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TMI Blog2025 (4) TMI 1413X X X X Extracts X X X X X X X X Extracts X X X X ..... puting the claim with a sole intention of obstructing the Appellant from filing a petition under the Insolvency and Bankruptcy Code (IBC); b) in an attempt to hinder the Appellant, the Respondent not filed an arbitration petition in the year 2022, which is pending before the Ld. Arbitral Tribunal and despite multiple reminders the respondent did not file necessary documents in the matter; c) on 31.01.2023 Appellant filed an investigation petition under Section 2l3(b) of the Companies Act, 2013, highlighting various illegalities committed by Respondent No. 1 Company, including: i) Illegal allotments of convertible debentures at a discount in violation of Section 53 of Companies Act, 2013; ii) illegal increase in authorized share capital of company in violation of section 14, 61 and 64 ofthe Companies Act, 2013. Illegal appointment / removal / resignation of statutory auditors of the company in violation of 95, 114 and 117 of Companies Act, 2013; iii) conversion of Respondent No. 1 Company from a private to a public entity without adherence to legal procedures and in violation of 95, 114 and 117, of Companies Act, 2013; iv) Illegal borrowing of funds based on fraudulent d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of showing that applicants have good reasons for seeking an order for conducting an investigation into the affairs of the company", as mentioned below clause (a) of Section 213 is applicable in all cases and the applicant(s), whoever prefers application under Section 213, whether they belong to category as mentioned in clause (a) or clause (b), such evidence is required to be relied upon not only to justify the allegations, but also to show that there is a good reason for seeking an order, to enable the Tribunal to form its opinion. 6. It is the submission of the learned counsel for the appellant there are sufficient allegations made in the Company Petition so also in his appeal and under such circumstances the Learned NCLT ought to have directed investigation under Section 213(b) of the Companies Act, 2013. 7. We have heard the arguments advanced by the learned counsel for the appellant as also for the Respondent. 8. Section 213 of the Companies Act, 2013 is as under:- 213. Investigation into company's affairs in other cases.-The Tribunal may,- (a) on an application made by- (i) not less than one hundred members or members holding not less than one-tenth of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nagement of its affairs shall be punishable for fraud in the manner as provided in section 447. 9. The Learned NCLT has dwelled upon the allegation set out in the Company Petition and has held as under:- 13. Based on the submissions and documents, this Tribunal reserved the Order to decide on the limited aspect of eligibility of the applicant to file the present application under Section 213 of the Companies Act, 2013 and its maintainability. This was also original decision of this Tribunal when the matter was heard on 15.02.2023. Vide orders dated 27.06.2023, the applicant was directed to show how he is eligible to file the present application under Section 213 of the Companies Act, 2013 alongwith relevant judgements. 14. The observations for a decision is based on the arguments put forth, the documents enclosed by the applicant who at later stage furnished documents as rejoinder that he qualifies to be a creditor stated to have agreed to resolve the dispute, if any, before an Arbitration as ordered by the Hon'ble High Court. Even though a copy of the ledger wherein certain exposure is shown of the Respondent No.1, the nature of dealing, its invoices or other documents were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted during various years way back to 2015 which apparently is nothing but filing this application to do a fishing expedition on a company, its affairs, which is unwarranted, fraud and malfeasance not proved and not inconsistent statements which are not maintainable. Hence, this petition filed is deemed to have been filed for reasons beyond the scope of needing any investigation under Sec 213. We also see that Respondent No.1 has a sufficiently competent Board and its strength with both working and independent directors and on a perusal of the minutes of the meeting, its approvals for increase of capital (approval for issue of capital through debentures] have been passed as per procedure complying with the relevant provisions of Companies Act particularly Sec 71 and do not warrant any action or investigation on the basis of this application. The applicant has not clearly brought in whether there was any violation under Sec 71 of the Act. 15. The Tribunal has carefully gone through the documents and submissions and conclude thereby that the applicant does not qualify for filing this application under Section 213(a) (i) and (ii) of the Companies Act, 2013 and the Tribunal is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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