National Company Law Tribunal and National Company Law Appellate Tribunal

Contents at a glance

Contents at a glance NCLT & NCLAT – Information at fingertips .................................................................vii Acknowledgement .......................................................................................................... xiv About the author ............................................................................................................. xv Foreword to the second edition ..................................................................................... xvi Foreword to the first edition ........................................................................................ xvii Preface to the fifth edition ........................................................................................... xviii Detailed table of contents ............................................................................................ xxiii NCLT, NCLAT and Supreme Court Rulings.......................................................................lv Table of cases ..................................................................................................................lx Key to reading this book.............................................................................................. lxxv Abbreviations ............................................................................................................ lxxvii Concise Referencer ......................................................................................................R-1 Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19

Introduction............................................................................................. 1.1 Constitution of NCLT and NCLAT ........................................................ 2.1 Transition to NCLT: Impact on Existing Cases ...................................... 3.1 General Powers of NCLT and NCLAT .................................................. 4.1 De-registration, Striking off of Companies and Director Disqualification....................................................................................... 5.1 Variation of Shareholders’ Rights .......................................................... 6.1 Transfer and Transmission of Securities ................................................. 7.1 Reduction of Capital ............................................................................... 8.1 Deposits: Delays and Defaults ................................................................ 9.1 Tribunal Convened General Meetings .................................................. 10.1 Reopening of Accounts and Revision of Financial Statements ............ 11.1 Tribunal directed investigations ............................................................ 12.1 Compromises and Arrangements .......................................................... 13.1 Oppression and Mismanagement .......................................................... 14.1 Class Actions ........................................................................................ 15.1 Revival and Rehabilitation of Sick Companies ................................... 16.1 Winding up ........................................................................................... 17.1 Compounding of Offence .................................................................... 18.1 Miscellaneous Powers of Tribunal ........................................................ 19.1

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Chapter 20 Chapter 21 Chapter 22 Chapter 23 Chapter 24

Powers of Tribunal under other Acts .................................................... 20.1 Appeals, Reviews and Writs ................................................................ 21.1 General Practice and Procedure ............................................................ 22.1 Jurisdiction and Limitation ................................................................... 23.1 The Insolvency and Bankruptcy Code, 2016 ........................................ 24.1

Annexures to the book Annexure 1 National Company Law Tribunal Rules, 2016 ..................................... A1-1 Annexure 2 National Company Law Appellate Tribunal Rules, 2016 .................... A2-1 Annexure 3 The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 ............................................................... A3-1 Annexure 4 The National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016 .............................................. A4-1 Annexure 5 The Companies (Transfer of Pending Proceedings) Rules, 2016 ........ A5-1 Bibliography ............................................................................................................... B1-1 Contents of attached CD ................................................................................................ liii

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Detailed table of contents NCLT & NCLAT – Information at fingertips .................................................................vii Acknowledgement .......................................................................................................... xiv About the author ............................................................................................................. xv Foreword to the second edition ..................................................................................... xvi Foreword to the first edition ........................................................................................ xvii Preface to the fifth edition ........................................................................................... xviii Contents at a glance ...................................................................................................... xxi NCLT, NCLAT and Supreme Court Rulings.......................................................................lv Table of cases ..................................................................................................................lx Key to reading this book.............................................................................................. lxxv Abbreviations ............................................................................................................ lxxvii Concise Referencer Powers of NCLT: At a Glance ................................................................................R-1 Notified Section of IBC as on 31st March, 2018 ....................................................R-9 Case Digest: List of Important Judgments under IBC ..........................................R-13 Roster of Judges....................................................................................................R-83 Chapter 1 Introduction Introduction ........................................................................................................ 2.2 2.1 2.2 Constitution of NCLT ........................................................................................ 2.2 2.2.1 Qualification ................................................................................ 2.2 2.2.1.1 President................................................................ 2.3 2.2.1.2 Judicial member .................................................... 2.3 2.2.1.3 Technical member ................................................. 2.3 2.2.2 Number of members .................................................................... 2.4 2.2.3 Seat of NCLT .............................................................................. 2.4 2.3 Appellate Tribunal (NCLAT) ............................................................................ 2.4 2.3.1 Constitution ................................................................................. 2.4 2.3.2 Number of members .................................................................... 2.4 2.3.3 Qualification ................................................................................ 2.4 2.3.3.1 Chairperson ........................................................... 2.4 2.3.3.2 Judicial member .................................................... 2.5 2.3.3.3 Technical member ................................................. 2.5 2.4 Selection Process ............................................................................................... 2.5 2.4.1 Manner of selection ..................................................................... 2.6 xxiii

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2.4.2 Composition of Selection Committee .......................................... 2.6 2.5 Term of NCLT and NCLAT .............................................................................. 2.6 2.6 Staff .................................................................................................................... 2.7 2.7 Further Reading .................................................................................................. 2.7 Annexure—Members of various benches...................................................................... 2.8 Chapter 3 Transition to NCLT: Impact on Existing Cases Chapter 3 ...................................................................................................................... 3.1 3.1 Introduction ........................................................................................................ 3.2 3.2 Transfer of Pending Proceedings........................................................................ 3.4 3.2.1 Date for transfer of proceedings .................................................. 3.4 3.2.2 Continuance of proceedings before existing forums .................... 3.4 3.3 Pending High Court Proceedings ....................................................................... 3.5 3.3.1 Corporate restructuring cases ....................................................... 3.8 3.3.1.1 Compromise and arrangements ............................. 3.9 3.3.1.2 Reduction of capital cases ................................... 3.11 3.3.2 Pending winding up proceedings ............................................... 3.12 3.3.2.1 What will be the status of pending cases? ............. 3.15 3.3.2.2 Appeals against orders passed by the high court ... 3.16 3.4 Pending Company Law Board Proceedings....................................................... 3.18 3.4.1 Challenge against orders of CLB ............................................... 3.20 3.4.2 Status of existing interim orders ................................................ 3.21 3.5 Pending BIFR/AAIFR proceedings .................................................................. 3.21 3.6 Pending Investigation Proceedings................................................................... 3.23 3.7 Existing Interim Orders .................................................................................... 3.24 3.8 Further Reading ................................................................................................ 3.24 Chapter 4 General Powers of NCLT and NCLAT 4.1 Introduction ........................................................................................................ 4.2 4.2 General Powers Under the ACT ......................................................................... 4.2 4.2.1 Power to determine procedure (Section 424) ............................... 4.2 4.2.2 Power to punish for contempt (Section 425) ............................... 4.3 4.2.3 Powers of civil court (Section 424) ............................................. 4.3 4.2.4 Powers of courts (Section 424) .................................................... 4.4 4.2.5 Execution of orders (Section 424) ............................................... 4.4 4.2.6 Assistance of courts/authorities (Section 429) ............................. 4.4 4.2.7 Delegation of powers (Section 426) ............................................ 4.4 4.3 General Powers Under the Rules ........................................................................ 4.5 4.3.1 Adjournment of hearing ............................................................... 4.5 4.3.2 General power to amend (Rule 155 of NCLT Rules) .................. 4.5 4.3.3 Tribunal to be deemed to be a court............................................. 4.6 4.3.4 Power to dispense with the requirements of the rules .................. 4.6 xxiv

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4.3.5.

