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TMI Blog2024 (5) TMI 965X X X X Extracts X X X X X X X X Extracts X X X X ..... to direction to be given to the Registering Authority as the cancellation of registration as noticed above, can be only in two circumstances. Where the concerned Registering Authority suo moto on its own motion reaches to a conclusion that the registration has been obtained by means of fraud, willful misrepresentation or suppression of facts. Section 29 (2) of the Act of 2017 empowers the officer for the said purpose and for reaching to such conclusion, it has to be either on his own motion. Section 29 (2) (e) of the Act of 2017 would come into picture where the registration was obtained by means of fraud, willful misrepresentation or suppression of facts while willful mis-statement or suppression of facts is a bundle of facts which have to be proved, in separate proceedings this Court would not presume only on the statement made by the petitioner that such an action has actually been taken place as noticed above since the petitioner company has not taken any steps either before the concerned competent company Court nor it has taken any such resolution in the Board, nor it has initiated any criminal or civil proceedings, it cannot be presumed that such fraud or mis-statement of fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for leasing out the property of the company to the newly firm M/s Asian Packaging. Thus, it is a case of fraud with the company and on the said basis mandamus ought to be issued directing respondent No. 2 to take appropriate action for cancellation of the registration. Further, it is also a case of willful mistake while obtaining registration and at the first blush this Court was of the view that there is a dispute inter se between the family members and the same could be resolved. However, upon examining the case from the legal point of view, we find ourselves disabled to enter into a judicial review with regard to the dispute which the petitioner has raised before this Court. It would be apposite to quote Section 188 (1), 188 (3), 188 (4) and 188 (5) of the Act of 2013 is reproduced as under:- 188. Related party transactions.--( 1) Except with the consent of the Board of Directors given by a resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to-- (a) sale, purchase or supply of any goods or materials; (b) selling or otherwise disposing of, or buying, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s length transaction means a transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest. (2) xxxxx xxxxx xxxxx (3) Where any contract or arrangement is entered into by a director or any other employee, without obtaining the consent of the Board or approval by a 1 [resolution] in the general meeting under sub-section (1) and if it is not ratified by the Board or, as the case may be, by the shareholders at a meeting within three months from the date on which such contract or arrangement was entered into, such contract or arrangement 4[shall be voidable at the option of the Board or, as the case may be, of the shareholders] and if the contract or arrangement is with a related party to any director, or is authorised by any other director, the directors concerned shall indemnify the company against any loss incurred by it. (4) Without prejudice to anything contained in sub-section (3), it shall be open to the company to proceed against a director or any other employee who had entered into such contract or arrangement in contravention of the provisions of this section for recovery of any loss sustained by it as a result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or has not been conducted and managed by such person in accordance with sound business principle or prudent commercial practices; (c) a company is or has been conducted and managed by such person in a manner which likely to cause, or has caused, serious injury or damage to the interest of the trade, industry or business to which such company pertains; or (d) the business of a company is or has been conducted and managed by such person with intent to default its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose or in a manner prejudicial to public interest, the Central Government may initiate a case against such person and refer the same to the Tribunal with a request that the Tribunal may inquire into the case and record a decision as to whether or not such person is a fit and proper person to hold the officer of director or any other office connected with the conduct and management of any company. (4) The person against whom a case is referred to the Tribunal under sub-section (3), shall be jointed as a respondent to the application. (5) Every application under sub-section (3)-- (a) shall contain a concise statement of such circumstances and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer shall not cancel the registration without giving the person an opportunity of being heard: 1 [Provided further that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.] (3) The cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation. (4) The cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation of registration under this Act. (5) Every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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