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Showing 361 to 380 of 7386 Records
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2025 (5) TMI 1159
Disallowing the indexed Cost of improvement while working out the capital gain on sale of property - HELD THAT:- On behalf of the assessee / appellant, summary of improvement bill furnished before us in which all the details / explanation given and it can’t be inferred that expenses, details of expenses which is submitted are not integral part of furnished house and we have no hesitation to hold that the finding of both the lower authorities quite unsustainable in law in this regard and so ground No.1 is hereby allowed and addition in question deserves to be deleted.
Treating cash deposit during demonetization period in joint account held by the assessee with her husband, as un-explained investment of the assessee u/s 69 - HED THAT:- It is brought in our notice that the assessment order for A.Y. 2017-18 in the case of Deepak Mathur (joint account holder and husband of the assessee Vandanda Mathur)in which the same amount was added in the hands of Sh. Deepak Mathur and view of that same amount cannot be taxed in the hands of assessee/ appellant Vadana also as it will create double taxation which is contrary to law and by only this reason the ground is deserves to be allowed and addition is deleted.
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2025 (5) TMI 1158
Undisclosed interest income earned on undisclosed deposits in foreign bank account (HSBC) - HELD THAT:- Since the quantum addition has already been deleted by the Tribunal the interest income which was added in the assessment year under consideration is liable to be deleted. Thus, we direct the AO to delete the interest income which was added in the assessment year under consideration.
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2025 (5) TMI 1157
Application of ICDS III to assessee being a civil contractor - Scope of Percentage of Completion Method (POCM) for revenue recognition in construction contracts - HELD THAT:- Assessee is mandated to follow ICDS III and has rightly followed the same and accounted the entire revenue as required by ICDS III in computing its total income. We also hold that the assessee paying GST on the basis of invoices raised and not on the basis of POCM will have no implication on the computation of total income of the assessee.
We also find merits in the argument of assessee has by itself has returned a total income of Rs. 9,79,75,000/- on a gross POCM of Rs. 42,26,67,000/- which itself amount to a net income of 23.18% and that if the addition made by the AO is also taken into account the net margin of the assessee would be 48.64% which appears to be improbable in the assessee's line of business.
Having found that the income has been correctly accounted as per POCM and that the manner of paying GST has no implication on the quantum of income to be offered and which has been correctly offered and that there is no conflict between the ICDS and the Income Tax Act, we are of the considered view that no interference is warranted with the findings and the order of the Ld. CIT(A) in deleting the additions made by the AO. Appeal of the revenue stands dismissed.
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2025 (5) TMI 1156
Assessment u/s 153A - Additions made u/s 68 - HELD THAT:- In view of the foregoing, and respectfully following the orders of Abhisar Buildwell (P.) Ltd [2023 (4) TMI 1056 - SUPREME COURT] and U.K. Paints (Overseas) Ltd [2023 (5) TMI 373 - SC ORDER] and further, on due consideration of aforesaid Instruction of Central Board of Direct Taxes (CBDT) [Instruction No. 1 of 2023 (F. No. 279/Misc./M- 54/2023-IT)] directing the field authorities to implement the aforesaid orders, in uniform manner we direct the AO to delete the aforesaid additions made u/s 68 of the Act, whereof is mentioned respectively in Ground no. 1 of each of these appeals.
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2025 (5) TMI 1155
Seizure of imported goods - issuance of summons to petitioner - import of over 9,86,000 pieces of tempered glass but the Bill of Entry filed for only 1,00,000 pieces - HELD THAT:- A perusal of the record would show that the adjudicating authority would need to reconsider the amounts to be imposed in this matter and rectify the impugned order.
Let the Petitioner, accordingly, appear before the adjudicating authority on 15th May, 2025 along with all the requisite documents. The adjudicating authority shall rectify the order accordingly and pass a fresh adjudication order within 30 days.
Petition disposed off.
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2025 (5) TMI 1154
Classification of Imported waste, parings and scrap of Polyurethane - goods appear to fall under category restricted import - Challenged the seizure memorandum issued under Section 11 - HELD THAT:- On going through the record, it is clear that though material is Polyurethanes, but not in its Primary Form. Waste, scrap and parings of polyurethanes under heading CTI 39159063 falls under restricted import. Goods in question are waste, parings and scrap of polyurethanes. Goods are top skin, bottom skin, side skin, shredding and trimmings of polyurethanes foam, therefore, it comes within the definition of scraps, waste and parings. No error has been committed by respondents in seizing the import material which comes within the category of restricted import.
Thus, writ petition is dismissed.
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2025 (5) TMI 1153
Liability of importer to pay customs duty - imports cleared using forged or tampered Duty Free Scrips issued by the Directorate General of Foreign Trade (DGFT), which were manipulated in the Customs Electronic Data Interchange (EDI) system - extended period of limitation - levy of penalty - HELD THAT:- It clearly transpires that the Duty Free Scrips issued by the DGFT were tampered with by accessing the EDI system of Customs and enhancing and manipulating the data/information of the Duty Free Scrips and these Scrips were utilised for payment of duty for the goods imported by the importer.
