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2021 (9) TMI 1485 - AT - Companies LawWinding up of Company - fraudulent conduct - failure to disclose that the limitation to file a winding up petition is three years from when the right to apply accrues as per Article 137 of the Limitation Act 1963 - exclusive jurisdiction of Tribunal to adjudicate matters under Section 271(c) of the Companies Act 2013 - contention of Appellant is that a private dispute of the Agreement dated 28.01.2005 executed between the Appellant and the 1st Respondent cannot be a part of fraud as per Section 271(c) of the Companies Act. HELD THAT - This Tribunal has elaborately discussed the defence raised by Devas in the winding-up petition. This Tribunal believes that the defence raised by Devas is not substantial and Devas deserves to be wound up on the grounds of Section 271(c) of the Companies Act 2013. Accordingly the finding of the Ld National Company Law Tribunal needs no interference from this Appellate Tribunal and both the Appeals deserves to be dismissed.
Issues Involved:
1. Whether the Petition is barred by Limitation. 2. Whether relief of winding up under Section 271(c) can be granted without following the procedure prescribed under Rule 5 and 7 of the Companies Winding-up Rules, 2020. 3. Can the Tribunal adjudicate private lis in exercising powers under Section 271(c) of the Companies Act, 2013? 4. Whether the Tribunal must await the outcome of other pending proceedings on the same set of facts. 5. Whether the petition filed under Section 271(c) of the Companies Act, 2013 is barred by estoppel. 6. Whether there are justifications for winding up 'Devas' under Section 271(c) of the Companies Act, 2013. Detailed Analysis: 1. Whether the Petition is barred by Limitation: The Tribunal analyzed the limitation period under Section 271(c) of the Companies Act, 2013, and found that the right to apply accrues from the date when the fraud was discovered. The Tribunal noted that the CBI filed its first charge sheet on 11.08.2016 and a supplementary charge sheet on 08.01.2019. Since the Company Petition was filed on 18.01.2021, it was within the limitation period of three years from the supplementary charge sheet. Hence, the petition is not barred by limitation. 2. Whether relief of winding up under Section 271(c) can be granted without following the procedure prescribed under Rule 5 and 7 of the Companies Winding-up Rules, 2020: The Tribunal held that Rule 5 of the Winding-up Rules, 2020, grants the Tribunal discretion to dispense with the requirement of advertisement when the petition is filed by a person other than the company. Since the petition was filed by Antrix, the Tribunal had the discretion to dispense with the advertisement. The Tribunal found that the requirement of advertisement was an empty formality in this case, as all relevant parties were aware of the proceedings. 3. Can the Tribunal adjudicate private lis in exercising powers under Section 271(c) of the Companies Act, 2013: The Tribunal held that Section 271(c) does not limit the contours of fraud or the mode in which such fraud should be committed. Since Devas is a company and there are allegations of fraud against it, the Tribunal has the jurisdiction to interpret the Agreement dated 28.01.2005 and test whether the allegations satisfy the ingredients of Section 271(c). The Tribunal rejected the contention that it cannot interpret the terms of the private agreement. 4. Whether the Tribunal must await the outcome of other pending proceedings on the same set of facts: The Tribunal held that it has exclusive jurisdiction to decide the winding-up issue under Section 271(c) of the Companies Act, 2013, independently and judiciously without being influenced by other pending proceedings. The Tribunal found that the same set of facts can form the basis of multiple proceedings under different enactments, and the Tribunal must exercise its jurisdiction to decide whether Devas needs to be wound up. 5. Whether the petition filed under Section 271(c) of the Companies Act, 2013 is barred by estoppel: The Tribunal rejected the contention of estoppel, noting that Antrix could not have terminated the agreement on the grounds of fraud in 2011 as the fraud was discovered only in 2016. Similarly, Antrix could not have raised the grounds of fraud before the ICC Arbitral Tribunal as the fraud was discovered after the ICC Award. The Tribunal also found that the auditors' reports, which did not mention fraud, cannot prevent the Tribunal from examining the allegations of fraud. 6. Whether there are justifications for winding up 'Devas' under Section 271(c) of the Companies Act, 2013: The Tribunal analyzed the allegations of fraud under various categories, including the misrepresentation in the Agreement dated 28.01.2005, the violation of the SATCOM Policy, the suppression and misrepresentation leading to the approval of the Cabinet, the ISP License dated 02.05.2008, the experimental license obtained by Devas, and the diversion of funds. The Tribunal found that Devas committed multiple fraudulent activities and misrepresentations, and the investors/shareholders were also responsible for these fraudulent actions. The Tribunal concluded that Devas deserves to be wound up under Section 271(c) of the Companies Act, 2013. Disposition: The Tribunal dismissed the Company Appeal (AT)(CH) No. 17 of 2021 and Company Appeal (AT)(CH) No. 24 of 2021, confirming the order of winding up Devas Multimedia Pvt. Ltd. and appointing the Official Liquidator to take steps to liquidate the company.
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