptions from a regime, whether taxation or otherwise, is to be strictly construed. This of course, is dependent also on the facts of each case. The question whether party falls in the notification or in the exemption clause, has to be strictly construed and when once the ambiguity or doubt is resolved by interpreting the applicability of exemption clause strictly, the Court may construe the notification by giving full play bestowing wider and liberal construction. The Courts are to examine as to whether the party seeking such benefit under such exemption notification is found to be entitled to such benefits or not. In case, a party is found to be eligible within the conditions prescribed, the notification is to be construed liberally. In contradistinction thereto, if a party is found to be ineligible as per the conditions prescribed, the notification is to be construed strictly. All that is to be seen is the legislative intent or the economic justification behind such notification.
A perusal of the CFSS 2020 dated 30th March, 2020 reveals that the benefit of exemption from charging additional fees and grant of immunity from launching prosecution on account of delay associated with certain filings was notified in respect of only those companies which were not in the excepted category as per sub clause (ix) (a) of clause 6 thereof. It is also apparent that the said benefit was to come into force with effect from 1st April, 2020 to 30th September, 2020.
The scheme envisages entitlement to companies, whose restoration orders were passed between 1st December, 2020 and 31st December, 2020. It is an undoubted fact that the restoration of the name of the appellant was directed. Thus, in view of the fact that the order restoring the name of the appellant was not passed between 1st December, 2020 and 31st December, 2020, even if it is to assume replacement of ‘NCLT’ with ‘Delhi High Court’, the exemption notification of “extended CFSS 2020” cannot be made applicable to the appellant - the appellant was clearly not entitled to the benefit of “extended CFSS 2020” and thus, this cannot be a second bite at the cherry.
There are no reason to interfere with the impugned judgment and resultantly, the appeal along with pending applications, if any, is dismissed.
-
2024 (9) TMI 627
Prayer for the quashing of the order restoring the case that had been dismissed due to non-appearance of the respondent - diversion of funds - allegation is that accused company had not utilised the IPO proceeds of 1540.56 Lakhs for the purposes stated in the prospectus - Sections 447/448 of the Companies Act, 2013 - HELD THAT:- The issue raised in the present petition is no longer re integra and, in fact, stands settled by the judgment of the Supreme Court in A.S. Gauraya [1986 (4) TMI 362 - SUPREME COURT]. In the said judgment, the Supreme Court, in answering the question as to “Whether a Subordinate Criminal Court has any inherent jurisdiction outside the provisions of the Criminal Procedure Code?”, and in similar fact situation where the Complaint dismissed due to the absence of the Complainant therein has been restored by the learned Magistrate, held that 'Filing of a second complaint is not the same thing as reviving a dismissed complaint after recalling the earlier order of dismissal. The Criminal Procedure Code does not contain any provision enabling the criminal court to exercise such an inherent power.'
In view of the above settled position in law, the order passed by the learned Special Judge was without jurisdiction and cannot be sustained.
The Order dated 13.08.2019 is set aside as having been passed by the learned Special Judge without jurisdiction. Consequently, the order dated 16.04.2022 passed by learned Special Judge and all consequential proceedings emanating therefrom, are set aside - Petition allowed.
-
2024 (9) TMI 626
Oppression and mismanagement - Recall of an earlier order - appeal against order should have been filed, which was not done - HELD THAT:- In Budhia Swain and others Vs Gopinath Deb and Others [1999 (5) TMI 596 - SUPREME COURT] the Hon’ble Supreme Court held 'The power to recall a judgment will not be exercised when the ground for re-opening the proceedings or vacating the judgment was available to be pleaded in the original action but was not done or where a proper remedy in some other proceeding such as by way of appeal or revision was available but was not availed. The right to seek vacation of a judgment may be lost by waiver, estoppel or acquiescence.'
Admittedly the order dated 20th December, 2023 did not fall within the four conditions as enumerated in para 8 of Budhila Swain. Instead of filing an appeal against the order dated 20.12.2023, the appellant had preferred a recall application, not permissible under Rule 11 of NCLT Rules.
There are no illegality in the impugned order dated 05.04.2024 - there is no merit in this appeal and accordingly it is dismissed.
-
2024 (9) TMI 570
Valid transfer of shares or not - Seeking rectification of the Register of Members of M/s. Lexus Technologies Pvt. Ltd., Vijayawada, Andhra Pradesh, respondent No.1, by entering their names therein under Sections 59 and 88 of the Act of 2013 - seeking to initiate action against Mantena Narasa Raju, Appa Rao Mukkamala and Suresh Anne, respondent Nos. 2,3 and 4, for oppression and mismanagement, apart from criminal proceedings under Sections 447 and 448 of the Act of 2013 for committing fraud.
