The National Company Law Tribunal (NCLT) is a quasi-judicial body in India that adjudicates issues of Indian Companies. NCLT was established underneath the Companies Act 2013 and was set up in June 2016 and is founded on the advice of the V. Balakrishna Eradi committee on law relating to the insolvency and the winding up of companies.
All proceedings underneath the Companies Act 2013, together with proceedings regarding arbitration, compromise, arrangements, reconstructions and therefore the winding up of Companies established in India shall be disposed off by the National Company Law court.
Various Sections of Companies Act, 2013 in Which Powers shall be Exercised by NCLT
| Sec. | Power of NCLT | Author’s outlook |
| Sec. 7(7) | Where a company has been 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 Tribunal may, on an application made to it, on being satisfied that the situation so warrants,—
(a) 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 (b) direct that liability of the members shall be unlimited; or (c) direct removal of the name of the company from the register of companies; or (d) pass an order for the winding up of the company; or (e) pass such other orders as it may deem fit: Provided that before making any order under this sub-section,— (i) the company shall be given a reasonable opportunity of being heard in the matter; and (ii) The Tribunal shall take into consideration the transactions entered into by the company, including the obligations, if any, contracted or payment of any liability.
|
Generally, on such grounds either Registrar of Companies, or Ministry of Corporate Affairs prefer to refer matter to National Company Law Tribunal which is always backed by documents through which this can be identified that the documents furnished are incorrect or not complete or there is some suppression of material fact or purpose to incorporation company is not to carry on any legitimate business activities.
Sec. 271(c)A company may, be wound up by the Tribunal, if on an application made by the Registrar or any other person authorized by the Central Government by notification under this Act, the Tribunal is of the opinion that the affairs of the company have been conducted in a fraudulent manner or the company was formed for fraudulent and unlawful purpose or the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith and that it is proper that the company be wound up; Sec. 241 (1) Any member of a company who complains that— (a) The affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company. Sec. 242(2)(k) appointment of such number of persons as directors, who may be required by the Tribunal to report to the Tribunal on such matters as the Tribunal may direct. |
| Sec. 8(9) | If on the winding up or dissolution of a company registered under this section i.e. Sec. 8, there remains, after the satisfaction of its debts and liabilities, any asset, they may be transferred to another company registered under this section (Sec. 8/ Sec. 25 as the case may be) and having similar objects, subject to such conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to Insolvency and Bankruptcy Fund formed under section 224 of the Insolvency and Bankruptcy Code, 2016. | Sec. 8(10) A company registered under this section shall amalgamate only with another company registered under this section and having similar objects. |
| Sec. 48(2) | Sec. 48 (1) Where a share capital of the company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or by means of a special resolution passed at a separate meeting of the holders of the issued shares of that class,—
(a) if provision with respect to such variation is contained in the memorandum or articles of the company; or (b) in the absence of any such provision in the memorandum or articles, if such variation is not prohibited by the terms of issue of the shares of that class: Provided that if variation by one class of shareholders affects the rights of any other class of shareholders, the consent of three-fourths of such other class of shareholders shall also be obtained and the provisions of this section shall apply to such variation. (2) Where the holders of not less than ten per cent of the issued shares of a class did not consent to such variation or vote in favor of the special resolution for the variation, they may apply to the Tribunal to have the variation cancelled, and where any such application is made, the variation shall not have effect unless and until it is confirmed by the Tribunal. Provided that an application under this section shall be made within twenty-one days after the date on which the consent was given or the resolution was passed, as the case may be, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose. |
Variation of right attached to the shares requires the approval of not only that class of shareholders but also the consent is required from other class of shareholders if such variation affects their right.
