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Companies Law - Case Laws
Showing 201 to 220 of 15082 Records
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2024 (7) TMI 72
Prayer for suspension of Look Out Circular (LOC) and permission to travel abroad for the period from 14.06.2024 to 04.07.2024 - HELD THAT:- It is borne out from the record that SFIO is investigating into the affairs of the ‘FHL’ and ‘REL’ and other associated/sister concerns in exercise of its plenary powers under Section 212(4) of the Companies Act, 2013 in larger “public interest” as the matter involves allegations of fraud, misappropriation and siphoning off of the funds through use of multiple conduit companies, ever-greening of loans from the financial institutions and alleged losses caused to the companies and the public.
The deposition by the petitioner in his affidavit dated 18.06.2024 that he has no assets or properties in India is manifestly not bringing forth the correct facts. The deposition is flawed with incomplete disclosure, and thus, not inspiring confidence. The aforesaid narrative coupled with the documents placed on the record invite a strong inference that the petitioner has a huge financial base outside India and he has not come to the Court with clean hands and that by itself disentitles him to grant of any discretionary relief.
This Court finds that having regard to the fact that prima facie it appears that the petitioner has sizeable assets and properties, directly or indirectly, outside India in foreign jurisdictions as discussed hereinabove and there is a strong inference that if liberty to go abroad is granted to him, he may not come back to India to face the investigation and trial, as and when it commences.
This Court finds that the reliefs claimed by the petitioner seeking permission to go abroad to attend the graduation ceremony of his two sons on the scheduled dates cannot be allowed. There are sufficient grounds to raise an inference that in case such liberty is granted to the petitioner, he may abuse the same and may not come back to India so as to scuttle the entire investigation and the ensuing process. Thus, this Court finds no illegality, perversity or incorrect approach adopted by the learned Special Judge in passing the impugned order dated 05.06.2024.
Petition allowed.
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2024 (6) TMI 1450
Scope of appealable order - whether the procedural order passed by the National Company Law Tribunal (NCLT), which directed the consolidation of multiple pending company petitions for adjudication by an appropriate bench, falls within the ambit of appealable orders under section 421 of the Companies Act? - HELD THAT:- In the instant case, when the proceedings were taken up on 09.05.2024, the bench of the Learned Tribunal, realized the fact that there are other Company Petitions which were pending, and hence the Tribunal thought it appropriate to refer the matter to the Hon’ble Chairperson for nomination of the appropriate bench, so that all the matters which are similar in nature, are decided together. This order itself will not amount to be an adjudication of any of the rights to the party to the proceedings.
The observation thus made that the court is not inclined to grant any Interim Relief, “at this juncture”, has been misconstrued by the learned counsel for the Appellant, as if it amounts to denial of the Interim Order. That may not be the case and the correct interpretation of the order for the reason being that the court has expressed his inability to consider the Interim Relief Application at that stage owing to the reasons already given in the preceding paragraph of the Impugned Order as well as this Judgment too. On this simple count and arguments itself, the Learned Counsel for the Appellant has burdened the litigant to this appeal with the preparation of 7 volumes of documents running to 1312 pages, for no good purpose or valid reason.
Conclusion - The appeal is not maintainable as the procedural order does not affect the appellant's rights.
Appeal dismissed.
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2024 (6) TMI 1042
Calling upon to furnish various details, documents and information - challenge to order passed under Section 206 (4) of the Companies Act 2013 - HELD THAT:- The impugned order under Section 206 (4) of the Act should make out a prima facie case as to the information called for, and how the same relates to the business of a Company being carried on for fraudulent and unlawful purpose. In the impugned order, the said linkage is totally absent.
In the impugned order, there is no finding even prima facie of the petitioner’s business being conducted fraudulently or unlawful purpose or in defiance of the provisions of the Act, etc. On the contrary in the affidavit in reply it is stated in the impugned notice respondent no. 1 is not alleging or establishing any fraud against petitioner, but is issued for gathering information and it is an opportunity of being heard. In such a case complying with the preconditions under Section 206 (1) to (3) is mandatory. Therefore, even on this count, initiation of Section 206 (4) of the Act being jurisdictional condition, is not satisfied, and therefore, the impugned order is wholly without jurisdiction.
