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Companies Law - Case Laws
Showing 181 to 200 of 15082 Records
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2024 (7) TMI 1464
Challenge to arbitral award - non-consideration of the facts - rights of the petitioner bank against whom the same recovery is sought by the committee of creditors in the IBC proceedings - Section 34 of the A&C Act - HELD THAT:- The Supreme Court in PSA SICAL Terminals (P) Ltd. v. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin, [2021 (7) TMI 1456 - SUPREME COURT], inter-alia held that 'It is only such arbitral awards that shock the conscience of the court, that can be set aside on the said ground. An award would be set aside on the ground of patent illegality appearing on the face of the award and as such, which goes to the roots of the matter. However, an illegality with regard to a mere erroneous application of law would not be a ground for interference. Equally, reappreciation of evidence would not be permissible on the ground of patent illegality appearing on the face of the award.'
It is important to remember that the position with respect to the limited interference of the courts has changed slightly in light of the 2015 Amendment to Section 34 of the A&C Act. The scope of violating Indian public policy has been expanded to include fraud or corruption in the award-making process, violating Sections 75 or 81 of the Act, violating the fundamental policy of Indian law, and going against the most fundamental ideas of justice or morality as a result of the addition of Explanation 1 to Section 34(2). Furthermore, Section 34 now contains sub-section (2-A), which states that in the event of domestic arbitrations, patent illegality appearing on the face of the verdict also constitutes a breach of Indian public policy.
This court at the stage of challenge under section 34 has to only prima facie see if there is a patent illegality in the impugned award which shocks the conscience of the court. Further, this court cannot appraise the evidence or merits in a challenge under section 34 of the A&C Act. The mere fact that another reasonable conclusion can be drawn from the case’s merits does not give the power to this court to interfere with the arbitral award. The award passed by the learned arbitrator is found to be correct and in accordance with the law.
Petition dismissed.
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2024 (7) TMI 1463
Fraudulent siphoning/diversion of funds - Initiating and carrying out appropriate inquiries and investigation against the management of ‘Three C Shelters Private Limited’, i.e., respondent No.3 and sister group of companies - manipulating of records and siphoning off funds of the said company to certain shell companies based in Kolkata - HELD THAT:- This Courts finds it unfathomable that the information about the state of affairs of respondent No.3 and its group of companies have not reached the ears of respondent No.1& 2, and yet shockingly no action has been taken in terms of Chapter XIV of the Companies Act, 2013. It is but imperative that they must exercise their statutory and public duties in arresting pilferage, siphoning off of the assets of respondent company (in liquidation)/respondent No.3 and its group of companies and safeguard the legitimate interests and rights of the petitioner and those similarly placed. It is surprising that despite issuance of advance notice and having a battery of lawyers on their panel, no one has bothered to even appear for respondent No.1 and 2 today during the hearing.
There is no gainsaying that Chapter XIV of the Act provides for a detailed mechanism to inspect, call for the accounts and record of the company, inquire and investigate into the financial affairs of the company. Further, where the Registrar or inspector has reasonable grounds to believe that the books or documents with regard to the company under investigation are likely to to be destroyed, mutilated, altered, falsified or secreted, an order can be prayed for from the Special Court for the seizure of such books and papers in the manner provided vide section 209 of the Act and proceed for freezing of the accounts of the company under investigation.
Considering the prayer made in the interim application moved on behalf of the petitioner, unhesitatingly there are compelling and justifiable grounds to pass certain directions so as to safeguard the paramount interests of the petitioner and those who are similarly placed in larger ‘public interest’.
Respondent Nos. 1 and 2, are hereby conjointly directed to initiate action and ensure step-wise compliance in terms of Section 206 to 210 of the Companies Act, 2013 and other analogous provisions in Chapter XIV of the Companies Act, 2013, and thereby inspect the affairs of ‘Three C Shelters’ and the related companies of ‘Three C Shelters’ in terms of the Status Reports of the IRP before the NCLT as brought out in his reports dated 9th August, 2023 and submit an Inspection Report within four weeks from today before this Court.
Re-notify for hearing on 14th March, 2024.