HELD THAT:- In the present case, proper verification of the assertions made by the parties was a sine qua non. The Acting President of the NCLT, by failing to carry out the said exercise, failed to discharge the mandate of law. Exercise of power under Section 59 of the Act of 2013 is to be undertaken in right earnest by examining the material, evidence, and the facts on record. This has not been done. Rather, a narrow view was taken without calling upon respondent No. 2 to prove the veracity of the contrary story put forth by him, despite receiving monies from the appellants.
The facts, material, and evidence had to be examined in the context of the underlying facts, which would have included the receipt of monies, the signatures on the transfer deeds, etc. Needless to state, questions of fact must be decided on the principle of preponderance of probabilities, giving due weight to the specific facts, as found, so as to draw the conclusion that a reasonable person, acquainted with the relevant field, would draw on the basis of the same facts.
Neither the Acting President of the NCLT nor the NCLAT examined, with any seriousness, the issues raised before them to come to a cogent conclusion as to whether the disputes raised by the respondents were mere moonshine.
In Ammonia Supplies Corporation (P) Ltd. [1998 (9) TMI 427 - SUPREME COURT], this Court held to that effect in the context of Section 155 of the Companies Act, 1956. Thereafter, in Aadesh Kaur (supra) also, this Court affirmed that if, on facts, an open-and-shut case of fraud is made out in favour of the person seeking rectification, the National Company Law Tribunal would be entitled to exercise such power under Section 59 of the Act of 2013. Therefore, verification of this aspect was essential but the NCLT failed to discharge this mandate.
Another crucial fact that needs to be noted is that the interim order passed on 27.06.2019 by the Member (Judicial) of the NCLT had indicated, in clear terms, the issues that arose for consideration and the inquiry required to determine the same. However, ignoring the said interim order, the Acting President of the NCLT chose to summarily dismiss the petition, without considering the material already placed on record and without further evidence being adduced. The documents that were referred to and attached to the Company Petition and the appellants’ rejoinder were glossed over or were completely ignored - Neither the NCLT nor the NCLAT chose to labour over the actual issues for consideration by looking at the documentary evidence already placed on record or by calling for further evidence in that regard.
The judgment in Company Petition and the judgment in Company Appeal are set aside - Appeal allowed.
-
2024 (9) TMI 467
Seeking interim stay of the LOC and for permission to travel abroad - HELD THAT:- The merits of the opening of the LOC against the petitioner, is a subject matter of challenge in the main Petition, which shall be considered thereunder. By way of the present Application, the permission has been sought to travel to New York and Dubai from 16.08.2024 to 05.09.2024, on the ground that the petitioner intends to meet his daughter in Dubai and also to facilitate the admission of his son in New York.
Insofar as meeting the son and daughter are concerned, there is no restriction on the children to travel to India, to meet the parents. For this purpose, there is no need for the petitioner, to travel to Dubai.
The learned Special Judge, has rightly observed that no cogent reasons have been given by the petitioner, for travelling abroad. The Judgments which have been relied upon by the petitioner, are of little assistance and need not be considered at this stage, for the simple reason that the purpose for travel itself has not been justified.
Application dismissed.
-
2024 (9) TMI 252
Grant of extension of three months to hold 40th Annual General Meeting for the financial year ending 31.03.2024 - no “special reasons” were provided by respondent No. 1 for allowing a three-month extension to the respondent No. 2 - HELD THAT:- The impugned order dated 22.08.2024 does not spell out 'special reasons' and appears not to have been issued in accordance with the mandate of Section 96 of the Act. However, there is more to the content of the impugned order than initially apparent. The reasons for seeking an extension are outlined in the request letter dated 21.08.2024 submitted by respondent No. 2.
There is merit in the submissions made by the learned counsel for respondent No. 1 that the sufficiency or insufficiency of the reasons for an extension cannot be assessed by respondent No. 1. Such orders are routine unless and until tangible evidence is presented showing that the extension was sought for ulterior motives or to the detriment of stakeholders. The petitioners have not demonstrated any exception grounds, either publicly or otherwise, that could have warranted the rejection of the extension.
Evidently, the issues highlighted by the learned counsel for the petitioners regarding the management of respondent No. 2's affairs are not recent developments, but obviously have a history. Therefore, the petitioners could have sought remedies under Section 241 of the Act by approaching the Tribunal for mismanagement or oppression by directors or shareholders, or for removal of any director or person in charge of regulating the company's affairs.
This course of action would have been available in cases of mismanagement or oppression. It cannot be that the petitioners are suddenly caught unaware by the extension of time granted by respondent No. 1 to hold the AGM. The Act does not mandate that shareholders be heard before respondent No. 1 considers and decides on an application for an extension.
Petition dismissed.