It is also not in dispute that the clearances of the goods where such Scrips were used to pay duty had taken place through one common Customs Broker namely M/s Kirti Cargo through ‘G’ card holder Sharafat Hussain. It clearly, therefore, transpires that the original Scrips/Licence issued by DGFT were different from what were actually registered in the system. All has been contended on behalf of the Mukta Enterprises and Rajinder Jain is that they were not involved in this act of forgery/manipulation of Scrips. The Scrips through which duty was debited were clearly forged as the original Scrips had been tampered with.
In M/s Mercedes Benz India Private limited, M/s O.A. Associates, Pashupati Acrylon Limtied versus Commissioner of Customs, Delhi, Additional Director General (Adjudication), New Delhi, Directorate of Revenue (Intelligence) & Others [2020 (2) TMI 437 - CESTAT NEW DELHI], the Tribunal examined almost a similar situation and held that the importers cannot be permitted to take the plea that they were not involved in fraud or forgery, even though the Scrips/Licences were forged.
The aforesaid decisions have examined both the aspects namely, as to whether the importer can contend that he was not responsible for the manipulation/forgery committed in the Scrips and whether in such circumstances the extended period of limitation can be invoked. These decisions do not support the contentions advanced by learned counsel for the appellants that the appellant was not responsible for the forgery. The aforesaid decisions hold that when the Scrips are forged they are void ab initio since fraud vitiates everything and the importers cannot be permitted to take plea that they were not involved in the fraud or forgery, even though the Scrips were forged.
It is also not possible to accept the contention advanced by the learned counsel for the appellant that the extended period of limitation could not have been invoked in the facts and circumstances of the present case.
Conclusion - i) The "fraud vitiates everything" and instruments such as Duty Free Scrips that are forged or manipulated are "void ab initio." Consequently, any customs duty purportedly paid through such forged scrips is "non-est" and amounts to short payment of duty, justifying demand under section 28(4) of the Customs Act. ii) The demand for customs duty with applicable interest and penalties upheld, the plea of innocence by the importer and its partner rejected.
There is no infirmity in the order passed by the Commissioner. The two appeals, therefore, deserve to be dismissed and are dismissed.
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2025 (5) TMI 1152
Levy of penalty - possession of the seized gold bars without valid licit documents - onus u/s 123 of the Customs Act upon the appellant to prove legality of the goods - HELD THAT:- The appellant has not mentioned anything about the recording of the statement under duress before the Magistrate or in the bail applications filed by him. He was released on bail w.e.f 12.12.2018, however, he has not retracted his statement till 26.06.2019. Thus, we observe that the retraction was only an afterthought, which need not be taken cognizance. Accordingly, the statements given by the appellant can be relied upon against him to establish his role in the offence.
Section 112(b)(i) of the Customs Act of 1962 states that someone who acquires possession of goods that they know or believe are liable to confiscation is liable to a penalty. In view of the above findings, the Appellant had knowingly or consciously involved himself in the alleged act of carrying gold without any valid documents. As the role of the appellant in the offence committed has been established based on his own admission, the appellant is liable for penalty as per section 112 (b)(i) of the Customs Act, 1962. Accordingly, the ld. adjudicating authority has rightly imposed penalty on the Appellant under Section 112(b)(i) of the Customs Act, 1962.
The appellant is an intermediary and he was not the ultimate beneficiary of the smuggled gold. Thus, the penalty imposed on him is very high and it can be reduced to commensurate with the role played by him in the offence. Accordingly, the penalty imposed on the appellant in the impugned order reduced from Rs.52,55,000/- to Rs.10,00,000/-.
Conclusion - The confiscation of the gold bars and the imposition of penalty on the appellant under the Customs Act affirmed, holding that the seizure was lawful, the onus was rightly cast on the appellant who failed to discharge it, the statement recorded under Section 108 was admissible, and the penalty was justified though reduced in amount to reflect the appellant's intermediary role.
Appeal disposed off.
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2025 (5) TMI 1151
Sentence awarded for offences u/s 12(1B) of the SEBI Act, 1992 and various provisions of the CIS Regulation, 1999 - seeking leniency in sentence awarded to Respondent Vijay Laxmi and has sought enhancement of the sentence - As submitted that the learned Trial Court has erred in relying upon the alleged medical record of the Respondent which were produced before the learned Trial Court at the time of Arguments on Sentence which indicated that she was suffering from ‘Organic Bipolar Disorder’
HELD THAT:- At the stage of Order on Sentence, medical documents of the year 2020-2021, 2022-2023 and 2023-2024 had been filed in support of her medical condition. The medical condition was also held to be apparent from her appearance as she was not responding well to the questions put to her.
Considering her medical condition, it was not considered necessary to get her examined by the Medical Board since it was not a case of Mental unsoundness of mind. However, considering the long trial and her medical condition, she was sentenced to imprisonment of “till rising of the Court” and to pay fine of Rs. 5,00,000/- with further directions that if the fine amount is not paid, the same shall be recovered from her Estate.
The aforesaid observation made by the learned Additional Session Judge in the Order on Sentence clearly reflects application of mind and consideration of all the attending circumstances.
Essentially, the Respondent may have been held guilty of the offences under Section 12 (1B) of SEBI Act, 1992 and Regulation 5 (1), 68 (1), 68 (2), 73 and 74 of the CIS Regulation, 1999, but the sentence is always tailored to the specific role of the convict as well as attending circumstances. It has been clearly noted that the trial took place for a period of twenty years, the travails of which were faced by the Respondent. Her medical condition over a period of time had deteriorated and she suffers from Schizophrenia and delusions hallucination which is a part of ‘Organic Bipolar Disorder’. Suffering from a mental condition does not imply that she is mentally unsound or that the trial/ sentence was required to be suspended till she recovers fully.
