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Companies Law - Case Laws
Showing 1 to 20 of 48 Records
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2018 (2) TMI 2110 - MADRAS HIGH COURT
Doctrine of purposive interpretation - alleged violation of under Sections 372 A 85(3) r/w 211 and Schedule II of the Companies Act, 1956, by which the petitioners herein were asked to show cause - seeking to invoke Section 463(2) of the Companies Act, 2013 - HELD THAT:- The principle governing the interpretation of the statute has reached the stage where the Courts interpreted a provision of legislation notwithstanding its nature, be it penal, revenue, social or otherwise. It is more so, when the rule of interpretation, while applied against a reasonable and harmonious one does not stand to reason or leading to absurdity. A principle of natural justice has to be read into and seen in any provision unless expressly conferred taking its own rationale behind it. The said principle is to be applied with more rigour in a case where the show cause notice was given followed by explanation a consequential decision was made without passing orders thereon.
This Court is of the considered view that when once the show cause notice is issued, then it would amount to initiation of the proceedings qua negligence, default, breach of duty etc., However, the same would not be applicable to a criminal action. The decision to initiate a criminal proceeding would naturally come on a factual finding resulting in the final order to be passed by the first respondent, on a consideration of the reply given to the show cause notice. Therefore, the first respondent has to pass a reasoned order on two aspects. One is on merit with respect to the negligence, default etc, attributable on the part of the officer and the second is with respect to the decision made to proceed under the criminal law. These two factors are mandatory as the Court under Section 463(2) of the Companies Act, 2013 is only required to say as to whether the officer has acted honestly and reasonably after finding the negligence on his part by the first respondent - This Court is of the view that the power to go into the question of negligence, default, breach of duty etc., does not lie with this Court as it is the role which is to be played by the first respondent. However, the issue pertaining to an officer having acted honestly and reasonably solely lies with this Court to be decided as against the petitioner concerned. To put it differently, such an issue can never be gone into by the first respondent as against this Court.
Thus, the first respondent cannot decide the issue of taking criminal action without a factual finding resulting in a final order to be communicated to the petitioner. After all, a show cause notice issued should result in an adjudication process, for which, a person, whose rights are liable to be affected has to be informed by a decision supported by reasons, on a consideration of the reply given. Therefore, it is mandatory on the part of the first respondent to see to it that such an order is passed and served on the officer against whom a criminal proceedings is likely to be initiated by giving a private complaint. Even otherwise, the decision is necessarily to be communicated by the first respondent.
The first respondent is directed to pass appropriate reasoned orders on a consideration of the reply given by the petitioners concerned - Petition disposed off.
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2018 (2) TMI 2009 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Waiver of the requirement of section 244(1)(a) of Companies Act - applicant along with his wife is holding 8.84 per cent, of the total paid-up capital of the first respondent-company, therefore is not fulfilling the requirement under section 244(1)(a) of the Companies Act, 2013, for filing petition under section 241 - HELD THAT:- The respondents in their reply has not established the fact that the application/proposed company petition is an act of malice and/or intended to achieve an oblique purpose or the applicant is ex facie estopped from complaining of the matter on account of acquiescence. Moreover, it is worthwhile to mention that the hon'ble National Company Law Appellate Tribunal in the above referred case has laid down under paragraph 145 of its order that the Tribunal cannot deliberate on the merits of proposed petition under section 241, while deciding an application for "waiver" under the proviso to sub-section (1) of section 244.
This Tribunal is not supposed to discuss the merits of the proposed petition. However, on perusal of the contents of the application and the proposed petition, the applicant has made out a case for grant of the waiver of the requirement under section 244(1)(a) of the Companies Act, 2013.
Appeal allowed in exercise of the powers conferred under the proviso to sub-section (1) of section 244 of the Companies Act, 2013, by granting the waiver of the requirement under section 244(1)(a) of the Companies Act, 2013, in favour of the applicant.
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2018 (2) TMI 2008 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Whether a non-member can seek waiver under Section 244 of the Companies Act, 2013?
HELD THAT:- In spite of adding words relating to “public interest” on 01.01.1964 in the old Act, even when Act of 2013 was enforced Section 241, 242 and 244 continue to refer to Members of the Company to deal with question of oppression and mismanagement. Thus there is no scope to make alleged purposive interpretation as claimed. We have perused Section 241 and read it with Section 244, and kept in view the old provisions of Section 398 and 399. We find that not much is required to be stated as Section 244 of the Act, to us, appears to be quite clear. A mere glance at the Section shows that the Proviso which has been added below Clauses (a) and (b) gives power to waive all or any of the requirements specified in Clauses (a) or (b) so as to “enable the members to apply”.
