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Case Laws
Showing 281 to 300 of 658 Records
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2007 (11) TMI 431
Penalty - imposition of penalty on the Managing Director of the company invoking Section 112 of the Act has been done without stating any reasons whatsoever - Held that:- without entering a finding that the writ petitioner, as the Managing Director, is guilty of omissions or commissions and had “sought to evade” duty. Neither the Commissioner nor the Appellate Tribunal had found against the version of the petitioner regarding the failure of business and that the international contracts with the Italian collaborators failed, leading the company to fall into liquidation. These factors clearly established that there was no ground to conclude that the situation in hand calls for an order against the Managing Director under Section 112 of the Act, imposes penalty on the writ petitioner as the Managing Director of the company
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2007 (11) TMI 429
Determining applicability of the provisions of the Finance Act, 1994 before investigation - Held that:- respondent is bound to consider the question of applicability of the provisions of the Finance Act, 1994 relating to service tax to the petitioner first, before undertaking any further investigation on the subject. Therefore, the writ petition is allowed
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2007 (11) TMI 427
Evasion of tax - Penalty - it would show that the plea which they have taken before the authorities that ignorance of law cannot be diluted but it cannot be an excuse in law - Bona fide impression for ignorance of law - Penalty is reduced from Rs. 2,08,709 to Rs. 1 lac - Appeal is disposed of
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2007 (11) TMI 424
Issues:
1. Justification of directing the appellant to pay interest on refund during a pending lis before appellate authorities.
Analysis:
The High Court heard the appeal challenging the Customs, Excise and Service Tax Appellate Tribunal's order directing the appellant to pay interest on refund during a pending lis. The respondent filed a refund claim after CEGAT set aside duty levied upon them. The Deputy Commissioner sanctioned the refund but appropriated it towards other dues, which was later set aside by CEGAT. The key issue was determining the date of refund sanction - whether on 18-7-2000 or later due to CEGAT's remand order on 20th September 2000.
The High Court found that the Deputy Commissioner, as the adjudicating authority, held on 18-7-2000 that the assessee was entitled to the refund. Since the amount was appropriated for other dues, it was clear that the assessee would have received the refund immediately if there were no other dues. The court rejected the revenue's argument that the refund order should be considered effective from 30-1-2001, emphasizing that the refund was due to the assessee on 18-7-2000 itself.
Therefore, the High Court concluded that no substantial question of law arose in the appeal. The court dismissed the appeal, stating that the assessee was entitled to the refund from 18-7-2000, and there was no merit in the revenue's arguments.
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2007 (11) TMI 423
Condition of deposit - legal right accrued to the writ petitioner to get the confirmation of sale and the stand taken by the Bank that the authorized Officer is different from the secured creditor and subject to the confirmation of the secured creditor only, the sale had been conducted cannot be said to be a sustainable contention - Held that:- Here is a case where the secured creditor on verification found the defect and was not inclined to confirm the same. This action of the secured creditor cannot be said to be not in accordance with law, since the publication made and also the Rules governing the field would clarify the situation.
It is no doubt true that in a particular given case, the Court may arrive at a conclusion that the action is arbitrary, when the Banking Institution is going back on totally untenable and unsustainable ground. When a particular confirmation may result in certain other ancillary litigations and when the secured creditor is not inclined to confirm the sale, the same cannot be found fault. Even otherwise, this Court is of the considered opinion that positive directions as prayed for normally cannot be issued by a writ Court, especially when the Banking Institution had taken such a stand in the counter affidavit filed specifying the Rules and also the conditions made in the publication in this regard. Hence, this Court is thoroughly satisfied that the writ petition is devoid of merit.
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2007 (11) TMI 422
Physical possession of residential building - whether the first respondent be restrined from taking physical possession of the building in question - Held that:- Inasmuch as no acceptable material as such had been placed relating to the alleged tenancy rights, this question cannot effectively gone into in the present writ petition. Even otherwise, since the petitioner has other alternative remedies, let the petitioner pursue such alternative remedies available to him in law. In the light of the same, liberty is given to the petitioner to pursue the other legal remedies available to him in accordance with law. W.P. dismissed.