4.4

4.5

Saving of inherent powers of the Tribunal (Rule 11 of the NCLT Rules) ..................................................................... 4.6 4.3.6 Enlargement of time (Rule 15 and 153 of the NCLT Rules) ....... 4.8 4.3.7 Rectification of Order (Rule 154 of the NCLT Rules) ................ 4.9 4.3.8 Power to impose costs (Rule 149 of NCLT Rules)...................... 4.9 4.3.9 Amicus Curiae........................................................................................... 4.9 4.3.10: Assesors and Valuers (Rules 54 of NCLT Rules) .................................. 4.9 General Provisions for Exercise of Powers ...................................................... 4.10 4.4.1 Production of documents ........................................................... 4.10 4.4.2 Nature of exercise of powers ..................................................... 4.10 Comparison between Powers of Different Tribunals ....................................... 4.10

Chapter 5 De-registration, Striking off of Companies and Director Disqualification 5.1 Introduction ........................................................................................................ 5.2 5.2 Nature of the remedy of De-registration ............................................................ 5.2 5.2.1 Background for insertion of this remedy ..................................... 5.2 5.2.2 Benefits ........................................................................................ 5.3 5.2.3 Scope of the remedy .................................................................... 5.3 5.2.4 Difference between provision of striking off and deregistration ............................................................................... 5.3 5.2.5 Difference between winding up and deregistration? ................... 5.3 5.3 The Remedy Of De-Registration ....................................................................... 5.4 5.3.1 Who can apply? ........................................................................... 5.6 5.3.2 When can one apply?................................................................... 5.6 5.3.3 Under what circumstances? ......................................................... 5.7 5.3.4 Against which companies? .......................................................... 5.7 5.3.4.1 Can registration of any company under the Companies Act, 2013 be challenged? ................... 5.7 5.3.4.2 Can registration of companies under the Companies Act, 1956 be questioned? ................... 5.8 5.3.5 Nature of reliefs sought ............................................................... 5.8 5.4 Procedure for Deregistration .............................................................................. 5.9 5.5 Striking off of Companies ................................................................................ 5.11 5.5.1 Power of Tribunal to Restore Companies Struck off ................. 5.12 5.5.1.1 Power to restore in case of any type of striking off........................................................... 5.13 5.5.1.2 Power in voluntary striking off ........................... 5.15 5.6 Procedure for Filing Appeal under Section 252 ............................................... 5.16 5.7 Director Disqualification .................................................................................. 5.17 Annexure A – Bombay High Court on Condonation of Delay Scheme, 2018 ............ 5.18 Annexure B-1 – Delhi Hight Court on Condonation of Delay Scheme, 2018 ............ 5.24 Annexure B-2 – Delhi High Court on Condonation of Delay Scheme, 2018.............. 5.30 xxv

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Annexure C – Condonation of Delay Scheme 2018 .................................................... 5.32 Annexure D – Continuation Circular of Condonation of Delay Scheme, 2018........... 5.37 Annexure E – Mumbai NCLT Bench Order of revival for the purpose of availing benefit of CODS Scheme ............................................................................................ 5.38 Chapter 6 Variation of Shareholders’ Rights 6.1 Introduction ........................................................................................................ 6.2 6.2 Overview of Changes ......................................................................................... 6.3 6.2.1 Additional approvals .................................................................... 6.3 6.2.2 Wider scope of applicants ............................................................ 6.3 6.3 What are shareholders’ rights? ........................................................................... 6.4 6.3.1 Statutory rights............................................................................. 6.5 6.3.1.1 Can statutory rights be waived/varied? ................. 6.5 6.3.2 Contractual rights ......................................................................... 6.6 6.4 What constitutes class rights? .............................................................................. 6.6 6.5 Nature and Scope of Variation ........................................................................... 6.8 6.5.1 What constitutes variation? .......................................................... 6.9 6.5.2 Applicability of these decisions to section 48 ............................ 6.10 6.5.3 Prohibition in contract – is variation possible? .......................... 6.10 6.6 When does section 48 become applicable? ......................................................... 6.11 6.7 Conditions for Varying Shareholder’s Rights...................................................... 6.11 6.7.1 Approval for seeking permission to vary ................................... 6.12 6.7.1.1 Approval from the concerned class whose rights are varied ................................................... 6.12 6.7.2 Approval of other affected class of shareholders ....................... 6.12 6.7.2.1 Deciphering the term “Affect” ............................ 6.13 6.7.2.2 Manner of approval from affected classes ........... 6.14 6.8 Variation by Other Provisions of the Act .............................................................. 6.15 6.8.1 Variation v Merger..................................................................... 6.15 6.8.2 Variation v Reduction ................................................................ 6.16 6.9 Objection to Variation ...................................................................................... 6.17 6.9.1 In which circumstances can one apply under section 48(2)?.......... 6.17 6.9.2 Who can apply? ......................................................................... 6.17 6.9.2.1 When to object? ................................................... 6.18 6.9.2.2 Joint application .................................................. 6.18 6.9.3 What is the time limit? ............................................................... 6.18 6.9.4 Condonation of delay ................................................................. 6.20 6.9.5 Powers of Tribunal and nature of reliefs .................................... 6.20 6.9.6 Time limit for completion of proceedings ................................. 6.21 6.10 Procedure for Objecting to the Variation of Shareholders’ Right ......................... 6.21 6.11 Comparison Chart - Variation of Shareholder's Right ...................................... 6.24