There are no substance in the arguments which are being raised by the learned counsel for the Appellant. The learned counsel for the Respondents submitted that busy bodies in the name of public interest cannot be allowed to resort to Section 241 and 244 otherwise the companies would not be able to function. There is substance in the submission. There are remedies available to the non-members or public, in case the company was functioning against public interest for which there are provisions in Chapter XIV of the Act, and Section 242(2) of the Act is also there.
The appeal is dismissed with costs quantified at ₹ 2 lakhs to be paid by the Appellant to the Respondent No.1.
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2018 (2) TMI 1997 - GUJARAT HIGH COURT
Direction to Official Liquidator to pay the amount of ₹ 17,04,09,403/- or as per ratio and as per the directions issued by this Hon’ble Court - payment to 2,806 workers of the Commercial Ahmedabad Mills Ltd. (In Liquidation) - HELD THAT:- The Court when issued direction for the payment to the workers and the secured creditors as per the ratio worked out between the workers and the secured creditors i.e. 55.97% and 44.03% respectively vide order dated 02.03.2005 passed in Company Application No.359 of 1998, also issued further direction to apply same ratio to any further distribution that may take place after realization of the sale proceeds of the land of the company. In respect of the ratio fixed between the workers and the secured creditors by the Chartered Accountant in the year 2004, no grievance has been made either by workers or secured creditors and such ratio was ordered to be applied for future distribution. The Court finds that since respondents no.3 and 5 have agreed for disbursement as per the same ratio and since other secured creditors have chosen not to appear, they could be taken to have no objection for disbursement of the amount as per the same ratio and since sufficient amount is available in company’s account with the Official Liquidator, the permission as sought for by the Official Liquidator for disbursement of the amount between workers and secured creditors could be granted.
The Official Liquidator is permitted to disburse the amounts to the eligible persons from the list of the workers submitted by the applicant to the Official Liquidator excluding respondents no.9 to 21 of Company Application No.99 of 2017 or any of their relative and to the secured creditors from the balance amount available in the account of the company in liquidation as on 29.01.2018 in proportion to the ratio of 55.97% and 44.03% fixed between the workers and secured creditors respectively. Such disbursement shall be after adjusting the past payment made to the workers and secured creditors - Application disposed off.
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2018 (2) TMI 1988 - BOMBAY HIGH COURT
Oppression and mismanagement - Rights issue of shares - shareholding of the Petitioners had been diluted - no notices were given for the meetings pertaining to the rights issue - shifting of the registered office, also, no notice for the same is given - appointment and removal of directors - Directorial disputes.
HELD THAT:- The order of the CLB in the present case can in no circumstances be said to be either perverse, based on no evidence or arbitrary. The CLB has analysed the factual and legal position in depth and has arrived at a conclusion on facts that no case of oppression and / of mismanagement has been made out by the Appellants.
The rights issue of shares and the service of notices by UPC - HELD THAT:- The rights issue was thus obviously contemplated as being the avenue for increasing the funds of the Company and for the growth of the Company. The CLB has recorded a finding of fact (in paragraph 28) that the rights issue was necessary for the growth of the Company and therefore the action of issuing the shares could not be termed as oppressive to the Appellants and/or mismanagement of the affairs of the Company - Pertinently, despite being party to the above meetings, at no point did the Appellants seek to subscribe to the rights issue, and did not even make such enquiries for several years prior to filing the present Petition. The reason for this was clearly because the rights issue which commenced from April 2007, was not of interest to the Appellants, as the Appellants had received back the sum loaned by them to the Company to the tune of ₹ 73,00,000/ . The Appellants had accepted back the loan as they did not desire to partake in the functioning of the Company.
The Appellants have no explanation for their having taken back their loan, save and except to contend that this was not reflective of their disinterest in the company. In this regard, the CLB has arrived at a finding of fact, based on the conduct of the Appellants and this finding ought not to be interfered with in exercise of jurisdiction under Section 10F. As a matter of fact, after accepting their loan amounts back in or about March 2007, at no point did the Appellants write a single letter or demand to participate or show any interest in participating in the company until issuance of the show cause notice on 5th November 2007 - even on merits it cannot be said that the rights issue was either oppressive or done behind the back of the Appellants.