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2007 (11) TMI 421
Charges - whether belated registration of a charge can be permitted in respect of any asset of a company which has been directed to be wound up?
Whether a charge comes to be created only upon the formal execution of a document and not on the company’s undertaking to the creditor to create a charge?
Held that:- It would, however, be permissible for the rectification of a charge or the modification of the extent of a charge, at the liquidation stage but that presupposes the charge being already registered. There is a huge distinction between the modification of an already registered charge and the attempt to have an unregistered charge freshly registered. Section 141 and the discretion found therein cannot be carried so far as to allow a creditor to undo the effect of section 125 by which the charge created or agreed to be created in his favour by the company can be avoided by the Official Liquidator and the other creditors of the company.
It would also appear from the decisions of the English courts under the provisions of both the 1948 Act and the 1985 Act in England which are in pari materia with sections 125 and 141 of the Act of 1956 applicable in this country, that the condition ordinarily imposed for allowing subsequent registration is that it would be open to the other creditors who had entered into transactions with the company during the interregnum, to disregard such registration
The order of the Company Law Board is maintained, but for alto-gether different reasons. The reasons given by the Company Law Board in support of the order of rejecting are not approved. The appeal and connected applications are dismissed.
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2007 (11) TMI 420
Winding up - Circumstances in which a company may be wound up - Held that:- As a matter of fact at the time of admission of this appeal, the appellant was directed to deposit a sum of ₹ 5,00,000 permitting the respondent herein to withdraw the same. Accordingly, the said amount has been withdrawn. When the amount has been permitted to be withdrawn by the respondent, when a decree has been obtained by the respondent under the provisions of the Industrial Undertakings Act on 29-9-1993, when the appellant has failed to discharge the decree even after four years, we do not see any error committed by the learned Company Judge in ordering the winding up of the appellant-company. Appeal dismissed.
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2007 (11) TMI 419
Winding up - Custody of company’s properties - Held that:- Since the present applicant is offering ₹ 1.51 crores and it is already deposited with the Official Liquidator, there is no reason not to accept the said offer. Therefore, the order dated 30-8-2007, passed by this Court in O.L.R. No. 143 of 2007 is hereby recalled and the sale of lot No. A of the company in liquidation confirmed in favour of respondent No. 2 is hereby cancelled. The Court hereby confirms the sale of lot No. A of the company in liquidation in favour of the present applicant for ₹ 1.51 crores. Since the entire sale consideration has already been deposited by the applicant with the Official Liquidator, the Official Liquidator is hereby directed to hand over the possession of the movables within one week from today and the sale deed be executed in favour of the present applicant within one week from the date of receipt of the draft of sale deed from the present applicant.
Since respondent No. 2 has already paid an amount of ₹ 1.27 crores, now the said amount is required to be refunded to respondent No. 2. The present applicant is, therefore, directed to pay interest at 12 per cent per annum on the actual amount of respondent No. 2 lying with the Official Liquidator. As soon as this transaction is over and sale deed is executed and possession is handed over, the Official Liquidator shall file compliance report before the Court.
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2007 (11) TMI 418
Issues:
Confirmation under section 78 of Companies Act for reduction of securities premium account.
Analysis:
The Company filed a Company Petition seeking confirmation under section 78 of the Companies Act for the reduction of the securities premium account. The company, incorporated in 1976, had two cement units and its registered office in Morak. A special resolution was passed at the Annual General Meeting on 14-7-2007, where shareholders approved the reduction on securities premium account to meet deferred tax liability. The Court ordered the publication of a Notice in newspapers, and after no objections were raised, the matter was scheduled for further hearing.
The Court, on 30-11-2007, noted the absence of any appearance or objections and proceeded to order the following:
(a) Confirmation of the reduction of share capital/securities premium account as per the special resolution passed at the General Meeting.
(b) Approval of the minutes proposed by the Company for utilizing the credit balance for meeting deferred tax liability.
(c) Dispensation of the additional words "and reduced" after the name of the Company as per the Companies Act.
(d) Dispensation of the publication of reasons for reduction and other information.
