Electro Trade Vs ETA Engineering Private Limited (NCLT Chennai)
The National Company Law Tribunal (NCLT), Chennai considered a petition filed by M/s Electro Trade, a proprietorship concern, under Section 213 of the Companies Act, 2013, seeking directions for inquiry and inspection into the affairs of ETA Engineering Private Limited, investigation into alleged fraudulent conduct of the company, action against its management under Section 447, and investigation into alleged income tax evasions.
The petitioner stated that Respondent No. 1 had purchased goods but failed to pay outstanding dues amounting to Rs. 1,32,49,817, ignored repeated communications, and conducted its affairs with an intention to defraud creditors. It alleged that the company had multiple creditor disputes, repeatedly settled insolvency proceedings only after legal action, failed to file MSME Form-I despite outstanding dues to an MSME supplier, suppressed liabilities in its financial statements, committed various statutory violations under the Companies Act, and therefore warranted investigation under Section 213. The petitioner also sought action under Section 447 and investigation into alleged income tax evasions.
The respondent company denied all allegations of fraud and submitted that it had suffered financial distress after disputes with one of its lending banks beginning in 2016. It contended that it had settled genuine claims, that the petitioner’s monetary claim related to FY 2012-13 and was barred by limitation, and that the petition was an indirect attempt to recover time-barred dues rather than a genuine request for investigation. It further disputed the allegations relating to MSME disclosures, statutory filings, and concealment of liabilities, asserting that necessary compliances had either been made or were being undertaken.