Therefore, without satisfying these preconditions an order of the nature issued and impugned in this petition cannot be sustained.
Petition disposed off.
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2024 (6) TMI 964
Seeking dissolution of the company (in liquidation) - Section 481 of the Companies Act, 1956 - HELD THAT:- It would be expedient to place reliance on the decision in MEGHAL HOMES (P.) LTD. VERSUS SHREE NIWAS GIRNI KK. SAMITI [2007 (8) TMI 447 - SUPREME COURT] whereby the Supreme Court inter alia held '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 view of the aforementioned decision of the Supreme Court in Meghal Homes and keeping in mind the import of Section 481 (1) of the Act as also 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. Ravindra Dyechem Ltd., stands dissolved and the Official Liquidator is hereby discharged as its Liquidator.
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2024 (6) TMI 963
Jurisdiction of Civil Court vs. NCLT/NCLAT - Dispute related to Transfer of or title of shares - Rejection of plaint under Order VII Rule 11 (a) and (d) read with Section 151 of The Code of Civil Procedure, 1908 - sole reason for rejection of the plaint was that Clause 8 of the SPA operates as a bar on the City Civil Court entertaining the suit - Section 430 read with Sections 58 and 59 of The Companies Act, 2013.
Whether the appellant/plaintiff could have been ousted from the domain of the City Civil Court, Hyderabad by reason of Section 430 read with Sections 58 and 59 of The Companies Act, 2013? - HELD THAT:- Clause 8 of the SPA indicates that the parties agreed to refer any dispute arising from the SPA with regard to transfer of shares from the appellant to the respondents to arbitration. It was hence open to the Trial Court to take the point of arbitrability of the dispute and pass necessary orders consequent to such finding. The issue of arbitrability of the dispute is relevant since counsel for the appellant proposes to file an appropriate application for appointment of Arbitrator under Section 11 of The Arbitration and Conciliation Act, 1996.
The objection raised on behalf of the respondents cannot be accepted since the question whether all the parties to the SPA are before the Court in the application filed under Section 11 of The Arbitration and Conciliation Act, 1996 for appointment of arbitrator may only be gone into at the time of hearing of the application as and when it is filed. It would be unwarranted to limit the options available to the appellant at this stage of the proceedings - the appropriate Court will decide the fate of such application as and when the appellant takes necessary steps in terms thereto.
Applicability of Section 430 read with Sections 58 and 59 of The Companies Act, 2013, to the suit filed by the appellant - HELD THAT:- The Trial Court rejected the plaint under Order VII Rule 11 (a) and (d) read with Section 151 of The Civil Procedure Code, 1908, which provides for rejection of the plaint where the suit appears from the statement in the plaint to be barred by any law. The Trial Court relied on Clause 8 of the SPA to hold that the Civil Court does not have any jurisdiction and that the parties must therefore be relegated to arbitration - the view taken by the Trial Court cannot be agreed upon.
The NCLT is certainly not the proper forum to adjudicate on disputes of individual members with regard to transfer of or title to the shares. Section 430 or Sections 58 and 59 of The Companies Act, 2013, will hence not operate as a bar to the suit filed by the appellant in any manner howsoever.
In the present case, the stand taken on behalf of the respondents amounts to ousting the appellant from all available and competent fora. The Court certainly cannot be a mute spectator to the conduct of the respondent.
The impugned order dated 09.01.2023 is set aside since it is found that Section 430 read with Sections 58 and 59 of The Companies Act, 2013, have no application to the statements in the plaint and the relief sought for therein - application allowed.