Shifting of registered office - HELD THAT:- Pertinently, it is the admitted position that the UPC amount paid was ₹ 3/. It is more than sufficient for service on Appellant Nos.1 and 2; the other Directors and Shareholders being part of the Respondent Group, may well have been served by other means – they have raised no objection as to service or receipt of the notices. Once again this aspect is purely factual and is being dealt with only in light of the contentions raised by the Appellants. The crucial factor remains that shifting of the Registered Office has caused no prejudice to the Company, and is not oppressive in the least. There is nothing to show that the shifting was done to prejudice the Appellants - this contention does not constitute oppression or mismanagement.
Directorial disputes - HELD THAT:- The Appellants have relied upon an RTI Application of 2012 to contend that no notice was received of the meeting for removal of the Appellants as Directors. It appears from the impugned judgment that this issue of the RTI Reply was not pressed before the CLB. Even otherwise, it is pertinent to note that in all the various allegations of not having received notice for various meetings, the Appellants have not sought to obtain any RTI on the delivery of notices for all the meetings which are the subject matter of dispute between 2007 and 2010, but have only purported to obtain an RTI for a meeting held in 2011. Be that as it may, the Appellants have been removed by resolutions and with appropriate Form 32’s filed, to the satisfaction of the ROC. It is nobody’s case that the ROC has thereafter raised any objections to the filing of the Forms or indeed to the manner of removal of the Appellants - Further the Company is not under any circumstances either a family company or a closely held quasi partnership, in which circumstances potentially directorial disputes may be raised. The judgments relied upon by the Appellants in this regard will have no application to a company such as Respondent No.1. Further, it does not appear that this issue of ‘quasipartnership’ was pressed before the CLB, and was not pressed in arguments before this Court.
The Appeal ought to be dismissed as it does not give rise to any question of law. The factual findings are strictly matters which were within the province of the CLB. The CLB having exercised its discretion after analysing the evidence before it, this Court cannot to replace the discretionary order passed by the CLB with any contrary order - Even otherwise, on the findings of delay/laches and unclean hands, the present Appeal ought to be dismissed as the CLB has rightly declined to exercise its equitable jurisdiction in favour of the Appellants.
Appeal dismissed.
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2018 (2) TMI 1983 - BOMBAY HIGH COURT
Permission to sell three tugs - company under liquidation - HELD THAT:- The Official Liquidator shall sell the two tugs, namely, Gal Beaufort Sea and Gal Ross Sea to M/s Akil Corporation in accordance with the terms proposed by the party. The Applicant has already received 10% of the offer amount as EMD, which it will have to deposit with the Official Liquidator. The liquidator shall hold the amount of EMD as also balance payment to be made by M/s Akil Corporation to the account of the company in liquidation. Distribution of the sale proceeds or declaration of dividend shall await hearing of the company application.
The Company Application is stood over to 28 February 2018 - By the next date, the Applicant shall submit a valuation in respect of the third tug, namely, Sangita.
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2018 (2) TMI 1952 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Prayer for adjournment - Petitioner submits that the connected matter being CP No. 350/2017 u/ s 241/242 of the Companies Act, is pending before the Hon 'ble Principal Bench. He would be taking appropriate steps for transfer of this case to the Hon 'ble Principal Bench. In view of the same, he prays for an adjournment - HELD THAT:- To come up on 16th March, 2018 for directions.
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2018 (2) TMI 1940 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment - debt due and payable - HELD THAT:- The Petitioner filed copies of Invoices and copies of TDS Certificate and copy of Ledger Confirmation supplied by the Respondent Company to establish that an amount of ₹ 5, 14,650/ - is due from the Respondent during the period between 25.2.2013 to 26.3.2013.
The amount claimed by the Petitioner from the Respondent is in respect of provision of services made to the Respondent Company from time to time. Therefore, Petitioner is an Operational Creditor. The documents filed by the Petitioner and the confirmation of balance by the Respondent show that the amount claimed in this Petition is due and payable by the Respondent to the Petitioner. The material on record also show that there is occurrence of default in payment of operational debt by the Respondent to the Petitioner. No dispute of dispute given to Respondent. No pre- existing brought on Record.
This Petition is admitted under Section IO(4)(a) of the Code - Application admitted - moratorium declared.