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6.12

6.13

6.11.1 Comparison of New Act with Old Act ...................................... 6.24 6.11.2 Comparison of Old Act with New Act ...................................... 6.25 6.11.3 Comparison of New Rules with Old Rules ................................ 6.26 6.11.4 Comparison of Old Rules with New Rules ................................ 6.26 6.11.5 Corresponding Forms under New Act & Old Act ..................... 6.26 Schedule I......................................................................................................... 6.27 6.12.1 Appendix A: Corporate Transactions Requiring Special Resolution ..................................................................... 6.28 6.12.2 Appendix B: Corporate Transactions Requiring Ordinary Resolution .................................................................. 6.30 6.12.3 Appendix C: 10% Shareholding ................................................ 6.32 6.12.4 Appendix D: Rights of Every Member ...................................... 6.32 Further Reading ............................................................................................... 6.34

Chapter 7 Transfer and Transmission of Securities 7.1 Introduction ........................................................................................................ 7.3 7.2 Overview of Changes.......................................................................................... 7.3 7.2.1 Scope and applicability of section 58 and section 59 have changed ............................................................................... 7.3 7.2.2 Changes in time lines................................................................... 7.4 7.2.3 Contract or arrangement .............................................................. 7.4 7.3 Appeal against Refusal to Transfer/Transmit ...................................................... 7.4 7.3.1 Distinction between remedy under section 58 and section 59 ..................................................................................... 7.5 7.3.2 Securities of a private company (Section 58(1)) ......................... 7.6 7.3.2.1 Restrictions on transfer/transmission of shares .................................................................... 7.6 7.3.2.2 Restrictions on other securities ............................. 7.6 7.3.2.3 Interest of member: a grey area ............................. 7.7 7.3.2.4 Who can challenge? .............................................. 7.7 7.3.2.5 Time limits ............................................................ 7.8 7.3.3 Securities of a public company .................................................... 7.9 7.3.3.1 Reasons for refusal .............................................. 7.10 7.3.3.2 Time lines............................................................ 7.11 7.3.4 Reliefs ........................................................................................ 7.11 7.3.5 Interim reliefs ............................................................................ 7.11 7.3.5.1 Can interim reliefs other than those specified in rules be granted? ............................................. 7.12 7.3.6 Penalty ....................................................................................... 7.12 7.4 Rectification of register of members ................................................................ 7.12 7.4.1 Rectification of register of members under section 59(1) .............................................................................. 7.14 xxvii

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7.5

7.6

7.7 7.8

7.9

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7.4.1.1 Which registers can be rectified? ........................ 7.14 7.4.1.2 Under what circumstances? ................................. 7.14 7.4.1.3 Who can file an appeal for rectification?............. 7.15 7.4.1.4 To whom does the appeal lie? ............................. 7.15 7.4.1.5 Nature of reliefs ................................................... 7.15 7.4.1.6 Interim reliefs ...................................................... 7.15 7.4.2 Rectification where transfers are in violation of law under section 59(4) .................................................................... 7.16 7.4.2.1 Which register? ................................................... 7.16 7.4.2.2 Under what circumstances? ................................. 7.16 7.4.2.3 Who can make an application? ............................ 7.16 7.4.2.4 Relief ................................................................... 7.17 7.4.3 Difference between rectification sought under section 59(1) and section 59(4) .................................................. 7.17 7.4.4 Time limit for filing application for rectification ....................... 7.17 7.4.5 Penalty ....................................................................................... 7.17 Case Laws and their Applicability ................................................................... 7.18 7.5.1 Part I: Case laws related to nature and scope of sections 111 and 111A ............................................................... 7.18 7.5.1.1 Case 1 .................................................................. 7.18 7.5.1.2 Case 2 .................................................................. 7.19 7.5.1.3 Case 3: Jurisdiction is exclusive .......................... 7.20 7.5.1.4 Case 4: Composite Petition ................................. 7.20 7.5.1.5 Case 5: Complicated Question ............................ 7.20 7.5.1.6 Case 6 .................................................................. 7.21 7.5.1.7 Case 7 .................................................................. 7.22 7.5.2 Part II: Case laws related to refusal to transfer and transmission of securities ........................................................... 7.22 7.5.2.1 Where refusal to transfer and transmission is valid: ....... 7.22 7.5.2.2 Where refusal to transfer and transmission is invalid .... 7.23 Procedure for Refusal to Transfer or Transmit Securities ................................ 7.28 7.6.1 Company Law Board (CLB)...................................................... 7.28 7.6.2 National company law tribunal (NCLT) .................................... 7.28 Free Transferability of Share of Public Company ............................................ 7.29 Comparison Chart — Refusal to Transfer or Transmit Securities.................... 7.43 7.8.1 Comparison of New Act with Old Act....................................... 7.43 7.8.2 Comparison of Old Act with New Act ...................................... 7.46 Further Reading ................................................................................................ 7.50

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Chapter 8 Reduction of Capital 8.1 Introduction ........................................................................................................ 8.3 8.2 Overview of Changes ......................................................................................... 8.3 8.2.1 Single procedure .......................................................................... 8.3 8.2.2 Representation of authorities ....................................................... 8.3 8.2.3 Certificate not a conclusive proof ................................................ 8.3 8.2.4 Restrictions on reduction ............................................................. 8.4 8.2.5 Removal of the words "and reduced" .......................................... 8.4 8.2.6 Articles irrelevant ........................................................................ 8.4 8.3 Meaning and Scope of Reduction of Capital...................................................... 8.4 8.3.1 Meaning of reduction .................................................................. 8.6 8.3.2 Applicability/non applicability of section 66............................... 8.7 8.3.2.1 Only share capital ........................................................ 8.7 8.3.2.2 No application in mergers ........................................... 8.7 8.3.2.3 Redemption ................................................................. 8.7 8.3.2.4 Court directed purchase in oppression and mismanagement ........................................................... 8.7 8.3.2.5 Securities premium account ........................................ 8.7 8.3.2.6 Cancellation of unissued shares .................................. 8.7 8.3.3 Companies who can reduce capital.............................................. 8.8 8.3.4 Manner of reduction .................................................................... 8.8 8.3.4.1 Whether we will be able to reduce the share capital in the same manner, as we were able to reduce it earlier? .......................................................... 8.8 8.3.4.2 Are there any new ways of reducing capital contemplated in the Act? ............................................. 8.8 8.3.4.3 Can we take benefit of the decisions under the old Act? ....................................................................... 8.8 8.3.4.4 Types of reduction .................................................... 8.9 8.4 Restrictions/Conditions for Reduction ............................................................. 8.12 8.4.1 Default in payment of deposits .................................................. 8.12 8.4.2 Notice to authorities (Section 66(2)) ......................................... 8.13 8.4.3 Auditors certificate .................................................................... 8.13 8.5 Approvals for Reduction .................................................................................. 8.14 8.5.1 Approval from shareholder ........................................................ 8.14 8.5.2 Approval from Tribunal............................................................. 8.14 8.6 Liability of Members ....................................................................................... 8.14 8.6.1 Unpaid creditors-liability of members ....................................... 8.15 8.7 Fraud on creditors ............................................................................................ 8.15 8.8 Procedure for Reduction of Share Capital........................................................ 8.15 8.9 Additional important details ............................................................................. 8.19 xxix