In this regards the application can be made to the NCLT and according to Sec. 48(3) the decision of the Tribunal on any application under sub-section (2) shall be binding on the shareholders.
|
| Sec. 55(3) | Where a company is not in a position to redeem any preference shares or to pay dividend, if any, on such shares in accordance with the terms of issue (such shares hereinafter referred to as unredeemed preference shares), it may, with the consent of the holders of three-fourths in value of such preference shares and with the approval of the Tribunal on a petition made by it in this behalf, issue further redeemable preference shares equal to the amount due, including the dividend thereon, in respect of the unredeemed preference shares, and on the issue of such further redeemable preference shares, the unredeemed preference shares shall be deemed to have been redeemed:
Provided that the Tribunal shall, while giving approval under this sub-section, order the redemption forthwith of preference shares held by such persons who have not consented to the issue of further redeemable preference shares. |
Company may with the approval of National Company Law Tribunal and on receipt of prior consent from the preference shareholders may redeem preference shares by issuing further redeemable preference shares equal to the amount due, including the dividend thereon, in respect of the unredeemed preference shares. |
| Sec. 56(4) | Every company shall, unless prohibited by any provision of law or any order of Court, Tribunal or other authority, deliver the certificates of all securities allotted, transferred or transmitted—
(a) within a period of two months from the date of incorporation, in the case of subscribers to the memorandum; (b) within a period of two months from the date of allotment, in the case of any allotment of any of its shares; (c) within a period of one month from the date of receipt by the company of the instrument of transfer under sub-section (1) or, as the case may be, of the intimation of transmission under sub-section (2), in the case of a transfer or transmission of securities; (d) within a period of six months from the date of allotment in the case of any allotment of debenture. |
Delay in delivery of certificates within the time frame prescribed under Sec. 56(4) shall also empower the person concerned to place the matter before NCLT.
The National Company Law Tribunal shall also prohibit Company to deliver share certificate generally in case when shares are in dispute or allotment is irregular or transfer is bad in the eyes of law or provision of the Companies Act or any other applicable law , which deals with transfer, transmission, allotment etc. |
| Sec. 58(3) | 58. (1) If a private company limited by shares refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of, or the transmission by operation of law of the right to, any securities or interest of a member in the company, it shall within a period of thirty days from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to the company, send notice of the refusal to the transferor and the transferee or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal.
(2) Without prejudice to sub-section (1), the securities or other interest of any member in a public company shall be freely transferable: Provided that any contract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract. (3) The transferee may appeal to the Tribunal against the refusal within a period of thirty days from the date of receipt of the notice or in case no notice has been sent by the company, within a period of sixty days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, was delivered to the company. (4) If a public company without sufficient cause refuses to register the transfer of securities within a period of thirty days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, is delivered to the company, the transferee may, within a period of sixty days of such refusal or where no intimation has been received from the company, within ninety days of the delivery of the instrument of transfer or intimation of transmission, appeal to the Tribunal. (5) The Tribunal, while dealing with an appeal made under sub-section (3) or sub-section (4), may, after hearing the parties, either dismiss the appeal, or by order— (a) direct that the transfer or transmission shall be registered by the company and the company shall comply with such order within a period of ten days of the receipt of the order; or (b) Direct rectification of the register and also direct the company to pay damages, if any, sustained by any party aggrieved. |
Appeal against the refusal to register transfer of shares or securities / transmission may be preferred by the transferee or nominee is the Company has refused the same on unreasonable grounds or on case when reason of refusal is not communicated to the parties concerned. |
| Sec. 59(2) | 59. (1) If the name of any person is, without sufficient cause, entered in the register of members of a company, or after having been entered in the register, is, without sufficient cause, omitted therefrom, or if a default is made, or unnecessary delay takes place in entering in the register, the fact of any person having become or ceased to be a member, the person aggrieved, or any member of the company, or the company may appeal in such form as may be prescribed, to the Tribunal, or to a competent court outside India, specified by the Central Government by notification, in respect of foreign members or debenture holders residing outside India, for rectification of the register.
(2) The Tribunal may, after hearing the parties to the appeal under sub-section (1) by order, either dismiss the appeal or direct that the transfer or transmission shall be registered by the company within a period of ten days of the receipt of the order or direct rectification of the records of the depository or the register and in the latter case, direct the company to pay damages, if any, sustained by the party aggrieved. |
Register of Member is a prima facie evidence of the records of the shareholders and its right of every shareholder to have its name of the register of member.