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2024 (7) TMI 1364
Seeking permission to withdraw application - Application on behalf of the substituted LRs of Defenant No. 3, to file a Written Statement - absolute new defence is sought to be taken by filing a Written Statement by the Defendants who have stepped into the shoes of the deceased Defendant - HELD THAT:- The application is permitted to be withdrawn with the liberty as prayed for.
Seeking dismissal of the Suit as infructuous - Section 248 read with Section 250 of the Companies Act, 2013 and Order XXII Rule 8 CPC - HELD THAT:- At present, the Company has been made active to enable the filing of annual returns - the conditions imposed by the NCLAT stand complied with. At this stage, it cannot be said that the Company is dead and the Suit stand abated - application is without merit and is hereby dismissed.
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2024 (7) TMI 1363
De-sealing and handing over of the physical, vacant and peaceful possession of the property - Rules 6 & 9 of the Companies (Court) Rules, 1959 - removal of the security guards deputed by the Official Liquidator from the property - HELD THAT:- The manner in which the sale agreement dated 16.04.2013 was executed, towards the transfer of shareholding of SJSPL, as also the pattern of payments pursuant to the same, which events took place prior to the winding up petition being entertained by this Court, raise an inference that such disposition had been done in the ordinary course of business. The transfer of shareholding was a purely commercial decision taken in the ordinary course of business and was obviously based on certain conditions prevailing in the real estate market. The management of SJSPL pursued its remedies against the respondent company in good faith, in the process laying claim over the subject property subsequent to the adverse action taken by the Noida Authority.
Since it is evident that the right to the shareholding of the applicant company/SJSPL did not fructify in favour of the respondent/ company (in liquidation), it is difficult to discern that there has been any lack of bonafides or diligence on the part of the applicant/SJSPL and for that matter, on the part of the Ex-directors of the company (in liquidation). It is also difficult to discern any element of collusiveness or conspiracy between the two parties, soon before or after commencement of the winding up petition vide order dated 23.02.2016. In such a scenario, there could be no two opinions but to hold that the subject property cannot be made available to the Official Liquidator for the purposes of the winding up proceedings.
The benefit of vesting the subject property in favour of the company (in liquidation) so as to enhance its assets cannot be sustained. Lastly, merely because some schemes for revival of the company (in liquidation) have been proposed by the stakeholders and are pending for consideration before this Court, the same would not warrant vesting the subject property in favour of the company (in liquidation), particularly when, apart for bhumipujan at the site, no construction work ever commenced at the subject property.
The instant application moved by the applicant-SJSPL is hereby allowed and the Official Liquidator is directed to de-seal the subject property viz. Plot No.1, Sector 154, Noida- 201301 and hand over its peaceful and vacant possession to the applicant-company.
Application allowed.
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2024 (7) TMI 1322
Maintainability of the writ petition - petitioner’s account has been declared as Non-Performing Asset - NCLAT observed that since the NCLT had reserved the proceedings filed by the Bank under Section 7 of the Code for passing orders, it was not inclined to entertain the appeal - HELD THAT:- The petitioner having filed the interlocutory application, the interest of justice demands that this application be considered prior to passing any order on the Company Petition preferred by the Bank. This is for the reason that in the interlocutory application, the petitioner has prayed that various subsequent events be taken note of and pronouncement of the order in the Company Petition be deferred. If the interlocutory application as well as the Company Petition are decided together, the apprehension of the petitioner of prejudice being caused to it cannot be brushed aside as unfounded - The interlocutory application now filed before the NCLT seeks consideration of these aspects before adjudicating the Company Petition. This request made by the petitioner ought to be considered by the NCLT before deciding the Company Petition.
The interest of justice demands that the interlocutory application preferred by the petitioner being Interim Application No. 3623 of 2024 be first decided before proceeding to pronounce final order on the Company Petition - Petition dispsoed off.
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2024 (7) TMI 1321
Seeking dissolution of the company (in liquidation) - Prayer that the Official Liquidator be discharged as its Liquidator - Section 481 of the Companies Act, 1956 - HELD THAT:- In view of the prevailing facts and circumstances, it would be expedient to refer to the decision in Meghal Homes (P) Ltd. v. Shree Niwas Girni K.K. Samiti & Ors. [2007 (8) TMI 447 - SUPREME COURT] whereby the Supreme Court inter alia held that 'When the affairs of the Company have been completely wound up or the court finds that the Official Liquidator cannot proceed with the winding up of the Company for want of funds or for any other reason, the court can make an order dissolving the Company from the date of that order. This puts an end to the winding up process.'