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2024 (6) TMI 912
Grant of statutory interest in accordance with Rule 156 of the Companies (Court) Rules, 1959 - scope of the Section 483 of the Companies Act, 1956 - pari passu principle for interest payment between secured creditors and workmen - HELD THAT:- Section 483 confers the right to appeal and forum for the same in respect of any order made in the matter of the winding up of a company by the High Court having jurisdiction in the matter - Further, it is settled position of law that while exercising the power of appeal under the provision of law, the appellate court is to exercise the power of appellate jurisdiction if the order is passed on erroneous consideration of the factual aspect.
The purpose of Section 529-A is to ensure that the workmen should not be deprived of their legitimate claims in the event of the liquidation of the company and the assets of the company would remain charged for the payment of the workers' dues and such charge will be pari passu with the charge of the secured creditors.
In the light of the definition of the “vested right”, it is evident that right accrues to person or persons attached to an institution or building or anything whatsoever, meaning thereby, if an incumbent is claiming a vested right, he is to substantiate before the court of law that the right has been created in his favour by an order passed by the competent authority in accordance with law.
It is evident that in the instant case, the workmen never raised the claim of interest and no such claim of interest was ever adjudicated upon. The payments have been made to the workmen in priority against sale proceeds of unsecured assets of the company in compliance of the order dated 12th August 2016. It has been accepted by the parties and has attained finality.
The section 483 of the Act 1956, confers power of the widest amplitude on the appellate court so as to do complete justice between the parties and such power is unfettered by consideration of facts like who has filed the appeal and whether the appeal is being dismissed, allowed or disposed of by modifying the judgment appealed against. The object sought to be achieved by conferment of such power on the appellate court is to avoid inconsistency, inequity, inequality in reliefs granted to the parties concern.
This Court, after having discussed the issue and taking in to consideration the settled proposition of law and coming back to the impugned order passed by the learned Single Judge, is of the view that if the learned Single Judge has declined to interfere with the prayer made in the interlocutory application for grant of statutory interest, the same cannot be said to suffer from an error.
The instant Company appeals are hereby dismissed.
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2024 (6) TMI 776
Permission for withdrawal of petition with liberty to institute proceedings before the appropriate commercial court for adjudication of their claims - Seeking winding up of the respondent company - Section 433(e) of the Companies Act, 1956 read with Sections 434 and 439 of the Act - Non-payment of outstanding dues with interest.
Winding up of company - HELD THAT:-This Court is of the opinion that the contentions raised by the parties constitute triable issues, insofar that there is a dispute as to the existence of a payable debt. It is trite law that the Company Court cannot enter into an adjudication of disputed facts, wherein a finding on facts is to be recorded as regards whether the liability stated is actually due and payable, and such a case would be the subject matter of a commercial suit.
Withdrawal of petition - it has been prayed by learned Counsel for the Petitioner that they may be permitted to withdraw the present petition with liberty to institute proceedings before the appropriate commercial court for adjudication of their claims in accordance with law - HELD THAT:- Reference may be invited to the decision of a Co-ordinate Bench of this Court in M/S. SHANKAR STEEL SUPPLIER VERSUS M/S. RAMPUR ENGINEERING COMPANY LIMITED [2018 (12) TMI 1308 - DELHI HIGH COURT], wherein it was held that the issues in contention ought to have been raised before the Civil Court, and it was held therein that 'It is settled legal position that it is not the function of the company court to enter into an adjudication of disputed facts which should have been the subject matter of the Civil Suit.'
The present company petition is dismissed as withdrawn, and pending applications, if any, are disposed of. The petitioner is granted liberty to institute proceedings before the appropriate Commercial Court and the petitioner may seek condonation of delay, in accordance with law, for the period of time which has been spent during the pendency of these winding up proceedings.
Petition dismissed.