Board cannot expel any member’s name from the register of members and if this can be done, the matter can be referred before NCLT. This may also happen when without any sufficient cause, the person’s name gets entered in the register of member or unnecessary delay takes place while entering person’s name in such register. |
| Sec.61(1)(b) | 61. (1) A limited company having a share capital may, if so authorized by its articles, alter its memorandum in its general meeting to—
(a) increase its authorized share capital by such amount as it thinks expedient; (b) consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares: Provided that no consolidation and division which results in changes in the voting percentage of shareholders shall take effect unless it is approved by the Tribunal on an application made in the prescribed manner. |
Consolidation or Division of Share Capital which results in changes in the voting percentage of shareholders always requires approval of NCLT |
| Sec. 62(4) to (6) | (4) Where any debentures have been issued, or loan has been obtained from any Government by a company, and if that Government considers it necessary in the public interest so to do, it may, by order, direct that such debentures or loans or any part thereof shall be converted into shares in the company on such terms and conditions as appear to the Government to be reasonable in the circumstances of the case even if terms of the issue of such debentures or the raising of such loans do not include a term for providing for an option for such conversion:
Provided that where the terms and conditions of such conversion are not acceptable to the company, it may, within sixty days from the date of communication of such order, appeal to the Tribunal which shall after hearing the company and the Government pass such order as it deems fit. (5) In determining the terms and conditions of conversion under sub-section (4), the Government shall have due regard to the financial position of the company, the terms of issue of debentures or loans, as the case may be, the rate of interest payable on such debentures or loans and such other matters as it may consider necessary. (6) Where the Government has, by an order made under sub-section (4), directed that any debenture or loan or any part thereof shall be converted into shares in a company and where no appeal has been preferred to the Tribunal under sub-section (4) or where such appeal has been dismissed, the memorandum of such company shall, where such order has the effect of increasing the authorized share capital of the company, stand altered and the authorized share capital of such company shall stand increased by an amount equal to the amount of the value of shares which such debentures or loans or part thereof has been converted into. |
Appeal can be prefer to the NCLT against the order of Government to convert the Loan availed from it or debentures issued to it into shares even if terms of the issue of such debentures or the raising of such loans do not include a term for providing for an option for such conversion. |
| Sec. 66(1) | Subject to confirmation by the Tribunal on an application by the company, a company limited by shares or limited by guarantee and having a share capital may, by a special resolution, reduce the share capital.
Provided that no such reduction shall be made if the company is in arrears in the repayment of any deposits accepted by it, either before or after the commencement of this Act, or the interest payable thereon. |
No reduction of share capital shall be sanctioned by the NCLT without considering the representation of ROC, RD, Income Tax and more importantly creditors.
The Tribunal do consider that the debt or claim of every creditor of the company has been discharged or determined or has been secured or his consent is obtained, make an order confirming the reduction of share capital on such terms and conditions as it deems fit. |
| Sec. 71(9) to (10) | (9) Where at any time the debenture trustee comes to a conclusion that the assets of the company are insufficient or are likely to become insufficient to discharge the principal amount as and when it becomes due, the debenture trustee may file a petition before the Tribunal and the Tribunal may, after hearing the company and any other person interested in the matter, by order, impose such restrictions on the incurring of any further liabilities by the company as the Tribunal may consider necessary in the interests of the debenture-holders.
(10) Where a company fails to redeem the debentures on the date of their maturity or fails to pay interest on the debentures when it is due, the Tribunal may, on the application of any or all of the debenture-holders, or debenture trustee and, after hearing the parties concerned, direct, by order, the company to redeem the debentures forthwith on payment of principal and interest due thereon. |
Power of Debenture Trustee to present the matter before the NCLT in case when asset secured by the way of charge in favor of debenture holders are insufficient or are likely to become insufficient to discharge the principal amount as and when it becomes due.
Debenture Trustee may also make an application when Company fails to redeem debentures at the time of redemption. |
| Sec. 73(4) | Where a company fails to repay the deposit or part thereof or any interest thereon under sub-section (3), the depositor concerned may apply to the Tribunal for an order directing the company to pay the sum due or for any loss or damage incurred by him as a result of such non-payment and for such other orders as the Tribunal may deem fit.