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8.10

8.11

8.9.1 Role of Tribunal ......................................................................... 8.19 8.9.2 What does the list of creditor contain?....................................... 8.19 8.9.3 Contents of petition .................................................................... 8.19 8.9.4 Contents of minutes ................................................................... 8.20 Comparison Chart on Reduction of Share Capital ............................................... 8.21 8.10.1 Comparison of New Act (Companies Act, 2013) with Old Act (Companies Act, 1956) ........................................ 8.21 8.10.2 Comparison of Old Act with New Act ...................................... 8.22 8.10.3 Comparison of New Rules with Old Rules ................................ 8.25 8.10.4 Comparison of Old Rules with New Rules ................................ 8.25 8.10.5 Corresponding forms as per New Act ....................................... 8.25 Further Reading ................................................................................................ 8.26

Chapter 9 Deposits: Delays and Defaults 9.1 Introduction ........................................................................................................ 9.2 9.2 Overview of Changes ......................................................................................... 9.3 9.2.1 Bar on acceptance of deposits ...................................................... 9.3 9.2.2 Provisions discontinued ............................................................... 9.3 9.2.3 Acceptance from members .......................................................... 9.3 9.2.4 Default in payment....................................................................... 9.3 9.2.5 Fraud ............................................................................................ 9.3 9.2.6 Class action .................................................................................. 9.4 9.3 Overview of Law on Deposits ............................................................................ 9.4 9.4 Definition of Deposits .......................................................................................... 9.6 9.4.1 Definition under section 2(31) ..................................................... 9.6 9.4.2 Items excluded from deposits ...................................................... 9.6 9.4.3 Definition of deposits for purpose of section 74 ........................ 9.10 9.5 Applicability ..................................................................................................... 9.13 9.5.1 Non Applicability ...................................................................... 9.13 9.6 Permissibility to Accept/Invite/Retain Deposits .................................................. 9.14 9.6.1 Who can accept/invite deposits and from whom?...................... 9.14 9.6.2 Retaining deposits under the Companies Act, 1956 .................. 9.14 9.7 Remedies for Depositors .................................................................................. 9.16 9.8 Restrictions on Defaulting Companies ............................................................. 9.18 9.9 Application to Tribunal .................................................................................... 9.19 9.9.1 Application in case of non- repayment of new deposits ...................................................................................... 9.19 9.9.2 Application for extension of time for company ......................... 9.20 9.10 Case Laws ........................................................................................................ 9.22 9.10.1 Case laws under section 73 and 74 of the Companies Act, 2013.............................................................................................. 9.22 9.10.2 Some Case Laws on deposits under the Companies Act, 1956 ...... 9.24 xxx

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9.11

9.12

Procedure Under Chapter V ............................................................................. 9.25 9.11.1 Procedure under NCLT ............................................................. 9.25 9.11.2 Procedure under CLB ................................................................ 9.27 Further Reading ............................................................................................... 9.28

Chapter 10 Tribunal Convened General Meetings 10.1 Introduction ....................................................................................................... 10.1 10.2 Tribunal Convened AGM .................................................................................. 10.2 10.2.1 Highlights of section 97 ............................................................. 10.2 10.3 Tribunal convened EOGM................................................................................. 10.3 10.3.1 Highlights of section 98 ............................................................. 10.3 10.4 Applicability of old case laws ............................................................................ 10.3 10.4.1 Analysis of case laws ................................................................. 10.4 10.5 Procedure for tribunal convened general meetings .............................................. 10.6 10.6 Comparison Chart - Holding of Annual and General Meeting of Members ....... 10.8 10.6.1 Comparison of New Act (Companies Act, 2013) with Old Act (Companies Act, 1956) ........................................ 10.8 10.6.2 Comparison of Old Act with New Act ...................................... 10.8 10.6.3 Comparison of New Rules with Old Rules ................................ 10.8 10.7 Further Reading ................................................................................................ 10.8 Chapter 11 Reopening of Accounts and Revision of Financial Statements 11.1 Introduction ...................................................................................................... 11.2 11.2 Historical Triggers ........................................................................................... 11.3 11.2.1 Satyam case ............................................................................... 11.3 11.2.2 Reebok ....................................................................................... 11.3 11.3 Reopening of Accounts by Court’s or Tribunal’s Orders ................................ 11.3 11.3.1 Similar provisions under the UK law ........................................ 11.4 11.3.2 Bar on reopening ....................................................................... 11.4 11.3.3 Application by authorities or any person concerned.................. 11.4 11.3.4 Court/Tribunal ........................................................................... 11.5 11.3.5 Circumstances ........................................................................... 11.5 11.3.6 In which event can one apply for reopening? ............................ 11.8 11.3.7 At what point of time? ............................................................... 11.8 11.3.8 Notice to whom?........................................................................ 11.8 11.3.9 Implication of order reopening/recasting................................... 11.8 11.3.10 Who should be heard? ............................................................... 11.9 11.3.11 Pros and Cons ............................................................................ 11.9 11.4 Voluntary revision of financial statements or Board’s report. ......................... 11.9 11.4.1 Comparison with UK Law....................................................... 11.10 11.4.2 Exception ................................................................................. 11.10 11.4.3 Which documents? .................................................................. 11.10 xxxi

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11.5 11.6 11.7

11.4.4 Which event? ........................................................................... 11.11 11.4.5 For which period is the revision permissible? ......................... 11.11 11.4.6 Prior approval of tribunal ......................................................... 11.11 11.4.7 Right to be heard ...................................................................... 11.11 11.4.8 Finality ..................................................................................... 11.11 11.4.9 Reporting ................................................................................. 11.12 11.4.10 Impact of this provision ........................................................... 11.12 Procedure for Reopening of Books of Accounts ............................................ 11.12 Procedure for Voluntary Revision of Financial Statements or Board’s Report ............................................................................................................. 11.13 Further Reading .............................................................................................. 11.14

