9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 1076 - AT - Insolvency and BankruptcyWinding up of company - Section 241 and 242 of the Companies Act, 2013 - HELD THAT - Reliance has been placed by Ld. Counsel for the Respondent No. 2 in the case of MSDC RADHARAMANAN VERSUS M. SD CHANDRASEKARA RAJA 008 (3) TMI 471 - SUPREME COURT , wherein the Hon ble Supreme Court has held in the context of the Companies Act, 1956 that the jurisdiction of the Company Law Board (now NCLT) must be considered having regard to the complex situation(s) which may arise in the cases before it. No hard and fast rule can be laid down. If an application is filed under Section 433 or Section 397/398 of the Companies Act, 1956, (now Section 241/242 of the Companies Act, 2013), an order of winding up may be passed but the Company Law Board in a winding up application may refuse to do so, if any other remedy is available. The Company Law Board may not shut its doors only on sheer technicality even if it is found that unless its jurisdiction is exercised, there will be complete mismanagement in regard to the affairs of the company. The ratio laid down in the aforesaid case is applicable in the facts of the instant case. The Consent Terms entered between the parties in the past, pursuant thereto, the Original Petition was disposed off, thereafter, violation of Consent Terms, applications were filed before the NCLT, therefore, the NCLT appointed Observer cum Facilitator to settle the disputes, to revive the company etc. however, the parties could not arrive at any amicable settlement despite several opportunities given by the NCLT - the order passed by the NCLT is correct in nature to meet ends of Justice and in the interest of the Company, winding up order was passed. Keeping in view of the aforenoted background, there are no merit in the instant appeal. The impugned order dated 08th June 2021 passed by the National Company Law Tribunal (Mumbai Bench, Court-II) is hereby affirmed. Appeal dismissed.
Issues Involved:
1. Compliance with Consent Terms 2. Appointment of Observer-cum-Facilitator 3. Justification for Winding Up Order 4. Deadlock in Management 5. Statutory Non-Compliance Summary: 1. Compliance with Consent Terms: The appellants filed Company Petition No. 29 of 2016 under Sections 241 and 242 of the Companies Act, 2013, alleging oppression and mismanagement. Consent Terms were drawn and recorded by the Tribunal on 21st August 2017. Saakar Corporation was required to deposit Rs. 18,43,28,252 in an escrow account but deposited only Rs. 13,68,11,081, resulting in a shortfall of Rs. 4,75,17,171. The appellants alleged that respondents failed to comply with the Consent Terms, leading to further litigation. 2. Appointment of Observer-cum-Facilitator: Due to non-compliance with the Consent Terms, the NCLT appointed Hon'ble Justice Dilip Karnik as Observer-cum-Facilitator on 8th March 2021 to mediate between the parties. Despite several meetings, the parties could not reach a consensus on the valuation or method of valuation of the company's lands and assets. The Observer-cum-Facilitator reported that settlement efforts failed. 3. Justification for Winding Up Order: The NCLT, after considering the failure to reach a settlement and the persistent non-compliance with statutory requirements, ordered the winding up of the company. The Tribunal held that no other remedy was available and that winding up was just and equitable to protect the interests of the company and its stakeholders. The NCLT's decision was based on the principle that the company was defunct and not conducting any business. 4. Deadlock in Management: The company faced a deadlock in management due to disputes among shareholders, with no business operations conducted since 2015. The financial statements had not been prepared since the financial year 2015-2016, and there were no board meetings since 01.04.2016. The Tribunal found that the deadlock and non-compliance with statutory requirements justified the winding up order. 5. Statutory Non-Compliance: The company had not filed statutory accounts or complied with other regulatory requirements for several years. A Strike Off Notice under Section 248(1) of the Act was received from the Registrar of Companies. The Tribunal noted that the company's non-compliance with statutory obligations and the deadlock among shareholders necessitated the winding up to prevent further deterioration of the company's value. Conclusion: The NCLT's order for winding up the company was affirmed by the Appellate Tribunal, which found no merit in the appeal. The Tribunal held that the winding up was necessary to meet the ends of justice and protect the company's interests. The appeal was dismissed, and the interim order dated 01.10.2021 was vacated.
|