(e) Direction for the Company to deliver a certified copy of the order to the Registrar of Companies within six weeks.
(f) Requirement for the publication of the order and minutes in specified newspapers within two weeks of registration by the Registrar of Companies.
Conclusively, the Court disposed of the Company petition in accordance with the directives mentioned above and instructed the Registrar of Companies to ensure compliance with the order.
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2007 (11) TMI 417
Oppression and mismanagement - Held that:- In view of the multifarious litigation pending between the petitioner and the contesting respondents, and the fact that the Central Government has already moved the Company Law Board for action, though not under section 401, find no merit in the contention that its decision not to do so is a wilful omission to exercise discretion which it was lawfully bound to, in the circumstances of this case.
In the light of the above findings, the writ petition has to fail. The petitioner has indulged in speculative litigation, by seeking to use the jurisdiction of this Court under article 226, when plainly, there was absolutely no occasion for it to seek recourse to it, as the facts do not justify entertainment of such proceeding.
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2007 (11) TMI 416
Oppression and mismanagement - Winding up petition - Held that:- The petition does not contain any specific instances of alleged acts of oppression and mismanagement. The allegations are of general nature. No doubt, the respondents filed certain documents, like minutes of the board of directors as well as copies of the ledger, etc., and the petitioners tried to project their case on the basis of these documents. However, the petitioners never chose to amend the petition or lead any evidence in this behalf.
It was imperative on the part of the petitioner to show that the circumstances were such which would show that there is just and equitable cause for winding up of the company. This is not so in the present case. On the contrary, as noted above, at the relevant time the petitioner stopped taking interest in the affairs of the company thinking it to be a "sinking ship". Today the company is leading healthy life and is very much alive and kicking. Furthermore, when the entire events are taken "as a part of a consecutive story", the phrase used by the Supreme Court, the facts of this case would warrant that no interference is called for. W.P. dismissed.
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2007 (11) TMI 415
Winding up – Statement of affairs to be made to official liquidator - Held that:- One should not lose sight of the fact that after 12 years of closure of the company and death of the main promoter as well, as professionals associated with the company wherein all the staff including senior officials having left not only the company but also the place where the company is situated it was very difficult for accused Nos. 2 and 3 or even accused No. 5 to furnish all these informations. The court, there fore is of view that whatever compliance was made by the accused persons till this date is considered to be sufficient compliance and they are not to be burdened with any further agonies by continuing these criminal proceedings against then.
Since the court has come to the conclusion that this is not a case where a view can be taken that the default was committed without reasonable excuse. Hence, there is no question of awarding any sentence. Even when the court is satisfied that there is a reasonable excuse, the court takes a lenient view while awarding the fine. The court, therefore, holds that interest of justice would better be served if accused Nos. 2, 3 and 5 are punished with a fine of ₹ 5,000 each for late filing of the statement of affairs. Accordingly, accused Nos. 2, 3 and 5 are punished with a fine of ₹ 5000 each. The amount of fine shall be deposited with the official liquidator within four weeks from today.
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2007 (11) TMI 413
Amalgamation - Held that:- The observations made by the RoC do not survive and the scheme of arrangement would be in the interest of the companies, their members and creditors. The prayers in terms of paragraphs 26(a), 21( a) and 21(a) made in Company Petition Nos. 183 of 2007, 184 of 2007 and 185 of 2007, respectively are hereby granted.
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2007 (11) TMI 412
Compromise and arrangement - order of the learned Company Judge sanctioning a Scheme of Amalgamation challenged raising an objection to clause 13.2 of the Scheme, which provides that the filing fee already paid by the Transferor Company on its Authorised Share Capital shall be deemed to have been so paid by the Transferee Company on the combined Authorised Share Capital
Held that:- The issue is not whether the fee, which is already paid by the Transferor Company would automatically be transferred to the Transferee Company. But, what is intended by section 391 of the Act is to reconstitute the Company without the Company being required to make a number of Applications under the Companies Act for various alterations which may be required in its memorandum and articles of association for functioning as a reconstituted Company under the scheme. Not only is section 391 of the Act is a complete code in itself, but it is intended to be in the nature of a "single window clearance". Appeal dismissed.