Chapter 12 Tribunal directed investigations 12.1 Introduction ...................................................................................................... 12.4 12.2 Overview of Changes ....................................................................................... 12.4 12.2.1 Dilution of eligibility criteria ..................................................... 12.4 12.2.2 Power to freeze assets ................................................................ 12.4 12.2.3 Restriction of securities ............................................................. 12.4 12.2.4 Constitution of SFIO .................................................................. 12.4 12.2.5 Application for investigation ..................................................... 12.5 12.2.6 Scope of investigation ................................................................ 12.5 12.2.7 Penalties ..................................................................................... 12.5 12.3 Power of the Tribunal ....................................................................................... 12.5 12.3.1 Investigation by the tribunal ...................................................... 12.5 12.3.2 Investigation into ownership of a company ............................... 12.8 12.3.3 Freezing of assets of company on inquiry and investigation (Section 221) ........................................................ 12.9 12.3.4 Imposition of restrictions upon securities (Section 222)............................................................................ 12.10 12.4 Inspectors ....................................................................................................... 12.11 12.4.1 Who can be an inspector? ........................................................ 12.11 12.4.2 Powers of inspectors ................................................................ 12.12 12.4.3 Report by inspector (Section 223) ........................................... 12.16 12.4.4 Actions on the basis of report .................................................. 12.17 12.5 Other Provisions ............................................................................................. 12.19 12.5.1 Protection to employees (Section 218) .................................... 12.19 12.5.2 Protection for whistleblowers .................................................. 12.20 12.5.3 Investigation during the pendency of other proceedings (Section 226) ...................................................... 12.20 12.5.4 Investigation of foreign companies (Section 228) ................... 12.21 12.5.5 Expenses for investigation (Section 225)................................. 12.21 12.6 Serious Fraud Investigation Authority ........................................................... 12.22 xxxii

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12.7 12.8

12.9

12.6.1 Organization structure ............................................................. 12.22 12.6.2 Exclusive jurisdiction to investigate ........................................ 12.23 12.6.3 What cases can be investigated by SFIO? ............................... 12.23 12.6.4 Can an investor complain to SFIO? ......................................... 12.24 12.6.5 Can SFIO investigate only companies? ................................... 12.24 12.6.6 Powers of SFIO ....................................................................... 12.24 12.6.7 Coordination ............................................................................ 12.25 12.6.8 Police report ............................................................................ 12.25 12.6.9 Obligation of company ............................................................ 12.25 12.6.10 Problem areas .......................................................................... 12.25 Procedure ....................................................................................................... 12.25 Comparison Chart Inspection, Inquiry and Investigation............................... 12.26 12.8.1 Comparison of the Companies Act, 2013 (New Act) with the Companies Act, 1956 (Old Act) ................................ 12.26 12.8.2 Comparison of Old Act with New Act .................................... 12.38 Further Reading ............................................................................................. 12.47

Chapter 13 Compromises and Arrangements 13.1 Introduction ...................................................................................................... 13.5 13.2 Overview of changes ........................................................................................ 13.5 13.2.1 Contractual mergers................................................................... 13.5 13.2.2 Deemed approval ....................................................................... 13.6 13.2.3 Cross border mergers ................................................................. 13.6 13.2.4 Scope of powers ........................................................................ 13.6 13.2.5 Intimation to authorities............................................................. 13.6 13.2.6 Valuation of shares .................................................................... 13.6 13.2.7 Squeeze out rights...................................................................... 13.7 13.2.8 Merger of a listed company with an unlisted company .................................................................................... 13.7 13.2.9 Disclosure requirements ............................................................ 13.7 13.2.10 Dispensation of creditors meeting ............................................. 13.7 13.2.11 Definition of “company� ........................................................... 13.7 13.3 Overview of Chapter......................................................................................... 13.7 Part I: Tribunal Approved Mergers ............................................................................. 13.8 13.4 Chapter XV: A Complete Code ....................................................................... 13.8 13.4.1 Whether the chapter on compromise and arrangement provides a complete code? .................................... 13.8 13.4.2 Scope of sections 230 and 232 .................................................. 13.9 13.5 Compromise and Arrangement (Section 230) ................................................ 13.10 13.6 Special Provisions for Mergers/Demergers (Section 232) ............................... 13.31 13.6.1 Which arrangements are included under section 232? ......................................................................................... 13.35 xxxiii

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13.6.2

Distinction between section 232 of the Companies Act, 2013 and section 394 of the Companies Act, 1956 ......................................................................................... 13.36 13.6.3 Applicability of section 230 to schemes under mergers and demergers under section 232 ............................... 13.36 13.6.4 The scheme of mergers or demergers ...................................... 13.36 13.6.5 Approvals ................................................................................. 13.39 13.7 Buying Minority Shareholding Holding ......................................................... 13.42 13.7.1 Purchase of minority interest ................................................... 13.42 13.7.2 Power to acquire shares of dissenting shareholders [Section 235]............................................................................ 13.44 13.7.3 Mandatory purchase of minority shareholding [Section 236]............................................................................ 13.44 13.7.4 Applicability ............................................................................ 13.46 Part II: Contractual Mergers/Fast Track Mergers (Section 233) ............................... 13.49 13.8 Under what circumstances can the Section 233 route be used?...................... 13.52 13.8.1 Nature of companies ................................................................ 13.52 13.8.2 Applicability to listed companies............................................. 13.53 13.8.3 Types of schemes ..................................................................... 13.53 13.8.4 Registered office ...................................................................... 13.54 13.8.5 Financial position..................................................................... 13.54 13.8.6 Returns ..................................................................................... 13.54 13.9 Can companies opt out of Section 233? ......................................................... 13.54 13.10 What are the conditions to be fulfilled for using Section 233 route? ............. 13.55 13.10.1 Notice to ROC/OL ................................................................... 13.56 13.10.2 Person affected......................................................................... 13.56 13.10.3 Consideration of objections ..................................................... 13.56 13.10.4 Approval .................................................................................. 13.56 13.10.5 Declaration of solvency ........................................................... 13.57 13.10.6 Creditors’ approval .................................................................. 13.57 13.10.7 Approvals and sanctions .......................................................... 13.58 13.11 Application to Tribunal .................................................................................. 13.59 13.11.1 Who can apply? ....................................................................... 13.59 13.11.2 Discretion of Tribunal .............................................................. 13.59 13.11.3 Order to be registered .............................................................. 13.59 13.12 Scheme under Section 233 ............................................................................. 13.60 13.12.1 Nature and scope of schemes ................................................... 13.60 13.12.2 Effect of registration of scheme ............................................... 13.60 13.13 Distinction between Sections 230 to 232 with Section 233............................ 13.60 13.13.1 Sanction ................................................................................... 13.60 13.13.2 Approvals ................................................................................. 13.61 xxxiv

