Condonation Of Delay In Filing Returns For Company Not Available To Directors: Kerala High Court

The Kerala High Court on Thursday held that condonation of delay in filing annual returns does not wipe out the statutory disqualification incurred by directors for failure to file returns for consecutive financial years. The court observed that the benefit of condonation available to the company cannot be extended to its directors. The court held that the office-bearers of the Aruvipuram Sree Narayana Dharma Paripalana Yogam, including V.K. Natesan, Dr. M.N. Soman, Thushar Vellappally and...

Calcutta High Court Sets Aside Order Restraining IIBI From Redemption Of ₹221.08 Crore Preference Shares At 20% Value

The Calcutta High Court on March 12 allowed an appeal filed by Industrial Investment Bank of India Limited (IIBI). The court set aside a single judge's order that had confirmed an interim direction requiring the bank to set apart properties worth Rs 2 crore in a dispute relating to a resolution adopted in its 13th Annual General Meeting regarding redemption of preference shares. While allowing IIBI's appeal, the Division Bench of Justices Debangsu Basak and Md. Shabbar Rashidi observed: ...

Maharashtra Stamp Authorities Have No Jurisdiction Over NCLT Chennai Order: Bombay High Court

The Bombay High Court on 18 February held that Maharashtra stamp authorities have no jurisdiction to assess stamp duty on an order passed by the NCLT, Chennai Bench, merely because the same scheme was also sanctioned by the NCLT, Mumbai Bench. A Single-Judge Bench of Justice Sharmila U. Deshmukh clarified that even if stamp duty had not been paid on the Chennai order, that question falls within the domain of authorities in Tamil Nadu and is irrelevant to the assessment of the Mumbai order. The...

Common Independent Director Not 'Common Management': Gujarat High Court Sets Aside GeM Bid Rejection

The Gujarat High Court has held that an Independent Director cannot be treated as part of the common management of a company for the purpose of disqualifying bids under Clause 29 of the Government e-Marketplace General Terms and Conditions, setting aside the rejection of NR Agarwal Industries Ltd's technical bid in a public tender. A Division Bench of Justice Bhargav D. Karia and Justice L.S. Pirzada observed, “the Independent Director stands on a different foot than the Director whether he is...

Recovery Impact Not Valid Ground To Oppose Transfer Of Winding-Up Proceedings To NCLT: Bombay High Court

The Bombay High Court has recently observed that objections raised by secured creditors and the Official Liquidator to the transfer of winding-up proceedings from the High Court to the National Company Law Tribunal (NCLT) cannot be sustained merely because such a transfer may affect their recovery actions. Justice Arif S. Doctor made the observation while allowing a company application filed by Sahjun Impex Trading Pvt. Ltd. The application sought transfer of a pending winding-up petition...

Managing Director Liable For Dishonoured Company Cheques Where He Ran Its Day-to-Day Affairs: Kerala High Court

A Managing Director who was in charge of a company's day-to-day affairs and who signed its cheques can be held vicariously liable for cheque dishonour, the Kerala High Court has held, dismissing a revision plea by a company's former head. Justice M.B. Snehalatha upheld the conviction of V.J. Joseph, the former Managing Director of J and A Foundations Pvt. Ltd., in a cheque dishonour case under Section 138 of the Negotiable Instruments Act. It involved three cheques issued by the company. The...

Directors Not Criminally Liable For Company's Contractual Breach Without Proof Of Fraud: Delhi High Court

The Delhi High Court has said that a company's inability to pay its dues because of financial distress is a civil issue, not a criminal offense. A director cannot be prosecuted for cheating unless there is clear proof of personal fraud or personal gain. Justice Neena Bansal Krishna quashed cheating charges against a former managing director of Creative Wares Limited, a manufacturing company that later ran into financial trouble and was declared a sick industrial company by the BIFR. The court...

Only Final SFIO Report, Not Interim Report, Can Trigger Prosecution Under Companies Act: Calcutta High Court

The Calcutta High Court has clarified that the central government cannot initiate prosecution under the Companies Act on the basis of an interim report submitted by the Serious Fraud Investigation Office and must wait for the final investigation report after completion of the probe. Justice Krishna Rao made the observation while allowing a writ petition filed by Sunil Kumar Agarwal and quashing a Look Out Circular issued against him during the pendency of an SFIO investigation, noting that...

Special Court Cannot Hear Private Complaints In Companies Act Fraud Cases; Only SFIO Can File: Supreme Court

The Supreme Court on Friday held that a special court cannot entertain a private complaint in cases involving fraud under the Companies Act. It ruled that where an offence attracts punishment under the fraud provision, cognisance can be taken only on a complaint filed by the Serious Fraud Investigation Office or an authorised officer of the Central government. A Division Bench of Justice J K Maheshwari and Justice K Vinod Chandran held that offences under Section 448 of the Companies Act, which...