Sec. 74(2) The Tribunal may on an application made by the company, after considering the financial condition of the company, the amount of deposit or part thereof and the interest payable thereon and such other matters, allow further time as considered reasonable to the company to repay the deposit. |
Depositor may also approach NCLT when Company fails to repay deposit or part of it or interest thereon.
The Tribunal may also consider application of the Company, considering its financial condition, and may allow further time as considered reasonable to the company to repay the deposit |
| Sec. 75 | Sec. 75 (1) Where a company fails to repay the deposit or part thereof or any Interest thereon referred to in section 74 within the time specified in sub-section (1) of that section or such further time as may be allowed by the Tribunal under sub-section (2) of that section, and it is proved that the deposits had been accepted with intent to defraud the depositors or for any fraudulent purpose, every officer of the company who was responsible for the acceptance of such deposit shall, without prejudice to the provisions contained in sub-section (3) of that section and liability under section 447, be personally responsible, without any limitation of liability, for all or any of the losses or damages that may have been incurred by the depositors. | Fraudulent conduct of Company may also be referred to the NCLT when it is proved that the deposits had been accepted with intent to defraud the depositors or for any fraudulent purpose. |
| Sec. 90 | (4A) Every company shall take necessary steps to identify an individual who is a significant beneficial owner in relation to the company and require him to comply with the provisions of this section
(5) A company shall give notice seeking information in accordance with under sub-section (5) of section 90, in Form No. BEN-4 to whom the company knows or has reasonable cause to believe— (a) to be a significant beneficial owner of the company; (b) to be having knowledge of the identity of a significant beneficial owner or another person likely to have such knowledge; or (6) The information required by the notice as stated above shall be given by the concerned person within a period not exceeding thirty days of the date of the notice. (7) The company shall,— (a) where that person fails to give the company the information required by the notice within the time specified therein; or (b) where the information given is not satisfactory, apply to the Tribunal within a period of fifteen days of the expiry of the period specified in the notice, for an order directing that the shares in question be subject to restrictions with regard to transfer of interest, suspension of all rights attached to the shares and such other matters as may be prescribed. The company may apply to the Tribunal in accordance with sub-section (7) of section 90, for order directing that the shares in question be subject to restrictions, including – (a) restrictions on the transfer of interest attached to the shares in question; (b) suspension of the right to receive dividend in relation to the shares in question; (c) suspension of voting rights in relation to the shares in question; (d) any other restriction on all or any of the rights attached with the shares in question (8) On any application made under sub-section (7), the Tribunal may, after giving an opportunity of being heard to the parties concerned, make such order restricting the rights attached with the shares within a period of sixty days of receipt of application. 9) The company or the person aggrieved by the order of the Tribunal may make an application to the Tribunal for relaxation or lifting of the restrictions placed under sub-section (8), within a period of one year from the date of such order: Provided that if no such application has been filed within a period of one year from the date of the order under sub-section (8), such shares shall be transferred, without any restrictions, to the authority constituted under sub-section (5) of section 125, in such manner as may be prescribed |
Significant Beneficial Owner” in relation to a reporting company means an individual referred to in sub-section (1) of section 90, who acting alone or together, or through one or more persons or trust, possesses one or more of the following rights or entitlements in such reporting company, namely:-
(i) Holds indirectly, or together with any direct holdings, not less than ten per cent. of the shares; (ii) Holds indirectly, or together with any direct holdings, not less than ten per cent. of the voting rights in the shares. For the purpose of this clause, an individual shall be considered to hold a right or entitlement indirectly in the reporting company, if he satisfies any of the following criteria, in respect of a member of the reporting company, namely: – (i) where the member of the reporting company is a body corporate (whether incorporated or registered in India or abroad), other than a limited liability partnership, and the individual,- (a) holds majority stake in that member; or (b) holds majority stake in the ultimate holding company (whether incorporated or registered in India or abroad) of that member; “Majority Stake” means;- (i) holding more than one-half of the equity share capital in the body corporate; or (ii) holding more than one-half of the voting rights in the body corporate; or (iii) having the right to receive or participate in more than one-half of the distributable dividend or any other distribution by the body corporate; (ii) where the member of the reporting company is a Hindu Undivided Family (HUF), and the individual is the Karta of the HUF; (iii) where the member of the reporting company is a partnership entity, and the individual,- (a) is a partner; or (b) holds majority stake in the body corporate which is a partner of the partnership entity; |