In keeping with the decision of the Supreme Court in Meghal Homes as also the import of Section 481 (1) of the Act, besides the facts and circumstances of the present case, these liquidation proceedings warrant to be brought to an end. Therefore, the present application is allowed. The company (in liquidation) – M/s. Dream City Builders P. Ltd., stands dissolved and the Official Liquidator is hereby discharged as its Liquidator.
The Official Liquidator is permitted to transfer the available balance, if any, to the Common Pool Fund and thereafter, to close the books of accounts of the company (in liquidation) - application allowed.
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2024 (7) TMI 1265
Seeking release of an amount under Section 151 of the Code of Civil Procedure, 1908 - right of the petitioners to seek refund of their investment in terms of the ‘buy-back’ clause in the contract - HELD THAT:- Although, there is merit in the plea advanced by the learned counsel for the applicants that the right of the petitioners to seek refund of their investment in terms of the ‘buy-back’ clause in the contract dated 04.04.2010 with the respondent company had crystallized on 24.04.2014, much before the winding up order was passed appointing a Provisional Liquidator on 22.07.2016. However, what turns the table against the petitioners is the fact that they neither furnished the requisite certificate from FEMA nor came out with the plea that such certificate was not required, and thereby evidently delaying the release of the amount deposited with the Registrar General of the High Court, on their own fault.
It is manifest that the amount towards investment had been deposited with the Registrar General pursuant to the directions dated 24.04.2014, but the petitioners also failed to comply with the necessary formalities, and eventually waived their rights in lieu of placing a claim for the said amount before the Official Liquidator. The fact that no claim is lodged before the Official Liquidator is another story. Indeed, the amount is lying deposited in this Court out of the reach of the stakeholders. However, since much water has flown over the last ten years or so, the amount deposited should rather be utilised for satisfying the claims of the secured creditors.
The amount, which has been deposited with the Registrar General, may be reclaimed by the Official Liquidator with accrued interest and the same may be brought within the corpus of the funds of the company (in liquidation) to be utilised for satisfaction of the claims of the secured stakeholders in accordance with law - Application dismissed.
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2024 (7) TMI 1264
Seeeking restoration of the name of the petitioner company to the Register of Companies maintained by the respondent/Registrar of Companies (ROC) - Section 560 (6) of the Companies Act, 1956 - HELD THAT:- The action that was earlier taken by the Registrar vide order dated 29.06.2007 was pursuant to and issued in terms of Section 560 (1) (6) of the old Act, which provision is effectively pari materia with Section 248 of the new enactment. Under the old Act, the Registrar had the power to proceed with striking off the name of a company from the Register on finding reasonable cause to believe that the company is not carrying on business or is otherwise not in operation. Likewise, under Section 248 of the new Act, where the company is not carrying on any business operation for a period two immediately preceding financial years, the Registrar has the power to proceed with striking off the name of the company from the Register of Companies.
It is clearly brought forth that the provisions under which action was earlier taken under the old Act, as also the action subsequently taken under the new Act, are not inconsistent with one another. The new enactment rather provides for a more detailed procedure for striking off the name of a company as also an effective remedy for dealing with the de-registration of a company, which is not running its business or in operation. Further, the registers maintained under the old Act are also deemed to be registers maintained under the new Act and can be relied upon for seeking any legal remedy.
The remedy of the petitioner lies with the National Company Law Tribunal in view of Chapter XXVII of the Companies Act, 2013. Therefore, the application moved by the petitioner is hereby dismissed.
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2024 (7) TMI 1263
Disclaimer of Onerous property - Praying for leave to be granted to the Official Liquidator to disclaim the office space - praying for peaceful, vacant and khas possession of the sub-demised office space to the applicant from the Official Liquidator - HELD THAT:- Any mortgage or charge over the property in question would exist and be enforceable in law only so long as the sub-lease was subsisting in favour of the company (in liquidation) envisaging observance and performance of all stipulations as contained in the sub-lease. As the narrative unfolds, loans were taken from the consortium of the banks, including PNB, by the company (in liquidation) and evidently its account became a “Non Performing Asset” w.e.f. 31.12.2011 and symbolic possession was taken over by PNB on 06.02.2013.