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2007 (11) TMI 411
Issues Involved:
1. Applicability of SEBI Takeover Regulations, 1994 to indirect acquisition.
2. Compliance with Clauses 40-A and 40-B of the Listing Agreement.
3. Petitioner's locus standi and maintainability of the petition.
4. Interpretation of statutory provisions and the impact of subsequent regulations (1997 Regulations) on the 1994 Regulations.
Detailed Analysis:
1. Applicability of SEBI Takeover Regulations, 1994 to Indirect Acquisition:
The primary issue was whether the indirect acquisition of SESA Goa by MITSUI through the acquisition of FINSIDER triggered the SEBI Takeover Regulations, 1994. The petitioner argued that the acquisition of FINSIDER, which held 51% of SESA Goa's shares, should be considered an indirect acquisition of SESA Goa, thereby invoking Regulation 9(1) and 9(3) of the 1994 Regulations. SEBI and the Appellate Authority rejected this contention, stating that the 1994 Regulations did not cover indirect acquisitions. They emphasized that no shares of SESA Goa were directly acquired by MITSUI, EARLY GUARD, or FINSIDER after the regulations were notified. The Appellate Authority upheld SEBI's decision, noting that the 1994 Regulations lacked provisions for indirect acquisitions, which were only introduced in the 1997 Regulations.
2. Compliance with Clauses 40-A and 40-B of the Listing Agreement:
The petitioner contended that the acquisition violated Clauses 40-A and 40-B of the Listing Agreement, which pertain to takeovers. SEBI and the Appellate Authority found that these clauses were not violated as there was no change in the control or management of SESA Goa that would trigger these provisions. The Appellate Authority noted that FINSIDER already held 51% of SESA Goa's shares, and its acquisition by MITSUI did not alter this control. They concluded that the provisions of the Listing Agreement did not apply to the transaction in question.
3. Petitioner's Locus Standi and Maintainability of the Petition:
Respondent No. 5 argued that the petitioner lacked locus standi as he no longer held shares in SESA Goa. The petitioner countered that he held substantial shares at the time of the acquisition and the filing of the petition. The court noted that the petition's validity must be judged based on the facts at the time of its presentation. The petitioner relied on the Supreme Court's decision in Rajahmundry Electric Supply Corpn. Ltd. v. A. Nageshwara Rao, which held that a petition remains maintainable despite subsequent changes in shareholding. The court found that the petitioner had the standing to pursue the petition, but ultimately dismissed the petition on other grounds.
4. Interpretation of Statutory Provisions and Impact of Subsequent Regulations:
The petitioner argued for a purposive interpretation of the 1994 Regulations, suggesting that the principles of indirect acquisition introduced in the 1997 Regulations should apply retrospectively. The court, however, adhered to the literal rule of interpretation, emphasizing that the 1994 Regulations did not explicitly cover indirect acquisitions. They referred to the Bhagwati Committee Report, which highlighted the deficiencies in the 1994 Regulations and led to the introduction of the 1997 Regulations. The court concluded that the 1997 Regulations, which explicitly addressed indirect acquisitions, could not be applied retrospectively to the 1994 Regulations.
Conclusion:
The court upheld the decisions of SEBI and the Appellate Authority, concluding that the 1994 Regulations did not cover indirect acquisitions and that there was no violation of the Listing Agreement. The petition was dismissed, with the court emphasizing the need for a literal interpretation of the regulations and the non-retrospective application of the 1997 Regulations. The petitioner's lack of current shareholding did not affect the maintainability of the petition, but the substantive issues were decided against him.
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2007 (11) TMI 410
Winding up application - whether leave of the Court shall be obtained for the admission of the petition - Held that:- The provisions do not, require that the matter should be placed before the Court in the first instance for acceptance before examining the merits of the case for admission and/or directing advertisement thereof. The necessity of placing the matter for acceptance is only to indicate the returnable date on which the matter will proceed for admission. That is a ministerial work which can be carried out even by the Registry. In other words, on institution and registration of the company petition, the matter is required to be considered by the Court for admission and to grant leave to advertise the petition. Granting of returnable date for admission of the petition after its institution and registration so that the matter would proceed before the Court for admission or for grant of leave to advertise, is a matter which can be left to the Company Registrar, being ministerial work. That will also ensure that the matters do not remain pending in the registry for want of acceptance.