| Sec. 97 | Sec. 97 (1) If any default is made in holding the annual general meeting of a company under section 96, the Tribunal may, notwithstanding anything contained in this Act or the articles of the company, on the application of any member of the company, call, or direct the calling of, an annual general meeting of the company and give such ancillary or consequential directions as the Tribunal thinks expedient. | Power is with NCLT to call or direct the calling of an AGM of the Company on an application made to it by any member of the Company, if Company has defaulted in holding AGM in any FY |
| Sec. 98 | 98. (1) If for any reason it is impracticable to call a meeting of a company, other than an annual general meeting, in any manner in which meetings of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this Act or the articles of the company, the Tribunal may, either suomotu or on the application of any director or member of the company who would be entitled to vote at the meeting,—
(a) order a meeting of the company to be called, held and conducted in such manner as the Tribunal thinks fit; |
Power is with NCLT to call or direct the calling of an EGM of the Company on an application made to it by any member of the Company, where it is impracticable to call an Extraordinary General meeting. |
| Sec. 119(4) | Sec. 119 (1) The books containing the minutes of the proceedings of any general meeting of a company or of a resolution passed by postal ballot, shall—
(a) be kept at the registered office of the company; and (b) be open, during business hours, to the inspection by any member without charge, subject to such reasonable restrictions as the company may, by its articles or in general meeting, impose, so, however, that not less than two hours in each business day are allowed for inspection. (2) Any member shall be entitled to be furnished, within seven working days after he has made a request in that behalf to the company, and on payment of such fees as may be prescribed, with a copy of any minutes referred to in sub-section (1). (4) In the case of any such refusal or default, the Tribunal may, by order, direct an immediate inspection of the minute-books or direct that the copy required shall forthwith be sent to the person requiring it. |
It is the right of every Member to inspect the Minutes of General Meeting and Member also possess right to have a copy of the same on payment of Fee.
In case if Company refuse for such inspection or refuse to provide certified copy of the same, then member possess right to make an application before NCLT and tribunal may, by order, direct an immediate inspection of the minute-books or direct that the copy required shall forthwith be sent to the person requiring it. |
| Sec. 130(1) | A company shall not re-open its books of account and not recast its financial statements, unless an application in this regard is made by the Central Government, the Income-tax authorities, the Securities and Exchange Board, any other statutory regulatory body or authority or any person concerned and an order is made by a court of competent jurisdiction or the Tribunal to the effect that—
(i) The relevant earlier accounts were prepared in a fraudulent manner; or (ii) The affairs of the company were mismanaged during the relevant period, casting a doubt on the reliability of financial statements. |
The application can be made before NCLT by the Ministry or Income Tax authorities or SEBI or any other regulator for re-opening of books of accounts in case if the applicant do have reasons to believe that the relevant earlier accounts were prepared in a fraudulent manner; or when the affairs of the company were mismanaged during the relevant period, casting a doubt on the reliability of financial statements. |
| Sec. 131 | Sec. 131 (1) If it appears to the directors of a company that—
(a) the financial statement of the company; or (b) the report of the Board, do not comply with the provisions of section 129 or section 134 they may prepare revised financial statement or a revised report in respect of any of the three preceding financial years after obtaining approval of the Tribunal on an application made by the company in such form and manner as may be prescribed and a copy of the order passed by the Tribunal shall be filed with the Registrar. |
Voluntary application can also be made to the NCLT in case if Company has not complied with the provisions of section 129 or section 134 while preparing financial statement or board report |
| Sec. 140(4) | (4) (i) Special notice shall be required for a resolution at an annual general meeting appointing as auditor a person other than a retiring auditor, or providing expressly that a retiring auditor shall not be re-appointed, except where the retiring auditor has completed a consecutive tenure of five years or, as the case may be, ten years, as provided under sub-section (2) of section 139.