Considering Respondent’s age and her medical condition, as was reflected in the medical record, she has been awarded sentence of “till rising of the Court” and to pay fine of Rs. 5,00,000/-, which cannot be stated to inappropriate or inadequate in the given circumstances. There is no ground to justify that the sentence awarded is inadequate. There is no merit in the present Petition.
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2025 (5) TMI 1150
Collective Investment Scheme (‘CIS’) without obtaining registration from the respondent complainant Board - as alleged that the accused persons illegally mobilised funds from the public under CIS in violation of the relevant provisions of the SEBI Act and concerned regulations, whereunder such a practice has been declared as fraudulent and unfair trade practice - limited ground agitated by the petitioner is that the complaint is bereft of necessary averments in relation to his role in the accused company and that the learned Trial Court has erroneously framed charges against him without considering that there is no strong suspicion. No arguments have been made in relation to whether the schemes run by the accused company were in the nature of CIS.
HELD THAT:- The complaint ought not to be quashed before the parties have been allowed to lead evidence if the same contains necessary averments, unless such unimpeachable material is brought by the accused to show that interference of the Court is required and trial should not be allowed to continue against the accused.
Necessary averments have been made in the complaint and a prima facie case is made out against the petitioner considering the orders of the Whole Time Director who found that the schemes run by the accused company are in the nature of CIS. No unimpeachable material has been put forth by the petitioner to show that he was not involved or in charge of the regular affairs of the accused company. On the other hand, it is argued on behalf of SEBI that there is cogent material to show the involvement of the petitioner, including his presence in board meetings as well as him being one of the first Directors and promoter of the accused company. It is relevant to note that the allegations in the present case relate to the very nature of operations of the accused company. While the role of the petitioner would be seen during the course of the trial, at this stage, it cannot be held that merely because the specific role of the petitioner is not spelt out in the complaint, the same is sufficient to exonerate him.
Insofar as the challenge to the order on charge is concerned, it is argued on behalf of the petitioner that strong suspicion is also required for framing of charges, despite which, the charges have been framed by seeing the existence of prima facie case against the petitioner.
As argued that the charges have been mechanically framed by the learned Trial Court. It is apposite to succinctly discuss the statutory law with respect to framing of charge and discharge as provided under Sections 227 and 228 of the Code of Criminal Procedure, 1973 (‘CrPC’).
Trial Court while framing charges is not required to conduct a mini-trial and has to merely weigh the material on record to ascertain whether the ingredients constituting the alleged offence are prima facie made out against the accused persons.
This Court, at the stage of framing of charges, is not required to evaluate the evidence or hold a mini trial. As specifically noted in the case of State of Gujarat v. Dilipsinh Kishorsinh Rao [2023 (10) TMI 1346 - SUPREME COURT] the Court is not required to venture into the probability of conviction at this stage and is only required to look into the prima facie case without delving into the probative value of the material on record. It is correct that grave suspicion is required for framing charges against an accused, however, it cannot be said that no strong suspicion exists against the petitioner merely because the complaint only contains the necessary averments against the petitioner.
As noted above, to quash the proceedings by petition filed under Section 482 of CrPC, the petitioner is to place some unimpeachable and uncontroverted evidence which is beyond suspicion or doubt. Thus, any defence in relation to the petitioner being an inactive Director cannot be probed at this stage in the absence of any direct and unimpeachable material to show the same. In such circumstances, at this stage, in the absence of such evidence, the question as to whether the accused person was responsible for the affairs of the accused company at the relevant time becomes a factual dispute, which is to be seen during trial.
Clear unambiguous averment in relation to the petitioner has been made in the complaint and from the totality of facts, at this stage, it cannot be said that the petitioner was not in charge of, and was responsible to, the company for the conduct of the business of the accused company at the time of commission of offence. Exercising the inherent jurisdiction at this juncture to quash the proceedings, before the respondent has had an opportunity to lead its evidence, will be an abuse of the process of law.
This Court finds no reason to interfere with the order on charge passed by the learned Trial Court or to quash the complaint.
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2025 (5) TMI 1149
Violation of Principle 4 of Schedule A of the PIT Regulations - SEBI imposing a monetary penalty of Rs. 30 lakhs u/s 15I of the SEBI Act upon the appellants - disclosure obligations under PIT Regulations and LODR Regulations - Whether the appellants had an obligation under Regulation 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") to confirm or deny the market rumours regarding the Facebook investment in Jio Platforms Limited ("JPL") during the period prior to formal announcement.
HELD THAT:- Appellants' plea that only till a binding agreement is signed, the information cannot be held as concrete or credible is devoid of merit, which if acceded to, would defeat the spirit of PIT regulations. There would be nothing left in a deal once a binding agreement is signed, as the listed entity has to mandatorily make due disclosure. This implies nonrecognition of Principle-1 as the listed entity is required to make UPSI generally available to public, when it comes to being as a credible and concrete piece of information. If appellants' view is to be accepted, no information relating to a potentially price sensitive transaction, enumerated in Reg. 2(n) of PIT regulations may be treated as UPSI till such a transaction is actually culminated through a binding agreement. That will defeat the very purpose of the said regulations.