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2024 (6) TMI 716
Prayer for rejection of plaint - absence of joint family nucleus - declaration of rights - HELD THAT:- The suit is instituted and the principal averment in the plaint is existence of joint family properties. Joint family properties, sought to be partitioned, include immovable properties mentioned in Schedule ‘B’ of the plaint, as well as movable properties and companies registered under the Companies’ Act 2013. Whether the companies can be subject matter of partition is a questionable issue. But there are immovable properties too. It is argued that the plaint failed to disclose genesis of the joint family fund or any particulars on it. Whether the properties were purchased out of joint family fund or not and the question of jointness of movable and immovable properties are question of fact to be established in trial. It is too early to say at this stage, that the suit does not disclose cause of action. Joint fund is averred in the plaint, as stated above; purchase of properties out of joint fund is also averred, which is sought to be partitioned.
The question of existence of nucleus of fund is also a matter of fact to be established in evidence. But at this stage it cannot be said that the suit does not disclose cause of action or barred by Companies’ Act 2013 or Benami Transaction Prohibition Act, 1988. A conclusion at this stage that the suit is barred under the laws, as mentioned above, would be inappropriate. The suit is one for partition. The National Company Law Tribunal has no authority to consider partition suit of immovable properties.
This Court is of opinion that the instant application filed under Order VII Rule 11 of the Code of Civil Procedure, 1908 is not tenable and stands dismissed.
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2024 (6) TMI 715
Winding up of company - Prosecution of the Ex-Directors - guilty of fraudulent concealment and have misappropriated the funds - Failure to discolse sale consideration in the company's bank accounts - Section 433(e) and 435 of the Companies Act, 1956 - HELD THAT:- It is categorically brought out that the true and correct information had not been supplied by respondent Nos. 1 to 4 during the course of winding up proceedings by the Official Liquidator in as much as the aspect of the sale and its consideration, that had been deposited in the Bank of Rajasthan, Karol Bagh Branch, New Delhi, was not disclosed.
All said and done, it stares on the face of the record that in so far as the property in question is concerned, third party rights have already been created much before the initiation of the instant winding up proceedings. There is no iota of allegations by the Official Liquidator that there was any collusion between the Ex-Directors of the company (in liquidation) and respondent No.5 and/or for that matter, the respondent Nos.6 and 7 in any manner and by all means, that they bonafidely purchased the property in question when there was pending no winding up petition.
It is directed that the aforesaid respondent Nos. 1 to 4 are held accountable and liable to pay Rs. 3,60,000/- with penal interest @ 12% per annum from the date of execution of the Sale Deed i.e. 10.03.1999, jointly and severally, which shall be paid to the Official Liquidator within 30 days from today.
Application disposed off.
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2024 (6) TMI 670
Declaring the petitioners as “Willful Defaulters”, in respect of the loan account - diversion of funds - Principles of Natural Justice - HELD THAT:- It is no longer res integra that fair procedure and Principles of Natural Justice, demand that all the underlying documents, which form the basis of the SCN, ought to be provided to the concerned party, so that an effective reply can be filed. If the requisite documents are not provided, then, it cannot be said that an effective opportunity has been provided to the noticee. This would be in direct contravention to the Principles of Natural Justice. Therefore, it is imperative that all the underlying documents, which form the basis of a SCN, are supplied to the noticee.
Since the present case is still at the stage of a SCN, it is directed that the respondent-bank shall provide all the underlying documents, which form the basis of the SCN dated 18th May, 2024, to the petitioners, within a period of two weeks from today - Upon receipt of the documents, the petitioners shall file reply to the SCN, within a period of four weeks, thereafter.
The present petition is disposed off.
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2024 (6) TMI 633
Recovaery of dues - Priority of claims among secured and unsecured creditors - priority charge on liquidation of company’s assets - HELD THAT:- The Supreme Court has in the case of ICICI Bank [2006 (4) TMI 264 - SUPREME COURT] in clear terms, held that the right to property is a Constitutional right and, therefore, right to recover the money lent by enforcing a mortgage would also be a right to enforce an interest in the property. The Court further held that in terms of section 48 of the Transfer of Property Act, claim of the first charge holder shall prevail over the claim of the second charge holder. The Court then, by referring to section 529 of the Companies Act, has opined that merely because such a section does not specifically provide for rights or priorities over the mortgaged assets, would not mean that the provision of section 48 of the Transfer of Property Act, 1882 shall stand obliterated.