(ii) On receipt of notice of such a resolution, the company shall forthwith send a copy thereof to the retiring auditor. (iii) Where notice is given of such a resolution and the retiring auditor makes with respect thereto representation in writing to the company (not exceeding a reasonable length) and requests its notification to members of the company, the company shall, unless the representation is received by it too late for it to do so,— (a) in any notice of the resolution given to members of the company, state the fact of the representation having been made; and (b) send a copy of the representation to every member of the company to whom notice of the meeting is sent, whether before or after the receipt of the representation by the company, and if a copy of the representation is not sent as aforesaid because it was received too late or because of the company’s default, the auditor may (without prejudice to his right to be heard orally) require that the representation shall be read out at the meeting: Provided that if a copy of representation is not sent as aforesaid, a copy thereof shall be filed with the Registrar: Provided further that if the Tribunal is satisfied on an application either of the company or of any other aggrieved person that the rights conferred by this sub-section are being abused by the auditor, then, the copy of the representation may not be sent and the representation need not be read out at the meeting. |
A special notice required to be given to the company shall be signed, either individually or collectively by such number of members holding not less than one percent of total voting power or holding shares on which an aggregate sum of not less than five lakh rupees has been paid up on the date of the notice.
The notice referred above shall be sent by members to the company not earlier than three months but at least fourteen days before the date of the meeting at which the resolution is to be moved, exclusive of the day on which the notice is given and the day of the meeting. The company shall immediately after receipt of the notice, give its members notice of the resolution at least seven days before the meeting , exclusive of the day of dispatch of notice and day of the meeting , in the same manner as it gives notice of any general meetings. If the Tribunal is satisfied on an application either of the company or of any other aggrieved person that the rights conferred by this sub-section are being abused by the auditor, then, the copy of the representation may not be sent and the representation need not be read out at the meeting. |
| Sec. 140(5) | (5) Without prejudice to any action under the provisions of this Act or any other law for the time being in force, the Tribunal either suomoto or on an application made to it by the Central Government or by any person concerned, if it is satisfied that the auditor of a company has, whether directly or indirectly, acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to, the company or its directors or officers, it may, by order, direct the company to change its auditors:
Provided that if the application is made by the Central Government and the Tribunal is satisfied that any change of the auditor is required, it shall within fifteen days of receipt of such application, make an order that he shall not function as an auditor and the Central Government may appoint another auditor in his place: Provided further that an auditor, whether individual or firm, against whom final order has been passed by the Tribunal under this section shall not be eligible to be appointed as an auditor of any company for a period of five years from the date of passing of the order and the auditor shall also be liable for action under section 447. |
Generally, Ministry of Corporate Affairs used to refer the matter to the NCLT for the removal of Statutory Auditor and this happens when any fraudulent conduct of Auditor is found during inspection or investigation.
In the matte of former auditors of IL&FS Financial Services (IFIN), wherein the criminal complaint against Deloitte Haskins & Sells and BSR Associates, an affiliate of KPMG, filed by the Serious Fraud Investigation Office (SFIO) during the course of investigation. |
| Sec. 169 | 169. (1) A company may, by ordinary resolution, remove a director, not being a director appointed by the Tribunal under section 242, before the expiry of the period of his office after giving him a reasonable opportunity of being heard:
Provided that an independent director re-appointed for second term under sub-section (10) of section 149 shall be removed by the company only by passing a special resolution and after giving him a reasonable opportunity of being heard:] Provided further that nothing contained in this sub-section shall apply where the company has availed itself of the option given to it under section 163 to appoint not less than twothirds of the total number of directors according to the principle of proportional representation. (2) A special notice shall be required of any resolution, to remove a director under this section, or to appoint somebody in place of a director so removed, at the meeting at which he is removed. (3) On receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director, whether or not he is a member of the company, shall be entitled to be heard on the resolution at the meeting. (4) Where notice has been given of a resolution to remove a director under this section and the director concerned makes with respect thereto representation in writing to the company and requests its notification to members of the company, the company shall, if the time permits it to do so,— (a) in any notice of the resolution given to members of the company, state the fact of the representation having been made; and (b) send a copy of the representation to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representation by the company), and if a copy of the representation is not sent as aforesaid due to insufficient time or for the company’s default, the director may without prejudice to his right to be heard orally require that the representation shall be read out at the meeting: Provided that copy of the representation need not be sent out and the representation need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Tribunal is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for defamatory matter; and the Tribunal may order the company’s costs on the application to be paid in whole or in part by the director notwithstanding that he is not a party to it. |
The representation need not be sent out and the representation need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Tribunal is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for defamatory matter; and the Tribunal may order the company’s costs on the application to be paid in whole or in part by the director. |
| Sec. 248(8) | Nothing in this section shall affect the power of the Tribunal to wind up a company the name of which has been struck off from the register of companies.