There was no need to disclose any information, since the information was already got disclosed in Media and was already 'generally available' - This plea is devoid of merit, as it is the responsibility of the company to give clarity on the matter to the investors and public at large with a credible and concrete explanation. In the absence of this, such a speculative information would keep floating around, which may break the integrity of the securities market. If at this stage, the appellant had disclosed the basic facts about the deal clarifying that no binding agreement has been signed, it would have settled the dust and stabilized speculative trends.
In our view, selective leakage of the information, howsoever accurate or otherwise or complete or in bits and pieces, does not discharge the company from its responsibility of making prompt disclosure to make it generally available, moreso when such information has been classified by company as UPSI. Till the information is disclosed by the company, it remains unauthenticated. The information leaked to news agencies remains selectively available to their subscribers / readers only and cannot be held as 'generally available' to the entire universe of investors of the company, for whom the company appointed a Chief Investor Relations officer to make such UPSI 'generally available'. It takes the characteristics of a 'generally available' information only when the company authenticates it.
Otherwise, it is only a speculative piece of information. This is evident by the fact though there was a price rise of 15% through speculative reporting in Newspapers, etc. on March 24, 2017, but despite of such a steep price rise, later when the company made a formal disclosure on April 21, 2020, making the information generally available, there was a further significant spike of 10% noted in market price. Thus, in respect of a materially price sensitive matter in the nature of significant cross-border investment in a company such as RIL, the information may be held as 'generally available' only when company authenticates it and not merely on the basis of a newspaper leakage, not authenticated by the company.
In terms of the Principle-4, if the information gets selectively disclosed, whether inadvertently or otherwise, whether or not due to anyone's omission or commission, it definitely shows lack of due care by the company. Undisputedly, the company had suo motu not made prompt disclosure of information under the Principle-1. The least the company could have done on noticing selective leakage of the information, was to make a timely and prompt disclosure of information to one and all.
Company was not required to come clean with regard to 'bits and pieces of UPSI' - The news which was flashed globally and was followed in Indian media on March 24, 2017, based on which the Market price was significantly increased, relates to substantial equity infusion in its material subsidiary by Facebook (which was proved to be correct in a few weeks later). By this stage, certainly, such an information had reached a stage to be treated as concrete, while it was certainly credible since signing of NDA between two sides. Hence, we find no merit in the plea that the said information would have been PSI only when valuation figures were to be available after due diligence.
We note that both the sides have extensively debated on LODR Regulations specifically whether Regulation 30(11) is discretionary or mandatory. The respondent's case is that while a listed entity shall be bound to disclose the information to the exchange when called upon to do so, it 'may' on its own initiative also do the same and, therefore, when read together it makes obligatory on the company to make suo motu disclosure, where it has not been asked by the regulator. The appellant's plea is based on interpretation of Regulation 30(10) independent of Regulation 30(11). We are in agreement with Mr. Sancheti that correct interpretation of Regulation 30(11) can be made when read in juxtaposition with Regulation 30(10). The term 'may' used in Regulation 30(11), when read with Regulation 30(10) provides for compliance by the listed entity in the given circumstances, whether in response to any query raised by the exchange or otherwise. Here, 'may' needs to be read as an adjunct to mandatory requirement of Regulation 30(10). This requirement was applicable to all listed entities till the beneficial proviso brought in w.e.f. June 14, 2003, restricted its applicability to only top 100 companies.
However, having held so, we are of the view that this issue is not germane to the violation under PIT Regulation. We have already held in the preceding paragraphs that it was incumbent on the appellant to disclose the information, which is in the nature of UPSI, in terms of Schedule A of the PIT Regulations. We, therefore, limit our observations in foregoing paragraphs to current facts, circumstances and records made available to us.
We find the appellants in violation of Principle 4 of Schedule A of the PIT Regulations and uphold the order of the AO.
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2025 (5) TMI 1148
Insider trading - SCN holding the appellants to be ‘insiders’ under Regulation 2(1)(g)(ii) of the SEBI (PIT) Regulations, based on alleged access to UPSI through (Late) Mr. Rakesh Jhunjhunwala but order holds the appellants as “connected persons” which implies reliance on Regulation 2(1)(g)(i) requiring a distinct and separate legal standard - as alleged that the respondent has effectively modified the basis of the original SCN without due notice or opportunity of rebuttal.
Whether appellants are ‘insiders’ under the PIT Regulations? And if so, whether they are insiders being “connected person” under Regulation 2(1)(g)(i) or by “being in possession having access to UPSI” under Regulation 2(1)(g)(ii)? - HELD THAT:- As we find no ground for holding appellant no. 1 as ‘connected person’ qua Aptech under Regulations 2(1)(g)(i). We have already held that preponderance of probabilities, do not suggest that appellant made trading while he was in possession of or had access to UPSI and hence he cannot be held as an insider under Regulation 2(1)(d)(ii). In view of this, we decide this question in negative.
Whether the trading behaviour of the appellants can be construed to hold that trading by the appellants was guided by the UPSI? - Appellants did not exploit the advantage of having alleged access to UPSI and continued to hold on to it for a long period of 8 years. This substantiates the appellant’s explanation that their trading was made in accordance with their long-term investment strategy about this stock, considering certain positive developments. Moreover, if the company is venturing into education sector, which even in respondent’s view is a new area, (as the company has been in ‘vocational training’), a long-term investment at early stage could perhaps be a prudent investment strategy.