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13.13.3 Type of schemes ...................................................................... 13.61 13.13.4 Authorities ............................................................................... 13.61 13.13.5 Time limit ................................................................................ 13.61 13.13.6 Disclosures .............................................................................. 13.61 13.13.7 Procedures ............................................................................... 13.61 Part III: Cross Border Mergers (Section 234) ........................................................... 13.61 13.14 Meaning of Company in Section 234............................................................. 13.62 13.15 Meaning of Foreign Company ....................................................................... 13.63 13.15.1 Which type of scheme?............................................................ 13.70 13.15.2 Applicability of Chapter XV ................................................... 13.70 Part IV: Central Government Approved Merger ...................................................... 13.72 13.16 Scope of Section 237...................................................................................... 13.73 13.17 Challenges to constitutionality of Section 396 of 1956 Act ........................... 13.74 13.18 Scheme under Section 237 ............................................................................. 13.75 13.18.1 Impact on property and liabilities ............................................ 13.75 13.18.2 Legal proceedings .................................................................... 13.75 13.18.3 Compensation .......................................................................... 13.75 13.18.4 Consideration before finalization of order ............................... 13.76 13.19 Procedures Under Chapter XV....................................................................... 13.76 13.20 Procedure for Compromise and Arrangement (Section 230) ......................... 13.76 13.21 Procedure Under Merger and Demerger Section 232 .................................... 13.87 13.22 Procedure for Fast Track Mergers Under Section 233 ................................... 13.96 13.23 Procedure under section 237 of amalgamation of companies by central government in public interest under section 237.......................................... 13.100 13.24 Comparison Chart Compromise, Arrangement and Amalgamation ............ 13.101 13.24.1 Comparison of New Act with Old Act .................................. 13.101 13.24.2 Comparison of Old Act with New Act .................................. 13.104 13.24.3 Comparison of New Rules with Old Rules ............................ 13.108 13.24.4 Comparison of Old Rules with New Rules ............................ 13.111 13.25 Further Reading ........................................................................................... 13.114 Annexure – Draft Guidelines issued by RBI. .......................................................... 13.115 Chapter 14 Oppression and Mismanagement 14.1 Introduction ...................................................................................................... 14.3 14.2 Overview of Changes ....................................................................................... 14.4 14.2.1 Reducing the bar set for oppression........................................... 14.4 14.2.2 Increasing the bar for mismanagement ...................................... 14.4 14.2.3 Composite petition..................................................................... 14.4 14.2.4 Dilution of eligibility criteria ..................................................... 14.4 14.3 The Remedy Under Section 241 ...................................................................... 14.5 14.4 Oppression ....................................................................................................... 14.6

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14.4.1

14.5

14.6

14.7

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Meaning of oppression and scope of the remedy ....................... 14.6 14.4.1.1 Dictionary meaning ............................................. 14.6 14.4.1.2 Meaning as analysed by case laws ...................... 14.7 14.4.2 Is there any change in the meaning and scope of Oppression? ............................................................................. 14.15 14.4.2.1 Past and concluded acts ..................................... 14.15 14.4.2.2 Prejudicial to members ...................................... 14.16 14.4.2.3 Old case laws analysed in new light .................. 14.17 14.4.2.4 Applicability of case laws under the Companies Act, 1956 ........................................ 14.19 Mismanagement .............................................................................................. 14.19 14.5.1 Meaning and scope of mismanagement under the Companies Act, 1956 ............................................................... 14.19 14.5.1.1 Dictionary meaning ........................................... 14.19 14.5.1.2 Meaning as analysed by case laws .................... 14.20 14.5.2 Change in nature and scope of mismanagement ...................... 14.21 14.5.2.1 Analysis of changes ........................................... 14.22 Impact of Changes in Other Provisions ............................................................. 14.23 14.6.1 Overview of Changes............................................................... 14.23 14.6.1.1 Additional powers ............................................. 14.23 14.6.1.2 Disclosures ........................................................ 14.24 14.6.1.3 Effective participation ....................................... 14.24 14.6.1.4 Additional rights ................................................ 14.24 14.6.1.5 Additional remedies .......................................... 14.25 14.6.1.6 Strong corporate governance framework .......... 14.25 14.6.1.7 Additional norms ............................................... 14.25 14.6.2 Exploring plural remedies ........................................................ 14.26 14.6.3 Impact and interplay of other remedies.................................... 14.26 14.6.3.1 De-registration and oppression and mismanagement(O&M)..................................... 14.27 14.6.3.2 Class action and O&M ...................................... 14.27 14.6.3.3 Investigation and O&M ..................................... 14.27 14.6.3.4 Reopening and oppression and mismanagement ................................................. 14.27 14.6.3.5 Compensation from auditor and O&M.............. 14.27 14.6.3.6 Refusal to transfer and transmit and O&M ....... 14.27 14.6.3.7 Exit route and O&M .......................................... 14.27 Eligibility to apply for Prevention of Oppression and Mismanagement ........ 14.28 14.7.1 Eligibility of members to apply ............................................... 14.28 14.7.1.1 Who can apply? ................................................. 14.28