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2018 (2) TMI 1884 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD BENCH, HYDERABAD
Rectification in Register of the Members of the Rl Company in respect of Allotment of Shares that took place on 19.06.1996 i.e. after a period of 21 years - HELD THAT:- It is a known fact that during 1996, the basis of allotment was made in consultation with Representative of Stock Exchange, Public Representative of SEBI, Representative of Lead Manager and RTI therefore, questioning the allotment took place in 1996 after 21 years by the petitioner company as illegal, malafide etc., is not tenable, not supported by any facts/documents.
The Bench is inclined to accept the submissions of the Respondents that the instant petition is time barred as per Limitation Act 1963 and is not eligible to file the instant petition however, instead of dismissing the matter on this ground alone, the Bench felt to consider other major allegation of the petitioner. The respondents have also correctly pointed out that the petitioner claims to be a Power of Attorney Holder of all his 146 applicants, has failed to submit even a single duly signed POA given by any of the applicants. Therefore, the petitioner is not entitled to file this instant petition.
Though the petitioner sought to invoke Section 59 of the Companies Act 2013, the alleged fraud, fake, falsification of the Register of Members according to the petitioner was in the year 1996 therefore, Section 111 of Companies Act 2013 is applicable.
Petition dismissed.
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2018 (2) TMI 1833 - DELHI HIGH COURT
Disqualification of directors - Held that:- The name of the petitioners have been put in the impugned list which is appended at Annexure P-4 list of Directors disqualified under Section 164 (2) (a) of the Companies Act, 2013 for the financial years 2014 to 2016 - Issue notice.
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2018 (2) TMI 1771 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Fraud by Gitanjali Gems Ltd. - affairs being conducted prejudicial to the public interest of India - restraint order passed - serving of notice by all means - Held that:- Though Trusts and individuals are not being covered either u/s. 221 of the Companies Act, 2013 or Section 43 of LLP Act, 2008, since there is a categorical statement from Union of India that funds were routed to those individuals and Trusts through the companies mentioned above, to make investigations meaningful to crack this fraud, restraint order is very much necessary against the assets lying with the individual and Trusts in addition to the companies and LLPs mentioned above.
Since the Petitioner having said that the funds of the Bank have been routed through the companies and LLPs to the Trusts and individuals as well, investigation against other entities being incidental to the investigation ordered against the companies and LLPs, the whole exercise of Investigation and passing orders by this Bench will become futile unless restraint order Is passed against these individuals and Trusts thereof.
If any further particulars come into existence, the Petitioner is directed to file additional affidavit supporting the case mentioned in this Company Petition. It goes without saying that the rigmarole of CPC not being applicable and this order being an aid to make investigation effective, though many of them against whom orders passed are not made as parties, this Bench has passed this order as an aid to investigation.
The Petitioner has candidly said that if notice has been given to the parties prior to hearing then there is every possibility of consuming time for effecting service in view of the exigency involved in this case, the Petitioner in view of the public interest has sought for ex-parte orders, for this Bench having noticed that the Petitioner has established prima facie case for asking ex-parte orders, this Bench has passed this ex-parte order.
This Bench, by invoking section 221 of the Companies Act, 2013 and section 43 of LLP Act, 2008, hereby injunct the Respondents and other companies, LLPs, Trusts and individuals mentioned above from removal, transfer or disposal of funds, assets and properties of the entities and individuals mentioned above until further orders.
To other reliefs and for appearance of the Respondents, list this matter for hearing on 26.03.2018 with a direction to the Petitioner to serve notice to all Respondents within 15 days of this order.
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2018 (2) TMI 1736 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Corporate Insolvency Resolution Process - whether an application under Section 7 of the ‘I&B Code’ can be rejected on the ground of pendency of a winding-up? - Held that:- In the present case, as admittedly the High Court has already admitted the winding up proceedings and ordered for winding-up of the Respondent-‘Corporate Debtor’, we hold that the question of initiation of ‘Corporate Insolvency Resolution Process’ against same ‘Corporate Debtor’ does not arise. Appeal dismissed.
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2018 (2) TMI 1721 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Time limit for completion of insolvency resolution process - empowered to extend such period up to 90 days beyond 180th day - Held that:- If within 180 days including the last day i.e. 180th day, a resolution is passed by the committee of creditors by a majority vote of 75% of the voting shares, instructing the resolution professional to file an application for extension of period in such case, in the interest of justice and to ensure that the resolution process is completed following all the procedures time should be allowed by the Adjudicating Authority who is empowered to extend such period up to 90 days beyond 180th day.