Appellants are right in contending that under the Regulations 2(1)(g)(ii), the onus is on SEBI to prove that appellant had access to UPSI. This is a foundational fact, in terms of Balram Garg decision (SC), which needs to be proved in order to hold the charges of insider trading.
We find no evidence in this regard and preponderance of probabilities also do not indicate that appellants had access to UPSI. On the contrary, the appellant cannot be called upon to prove that their trading was not guided by UPSI. However, appellants attempted to provide reasons for their trading behavior, inter-alia, their perception of positive outlook about Aptech, which respondent attempted to rebut before us. However, in our considered view, since appellants were held as ‘insider’ under Regulations 2(1)(g)(ii) in the SCN, they were under no onus to prove that the trading was not guided by UPSI as onus was on the SEBI and not on them. In view of this, the question B is decided in negative.
We do not find merit in the findings of the respondent that appellants are in violation of PIT Regulations, 2015 with regard to trading in Aptech shares.
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2025 (5) TMI 1147
Rejection of Section 9 application filed by the Respondent - jurisdiction to direct for investigation against the Appellant who was arrayed as Respondent No.1 in the Section 9 application - HELD THAT:- The application under Section 9 has already been rejected which was filed by the Operational Creditor against the Appellant. No issue pertaining to Section 9 has been raised in this Appeal nor needs any consideration. The judgment of the Hon’ble Supreme Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited [2017 (9) TMI 1270 - SUPREME COURT] dealt with the statutory scheme under Sections 8 & 9 in which judgment the issues which are sought to be raised in the Appeal were not under consideration, hence, the said judgment does not give any support to the submission which has been raised in this Appeal by the Appellant.
In Allahabad Bank vs. Poonam Resorts Limited [2020 (5) TMI 563 - NATIONAL COMPANY LAW APPEALLATE TRIBUNAL, NEW DELHI], this Tribunal observed that the ‘I&B Code’ does not envisage a pre-admission enquiry in regard to proof of default by directing a forensic audit of the accounts of the ‘Financial Creditor’, ‘Corporate Debtor’ or any ‘financial institution’. In the above case, Adjudicating Authority has passed an order on objection raised by the Corporate Debtor that Financial Creditor has initiated proceeding fraudulently. Adjudicating Authority appointed PWC as Forensic Auditor to examine allegations raised by the Corporate Debtor and submit an Independent Report which order was set aside while allowing the appeal. This issue which was raised in the above appeal have no applicability in the facts of the present case.
Now it is required to look into the judgments which have been relied by the Counsel for the Amicus Curiae. Counsel for the Amicus Curiae has also relied on judgment of this Tribunal in “Lagadapati Ramesh” [2019 (9) TMI 1316 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] as well as “M. Srinivas” [2019 (11) TMI 290 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] to support his submission that the Adjudicating Authority can refer or forward the order passed by the Central Government for investigation. From the scheme under Section 213 as noticed above, it is clear that the Adjudicating Authority while exercising jurisdiction of the NCLT can also issue direction for investigation but said direction has to be in accordance with the statutory scheme i.e. after giving a reasonable opportunity of being heard to the parties against whom investigation is ordered.
Present is not a case, as observed above, where Adjudicating Authority has directed any investigation under Section 213 rather has forwarded the copy of the order to the Central Government Ministry of Corporate Affairs for taking such steps as may be necessary. It is already held that direction issued by the Adjudicating Authority in paragraphs 65 and 66 cannot be read to mean any direction to Ministry of Corporate Affairs or any other statutory authorities to carry out the investigation.
Conclusion - i) The Adjudicating Authority while exercising jurisdiction under Section 9 of the IBC also exercise jurisdiction of NCLT under the Companies Act, 2013. ii) Adjudicating Authority in exercise of powers under Section 213 of the Companies Act, 2013 can direct for investigation but the said investigation can be directed after complying the pre-condition i.e. affording a reasonable opportunity to the parties concerned. The order passed by the Adjudicating Authority in paragraphs 65 and 66 cannot be held to be an order directing any investigation. iii) NCLT can also exercise inherent jurisdiction under Rule 11 in a case where NCLT is of the view that copy of the order need to be forwarded to the relevant statutory authorities, it can forward the copy for doing needful. The direction under Section 212 to carry out any investigation of company’s affairs by SFIO can be made only in accordance with the statutory provisions of Section 212 and Adjudicating Authority while exercising jurisdiction under the Companies Act 2013 cannot issue any direction to SFIO for carrying out investigation.
Appeal disposed off.
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2025 (5) TMI 1146
Seeking a direction to provide assistance to the IRP in obtaining peaceful physical possession of the assets of the Corporate Debtor - jurisdiction of Adjudicating Authority to entertain the application filed by the IRP seeking possession of two flats - HELD THAT:- There are no substance in the submission of the Counsel for the Appellant that application filed by IRP was not maintainable before the Adjudicating Authority. Admittedly, the Flats were owned by the Corporate Debtor and IRP was under obligation to take possession of the assets of the Corporate Debtor. Counsel for the Resolution Professional submitted that the CIRP process is underway and Resolution Plan has been received and there being no clarity with regard to Flat Nos.601 and 1101 and Resolution Applicants are withdrawing. Reference of one of the emails received from Resolution Applicants dated 20.01.2025 has been made where one of the Resolution Applicants has expressed his intention to withdraw from the Resolution Process.