Detailed table of contents

14.7.1.2 14.7.1.3 14.7.1.4 14.7.1.5

14.8

14.9 14.10 14.11 14.12 14.13

14.14 14.15

What is the eligibility criteria? .......................... 14.28 Can the Tribunal waive the conditions? ............ 14.29 Comparison with section 399 of 1956 Act ........ 14.29 Analysis of important case laws under section 399 and their applicability to section 244 ......... 14.29 14.7.2 Power of central government to apply ..................................... 14.30 Nature and Scope of Powers of Tribunal ....................................................... 14.31 14.8.1 Wide power to make order ...................................................... 14.34 14.8.2 Tests for granting reliefs .......................................................... 14.34 14.8.3 Principles laid down under the Companies Act, 1956 ............. 14.35 14.8.3.1 Examples: two examples are given here to elucidate this aspect .......................................... 14.36 14.8.4 Power specified under section 242(2)...................................... 14.36 14.8.4.1 Existing powers ................................................. 14.36 14.8.4.2 New/modified powers ....................................... 14.37 14.8.5 Power to grant stay/injunction [section 242(4)] ...................... 14.37 Application of certain provisions to proceedings under section 241 ................... 14.39 Removal of Certain Provisions ...................................................................... 14.39 Limitation of this Remedy - A Case for Class Action ................................... 14.40 Procedure for seeking relief against oppression and mismanagement ........... 14.41 Comparison Chart Oppression and Mismanagement ..................................... 14.44 14.13.1 Comparison of New Act with Old Act .................................... 14.44 14.13.2 Comparison of Old Act with New Act .................................... 14.45 Appendix A : Extracts of Bennett Coleman Case .......................................... 14.48 Further Reading ............................................................................................. 14.58

Chapter 15 Class Actions 15.1 Introduction ...................................................................................................... 15.2 15.2 The new-age of investor protection.................................................................. 15.2 15.3 Class Action - Meaning, Concept & Scope...................................................... 15.3 15.3.1 Advantages of class action ........................................................ 15.4 15.3.2 Nature of class action ................................................................ 15.5 15.3.3 Class actions worldwide ............................................................ 15.5 15.3.4 Class action in India .................................................................. 15.6 15.3.5 What is the importance of class action suits in the Indian context? .......................................................................... 15.6 15.3.6 Class action under the new Act ................................................. 15.6 15.3.7 Applicability to companies ........................................................ 15.9 15.3.8 Who can file a class action suit? .............................................. 15.10 15.3.8.1 Eligibility criteria for members ......................... 15.10 15.3.8.2 Eligibility criteria for depositors ....................... 15.11

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15.3.9 15.3.10

Representative person or association ....................................... 15.12 Guidelines for considering applications under section 245 ............................................................................... 15.13 15.4 Public notice ................................................................................................... 15.16 15.5 Bar on future class action ............................................................................... 15.16 15.6 When can the Class action be filed? ............................................................... 15.18 15.7 Nature of orders and their Impact ................................................................... 15.19 15.7.1 Non-compliance with orders [Section 245(7) read with section 425]...................................................................... 15.20 15.7.2 Vexatious application .............................................................. 15.20 15.7.3 Reimbursement of expenses in class action ............................. 15.20 15.7.4 Plural remedies ........................................................................ 15.21 15.7.5 Application of certain provisions to proceedings (Section 245)............................................................................ 15.21 15.8 Challenges in class action............................................................................... 15.21 15.9 Future of class action...................................................................................... 15.22 15.10 Institutional Shareholder ................................................................................ 15.22 15.11 Procedure for Class Action............................................................................. 15.24 Chapter 16 Revival and Rehabilitation of Sick Companies Chapter XIX – Section 253 to 269 of Companies Act, 2013 has been omitted by the Insolvency and Bankruptcy Code, 2016. Companies in financial distress can take recourse to the provisions of Insolvency and Bankruptcy Code for resolving the insolvency. For academic purpose, Chapter 16 is retained in the CD. .................. 16.1 Chapter 17 Winding up 17.1 Introduction ...................................................................................................... 17.5 17.2 Overview of Changes ....................................................................................... 17.6 17.2.1 Change in grounds for winding up............................................. 17.6 17.2.2 Concept of private liquidator ..................................................... 17.6 17.2.3 Summary involuntary winding up procedure............................. 17.6 17.2.4 Custody of property ................................................................... 17.6 17.2.5 Statement of affairs .................................................................... 17.6 17.2.6 Overview of Changes brought about by Insolvency and Bankruptcy Code, 2016 (IBC) ............................................ 17.7 17.2.6.1 Change in Grounds for Winding up .................... 17.7 17.2.6.2 Provisions for Voluntary winding up omitted ..... 17.7 17.2.6.3 Qualification of Company Liquidators ................ 17.8 17.2.6.4 No Stay on winding up for exploring revival ...... 17.8 17.2.6.5 Priority of Payouts ............................................... 17.8 17.2.6.6 Insolvency Rules inapplicable ............................. 17.8 17.3 Types of winding up ......................................................................................... 17.8

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17.4 17.5 17.6

Winding up and Dissolution............................................................................. 17.9 Winding up by Tribunal ................................................................................. 17.10 Grounds for winding up ................................................................................. 17.10 17.6.1 Analysis of the grounds ........................................................... 17.10 17.6.2 Applicability of principles under Companies Act, 2013 ................................................................................. 17.12 17.6.3 What will be the status of pending cases? ............................... 17.12 17.6.4 Who can file a winding up petition? ........................................ 17.12 17.7 Order in winding up proceedings ................................................................... 17.13 17.7.1 Decision of tribunal ................................................................. 17.13 17.7.2 Timeline................................................................................... 17.13 17.8 Effect of Order ............................................................................................... 17.13 17.8.1 Impact on creditors and shareholders [Section 278] ................ 17.13 17.8.2 Impact on litigation [Section 279] ........................................... 17.13 17.8.3 Impact on officers [Section 277(3)]......................................... 17.13 17.8.4 Impact on company property [Section 283(2)] ........................ 17.14 17.9 Important aspects in winding up .................................................................... 17.14 17.9.1 Provisional liquidator .............................................................. 17.14 17.9.1.1 Who can be a provisional liquidator? ................ 17.14 17.9.1.2 Can an official liquidator be a provisional liquidator? ......................................................... 17.14 17.9.1.3 When is a provisional liquidator appointed? ..... 17.14 17.9.1.4 Right of a company to oppose appointment ...... 17.14 17.9.1.5 When does a provisional liquidator cease to hold his position? .............................................. 17.15 17.9.1.6 What are the powers of provisional liquidator? ......................................................... 17.15 17.9.1.7 How a provisional liquidator is remunerated? .. 17.15 17.9.1.8 Who pays for his remuneration? ....................... 17.15 17.10 Company Liquidator ...................................................................................... 17.15 17.10.1 Who can be a company liquidator? ......................................... 17.15 17.10.2 Can an official liquidator be a company liquidator? ................ 17.15 17.10.3 Can company liquidator/provisional liquidator be removed/replaced? ................................................................... 17.16 17.10.4 Remuneration of company liquidator ...................................... 17.16 17.10.5 Powers of company liquidator ................................................. 17.16 17.10.6 Appeal against the decision of company liquidator [Section 292(4)] ....................................................................... 17.18 17.10.7 Other provisions ...................................................................... 17.18 17.11 Official liquidator ........................................................................................... 17.18 17.11.1 Appointment of official liquidator [Section 359] .................... 17.18 xxxix

