Company Law India: Read latest Company law news & updates, acts, circular, notifications & articles issued by MCA amendment in companies Act 2013. Article on Loans Company formation XBRL, Schedule VI IFRS.
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Considering all the facts and circumstances and taking into account all the contentions raised by the affidavits and reply affidavits, considering the decisions of other High Courts, Supreme Court and the Division Bench of this High Court on the issues raised by the Regional Director and the submissions during the course of hearing, I am satisfied that the observations made by the Regional Director, Ministry of Corporate Affairs, do not survive. I have come to the conclusion that the present scheme of arrangement is in the interest of its shareholders and creditors as well as in the public interest and the same deserves to be sanctioned.
Merely because a financial loss would be suffered by the appellant qua the arbitration Awards which had been passed against him would not entitle him to come under the exception seeking a refusal of the restoration of the company. The position of the company vis-à-vis this stand is that a healthy company who was admittedly operational at the time when its name was struck off would be deprived of its right to function as a going concern and in the bargain would not be permitted to recover its dues which amounts have accrued to it under the Awards of the Arbitral Tribunal.
In the present case, there were undoubtedly three separate contracts entered into between the parties. One was for the supply of cables and the other two for supply of accessories, i.e., Jumpers, Connectors and Surge Arrestors. Both the parties have been dealing with each other for over seven years. The Petitioner itself being the manufacturer of cables and accessories knew that for the purpose of the business of the Respondent the mere supply of cables without the accessories could not be sufficient. The Respondent was in turn supplying cables and accessories to the telecom service providers including Tata Tele Services Limited (‘TTL’). The mere supply of cables to TTL would not have constituted a complete delivery of goods. The peak period in the telecom industry for the supply of cables was the first three months of the year. Therefore, the failure on the part of the Petitioner to supply the accessories would adversely affect the corresponding obligations of the Respondent to its customers.
It was observed by the CLB that if the Appellants failed to cooperate with NHEL for the determination of the value of the occupied premises, including land, plant and machinery and do not accept the fair value of the assets determined, the petition shall be deemed to have been dismissed. The impugned order thus makes it impossible for the Appellants to even question the valuation. Having succeeded in demonstrating oppression by the Respondents, the Appellants cannot be compelled to accept an arbitrary and unilateral determination of the fair value by the Respondents not based on any sound financial and accounting principles. The remedy provided by the CLB has thus been rendered illusory.
Further it is clarified that fee payable for forms on/till 16-01-2013 will remain payable along with additional fee and relaxation of any additional fee will be considered for forms on or after 17-01-2013.
A petition for winding up can be maintained at the behest of a creditor, whether secured or unsecured. This is evident from the provisions of section 439(1)(d). Under sub-section (2) of section 439, among others, a secured creditor is to be deemed to be a creditor within the meaning of clause (b) of sub section (1).
The alternative prayer that RLB should be directed to be wound up, since its entire substratum has disappeared, will require a detailed examination of several relevant factors, all of which are not before the Court. Nothing precludes RLB from seeking winding up in accordance with law in appropriate proceedings by placing the full facts before the Court which can then be responded to by the OL, the RD and other interested parties including creditors. Given the pleadings in the present application, it is not possible to undertake that exercise at this stage.
Though recognising that the company court (now CLB) would be the court of exclusive jurisdiction for applications for rectification of register of members, it is held that if the issues arose whether the plaintiff was the owner of the shares, whether there was fraud or forgery or there was dispute on the very title of the shares, those issues would be beyond the jurisdiction of the company court and would have to be decided by the civil court. This would be upon the issues that arise in an application. It may be mentioned that an issue arises when a material fact is alleged and disputed. Hence, mere mention of fraud may not take the matter out of the exclusive jurisdiction granted by the statute to the CLB, but when the “very title to the shares” is challenged and the court sees that that is at least prima facie shown, the civil court’s jurisdiction would not stand barred.
The other ground on which the CLB interfered with the decision at the board meeting held on 31-10-2012 was that the notices of the board meeting were issued at a time when the Respondent was not in the country and was stuck in New Jersey, USA, which was admittedly hit by a hurricane. While the notice was properly delivered to the Respondent, its request for adjournment of the meeting could have been easily accommodated by the Appellants. Nevertheless, they went ahead and held the meeting. This has been sought to be remedied by the impugned order of the CLB by directing that a fresh board meeting be convened. In the facts and circumstances, the CLB was justified in issuing the said direction. What however cannot be sustained in law is the direction that in the fresh board meeting, effect must be given to clause 6.2 of the JVA. That portion of the impugned order is, therefore, set aside.
The Regional Director or Registrd of Companies or any other officer of the Central Government shall be authorised to make complaints under sub-section (2) of section 58AAA of the Act.