The objections espoused by the objector - PNB to the CO. APPLs. 517/2018 and 60/2022 cannot be sustained in law. The objector-PNB cannot claim right in the property beyond what was available to the company (in liquidation) during the subsistence of the sub-lease rights. In other words, since the rights of the bank to seek forfeiture of the mortgaged property flew from the rights of the sub-lessee i.e. the company (in liquidation), on the termination of such rights at the behest of the applicant-IIPL, nothing survived in favour of the objector-PNB, so as to lay its claim over the property for the remainder of the period of the lease.
Incidentally, the facts of this case are similar to what came up for consideration before Supreme Court in the case of Stressed Assets Stabilization Fund [2019 (10) TMI 1526 - SUPREME COURT], wherein the loans were obtained by the lessee on the strength of mortgage of title deeds of the leased industrial property, but subsequently, the company went into liquidation. The West Bengal Small Industries Development Corporation Limited, which was the original lessor terminated the lease as the lessee had ceased to carry on manufacturing activities beyond the stipulated acceptable period.
Thus, leave is granted to the Official Liquidator to disclaim the entire sub-demised office space containing super built-up area of 16523 sq. feet on the 15th floor of the building “Infinite Benchmark” constructed on the demised plot of land number G-1 in Block No. EP & GP, Sector V of Bidhannagar in the District of North 24-Parganas within Police Station Bidhannagar (East), Salt Lake City, Kolkata-700 091, and handover the peaceful, vacant and khas possession of the property to the applicant-IIPL by removing padlocks and/or seals put by the Official Liquidator or by PNB upon the same, within 45 days from today.
Application disposed off.
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2024 (7) TMI 1262
Seeking dissolution of company and that the Official Liquidator be discharged as its Liquidator - Section 481 of the Companies Act, 1956 - HELD THAT:- This Court is of the opinion that these liquidation proceedings warrant a quietus, and the company (in liquidation) should be dissolved as the Official Liquidator cannot proceed any further with the winding up process.
It would be expedient to invite reference to the decision of the Supreme Court in Meghal Homes (P) Ltd. v. Shree Niwas Girni K.K. Samiti & Ors. [2007 (8) TMI 447 - SUPREME COURT] where it was held that 'When the affairs of the Company have been completely wound up or the court finds that the Official Liquidator cannot proceed with the winding up of the Company for want of funds or for any other reason, the court can make an order dissolving the Company from the date of that order. This puts an end to the winding up process.'
Thus, relying on the decision of the Supreme Court in Meghal Homes as also the import of Section 481 (1) of the Act, besides the facts and circumstances of the present case, these liquidation proceedings warrant to be brought to an end - The company (in liquidation) – M/s. Spack Tunrkey Projects (P) Ltd., stands dissolved and the Official Liquidator is hereby discharged as its Liquidator.
The present application is allowed.
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2024 (7) TMI 1218
Transfer of total of 7000 equity shares in the name of the respondents collectively - issuance of prohibitory order under section 45MB (2) of the Reserve Bank of India Act - HELD THAT:- It is an admitted position that the original share certificates of 4000 RIL shares (96 in number) along with transfer deeds are in possession of Shri Anoop Jain. Now the only issue raised is of consideration for these 4000 shares. Shri Anoop Jain has relied on Delhi stock exchange register within the cycle 12.04.1997 to 25.04.1997 to show that he had paid the consideration. He also stated that he got the delivery of the shares on 02.05.1997 along with the original shares and blank transfer deed. He also states that through his proprietorship concern Jain and company, Mr. Anoop Jain made the payment to Delhi Stock Exchange.
In effect the appellants' sole objection is that there is discrepancy in the timeline when the shares were sold by the appellant No. 1, and thereafter sold by broker to the respondent No. 1 in each appeal and that in Mr. Anoop Jain's case the contract notes, bills for delivery of possession of shares and proof of having paid the consideration is not coming forth and in Saraf brothers' case the contract notes, bills for delivery of possession of shares and proof of having paid the consideration were placed on record by them after the order was reserved by the learned Company Court but they did not get any chance to rebut the same.