Intimation by the Resolution Professional after commencement of the CIRP is clearly intimation to the Appellant to vacate the premises and even for argument sake, it is accepted that they were entitled for 10 months notice that period is very well over. There are no error in the order of the Adjudicating Authority rejecting IA No.4820 of 2024.
Conclusion - i) The Appellants had no right to continue possession beyond the 10-month notice period. ii) The Board Resolution did not confer any right to resist possession handover after intimation
This Appeal was filed by the Appellant within 10 days from passing of the order although no interim order was passed in the Appeal but Appellant has not vacated the premises till date as has been submitted during the course of the submissions - appeal dismissed.
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2025 (5) TMI 1145
Condonation of delay in filing the appeal against the modification order - delay of 11 days or 47 days - delay in filing the appeal against the modification order - HELD THAT:- From the material on record, there is no whisper on appealing the Order of 22.12.2023 and all the correspondence relates to Appeal with respect to modification order, which is not a substantive order. There is no material on record to show that the Appellant has chosen to file an appeal against the approval of Resolution Plan. We find that the Appellant has not been vigilant and not taking timely action in pursuing the Orders passed by the Adjudicating Authority on 22.12.2023 and even in this Appeal has filed beyond condonable period.
As per materials on record, there is a delay of 47 days. On going through the justification provided by the Appellant. There is no sufficient cause to explain the delay in filing the Appeal, when the Appellant had known about the Orders by at least 16.08.2024. Moreover, this order was a modification order and the substantive order was already issued on 22.12.2023, whereby the Resolution Plan of the Respondent was approved by the NCLT. The subsequent order dated 02.08.2024 was only a modification order correcting some inadvertent errors which had crept in due to over sight. The Appellants had not preferred any Appeal against the Order of 22.12.2023 and strangely only modification orders are being assailed by the Appellant. The material on record don’t indicate any steps taken by the Appellant after the Adjudicating Authority had passed substantive order on 22.12.2023.
The Appellant itself admits to have the knowledge of the Impugned Order at the worst case as on 16.08.2024. Moreover, this was a modification order and substantive order was issued on 23rd August 2023, which the Appellant had not challenged. The Appellants arguments that limitation for filing of Appeal under Section 61 of IBC would commence from 18th September 2024 i.e. the date of knowledge of the contents of order cannot be accepted as per existing law, which prescribes strict compliances with the timelines in the IBC proceedings - Presuming that they had come to know about the Order on 16th August 2024, even then the 45 days had elapsed by 8th Oct 2024. In any case, the Appeal was filed on 26th October 2024, much beyond 45 days. Therefore, the argument for taking advantage of the Navratri holidays is absurd and is of no avail to the Appellant. In conclusion, it is not found that the Appellant has been vigilant in pursuing their Appeals. In the facts and the circumstances of the case, therefore, there are no sufficient cause for condoning the delay of more than 15 days.
Conclusion - i) The modification orders do not reset limitation periods if the substantive order remains unchallenged, and that delay caused by lack of vigilance or failure to promptly seek certified copies or communicate with the RP does not constitute sufficient cause. ii) The limitation period under Section 61(2) is mandatory and only a maximum of 15 days delay beyond 30 days can be condoned, subject to sufficient cause. iii) There are no merit in the application for condonation of delay as sufficient cause has not been shown.
Application for condonation of delay dismissed.
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2025 (5) TMI 1144
Rejection of application under Section 94 filed by the Appellant - initiation of personal insolvency against the Appellant, the personal guarantor - notice gives any cause of action to file application under Section 94(1) or not.
Whether notice dated 09.10.2023 issued under Section 13(2) of the SARFAESI Act, 2002 which was addressed to the Appellant gives any cause of action to file application under Section 94(1)? - HELD THAT:- On looking into Clause 7 of the Guarantee Agreement, it requires demand made by the Bank. Notice under Section 13(2) which was addressed to the Guarantor i.e. Appellant clearly required Appellant to discharge liabilities within 60 days from the date of the Notice. The amount to be paid has also been mentioned as Rs.28,56,64,336.06/-. It is true that the Notice also mentioned to take steps under Section 13(4) of the SARFAESI Act, 2002. The question to be answered is as to whether the above notice had invoked the personal guarantee given by the Appellant or not.
The judgment in Amanjyot Singh vs. Navneet Kumar Jain & Ors. [2023 (1) TMI 253 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] cannot be read to mean that this Tribunal has held that the personal guarantee can never be invoked by notice under Section 13(2). This Tribunal held in the above case that the Bank has taken a categorical case that no steps have been taken against the Appellant, hence, there is no cause for the Appellant to pray for initiation of the CIRP against the Appellant, the personal guarantor. In the above case, notice under Section 13(2) was issued on 04.10.2013 and application was filed after 7 years.
