APPLICATION UNDER SECTION 7(7) OF COMPANIES ACT, 2013 BEFORE NATIONAL COMPANY LAW TRIBUNAL

[Mr. M. GOVINDARAJAN]

Section 7 of the Companies Act, 2013 (‘Act’ for short) provides with the procedure for incorporation of company under the Act.  Section 7(1) provides that there shall be filed with the Registrar within whose jurisdiction the registered office of a company with the documents and information for registration.  Section 7(2) provides that the Registrar on the basis of documents and information filed shall register all the documents and information and issue a certificate of incorporation in Form INC – 11.

Section 7(5) provides that if any person furnishes any false or incorrect information or suppress any material information, of which he is aware in any of the documents filed with the Registrar in relation to the registration of a company, he shall be liable for action under Section 447 of the Act.

Section 7(6) provides that after the incorporation of the company, if it is proved that the company has been got incorporated by furnishing any false or incorrect information or representation or by suppressing any material fact or information in any of  the documents or declaration filed or made for incorporating such company, or by any fraudulent action, the promoters, the persons named as the first director of the company and the persons making declaration shall each be liable for action under Section 447.

Section 7(7) provides that without prejudice to the provisions of Section 7(6), where a company has been got incorporated by furnishing any false or incorrect information or representation or by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company or by any fraudulent action, an application may be filed before the National Company Law Tribunal (‘Tribunal’ for short).

The application shall be in Form NCLT – 1.  The following are to be furnished in Form No. NCLT – 1-

• Details of original application – Particulars of the applicantstate whether company;
• The applicant is to declare that the subject matter of the petition is within the jurisdiction of the Bench;
• The applicant is to declare that the application is within thelimitation laid down in the Companies Act, 2013;
• Facts of the case;
• Reliefs sought;
• Particulars of the details of bank draft evidencing payment of fee for the application.

The fee payable for filing this application is ₹ 5000/-

Every application filed shall also set out the following particulars-

• Name of the company and other details including date of incorporation, name and address of the subscribers, promoters and first directors; and
• Details of false or incorrect information or representation or material facts or information suppressed;
• Details of such documents in or declaration filed or made for incorporating such company;
• Involvement of promoters, subscribers and first directors in committing fraud during the course of incorporation.

The following documents are enclosed along with the application for this purpose-

• Copy of the memorandum and articles of association;
• Document in proof of false or incorrect information or fraudulent action;
• Affidavit verifying the application;
• Bank draft evidencing payment of application fee;
• Memorandum of appearance with copy of the Board Resolution or the executed Vakalatnama, as the case may be.

The Tribunal shall, before making any order on the application filed by the company, shall give a reasonable opportunity of being heard in the matter.  The procedure involved in disposing the application is as discussed in my previous article entitled – ‘General Procedure to be followed in a case before NCLT’.

The Tribunal shall take into consideration the transactions entered into by the company, including the obligations, if any, contracted or payment of any liability.

The Tribunal may, on being satisfied that the situation so warrants-

• Pass such orders, as it may think fit, for regulation of the management of the company including changes, if any, in its memorandum and articles, in public interest or in the interest of the company and its members and creditors; or
• Direct the liability of the members shall be unlimited; or
• Direct removal of the name of the company from the Register of Members; or
• Pass an order for the winding up of the company; or
• Pass such other orders as it may deem fit.