Karnataka High Court Remands Quikr's ₹1.77 Crore Stamp Duty Dispute Over NCLT-Approved Amalgamation

The Karnataka High Court has set aside an order directing Quikr India Private Limited, which operates the online classifieds platform Quikr, to pay an additional ₹1.77 crore as stamp duty on a National Company Law Tribunal (NCLT)-approved scheme of amalgamation. The matter has been remitted to the District Registrar for fresh consideration. Justice M.G.S. Kamal observed that, for the purpose of levying stamp duty under the Karnataka Stamp Act, 1957, the NCLT's order approving the amalgamation...

Advanced Liquidation Cannot Be Shifted To NCLT Merely Because Assets Are Unsold: Karnataka High Court

The Karnataka High Court on 23 June, held that winding up proceedings cannot be transferred to the National Company Law Tribunal (NCLT) merely because the company's assets have not yet been sold. It noted that once liquidation has progressed substantially in time and substance, transfer would disrupt a mature liquidation process and is not warranted. Justice Suraj Govindaraj dismissed an application filed under the fifth proviso to Section 434(1)(c) of the Companies Act, 2013 (which empowers...

Madras High Court Refuses To Quash CBI FIR Against Ind Barath Power Directors Despite Withdrawal Of Fraud Tag

The Madras High Court has refused to quash a CBI FIR against the directors of Ind Barath Power Gencom Limited. It held that the subsequent withdrawal of the company's "Fraud" classification by the lending bank does not wipe out criminal proceedings arising from allegations of diversion of funds, fabrication of records, and other cognisable offences. The court also observed that the FIR was not registered solely on the basis of the forensic audit that led to the fraud classification. Justice...

When Can A Disqualified Company Director Continue In Office? Karnataka High Court Clarifies

The Karnataka High Court has clarified that a director disqualified because of a company's statutory defaults can continue to hold office in that defaulting company so that the director can undertake the statutory compliance required to rectify the defaults and authorities can pursue proceedings against the person responsible. It also held that such a director must vacate office in companies that are not in default. Justice Suraj Govindaraj passed the order while partly allowing a review...

Pre-Cognizance Hearing Under BNSS Doesn't Apply In Companies Act Cases: Punjab & Haryana High Court

The Punjab and Haryana High Court has held that companies and individuals prosecuted by the Serious Fraud Investigation Office (SFIO) under the Companies Act, 2013 are not entitled to a pre-cognizance hearing under the first proviso to Section 223 of the Bharatiya Nagarik Suraksha Sanhita (BNSS). It ruled that the Companies Act prescribes a separate procedure for taking cognizance in such prosecutions. Justice Subhas Mehla, who heard a petition filed by Vivo India Private Limited challenging...

Section 452 Companies Act Not Decriminalised, Criminal Courts Retain Jurisdiction: Kerala High Court

The Kerala High Court on 1 July held that offences under Section 452 of the Companies Act, 2013, relating to the wrongful withholding of company property by an officer or employee, remain triable by criminal courts and were not decriminalised by the Companies (Amendment) Act, 2020. Justice G. Girish allowed Tata Coffee Limited's revision petition, set aside the Chief Judicial Magistrate, Thrissur's order returning the company's complaint against its former employee, and directed the Magistrate...

Asset Transfers To Defeat Creditors During Liquidation Are Void As Fraudulent Preference: Bombay HC

The Bombay High Court on 25 June held that a transfer of company property made during liquidation proceedings to promoters, without valid consideration and without a registered instrument, constitutes a fraudulent preference under Section 531(1) of the Companies Act, 1956, when it operates to defeat creditors' rights. Justice Somasekhar Sundaresan allowed an Official Liquidator's Report, and declared the transfer of agricultural land in favour of the promoters of Indage Vineyard Pvt Ltd void,...

Interrogatories Maintainable In Oppression & Mismanagement Cases Before Company Law Board: Delhi High Court

The Delhi High Court on Wednesday held that interrogatories are maintainable in oppression and mismanagement proceedings before the Company Law Board (now NCLT), observing that such discovery mechanisms help elicit material facts and shorten prolonged trials.A coram of Justice Anish Dayal held that interrogatories cannot be rejected merely on the ground of delay if they are relevant to the issues in dispute and are neither vexatious nor oppressive.Interrogatories are a set of written questions...

Bona Fide Dispute Over Liability Bars Winding Up Proceedings: Madhya Pradesh High Court

The Madhya Pradesh High Court at Gwalior on 22 June held that a bona fide dispute over the rate of goods supplied to a company bars initiation of winding-up proceedings under Sections 433(e), 434(1)(a) and 439(1)(d) of the Companies Act, 1956. Justice Ashish Shroti dismissed a company petition filed by Mahavir Enterprises against Gwalior Sugar Company Ltd., finding that the claim involved disputed questions of fact regarding the applicable rates and outstanding liability. He observed: ...

NCLT Consent Order Does Not Bar Appeal Against Unconsented Penalty: Kerala High Court

The Kerala High Court on 10 June held that even where an order of the National Company Law Tribunal (NCLT) is recorded as a consent order, a party may still challenge a penal condition before the appellate tribunal if it was not specifically consented to. Justice Harisankar V. Menon disposed of a writ petition filed by Gramox Paper & Boards (P) Ltd and its authorised representative, granting them liberty to challenge an NCLT Kochi Bench order before the National Company Law Appellate...

Company Court Can Transfer Winding-Up Proceedings To NCLT Without Formal Application: Calcutta High Court

The Calcutta High Court on 8 June held that a Company Court may transfer a pending winding-up proceeding to the National Company Law Tribunal (NCLT) even in the absence of a formal application by any party, provided it applies its mind and finds that the liquidation has not reached an irreversible stage. A Division Bench of Justices Debangsu Basak and Md. Shabbar Rashidi dismissed an appeal filed by creditor Anil Kumar Murarka and upheld the Company Court's order transferring the winding-up...

'Criminal Prosecution Cannot Be A Frolicsome Act': Karnataka HC Quashes Fraud Case Against Ex-Vihaan Director

The Karnataka High Court has recently quashed criminal proceedings against chartered accountant M.N. Gunasheela, a former director of Vihaan Direct Selling (India) Pvt Ltd, in connection with a complaint concerning the affairs of the company. The Court also quashed a Look Out Circular issued against him. Justice M. Nagaprasanna held that the complaint did not disclose any specific role attributable to Gunasheela. The Court also noted that the company's business operations commenced after he...