Adjudicating Authority has not hold that the subject matter of the case do not justify to extend the period. It has not been rejected on the ground that the committee of creditors or resolution professional has not justified their performance during the 180 days. In such circumstances, it was duty on the part of the Adjudicating Authority to extend the period to find out whether a suitable resolution plan is to be approved instead of going for liquidation, which is the last recourse on failure of resolution process.
We set aside the impugned order dated 18th December, 2017 and extend the period of resolution process for another 90 days to be counted from today. The period between 181st day and passing of this order shall not be counted for any purpose and is to be excluded for all purpose
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2018 (2) TMI 1720 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Proceeding against Resolution Professional, Mr. Mukesh Mohan - suppression of order passed by Appellate Tribunal - Held that: - The allegation as made in this supplementary Affidavit being serious in nature, before passing any order or making any observations with regard to functioning of the Adjudicating Authority (Ahmedabad Bench), we issue notice on Mr. Mukesh Mohan to state as to why a proceeding for Contempt be not initiated against him - Mr. Mukesh Mohan, may file a reply within 15 days after service of copy of the same.
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2018 (2) TMI 1684 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Scheme of merger - commencing of meetings - discretion to the NCLT with regard to calling of meetings - Held that:- When it is a question of merger and the provisions require and give discretion to the NCLT with regard to calling of meetings, it is a discretion to be exercised judiciously by NCLT. NCLT is duty bound to follow procedure laid down by law. The NCLT recorded reasons why it finds that calling of the meetings is necessary and we do not find that the reasons recorded are arbitrary. The Law provides and the NCLT has exercised discretion that the meetings are required to be called. We do not wish to substitute our discretion over the discretion exercised by the NCLT. We do not find any substance in the appeal. The appeal is rejected.
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2018 (2) TMI 1683 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Oppression and mismanagement - Whether the Petitioners are entitled to file this Company petition? - Petitioners contention that no notice of EGM was served on them for passing special resolution relating to the business items mentioned supra and the allotment of shares - Held that:- Sending of notice of EGM by ordinary post is a proper compliance of section 53(1) of the Companies Act, 1956 and the Petitioners’ contention that there is no proper service of notice to them cannot hold water and there is no irregularity in the conduct of the EGM. Further it is to be noted that P2 is holding only 4.88% of the shareholding and it is a foregone conclusion that even if he has attended the meeting the resolutions would have been through despite his presence in view of his 4.88% shareholding.
The company has raised funds for the purpose of this expansion plans only and the further issue of capital, issue of debentures etc. are justified and the contention of the Petitioner that the company is creating some false and fictitious expansion and diversification plan to entice R22 which is a subsidiary of a public sector enterprise is totally unfounded and misconceived.
The Petitioners stated that in the Balance Sheet of the company for the year ended 31-3-2010, there are violation of Sections 217(l)(b), 217(l)(c), 217(2A), 211(3A), 211 and 211(1) for which the Respondents suitably explained that none of the Section have been violated by the Company. However, violation of certain sections of the Companies Act, 1956 cannot become a ground to convert such violation in an act of oppression and mismanagement under sections 397-398 of the Companies Act against these Petitioners, hence this allegation also falls to the ground.
Further for invoking the equitable jurisdiction of this Tribunal under sections 397-398, the Petitioners have not made out a case that the company’s affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to the Petitioners, and there being no ground for commanding it for winding up of the company, there could not be any occasion to look into as to whether wind up of the company would unfairly prejudice such member or members but that otherwise the facts would justify winding up of the Company. In the facts and circumstances of this case, the allegation of oppression and mismanagement by the Petitioners fails.
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2018 (2) TMI 1618 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Execution of the Investigative Audit Report was rejected by the NCLT - Held that:- It was necessary for NCLT to consider the report which was available and which was treated by the Auditor as its final report for whatever it was worth and record finding whether or not the said report could be maintained. Without rejecting the said report, giving directions for further Chartered Accountants to be suggested and appointment was not proper. When the present report has not been set aside, taking fresh report if the same happens to be in conflict would create confusions.
The present appeal is allowed. The impugned order is quashed and set aside. Consequently, subsequent actions taken on the basis of Impugned Order would not survive. Matter is remitted back to NCLT.