The report filed by the recovery officer is in tune with the order passed by this Court. The objection is accordingly rejected.
Seeking release of amount for the purpose of distribution to the certificate holders in terms of recovery certificate after retaining the amount payable to the workers - HELD THAT:- It will be appropriate to direct the Official Liquidator to release Rs. 9.5 Crores in favour of the recovery officer in terms of the prayer made by him. The amount be released within fifteen working days - Application disposed off.
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2024 (6) TMI 632
Seeking winding up of the respondent company - non-payment of outstanding dues - HELD THAT:- Evidently, the respondent company has failed to pay its debt in the normal and ordinary course of its business, hence, the present petition has been filed. However, on a perusal of the record, it is borne out that this winding up petition has been a complete non-starter, and as of yet, no substantial orders have been passed in furtherance of the liquidation of the respondent company.
The instant petition is transferred to the NCLT. Parties to appear before the NCLT on 27.05.2024. The interim orders passed by this Court in these petitions, if any, shall continue till the said date.
Petition disposed off.
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2024 (6) TMI 631
Seeking dissolution of the company - Voluntary Liquidation - Section 497(6) of the Companies Act, 1956 - HELD THAT:- It is stated on behalf of the Official Liquidator that the Official Liquidator is satisfied that the necessary compliance of Section 497 and other relevant provisions of the Act have been made and the affairs of the said company have not been conducted in a manner prejudicial to the interest of its members or to the public interest and the said company may be dissolved.
In view of the foregoing and in view of the satisfaction accorded by the Official Liquidator by way of the present petition, the said company is hereby wound up and shall be deemed to be dissolved with effect from the date of the filing of the present petition i.e. 03.04.2024.
Petition disposed off.
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2024 (6) TMI 510
Seeking transfer of company petition to the NCLAT - Liquidation of a company - 5th proviso to Section 434(1)(c) of the Companies Act, 2013 - HELD THAT:- In view of 5th proviso to Section 434(1)(c), any party or parties to any proceedings relating to the winding up of company pending before any Court may file an application for transfer such proceedings and the Court may, by order, transfer such proceedings to the Tribunal which was then to be dealt with by the Tribunal as an application for initiation of corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016.
It is only where the winding up proceedings have reached the stage where it would be irreversible, making it impossible to set the clock back, that the Company Court must proceed with the winding up instead of transferring the proceedings to NCLT to be decided in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.
Since the Official Liquidator has not invited any claims from the creditors or workers of the company in liquidation, the transfer of proceedings to the NCLT would ensure speedier resolution of the corporate insolvency resolution process while also allowing for a more technical consideration of issues and that further proceedings before the NCLT allows for the creditors to be active and final determinants of how the insolvency resolution process would take place. This Court had also expressed apprehensions in respect of the claims of the workmen as the Official Liquidator had not invited any claims in respect of the creditors/workmen as per the requirement of Rule 148 of the said Rules. Mr.Khan for the Official Liquidator and Ms.Cheema for the Applicant have clarified that Section 53(1)(b) read with Section 15(1)(c) read with Regulations 6(2)(c) and 12(1) of the Insolvency and Bankruptcy Code, 2016 (the “IBC”) would take care of the same. Therefore, in my view, exercise of power under the 5th proviso to Section 434(1)(c) would be appropriate.
The Company Petition shall be treated by the NCLT as an application for initiation of the Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016.
The order of admission dated 28th September 2017 is recalled/revoked.
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2024 (6) TMI 452
Seeking dissolution of the company (in liquidation) - Section 481 of the Companies Act, 1956 - HELD THAT:- Since the company (in liquidation) did not have sufficient funds and no further assets were available with the Official Liquidator from which any money could be realised and be paid to any of the creditors of the company, other than its Secured Creditors, an application was moved on behalf of the Official Liquidator bearing CA No. 561/2023, interalia seeking permission to make payment to the Secured Creditors and transfer the available balance, if any, to the Common Pool Fund, after deduction of the Liquidation Expenses incurred by the office of the Official Liquidator.
