Case Law Details
K.N. Abdul Gafoor Vs Kasmisons Builders Pvt. Ltd (Kerala High Court)
Introduction: The Kerala High Cout recently ruled on the case of K.N. Abdul Gafoor Vs Kasmisons Builders Pvt. Ltd, challenging an order from the National Company Law Tribunal (NCLT). The tribunal had directed the petitioner, a shareholder, to produce a statement of affairs in a winding-up proceeding. The crux of the challenge lies in the interpretation of Section 274(1) of the Companies Act, 2013, which governs such matters.
Detailed Analysis: The petitioner argued that Section 274(1) allows the tribunal to direct a company, not an individual shareholder, to file objections along with a statement of affairs in winding-up cases. The legal contention revolves around the language of the provision, emphasizing the term “company.” The court, after considering the submissions, concurred with the petitioner, declaring the directive against the shareholder as illegal.
Section 274(1) clearly outlines that the tribunal can only instruct the company to submit its objections and statement of affairs within a specified timeframe. The court found no provision empowering the tribunal to extend this directive to individual shareholders. Consequently, the impugned order (Ext.P5) requiring the petitioner to produce the statement of affairs was deemed unlawful and set aside.
The court emphasized that the winding-up proceedings would proceed according to the law, directing the company to furnish the statement of affairs if deemed necessary during the course of the proceedings. The judgment reiterates the importance of adhering to statutory provisions and the limited scope of the tribunal’s authority in such matters.
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