The dismissal of the Appeal in the Amanjyot Singh’s case was on the facts of the said case and has no application in the facts of the present case. The invocation of personal guarantee has to be in accordance with the terms of the Guarantee Agreement which is a settled law. Clause 7 of the Guarantee Agreement does not require any particular mode and manner of the demand notice. When demand notice is issued against the personal guarantor asking the personal guarantor to discharge its liabilities, the guarantee stands invoked. Whether notice under Section 13(2) in a particular case invoked the guarantee or not depends on the words and intent of the notice. For finding out as to whether Notice under Section 13(2) invoked the personal guarantee, the letters and words of the Notice has to be looked into to come to any conclusion that whether personal guarantor has been asked to discharge its liabilities or not. In the facts of the present case, the Notice under Section 13(2) issued by the State Bank of India is a clear demand notice from the Appellant to pay the amount of Rs.28,56,64,336.06/-.
The above judgment, thus, clearly holds that in a case where Notice under Section 13(2) makes a demand as per the Guarantee Agreement between the parties, the Notice has to be treated as notice for invocation of Bank Guarantee. Thus, the observation of the Adjudicating Authority made in paragraph 13 of the impugned order that application has been filed without any cause of action and is premature are unsustainable.
Conclusion - The invocation of personal guarantee has to be in accordance with the terms of the Guarantee Agreement which is a settled law. Clause 7 of the Guarantee Agreement does not require any particular mode and manner of the demand notice. When demand notice is issued against the personal guarantor asking the personal guarantor to discharge its liabilities, the guarantee stands invoked.
The order of the Adjudicating Authority rejecting application under Section 94(1) cannot be sustained - Appeal allowed.
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2025 (5) TMI 1143
Penalties and confiscation u/s 3(c) and 3(d) - appellant had received a sum in India on the instructions of person resident outside India - HELD THAT:- Tribunal would not be justified to cause interference in the order for the sake of it unless an error or the illegality in the order is shown. It is, otherwise, not a case to place the reliance on the statements of Shri Ratan Das M and Shri Srinivas alone but the statements were corroborated by the documents and hence we find a case for contravention of Section 3(c) and Section 3(d) of the Act of 1999 where the appellant had received a sum in India on the instructions of person resident outside India in an unauthorized manner and further he entered into a financial transaction in India for creation of right to equivalent foreign exchange of persons outside India.
Forfeiture of the amount seized by the respondent at the time of search and seizure - Elaborate argument in reference to it has been given. The cash-book and other documents have been produced to indicate no justification for forfeiture of the cash recovered at the time of search. The cash-book shows Rs. 40,99,431.49 in the hands of the Firm while recovery was only of Rs. 30 lakhs from the business premises and at the same time out of the recovery of Rs. 80,95,000/-, the appellant submitted that a sum of Rs. 69,95,000/- was belonging to appellant’s father in the Almirah maintained by him leaving a sum of Rs. 11 lakhs. It is apart from the fact that total sum in the books of accounts was showing cash in hand to be more than Rs. 1 crore. It is not properly considered by the Adjudicating Authority. We find admission of the appellant about the cash recovered from him to be part of transaction through Shri Ratan Das M. The Adjudicating Authority has recorded finding taking aforesaid into consideration and the documents produced and relied upon.
Penalty amount - Tasking overall facts into consideration and also that the matter is now old by 14 years the penalty imposed for contravention of Section 3(c) of the Act is substituted to Rs. 2,75,00,000/- against the penalty of Rs. 9,00,00,000/- and for contravention of Section 3(d) of the Act of 1999, the penalty of Rs. 1,00,00,000/- is substituted to Rs. 25,00,000/- . The appellant has already deposited Rs. 90 lakhs towards the satisfaction of the condition of High Court of Delhi and otherwise Bank Guarantee of Rs. 1,10,00,000/- was given which can be encashed by the respondent and apart from that we direct the respondent to adjust the amount of Rs. 1,00,00,000/- out of Rs. 1,10,95,000/- confiscated by them with direction to the respondent to return the excess amount after adjusting an amount to make good of the penalty and remaining amount would be refunded to the appellant. The adjustment of the confiscated amount has been allowed looking to availability of cash in hand in cash-books of the Firm and in the hands of the appellant’s father.
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2025 (5) TMI 1142
Contravention of Section 10(5) of FEMA for remittance of Rs. 47.3 Crores towards the interest @ 17% - HELD THAT:- The transactions to divert the funds were made after receipt of the amount in the bank account of the appellant bank who remitted the interest despite diversion of the fund and its utilization for the purpose other than for which FDI was taken. The appellant bank has pleaded no control over the affairs of M/s Amrapali and its entities after the amount came to their account ignoring the fact that diversion of the amount out of the bank account was to be in the knowledge of the appellant bank otherwise there was no purpose to seek declaration by the authorized person that the transaction is not for the purpose of contravention of the provisions of the Act of 1999 or Rules and Regulations made thereunder.
The plea has been taken that if the CCD was not converted into equities in a period of five years, it could not have been termed to be ECD so as to seek prior permission of the RBI for remittance of the interest amount. The argument raised by the appellant bank cannot be accepted in their hands and otherwise when appellant bank was under obligation to take declaration that transaction would not involve contravention of the provision of the Act of 1999 and Rules and Regulations, it was required to give significance to it thus contravention of Section 10(5) of the Act of 1999 is found in the light of the finding recorded by us.