At present, it is stated that the company (in liquidation) has no further assets, either movable or immovable, from which any money can be realised. Therefore, the present application has been filed under Section 481 of the Act for dissolution of the company (in liquidation), as no fruitful purpose would be served in keeping the present winding up proceedings pending.
Keeping in mind the import of Section 481 (1) of the Act as also 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. Sarvodya Paper Mills Ltd., stands dissolved and the Official Liquidator is hereby discharged as its Liquidator.
Application for dissolution allowed.
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2024 (6) TMI 253
Provisional winding up of the Company u/s 450 of Companies Act, 1956 - Whether the present company petition needs to be admitted and steps be taken for liquidation of the company by appointing the Official Liquidator? - fraudulent activities carried on or not - HELD THAT:- Appellant allege fraudulent activities in the respondent - Company, it is a matter of records to be verified. If a Company engaged in fraudulent activities, it may be wound up. Fraudulent activities can include misappropriation of funds, falsifying financial statements, and other illegal activities. Having regard to certain allegations made by the appellant, respondents have to clarify with material information. The same has not been examined by the learned Company Judge while deciding the Company Petition.
The respondents have very vaguely defended while alleging that appellant who was Managing Director for the year 1980 to 1986, certain irregularities have been committed for which he was subjected to prosecution. However, what happened to such prosecution has not been apprised and what would be the result. This is just only to prejudice this Court, such statement has been made. At one stretch the respondents have submitted that appellant while leaving Biharsharif in the year 1986 have sold his three residential properties. How is it relevant for the present case is not forthcoming.
The winding up order may also be made if it is approved that the affairs of the Company have been conducted in a manner unfairly and prejudicial to the interest of some shareholders of the Company or its shareholders generally. In considering the various factual aspects of the matter the Court still shall taken into account the circumstances of the Company including whether it is insolvent and whether there is any alternative solution to the dispute such as buying each of the shares of disgruntled and dissatisfied shareholders. These are all the material which was required to be taken note of by the learned Company Judge while deciding Company Petition No. 2 of 2013 with reference to the various contentions raised by the appellant/petitioner.
Both appellant and respondents are hereby directed to furnish material information in support of their each of the contentions. The respondent - Company is also required to apprise the learned Company Judge what are the development in respect of company affairs after disposal of certain movable and immovable properties.
Application disposed off.
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2024 (6) TMI 196
Maintainability of petition - lack of territorial jurisdiction - invocation of Doctrine of Forum Conveniens - cheating - misappropriation of funds - defrauding of the investors - siphoning of the funds - HELD THAT:- A plain reading of Clause (2) to Article 226 of the Constitution of India makes it clear that the High Court could issue a writ when the person or the authority against whom the writ is issued is located outside its territorial jurisdiction, provided the cause of action wholly or partially arises within the Court’s territorial jurisdiction. Needless to state that the expression‘cause of action’ for exercising powers under Article 226 (2) of the Constitution of India is to be assigned the same meaning as assigned to such an expression under Section 20 (c) of the CPC.
Further, merely because the seat or the main head office of the respondent is located in Delhi would not be sufficient to confer jurisdiction upon this Court. Reference in this regard can be invited to a decision by the Supreme Court in the case of UNION OF INDIA (UOI) AND ORS. VERSUS R. THIYAGARAJAN [2020 (4) TMI 915 - SUPREME COURT] wherein it is reiterated that unlike the Supreme Court, which can exercise jurisdiction over the entire country, the jurisdiction of the High Courts is limited to the territorial jurisdiction of the State (s) of which it is the High Court; and that such orders may be passed if it impacts the people within its territorial jurisdiction and the High Courts have no pan-India jurisdiction. Further, there is no averment that any person or authority within the territorial jurisdiction of this Court is substantially affected by the affairs of the company in question i.e. VSPL.