The matter is remanded back to the learned Company Court only for the limited purpose to inquire when the 4000 shares subject matter of transfer to Mr. Anoop Jain; 1500 shares subject matter of transfer to Mr. Murari Saraf, 900 shares subject matter of transfer to Mr. Banwari Lal Saraf and 600 shares subject matter of transfer to Mr. Bihari Lal Saraf brothers were sold by the Appellant No. 1, CRB Capital Markets Limited and to whom; and that Mr. Anoop Jain, Mr. Murari Saraf, Mr. Banwari Lal Saraf and Mr. Bihari Lal Saraf have paid the consideration for these shares. Once it is established that appellant No.1 had divested itself of the rights in these shares and sale was concluded before 09.04.1997; and that the consideration is paid by the respondent No. 1 in each appeal to the broker from whom they purchased these, the effect of the impugned order shall follow.
Appeal disposed off by way of remand.
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2024 (7) TMI 1217
Seeking winding up of the respondent company on the ground of non-payment of outstanding dues - Section 433 (e) read with Section 439 of the Companies Act, 1956 - HELD THAT:- It is the opinion of this Court, that since no substantive proceedings have been undertaken towards winding up of the company, the present petition does not deserve to be continued before this Court. Although this company petition has been admitted by this Court, it is at a nascent stage and no effective orders as such have been passed towards the winding up of the company. In other words, given the prevailing facts and circumstances, it is but evident that no irreversible steps have been taken pursuant to the winding up of the respondent company.
Hence, the instant petitions is transferred to the NCLT. It is left to the NCLT to consider the matter and pass appropriate orders in accordance with law - The electronic record of the instant petition be transmitted to the NCLT within a period of one week by the Registry.
List before the NCLT on 04.07.2024 - Petition disposed off.
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2024 (7) TMI 1216
Seeking dissolution of the company - seeking that the Official Liquidator be discharged as its Liquidator - Section 481 of the Companies Act, 1956 - HELD THAT:- In view of the facts and circumstances of the present case, these liquidation proceedings warrant to be brought to an end.
The company (in liquidation) – M/s. Moradabad Syntex Ltd., stands dissolved and the Official Liquidator is hereby discharged as its Liquidator - the present application is allowed.
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2024 (7) TMI 1215
Seeking dissolution of the respondent company (in liquidation) - seeking that Official Liquidator be discharged as its Liquidator - Section 481 of the Companies Act, 1956 - HELD THAT:- Keeping in mind the import of Section 481 (1) of the Act and the facts and circumstances of the present case, these liquidation proceedings warrant to be brought to an end. The Official Liquidator has sought to be exempted from carrying out the publication of the citation of the final winding up, and without further ado the same is allowed and such exemption from publication is granted. Further, the Official Liquidator is permitted to close the books of accounts of the company after adjusting expenses and losses from the CPL - the company is thereby dissolved and the Official Liquidator is discharged.
Failure to file Statement of Affairs of the respondent company - Section 454(5) and 5(A) of the Companies Act, 1956 - HELD THAT:- The Official Liquidator has moved CO.APPL. 641/2023 under Section 481 of the Companies Act, 1956 seeking dissolution of the company (in liquidation) wherein it has been stated that the Official Liquidator has no knowledge of any other recoverable asset, either moveable or immoveable from which any money may be realized for the company (In liquidation). The same has been allowed and disposed of, and the company (in liquidation) stands dissolved accordingly.
Petition disposed off.
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2024 (7) TMI 694
Invocation of arbitration clause in the Retirement Deed and appointment of an Arbitrator - alleged manipulation of accounts by the respondents.
Whether the impugned order is in aid of the main relief? - HELD THAT:- The tests to be applied to Section 17 are somewhat akin to those applicable to interim measures passed in a civil suit under Order XXXIX of the Code of Civil Procedure. Although Section 19 (1) of Arbitration and Conciliation Act, 1996, stipulates that the provisions of the Code are not applicable to arbitral proceedings, nevertheless, the principles thereof apply, as the nature of interim measures which can be granted under Section 17 are equivalent to that under Order XXXIX of the Code. Section 17 (1)(ii) envisages interim measures of protection in respect of certain matters, including the preservation, interim custody or sale of goods which are the subject-matter of the arbitration agreement, securing the amount in dispute in the arbitration, detention, preservation or inspection of any property etc. which may be necessary or expedient for the purpose of obtaining full information or evidence, interim injunction or appointment of receiver and such other interim measures of protection as may appear to the Arbitral Tribunal to be just and convenient. A broad analogy between interim measures under Order XXXIX of the Code and Section 37 of the 1996 Act is thus inevitable.