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2018 (2) TMI 1572 - DELHI HIGH COURT
Director disqualified for violation of Section 164(2)(a) of the Companies Act, 2013 - petitioner found that the resignation which he had tendered to the company had not been filed with the Registrar of Companies - benefit of CODS-2018 Scheme avalability - Held that:- (i) The petitioner may file all the requisite returns in relation to the company in order to enable him to avail the benefits under the CODS-2018 Scheme;
(ii) The petitioner would also submit the necessary application under CODS-2018 Scheme along with its requisite charges;
(iii) The aforesaid documents and applications will be submitted online to the Registrar of Companies.
It is clarified that if the petitioner does not avail of the CODS-2018 or file the necessary documents as required, in addition to other consequences, the petitioner would also be liable to be prosecuted for Contempt of Court.
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2018 (2) TMI 1571 - CALCUTTA HIGH COURT
Winding up of company - present application was filed after the Official Liquidator had taken possession of at least two of the major assets of the company (in liquidation) and all further proceedings towards winding-up of the company (in liquidation) have been stayed - Held that:- From a perusal of the application filed by the applicant company, it appears that the same has been filed with a bare assurance to revive the company (in liquidation), without disclosing the actual facts and figures with regard to the outstanding statutory and other dues of the company (in liquidation).
The applicant has only alleged that the secured creditors of the company (in liquidation) being the banks and financial institutions have chosen to remain outside the winding up proceeding. There is no statement in the application about the source of fund of the applicant for payment of the outstanding dues of even the creditors, at whose instance the company (in liquidation) suffered the order of winding up.
The fact that there is total lack of bona fide on the part of the applicant to file the present application and to obtain the said order dated March 22, 2017 is further evident from the fact that even though in Annexure “E” to the application, it held out to pay substantial amounts to each of its creditors, at whose instance the winding-up applications had been admitted, within six months from the date of stay of the winding-up proceeding but admittedly, not a single penny has been paid to any of the creditors in spite of expiry of six months from the date of the order dated March 22, 2017.
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2018 (2) TMI 1503 - MADRAS HIGH COURT
Insolvency process - delay in getting back the money - sale of the machinery attached by the order of this Court - Held that:- As learned Senior Counsel appearing for the respondent/defendant in the suit that the respondent/defendant has obeyed all the orders of this Court and therefore he cannot be penalized for obeying the orders of this Court. The sum and substance of the contentions of Mr.APS.Ahluwalia, learned Senior Counsel is that having obeyed the orders under the firm belief that it would get back the money spent by it, the respondent cannot be made to wait till the conclusion of the Insolvency Resolution process. All that this Court can do in the present situation is only to sympathize with the 1st respondent/defendant. A bare perusal of the earlier orders passed by this Court would show that the plaintiff in the suit M/s.Falcon Tyres Ltd., is a consistent and willful defaulter. But, in view of Section 14 of the Code, this Court is denuded of the power to proceed against the properties of a consistent defaulter also.
Even proceedings initiated by a secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, Act 2002, have been included under Sub Cause (c) of Sub Section (1) of Section 14. Therefore, unable to accept the submission of the learned Senior Counsel Mr.APS.Ahluwalia, that the present proceedings cannot be termed as proceedings within the meaning of Sub Clauses a, b, c and d of Sub Section (1) of Section 14. Mr.APS.Ahluwalia, learned Senior Counsel would also contend that by virtue of the lien created under the Order dated 21.04.2011, the property becomes answerable to the claims of the 1st respondent. Therefore the 1st respondent would be in the position of the secured creditor and hence these proceedings cannot be prohibited by the order of NCLT. A lien created over the property would not divest the ownership of the corporate debtor over the said property. Even claims of secured creditors are barred under Sub Clause (c) of Sub Section (1) of Section 14. Clause (d) of Sub Section (1) of Section 14 includes even proceedings of recovery of any property in possession of a corporate debtor by its owner or lessor. Apart from the wide language of Section 14, Section 238 of the Code gives an overriding effect to the provisions of the Act for any statute or any instrument having the force of the statute. Stay all further proceedings pursuant to the earlier orders in the suit and adjourn the suit till 16th April 2018.
Also all further proceedings for sale of the machinery attached by the order of this Court dated 13.08.2012 will stand stayed, till the expiry of 180 days from 30.08.2017, or till such extended period as may be granted by the Adjudicating Authority, viz. The National Company Law Tribunal, Bengaluru.
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