9911796707
TMI Blog2024 (5) TMI 965X X X X Extracts X X X X X X X X Extracts X X X X ..... ramjit Singh Shad who was an authorized Director of the petitioner company M/s Bata Steels Pvt. Ltd. and without getting any resolution passed by the company, it proceeded to first form a partnership with his wife in the name of M/s Asian Packaging and leased out the property of the company to such respondent No. 3-M/s Asian Packaging without authorization. 3. Learned counsel has invited attention to Section 188 of the Companies Act, 2013 (for short "the Act of 2013") to submit that such an action taken by respondent No. 4 has to be termed as legal and therefore the rent deed as submitted by respondents No. 3 and 4 before respondent No. 2 for the purpose of registration of GST, could not have been noticed by respondent No. 2 and such rent deed being unauthorised and illegal in terms of Section 188 of the Act of 2013 has to be treated as an act of fraud and willful misrepresentation and on the said basis alone, the registration needs to be cancelled in terms of Section 29 (2) of the Act of 2017. He further submits that respondent No. 4 Bikramjit Singh Shad, the petitioner and their mother Hardeep Kaur Shad who are the Managing Director of the petitioner company while respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are relatives of promoters or are related parties:] Provided also that nothing in this sub-section shall apply to any transactions entered into by the company in its ordinary course of business other than transactions which are not on an arms length basis: [Provided also that the requirement of passing the resolution under first proviso shall not be applicable for transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.] Explanation.-- In this sub-section,-- (a) the expression "office or place of profit" means any office or place-- (i) where such office or place is held by a director, if the director holding it receives from the company anything by way of remuneration over and above the remuneration to which he is entitled as director, by way of salary, fee, commission, perquisites, any rent-free accommodation, or otherwise; (ii) where such office or place is held by an individual other than a director or by any firm, private company or other body corporate, if the individual, firm, private company or body co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter. (2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter. 1[Provided that the applicants under this sub-section, in respect of such company or class of companies, as may be prescribed, shall be made before the Principal Bench of the Tribunal which shall be dealt with by such Bench.] 2[(3) Where in the opinion of the Central Government there exist circumstances suggesting that-- (a) any person concerned in the conduct and management of the affairs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or (b) there is any change in the constitution of the business; or [(c) the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25:] [Provided that during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.] (2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,- (a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or (b) a person paying tax under section 10 has not furnished 3[the return for a financial year beyond three months from the due date of furnishing the said return]; or (c) any registered person, other than a person specified in clause (b), has not furnished returns for a [such continuous tax period as may be prescribed]; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of 2013 could have been initiated by taking umbrage of Section 241 of the Act of 2013. However, in the present case no such action has been taken by the company. A presumption therefore cannot be drawn by this Court that there is a prima facie dispute between the Directors especially so when respondent No. 4 is admittedly an authorized Director of the company. Secondly, this Court also finds itself unable to enter into the dispute raised herein with regard to direction to be given to the Registering Authority as the cancellation of registration as noticed above, can be only in two circumstances. Where the concerned Registering Authority suo moto on its own motion reaches to a conclusion that the registration has been obtained by means of fraud, willful misrepresentation or suppression of facts. Section 29 (2) of the Act of 2017 empowers the officer for the said purpose and for reaching to such conclusion, it has to be either on his own motion. Thus, Section 29 (2) (e) of the Act of 2017 would come into picture where the registration was obtained by means of fraud, willful misrepresentation or suppression of facts while willful mis-statement or suppression of facts is a bundle of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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