The last part of Section 17 (1) provides that for such purpose, the arbitral tribunal shall have the same power for making orders as the Court has for the purpose of and in relation to any proceedings before it, thereby importing the governing guidelines of similar orders passed by a Civil Court. In fact, sub-section (2) of Section 17 clearly stipulates that any order so issued under Section 17 shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure in the same manner as if it were an order of the Court, further strengthening the above view. Hence, the entire focus of Section 17 is to preserve the property in statu quo till final disposal of the arbitral proceeding - this issue is decided in the negative, holding that the impugned order is not in aid of the main relief.
Whether the impugned order has the effect of granting the final relief, thus rendering the arbitral proceedings infructuous? - HELD THAT:- Although the impugned order is not in aid of the main relief, if it is implemented, the effect will be that the very plinth of the claimant’s challenge might be rendered infructuous. In the event the claimant succeeds, the financial accounts of the firm will already be a part of the income tax returns filed by the firm, containing the claimant’s signature as well. The learned Arbitrator would not have the jurisdiction to reverse such filing even if the claimant ultimately succeeds in his challenge, since the same is not only beyond the scope of the dispute before the Arbitrator but the Income Tax Authorities are not parties to the arbitration agreement. Hence, in a sense, the impugned order has the effect of rendering the arbitral proceedings infructuous. Thus, this issue is held in the positive.
How far are the Accounting Standards binding on the Income Tax Authorities? - HELD THAT:- A comprehensive assessment of the document relating to accounting standards issued by the Institute of Chartered Accountants of India, on which the respondents rely to support the impugned order, itself clearly enumerates that the auditors are entitled to disown their liability for the statements made therein. It is entirely the responsibility of the management for the preparation of the financial statements giving a true and fair view of the financial position and it is the management which gets the flak for inaccuracy or suppression in the same.
SA 706, the Auditing Guideline, is issued by the Institute of Chartered Accountants of India and comprise of mere guidelines to its own members. Hence, those can at best guide the auditors in their functioning. In fact, there is some doubt as to how far they are binding on the auditors themselves as well. The said accounting standards cannot be stretched so far has to be binding on any third party apart from the institute and its members. Those are not even binding on the clients of the auditors, let alone the Income Tax Authorities. Hence, there is nothing in any law produced before this Court or the accounting standards themselves to indicate that they are binding in any manner on the Income Tax Authorities - the issue is decided in the negative, observing that the accounting standards are not binding on the Income Tax Authorities at all.
Whether the order of the Arbitral Tribunal is binding on the Income Tax Authorities? - HELD THAT:- It is well-settled that legal causes in the nature of matters in rem are not inherently arbitrable and fall beyond the pale of the Arbitration and Conciliation Act, 1996, being under normal circumstances non-arbitrable. Hence, from the perspective of the Income Tax Authorities, no order of the arbitral tribunal, which is an adjudicatory Authority of issues confined to the signatories to the arbitration agreement, can bind the said authority in any manner. The Income Tax Authorities are bound by the provisions of the statute which creates them that is the Income Tax Act, 1961 and function within the confines of the said statute - The observation of an Arbitrator, that too in an interlocutory matter in a dispute restricted to private parties who were signatories to the arbitration agreement, cannot even concern the Income Tax Authorities, let alone to be binding on them. Hence, the present issue is decided in the negative, holding that the order of the arbitral tribunal is not binding on the Income Tax Authorities at all.
Whether the claimant/petitioner can be compelled to sign the financial statements at this stage despite the disputes raised by him to the accounts? - HELD THAT:- The 1961 Act operates in a completely different footing, at least insofar as Sections 271 and 271A are concerned. The said provisions stipulate penalties for deliberate suppression or concealment of the real state of affairs in financial statements and in documents as well as returns and also penalize inaccurate recordings in the financial statements of a firm. Such consequences are direct and criminal in nature, whereas the evidentiary value of recordings in a balance sheet as admission, which was being considered in ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VERSUS BISHAL JAISWAL & ANR. [2021 (4) TMI 753 - SUPREME COURT] was merely in respect of a rule of evidence.