-
2024 (9) TMI 251
Restoration of the Company's name i.e. M/s. Era Financial Services (India) Limited in the Register of Companies maintained by Registrar of Companies, Uttar Pradesh - Section 252(1) of the Companies Act, 2013 - HELD THAT:- An appeal u/s 252(1) can be filed by any aggrieved person in case the company is dissolved by the ROC u/s 248 by initiating proceedings as provided u/s 248(1) but when a company gets its name struck off from the Register of Companies, certain aggrieved persons can only file application u/s 252(3). The provision for a company getting its name struck off is provided u/s 248(2). Therefore, filing of appeal by any aggrieved person against the action of the ROC dissolving the company u/s 248 is provided u/s 252(1) for which limitation period is 3 years. However, filing of application u/s 252(3) is provided only by certain persons on getting aggrieved against the company having its name struck off, which may happen when a company gets its name struck off as per the provisions of section 248(2) for which longer period of limitation of 20 years are provided.
Thus, when a Company is struck off by the ROC as per the provision of section 248(1) on violation of certain provisions of the Companies Act, provision for revival of the company is provided u/s 252(1) and when a Company is struck off u/s 248(2) on its application to ROC having discharged its liabilities and passing of special resolution by the shareholders, provision for revival of the company is provided u/s 252(3).
In the present case under appeal also, STK-1 dated 18.07.2022 was issued by the ROC after finding that the subscription which the company had undertaken to pay at the time of incorporation of the Company and a declaration to this effect, has not been filed within 180 days of its incorporation under sub-section (1) of section 10A, which is in violation of section 248(1)(d). Therefore, the ROC after giving notice u/s 248(5) vide STK-5 dated 30.08.2022, struck off the Company from the Register of the Companied by issuing notification in STK-7 dated 18.10.2022, from the date of publication of this notification in the Gazette of India and the said company was dissolved as mentioned at serial no 1750 of the list attached with STK-7 dated 18.10.2022.
The instant appeal allowed to the extent of directing the ROC, Uttar Pradesh, Kanpur to restore the name of the appellant Company on the Register of Companies in the same position as nearly as may be as if the name of the company had not been struck off from the Registrar Of Companies, changing the status of the appellant Company from "struck off" to "active" and take such further action against the Appellant Company with respect to late payment of subscription as provided under section 10A of the Companies act, 2013 and any other violations of statutory provisions if any detected after revival of the company.
Appeal disposed off.
-
2024 (9) TMI 8
Deletion of the Appellant as party - Whether there is sufficient justification for deletion of the Appellant as party Respondent in C.P. 3638 of 2018 and for removal of restraints on him with respect to his moveable and immoveable property? - HELD THAT:- It is an undisputed fact that the SFIO Final Report had removed the Appellant from the list of persons who constituted the coterie governing IL&FS and its Group Companies. It is also undisputed that the Appellant is not named as an accused therein. Apart from there being no generic findings against the Appellant in the SFIO Final Report, there are no specific imputations either of wrong-doing or illegality on the part of the Appellant. There is also no dispute that in pursuance of the Final Report, charge-sheet was filed and prosecution proceedings commenced thereafter. However, no charge of fraud or any other wrongful act has been brought out against the Appellant. Clearly the Appellant had not been identified as an accused in the same charge-sheet.
The NCLT clearly committed an error in observing at para 23 of the impugned order dated 10.04.2024 that the Appellant “has not been discharged so far from the matter by the criminal court also.” Since it is a matter of fact and record that there are no criminal proceedings pending against the Appellant, there was no question arising of discharge from such non-existing proceedings.
It is the contention of the Ld. Sr. Counsel for the Appellant that the NCLT had erroneously denied discharge on ground that the Appellant had made withdrawal of lookout circular as the only basis of his discharge - Withdrawal of lookout circular was only one other additional demonstrable proof that the Appellant was no longer a material or relevant party for impleadment.
The mere ground of delay in conduct of any investigation by itself cannot constitute sufficient ground for any investigation to be brought to an abrupt end. The investigation process is nevertheless expected to proceed with reasonable and optimal dispatch and should not be inordinately stretched and prolonged at the cost of fair play in action. In the interest of justice and equity, it is imperative to ensure that the delay does not violate or infringe the right of any party to be treated fairly, justly and reasonably.
The latitude of time given to the Respondent to complete the investigations cannot continue endlessly, an observation which was made by the NCLT itself more than two years back. Further, prima-facie, there is force in the contention of the Appellant that such inordinately delayed investigation and consequential freeze of assets has prejudicially affected the rights and interests of the Appellant causing agony to a senior citizen, more so, when no adverse findings specifically against the Appellant has come on record so far.
This Bench is of the considered view that to meet the ends of justice, while the enquiry may continue, the name of the Appellant from the list of party Respondents in CP 3638 of 2018 could be removed and restraint/freeze of assets also be vacated - Appeal allowed.
............
|
9911796707