Penalty imposed on the appellant bank which is said to be disproportionate to the contravention and thus the counsel for the appellant bank has prayed for appropriate order - Though at the first instance, the counsel pleaded no contravention of Section 10(5) of the Act of 1999 in the hands of the appellant bank but alternative plea was to make the penalty proportionate to the allegation. We find that the penalty of Rs. 5 Crores has been imposed on the appellant bank while separate penalties have been imposed on the other noticee. Looking to the overall case, we find penalty of Rs. 5 Crores to be disproportionate to the allegation against the appellant bank and accordingly to make it proportionate, we reduce it from Rs. 5 Crores to Rs. 50 lakhs. An amount of Rs. 5 Crores has already been deposited by the appellant bank. Thus, after keeping Rs. 50 lakhs towards the penalty imposed and substituted by us, remaining amount of Rs. 4.50 Crores would be returned to the appellant bank. The appeal is disposed of with the aforesaid.
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2025 (5) TMI 1141
Waiver of condition of pre deposit u/s 19 of FEMA - contravention of section 6(3)(f) of FEMA - HELD THAT:- Proceeding for imposition of penalty under different legislation is not affected by section 14 of the Act. Thus, prima facie we are of the view that the plea raised by the appellant in reference to section 14 is not tenable. It is more so when the order passed by NCLT, Kolkata has been stayed by the NCLAT. In any case, we have expressed our view on the effect of section 14 to these proceeding where the impugned order was passed even much prior to the moratorium under section 14 of the IBC.
So far as alleged discrepancies with reference to the Regulation are concerned, we do not find prima facie much substance in the argument of the appellant because show cause notice was issued referring to the Regulation applied by the respondent i.e. Foreign Exchange (Deposits) Regulation, 2000. Thus, we do not find any discrepancy in referring the provision applicable to the case. The reference of a wrong provision does not affect the order if facts available on record make out a case for valuation of the Regulations applicable to the case.
The appellants have otherwise not shown any financial crunches to deposit the amount of penalty for maintaining the appeal.
However taking overall view, we are of the opinion that it would be appropriate to direct the appellants to deposit only 25% of the penalty amount to satisfy the condition of pre-deposit so that there remains no hardship on the appellants to pursue the appeal and with the aforesaid, the application is disposed of.
The order would be satisfied by the appellants within three weeks of its pronouncement and subject to satisfaction of the condition of pre-deposit, appeal may be heard.
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2025 (5) TMI 1140
Penalty on the appellant’s bank for contraventions of Section 6(3)(b), Section 10(5) and Section 47(3) of FEMA for allowing outward remittance without the approval of RBI - DCF method was applied to determine repurchase price of the share at Rs. 2290 Rs. 2577.25 Rs. 2910 per share having face value of Rs. 10 per share and otherwise purchased at a price of Rs. 1071.81 per share and thereby huge amount was siphoned off at the cost of the home buyers and thus cognizance was taken by the Apex Court
HELD THAT:- As found that in the head of “valuation” in the brief summary that no person from Mauritius travelled to India and no person from India travelled to Mauritius. Indian people signed the contract in India and Mauritius people signed the contract in Mauritius. Buyer did not carry out any due diligence nor it appointed any valuer. The appellant was under obligation to call for the information in the case, as mandated u/s 10(5) of the Act when C.A. was not given proper access to the record.
The company was not having any profit for taking value of the share at Rs. 2290 Rs. 2577.25 and Rs. 2910 per share at time of exist. The outcome of it remained onward remittance of Rs. 140 crores without proper report or certificate. The authorised dealer was bound to follow the direction issued by the RBI from time to time and Regulation 11(2)(b) of the Regulation of 2000 which was required to be read harmonization with liberalization scheme.
RBI’s approval was not required for the sale of security and onward remittance but it could not have been without adherence of other provisions and by simply in ignorance and the responsibility under Section 10(5) of the Act of 1999 and relying on the valuation certificate issued by the CA when DCF method was based on incorrect data and thereby without following the genuineness of the transaction.
Accordingly, we are unable to agree with the appellant that it has not contravened the provisions of Section 6(3)(b), Section 10(5) and Section 47(3) of the Act of 1999 read with Regulation 11(2)(b) of the Regulation of 2000 rather we endorse the analysis of the Special Director, Directorate of Enforcement on the aforesaid.
Imposition of penalty of Rs. 14 crores on the appellant’s bank while the penalty has been imposed on other noticees varying from Rs. 85 crores to Rs. 4 crores on different noticees who were taken to be involved in the contravention and otherwise penalty of Rs. 140 crores imposed on JP Morgan apart from the penalty of Rs. 85 crores - As we find that Rs. 14 crores penalty imposed on the appellant bank is disproportionate. The main allegation for contravention of provisions of Act of 1999 and Regulation of 2000 was against other notices and even the appellant but definitely the appellant bank had remitted the amount said to be in terms of the agreement but finding case of contravention of Section 6(3)(b), Section 10(5) and Section 47(3) of the Act of 1999 read with Regulation 11(2)(b) of the Regulation of 2000, the penalty of Rs. 14 crore has been imposed. We find it to disproportionate, thus, reduce it from Rs. 14 crores to Rs. 1.4 crores on the appellant bank. The amount aforesaid has been deposited towards satisfaction of the pre-deposit as per the order of this Tribunal. Accordingly, we cause interference in the impugned order qua the appellant bank only in reference of penalty which is reduced to Rs. 1.4 crores and with the aforesaid appeal is disposed of.
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