A non-admission of a civil debt by filing of balance sheets is entirely different from penalties imposed for deliberately filing inaccurate balance sheets or concealment of the actual state of affairs in financial statements, which operate in entirely different fields - this issue is answered in favour of the claimant/petitioner and against the respondents inasmuch as the claimant/petitioner cannot be compelled to sign the financial statements at this stage, in the teeth of the disputes raised by him regarding the accounts, before adjudication of the cardinal issue of veracity of the accounts, which is the subject-matter of dispute in the main arbitral proceeding.
The impugned order suffers from utter lack of jurisdiction and authority and is vitiated by a patent misreading of the provision of Section 271 and 271A of the Income Tax Act, 1961. The order is also passed beyond the authority and jurisdiction of the arbitral tribunal as well as violative of the principle embodied in Article 20 (3) of the Constitution of India and thus cannot survive judicial scrutiny.
Petition allowed.
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2024 (7) TMI 485
Seeking issuance of directions to have the proceedings carried out before the National Company Law Tribunals (NCLT), located in various parts of the country and the National Company Law Appellate Tribunal be recorded - HELD THAT:- The Hon’ble Chairperson is requested to examine the viability of the directions sought in the writ petition concerning recordal of proceedings before NCLT benches and NCLAT.
The petitioner is given liberty to place the writ petition before the Hon’ble Chairperson, NCLAT - Petition disposed off.
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2024 (7) TMI 484
Condonation of delay on the part of Petitioners in filing of e-forms in respect of belated annual returns and balance sheets - permission to Petitioners to file e-forms in respect of belated annual returns and balance sheets without charging additional fees - HELD THAT:- On 11.02.2021, the Scheme dated 15.01.2021 was floated by the Union of India for condonation of delay for companies which has been restored on the Register of Companies between 01st December, 2020 and 31st December, 2020. Despite the fact that the Scheme for condonation of delay was already in existence, this Court did not extend the benefit of the Scheme to the Petitioners herein. Meaning thereby, this Court while exercising its jurisdiction under Article 226 of the Constitution of India only directed that the name of the Petitioners to be restored subject to the payment of requisite fees by the Petitioners which actually meant that the Petitioners had to pay the late fees.
The Petitioners by way of the present writ petitions cannot now seek the relief which this Court had not given in the Order dated 11.02.2021. The Petitioners will have to pay the late fees in order to get the name of the Petitioners restored - Petition dismissed.
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2024 (7) TMI 448
Declaration as Significant Beneficial Owner - Non-compliance of Section 90 r/w the Companies (Significant Beneficial Owners) Rules, 2018 of the Companies Act, 2013 - Adjudication of Penalty.
Declaration as Significant Beneficial Owner - HELD THAT:- Section 90 of the Act r/w Rules made thereunder deals with the concept of disclosure of Significant Beneficial Owner (SBC)) in a company. Section 90 provides a dual test of objective and subjective for identification of a 'Significant Beneficial Owner'. The section along with the rules provide for determination of the SBO either through a concept of threshold limit in the shares of the company or through exercise of significant influence or a control in the company, thus Section 90 and the SBO Rules made thereunder does not restrict the threshold limit in shares only, to establish the SBO in a company, when there also exists significant influence or control by any individual directly or indirectly.
From the details submitted by the reporting company vide its various replies to the Registrar, it is clear that all required information and documentary evidences have not been submitted before this office. Further, it also appears from the material placed in this Order that the reporting company has failed to exercise the necessary due diligence to ascertain the SBO in terms of the provisions of Section 90 of Act r/w SBO Rules.
The reporting company has not taken necessary action to identify an individual(s) who is /are SBC) in relation to company and require them to comply with the provisions of Section 90 of the Act, thus the subjected company and its officers who is in default have violated the provisions of Section 90(4A) of the Companies Act, 2013.
Adjudication of Penalty - HELD THAT:- In respect of the violation under Section 90 r/w SBO Rules of the Act, the company Samsung Display Noida Pvt. Limited, its "officers' are further directed pursuant to Section 454(3) (b) of the Companies Act, 2013 to determine all the individuals who fall under the definition of 'significant beneficial owner' in the letter and spirit of the Act, in respect of the reporting company and file the relevant e-form BEN-2 with respect to all such individuals within a period of 90 days from the date of this Order.