There is no gainsaying that the respondent has its Regional Office with necessary paraphernalia in the State of Karnataka and the petitioner has appropriate efficacious remedy to approach the Karnataka High Court in order to seek appropriate reliefs. In a case like the present one, this Court can refuse to exercise its discretionary jurisdiction by invoking the Doctrine of Forum Conveniens.
Reference made to a decision by the Supreme Court in the case of U.P. RASHTRIYA CHINI MILL ADHIKARI PARISHAD LUCKNOW VERSUS STATE OF U.P. [1995 (7) TMI 423 - SUPREME COURT] wherein it was held that the situs of office of the Parliament, Legislature of a State or Authorities empowered to make subordinate legislation, would not by itself, constitute any “cause of action” or “cases arising”. Likewise, mere fact that the respondent-Ministry of Corporate Affairs can appoint or entrust the investigation to the SFIO from Delhi would not by itself be sufficient to invoke the territorial jurisdiction of this Court.
The present Writ Petition is dismissed for not being maintainable before this Court for lack of territorial jurisdiction.
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2024 (5) TMI 1533
Professional misconduct - Role of NFRA V/s ICAI on disciplinary matters of Chartered Accountants - Retrospective V/s prospective applicability of provisions as contained in Section 132 of Companies Act, 2013 as well as NFRA Rules, 2018 - it was held by NCLAT that 'It is of utmost importance that Auditors realise their responsibilities which is necessary not only to the company but also to the public. In view thereof, giving effect to the Impugned Orders which highlights the professional misconduct and other misconduct on the part of the appellant vis-à-vis a public listed company become quintessential so as to make public aware and enable them to make informed and sound financial decisions and investments.'
HELD THAT:- There are no good ground and reason to interfere with the order of the National Company Law Appellate Tribunal - appeal dismissed.
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2024 (5) TMI 1525
Levy of penalty u/s 203 of the Companies Act 2013 - non consideration of material facts - principles of natural justice - HELD THAT:- The language of sub-Section (5) of Section 203 is that if any company makes any default in complying with the provisions of the Section, such company “shall be liable to a penalty” of the amount as stipulated therein. Thus, payment of penalty is not mandatory. The “liability” to pay penalty is subject to adjudication by the concerned authority, that is, the ROC - Such discretion has, associated with it, a responsibility of the adjudicating authority to take into consideration any mitigating or alleviating circumstances which might have visited the company in question before imposing such penalty and or deciding the quantum of the penalty.
Conclusion - In the absence of any real consideration worth the name of the mitigating circumstances of the petitioner company and the small size of the petitioner company, including that of its number of shareholders and share capital, as well as the fact that a whole-time Company Secretary has already been appointed by the company since July 15, 2022 and was functioning on the date of passing the impugned order, the impugned orders of the Appellate Authority as well as the ROC are vitiated for non-consideration of material fact.
The impugned order set aside - petition allowed.
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2024 (5) TMI 1522
Seking winding up of the respondent company on the grounds of non-payment of outstanding dues along with due interest - Section 433 of the Companies Act, 1956 - HELD THAT:- The entire statutory scheme in respect of winding up of companies, as also a catena of judgements has been considered by the Supreme Court in holding that even post admission, such a petition may be transferred by the High Court to the NCLT, as long as no irreversible steps have been taken pursuant to the winding up of the company concerned. Further, the submission of the learned Counsel for the petitioner that no application seeking transfer of the present petitions to the NCLT has been moved, cannot be countenanced. A decision to transfer the matter to the NCLT is a matter of jurisdiction of the Court, which transfer can be effected suo moto by this Court and mere moving or non-moving of an application by any of the parties seeking such transfer, will not be decisive.
Conclusion - It is the opinion of this Court, that since no substantive proceedings have been undertaken towards winding up of the company, the present petitions can not be allowed to be continued before this Court. Hence, the instant petitions are transferred to the NCLT. It is left to the NCLT to consider these matters on merits and pass appropriate orders in accordance with law.
List before the NCLT on 08.07.2024.
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9911796707
