Conditional Votes Cannot Be Treated As Unconditional Approval Of Companies Act Revival Scheme: Delhi High Court

The Delhi High Court recently ruled that votes cast “for, with modification” cannot automatically be treated as unconditional assent to a Revival Scheme under the Companies Act, 1956.The court must first examine the legal effect of the conditions attached to those votes before deciding whether they amount to approval of the Scheme.“A vote cast “for” the Scheme simpliciter expresses assent to the Scheme as placed before the meeting. A vote cast “for, with modification” is, by its very...

Delhi High Court Upholds Restoration Of Shareholding After 964 Shares Allotted During Restraint Order

The Delhi High Court has upheld an order directing restoration of the shareholding pattern of Moral Properties Private Limited after its Board allotted 964 fresh shares while a restraint order concerning the company's properties was in force.Justice Manoj Kumar Ohri dismissed an appeal against the order passed by the Additional District Judge, South District, Saket Courts, which found that the allotment violated the restraint order and directed restoration of the earlier shareholding pattern.The...

Company Cannot Deny Employee Equity By Relying On Its Own Failure To Frame ESOP Scheme: Bombay High Court

The Bombay High Court has recently held that a company cannot rely on its own failure to frame an Employee Stock Option Plan (ESOP) to deny an employee equity that was offered as part of his remuneration package.Justice N.J. Jamadar made the observation while dismissing Waterfield Advisors Private Limited's petition under Section 34 of the Arbitration and Conciliation Act, 1996. The company had challenged an arbitral award directing it to allot 31,878 equity shares to its former Director...

CA Certifying False Returns Can Be Prosecuted If Active Complicity, Mens Rea Shown: Calcutta High Court

The Calcutta High Court has recently held that a Chartered Accountant certifying a false statutory return or e-form can face prosecution if there are specific allegations showing that the professional knowingly participated in the falsification or actively connived in it.Justice Uday Kumar was hearing a revision filed by the Registrar of Companies, West Bengal, against the discharge of practising Chartered Accountant Ranjan Meghani.“The proposition that an independent professional certifying a...

Article 227 Petition Not Maintainable When Similar Relief Sought Before Supreme Court: Kerala High Court

The Kerala High Court on 30 July held that parties cannot invoke its supervisory jurisdiction under Article 227 of the Constitution to seek interim relief in execution proceedings when connected appeals involving the same dispute are already pending before the Supreme Court. Justice T.R. Ravi refused to stay the execution proceedings pending before the National Company Law Tribunal (NCLT), Kochi in a family dispute over management of companies, holding that the petitioners must seek such relief...

Supreme Court Pleadings Cannot Decide Legal Status Of Nair Service Society: Kerala High Court

The Kerala High Court on 17 July dismissed a writ appeal filed by a member of the Nair Service Society (NSS) seeking action against the Society and its directors for alleged violations of the Companies Act, 2013. A Division Bench of Justices Raja Vijayaraghavan V and K.V. Jayakumar held that pleadings filed before the Supreme Court could not determine the Society's regulatory framework. The judges observed:“It can thus be held that the “court of record” attribute under Article 129 does not mean...

Madras High Court Quashes SFIO Case Against Deloitte Partner In Subhiksha Fraud Probe

The Madras High Court on Wednesday has quashed criminal proceedings initiated by the Serious Fraud Investigation Office (SFIO) against Deloitte Haskins & Sells partner and statutory auditor M.K. Ananthanarayanan over his audit of Subhiksha Trading Services Limited (STSL). The SFIO had accused him of failing to verify the retailer's sales, purchases and related-party transactions, and of not reporting its non-compliance with prescribed accounting standards. Justice Sunder Mohan held that,...

Delhi High Court Refuses Disclosure Of MCA Orders In SFIO Probe Into Anil Ambani Group Companies

The Delhi High Court has recently refused to direct the Ministry of Corporate Affairs (MCA) and the Serious Fraud Investigation Office (SFIO) to disclose orders directing an investigation into the affairs of Reliance Home Finance Limited, Reliance Communications Limited, and other Anil Ambani companies under Section 212 of the Companies Act, 2013. The court held that the Mandke Foundation had no enforceable right to seek disclosure of those orders or the material forming their basis while the...

Centre's Order To Change Similar Company Name Can't Be Invalid Because It Was Triggered By Complaint: Delhi High Court

The Delhi High Court has upheld an order directing a DNA testing company to change its name, holding that the Central Government's power to rectify similar company names under the Companies Act is not rendered invalid merely because its opinion was triggered by an application from another company. "The order being passed under Section 16(1)(a) of the Act, even though triggered by an application, cannot be considered to be invalid or without jurisdiction, for the simple reason that it was...

Stamp Duty Amendments On Amalgamation Cannot Apply Retrospectively: Kerala High Court

The Kerala High Court on 3 July held that amendments to the Kerala Stamp Act, 1959, introducing stamp duty on amalgamations and reconstructions, cannot be applied retrospectively to transactions completed before the amendments came into force. Justice Harisankar V Menon allowed a petition filed by Zuri Hotels and Resorts Private Limited and quashed the stamp duty demand of Rs. 2.01 crore raised by the registration authorities along with the consequential revenue recovery proceedings. He held: ...

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...