Attention is also invited to Section 454(8) of the Companies Act, 2013, in the event of noncompliance of this order. In case appeal is made, 0/0 the Registrar of Companies, U.P may be informed alongwith the penalty imposed and the payments made.
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2024 (7) TMI 199
Relevant date for adjudication of claims - Whether the claims of the applicant are to be adjudicated up to the date of the appointment of the provisional liquidator i.e., 25.02.2002 or up to the date of final winding up of the company (in liquidation) i.e., 09.08.2012? - HELD THAT:- A bare perusal of the order dated 28.09.2012 passed by this Court would substantiate the dual claims of the Bank of Baroda, which had submitted its claim for Rs. 7,56,02,275/- as secured creditor and claim for Rs. 8,34,4,285/- as Debenture Trustee.
Insofar as the plea by the applicant is concerned, that a sum of Rs. 7,56,02,275/- was paid towards full and final settlement of its claim and that it was paid another sum of Rs. 6.50 crores towards its claim upto the date of final winding up i.e. 09.08.2012, the said aspect appears to be factually incorrect as the applicant overlooks that the DRT-II, New Delhi in O.A. No. 54/2002 passed an order thereby making the Bank of Baroda entitled to recover a sum of Rs. 7,57,77,191/- plus interest towards loan defaults, which order was also upheld by the DRAT vide order dated 28.05.2015. It was in respect of the aforesaid claim of Bank of Baroda being in the nature of a secured creditor, that a sum of Rs. 6.50 crores was paid towards full and final settlement of its claim.
The order dated 31.01.2019 has not been assailed by the applicant and the same has attained finality. It goes without saying that a sum of Rs. 7,56,02,575/- has further been paid to Bank of Baroda in respect of the claims in the capacity of being a Debenture Trustee, which has been assessed up to the date of provisional winding up of the company vide order dated 25.02.2002.
There is no error apparent on the face of the record to seek review of the order dated 03.02.2023 passed by this Court - this Court finds no merit in the present application - application dismissed.
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2024 (7) TMI 119
Seeking declaration that the sale agreement dated 5th September, 2007 is not affected by Section 536 (2) of the Companies Act, 1956 and to ratify the said sale - It is the case of the Applicant that the said company did not inform the Applicant of the filing of the winding up petition nor of any order of admission or of winding up and the Applicant came to know of the same only in the year 2011 - HELD THAT:- Pursuant to Section 441 of the Companies Act, winding up of a company by Court shall be deemed to have commenced at the time of presentation of the petition which in the present case would be 25th August 2003. It is also provided under Section 536(2) of the Companies Act that in the case of a winding up by a Court, any disposition of the property of the company made after the commencement of the winding up shall, unless the Court otherwise orders, be void - the jurisdiction vested is equitable and is meant to be exercised as such. If even bonafide transaction for a consideration would not be protected, then the company, only by the fact that the process of winding up has started, would benefit itself by unjust enrichment. Such a result is clearly to be avoided while exercising power under the said provision.
In the case of Pankaj Mehra and Another vs. State of Maharashtra and Others [2000 (2) TMI 718 - SUPREME COURT], the Hon'ble Supreme Court has considered the impact of the legislative direction in Section 536(2) that any disposition of the property of the company made after the commencement of the winding up shall be void. The Hon'ble Supreme Court has observed that there are two important aspects: first is, that the word "void" need not automatically indicate that any disposition should be ab-initio void. That, the legal implication of the word "void" need not necessarily be a stage of nullity in all contingencies. The Hon'ble Supreme Court has observed that the manner in which the word "void" has been employed in Section 536(2), the same means voidable.
In the facts of the case, the Applicant has conducted its due diligence before entering into the sale agreement dated 5th September 2007, has paid the entire consideration to the company in liquidation and the sale agreement is duly registered after obtaining permission from the MIDC and confirmation of no dues from Bank of Baroda and has also settled the dues of the petitioner in the winding up petition - The transaction is not only bonafide but also fair, just and reasonable and deserves to be protected.
The sale agreement dated 5th September, 2007 being a bonafide transaction is ratified - application allowed.
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