COMPANY LAW
Companies Act | Under Sec. 59, Registered Society Can't Seek Rectification Of Share Register Of Company's Members: NCLT Hyderabad
The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising of Dr. N. Venkata Ramakrishna Badarinath (Judicial Member) and Shri Charan Singh (Technical Member), has held that a company petition filed by a Society registered under Andhra Pradesh Societies Registration Act, 2001, for rectification of share register of the members of a Company under Section 59 of the Companies Act, 2013, is not maintainable. The Bench held that the Society is not a 'person' for the purpose of...
Banks/NBFCs Not Obliged To Initiate Restructuring Process Before Classifying MSME Account As NPA Sans Application From MSME: Bombay High Court
The Bombay High Court recently held that banks and non-banking financial companies (NBFCs) are not obligated to initiate restructuring process before classifying accounts of Micro, Small, and Medium Enterprises as Non-Performing Assets (NPA) in the absence of any application from the MSMEs seeking restructuring.A division bench of Justice BP Collabawalla and Justice MM Sathaye held that notification dated May 29, 2015, under Section 9 of the Micro, Small and Medium Enterprises Development Act,...
SFIO Not Barred From Investigating IPC Offences, Conducting 'Further Probe': Delhi High Court
The Delhi High Court has observed that the Serious Fraud Investigation Office (SFIO) is not barred from investigating offences under the Indian Penal Code, 1860, or conducting further investigation in accordance with law after the Investigation Report has been submitted.“From a conjoint and harmonious reading of the relevant provisions of the CrPC and the present Act, as quoted hereinabove, it cannot be said that the SFIO is barred from investigating an offence under the IPC. SFIO is not barred...
SFIO Not Barred From Investigating IPC Offences, Conducting 'Further Probe': Delhi High Court
The Delhi High Court has observed that the Serious Fraud Investigation Office (SFIO) is not barred from investigating offences under the Indian Penal Code, 1860, or conducting further investigation in accordance with law after the Investigation Report has been submitted.“From a conjoint and harmonious reading of the relevant provisions of the CrPC and the present Act, as quoted hereinabove, it cannot be said that the SFIO is barred from investigating an offence under the IPC. SFIO is not barred...
Non-Obstante Clause In S. 109A(3) Of Companies Act 1956 Doesn't Exclude Legal Heir From Claiming Securities Against Nominee: Supreme Court
The Supreme Court has held that the non-obstante clause in both Section 109A(3) of the Companies Act, 1956 & Bye-law 9.11.7 of the Depositories Act, 1996, does not exclude the legal heirs from their rightful claim over the securities, against the nominee.The sole purpose of the non-obstante clause is to allow the company to vest shares upon the nominee to the exclusion of any other person, for the purpose of discharge of its liability against diverse claims by the legal heirs of the deceased...
Nomination Process Under Companies Act Does Not Override Succession Laws: Supreme Court
The Supreme Court has held that the nomination process under the Companies Act, 1956 (pari materia Companies Act, 2013) does not override succession laws. It is beyond the scope of the company's affairs to facilitate succession planning of the shareholder. In case of a Will, it is upon the administrator or executor under the Indian Succession Act, 1925, or in case of intestate succession, the laws of succession to determine the line of succession.The Bench has upheld the High Court order,...
S.274 Companies Act | NCLT Can Only Direct Company & Not It's Shareholders To File Written Statement & Objections During Winding Up: Kerala HC
The Kerala High Court recently laid down that the National Company Law Tribunal (NCLT) can only direct the Company to file its objections along with the statement of affairs when a petition for winding up of the Company before the Tribunal had been filed by any person other than the Company itself. Justice C. Jayachandran, passed the order on perusing Section 274(1) of the Companies Act, which stipulates the 'directions for filing statement of affairs'. The NCLT, Kochi Bench had in...
Companies Act | NCLT Permits 'Change' In Utilization Of Share Capital Reduction Amount By Invoking Powers Under Rule 11 Of NCLT Rules
The National Company Law Tribunal (NCLT), Chennai Bench, comprising of Shri Sanjiv Jain (Judicial Member) and Shri Ravichandran Ramasamy (Technical Member), while invoking its powers under Rule 11 of the NCLT Rules, 2016 has permitted a company to 'change' the utilization of its reduced share capital amount by altering the amounts to be adjusted towards Negative Capital Reserves and the amounts returnable to Shareholders. Previously, the NCLT had permitted the Company to reduce its...
S.469 CrPC | Date Of Knowledge Of Offence Decides Limitation Period, Issuance Of Notice By ROC To Accused Company Indicates Knowledge: Telangana HC
The Telangana High Court has held that as per Section 469 of CrPC, issuance of notice by the Registrar of Companies indicates knowledge of the offence committed by the accused company and that this determines the limitation period.Justice K. Surender clarified that the date of issuance of sanction by the Central Government for initiating a complaint cannot be taken as the date of knowledge.“In view of Section 469 of Cr.P.C, the commencement of the period of limitation would be from the date of...
NCLT Mumbai: Tribunal Is A Judicial Authority With Power To Refer Matter To Arbitration If Dispute Falls Within Scope Of Arbitration Agreement
The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Mr. Kishore Vemulapalli (Judicial Member) and Mr. Prabhat Kumar (Technical Member), dismissed an application and held that the Tribunal is a judicial authority, and has the power to refer the matter to Arbitration if it finds that the dispute is arbitral and falls within the scope of the Arbitration Agreement. Background Facts: Chaitra Gowdar Chidanand (Petitioner) had filed a Company Petition before NCLT,...
Corporate Ministry Can Order Company To Change Name After 12 Months If Deceptively Similar To Another Priorly Registered Company: Telangana HC
The Telangana High Court has upheld that the Regional Director, Ministry of Corporate Affairs is authorised to direct a company for change of name, even after expiry of 12 months, if it has reason to believe that the company incorporated at a later date is trying to pass off as a Company incorporated on a prior date.Justice K Lakshman has conceded with the view taken by the Delhi High Court in Mondelez Foods Private Limited v. The Regional Director (North), Ministry of Corporate Affairs passed...
Customs Act Does Not Create A Statutory First Charge Overriding Charge In Favour Of Secured Creditor Under S. 529A Of Companies Act : Supreme Court
The Supreme Court has ruled that in case of winding up of a company, the customs duty owed by the company would be treated as a preferential payment under Section 530(1) (a) of the Companies Act, 1956. But customs duty would not override and be given preference over the payments due to overriding preferential creditors covered under Section 529A of the Companies Act, which include the secured creditors, the court has held.The court said that the Customs Act, 1962 does not create a statutory...