|
Where it is found that an application by a company under sub-section (2) of section 248 has been made with the object of evading the liabilities of the company or with the intention to deceive the creditors or to defraud any other persons, the persons in charge of the management of the company shall, notwithstanding that the company has been notified as dissolved. |
| Sec. 252(1) | Any person aggrieved by an order of the Registrar, notifying a company as dissolved under section 248, may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar and if the Tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar, it may order restoration of the name of the company in the register of companies:
Provided that before passing any order under this section, the Tribunal shall give a reasonable opportunity of making representations and of being heard to the Registrar, the company and all the persons concerned. Provided further that if the Registrar is satisfied, that the name of the company has been struck off from the register of companies either inadvertently or on the basis of incorrect information furnished by the company or its directors, which requires restoration in the register of companies, he may within a period of three years from the date of passing of the order dissolving the company under section 248, file an application before the Tribunal seeking restoration of name of such company. |
Appeal may be preferred before the NCLT in case when the name of the Company gets struck off by the ROC.
If the Tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar, it may order restoration of the name of the company in the register of companies |
| Sec. 252(3) | If a company, or any member or creditor or workman thereof feels aggrieved by the company having its name struck off from the register of companies, the Tribunal on an application made by the company, member, creditor or workman before the expiry of twenty years from the publication in the Official Gazette of the notice under sub-section (5) of section 248 may, if satisfied that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the register of companies, order the name of the company to be restored to the register of companies, and the Tribunal may, by the order, give such other directions and make such provisions as deemed just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off from the register of companies. | Application may be preferred by the member, creditor or workman before the NCLT in case when the name of the Company gets struck off by the ROC.
If the tribunal is satisfied that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the register of companies, order the name of the company to be restored to the register of companies, |
| Sec. 441 | Sec. 441 (1)Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act (whether committed by a company or any officer thereof) not being an offence punishable with imprisonment only, or punishable with imprisonment and also with fine, may, either before or after the institution of any prosecution, be compounded by—
(a) the Tribunal; or (b) where the maximum amount of fine which may be imposed for such offence does not exceed twenty-five lakh rupees, by the Regional Director or any officer authorized by the Central Government, on payment or credit, by the company or, as the case may be, the officer, to the Central Government of such sum as that Tribunal or the Regional Director or any officer authorized by the Central Government, as the case may be, may specify: Provided that the sum so specified shall not, in any case, exceed the maximum amount of the fine which may be imposed for the offence so compounded. |
The offence punishable with fine up to Rs. Twenty-five Lakh can be compound by Regional Director otherwise matter will be referred to NCLT.
Any offence which is punishable under this Act with imprisonment only or with imprisonment and also with fine shall not be compoundable. |
The Powers of NCLT during the course of Inspection, Inquiry & Investigation, Compromise, Arrangement & Amalgamations, in the matter of Prevention of Oppression & Mismanaged and In Winding up, are not covered in the said content and the same is required a separate / special discussion.
This insight has been authored by CS Vinit Nagar, Founder of M/s. Vinit Nagar & Co. Company Secretaries, Ahmedabad (Gujarat) which majorly deals into the domain of Litigation Management Practice under the Corporate Law and Insolvency & Bankruptcy Law in India. They can be reached on vinit_nagarcs@yahoo.com and vinitnagarandco@gmail.com for any questions. This insight is intended only as a general discussion of the issues & is not intended for any solicitation of work. Further, it should not be regarded as a Legal advice and no legal or business decisions should be based on its content.
Author Bio