Place this matter for admission on 13-12-2007. The petitioner shall take steps to give intimation to the respondent-company in this behalf, if so advised.
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2007 (11) TMI 409
Issues involved: Appeals u/s 10F of Companies Act, 1956 against interlocutory orders dated 24-8-2007 and 13-9-2007 in Co. Pet. 39/2007.
Summary:
Issue 1: Jurisdiction of passing interim order without relief sought in main petition
The respondents filed a company petition before the Board under sections 397 and 398 of the Co. Act, raising concerns about oppression and mismanagement. Interlocutory orders dated 24-8-2007 and 13-9-2007 were passed by the Board, restraining certain actions related to bank accounts. The appellants challenged these orders on the grounds of jurisdiction and the authority to pass interim orders without relief being sought in the main petition. The High Court observed that the interlocutory orders were related to the management and better functioning of the company's affairs. The Court found that the Board had not exceeded its jurisdiction in passing these orders, as they were within the scope of addressing the issues of oppression and mismanagement. The Court held that the questions raised did not amount to questions of law under section 10F of the Co. Act, and thus, the appeals were dismissed.
Issue 2: Authority to sign on behalf of the Company after removal from Directorship
The second question raised by the appellants was whether a person who had been removed from the directorship of a company could be allowed to sign on behalf of the company. The Board had directed that parties could operate bank accounts other than the specified one with joint signatures until the disposal of the petition. The High Court noted that the company petition was primarily about oppression and mismanagement, and the interim orders were aimed at ensuring the smooth functioning of the company's affairs. The Court found that the Board's exercise of discretion in issuing these orders was not perverse and did not warrant intervention. The Court concluded that the issues raised did not qualify as questions of law arising from the interlocutory orders, and therefore, the appeals were dismissed.
In conclusion, the High Court upheld the interlocutory orders passed by the Board and dismissed the appeals, stating that no costs were to be awarded.
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2007 (11) TMI 408
Winding up - Overriding preferential payment - Held that:- Once it is held that section 529A has effected overriding preferential payment and treats the dues of the workmen and debts due to the secured creditors at par then before entering into any other controversy the Company Court is obliged to see as to whether the amounts already paid or proposed to be paid to the workmen would stand pari passu with the rights of the secured creditors.
With due respect to the learned Company Judge, it is held that the learned Single Judge did not see as to whether the payment of amount of ₹ 6,45,40,834 would still be under the provisions of section 529A, whether it would come beyond the pari passu claim of the workmen and whether the Department still would be entitled to recover the money before settlement of the dues of the secured creditors so also of the workmen. It appears that all these arguments were not raised before the learned Single Judge and the question for making an order on those lines never cropped up before the learned Single Judge.
With utmost respect at our command we set aside the judgment/order dated 4-4-2007, passed by the learned Single Judge. As a consequence of this order, we direct respondent No. 3 to deposit back the amount of ₹ 6,45,40,834 with the Official Liquidator. We remit the matter to the learned Single Judge with a request to reconsider the entire matter in accordance with law.
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2007 (11) TMI 407
Winding up - Circumstances in which a company may be wound up - Held that:- The learned Company Judge should have either accepted the compromise making it as a part of the final order (decree) or could have refused to accept the said compromise with a reasonable ground for not accepting the same and in such case only he could have proceeded on merits to decide whether winding up was necessary or not. In this connection we may state that this court has noted the oral submissions made by the parties that number of winding up proceedings have been preferred against the company and in many of them such compromise petitions have been filed. For the said reason we are not deliberated on the question whether the winding up is necessary or not, which required determination by the learned Company Judge.
In fine, the appeal is allowed and the matter is remanded to the learned Single Judge for fresh determination taking into consideration the compromise petition filed by the parties and then to dispose of the matter in accordance with law.
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9911796707