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17.11.2 Power and functions................................................................. 17.18 17.12 Procedure of winding up by Tribunal ............................................................. 17.19 17.12.1 Procedure of winding up by tribunal........................................ 17.19 17.12.1.1 Application to vacate stay on other proceedings ....................................................... 17.27 17.12.2 Role of advisory committee ..................................................... 17.28 17.12.3 Procedure to be followed at the meetings of advisory committee ................................................................................ 17.28 17.12.4 Rights of creditor and contributories ....................................... 17.28 17.12.5 Meeting of members ................................................................ 17.29 17.12.6 Meeting of creditors ................................................................. 17.30 17.12.6.1 Limitation on voting rights of creditors............. 17.32 17.13 Provisions applicable to involuntary winding up ........................................... 17.32 17.13.1 Section 324: Debts of all descriptions to be admitted to proof .................................................................................... 17.32 17.13.2 Section 325: Application of insolvency rules in winding up of insolvent companies ......................................... 17.32 17.13.3 Section 326: Overriding preferential payments ....................... 17.33 17.13.4 Section 327: Preferential payments ......................................... 17.35 17.13.5 Section 328: Fraudulent preference ......................................... 17.38 17.13.6 Section 329: Transfers not in good faith to be void ................. 17.39 17.13.7 Section 330: Certain transfers to be void ................................. 17.39 17.13.8 Section 331: Liabilities and rights of certain persons fraudulently preferred .............................................................. 17.39 17.13.9 Section 332: Effect of floating charge ..................................... 17.40 17.13.10 Section 333: Disclaimer of onerous property .......................... 17.40 17.13.11 Section 334: Transfers, etc after commencement of winding up to be void .............................................................. 17.43 17.13.12 Section 335: Certain attachments, executions, etc in winding up by Tribunal to be void ........................................... 17.43 17.13.13 Section 336: Offences by officers of companies in liquidation ................................................................................ 17.43 17.13.14 Section 337: Penalty for frauds by officers .............................. 17.46 17.13.15 Section 338: Liability where proper accounts not kept .......................................................................................... 17.46 17.13.16 Section 339: Liability for fraudulent conduct of business .................................................................................... 17.47 17.13.17 Section 340: Power of Tribunal to assess damages against delinquent directors, etc ............................................... 17.49 17.13.18 Section 341: Liability under sections 339 and 340 to extend to partners or directors in firms or companies .............. 17.49

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17.13.19

Section 342: Prosecution of delinquent officers and members of company .............................................................. 17.50 17.13.20 Section 343: Company liquidator to exercise certain powers subject to sanction ....................................................... 17.51 17.13.21 Section 344: Statement that company is in liquidation ............ 17.52 17.13.22 Section 345: Books and papers of company to be evidence ................................................................................... 17.53 17.13.23 Section 346: Inspection of books and papers by creditors and contributories ..................................................... 17.53 17.13.24 Section 347: Disposal of books and papers of company .................................................................................. 17.54 17.13.25 Section 348: Information as to pending liquidations ............... 17.55 17.13.26 Section 349: Official liquidator to make payments into public account of India ..................................................... 17.56 17.13.27 Section 350: Company liquidator to deposit monies into scheduled bank ................................................................. 17.56 17.13.28 Section 351: Liquidator not to deposit monies into private banking account ........................................................... 17.57 17.13.29 Section 352: Company Liquidation Dividend and Undistributed Assets Account ................................................. 17.57 17.13.30 Section 353: Liquidator to make returns, etc ........................... 17.60 17.13.31 Section 354: Meetings to ascertain wishes of creditors or contributories ........................................................ 17.60 17.13.32 Section 355: Court, tribunal or person, etc., before whom affidavit may be sworn ................................................. 17.61 17.13.33 Section 356: Powers of Tribunal to declare dissolution of company void.................................................... 17.61 17.13.34 Section 357: Commencement of winding up by Tribunal ................................................................................... 17.62 17.13.35 Section 358: Exclusion of certain time in computing period of limitation .................................................................. 17.62 17.14 Official liquidators ......................................................................................... 17.62 17.14.1 Section 359: Appointment of official liquidator ...................... 17.63 17.14.2 Section 360: Powers and functions of official liquidator ................................................................................. 17.63 17.14.3 Section 361: Summary procedure for liquidation .................... 17.64 17.14.4 Section 362: Sale of assets and recovery of debts due to company .............................................................................. 17.64 17.14.5 Section 363: Settlement of claims of creditors by official liquidator ..................................................................... 17.65 17.14.6 Section 364: Appeal by creditor .............................................. 17.65 17.14.7 Section 365: Order of dissolution of company ........................ 17.66 17.15 Further Reading ............................................................................................. 17.66 xli

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Chapter 18 Compounding of Offence 18.1 Introduction ...................................................................................................... 18.3 18.2 Overview of Changes ....................................................................................... 18.3 18.2.1 Changes by Company Amendment Act, 2017 ........................... 18.3 18.2.2 Officer who is in default ............................................................ 18.3 18.2.3 Penalties ..................................................................................... 18.3 18.2.4 Adjudication mechanism ........................................................... 18.3 18.2.5 Trial of offence .......................................................................... 18.3 18.2.6 Compounding procedure............................................................ 18.3 18.2.7 Grace period............................................................................... 18.4 18.3 Corporate Criminal Liability ............................................................................ 18.4 18.4 What is an offence? .......................................................................................... 18.4 18.4.1 Who is responsible for the offence?........................................... 18.4 18.4.1.1 Analysis of the definition .................................... 18.6 18.5 What is the penalty? ......................................................................................... 18.7 18.5.1 Penalty levels ............................................................................. 18.7 18.5.2 Penalties tied to damages ........................................................... 18.7 18.5.3 Enhanced imprisonment ............................................................ 18.8 18.5.4 New imprisonment ..................................................................... 18.8 18.5.5 Non-executive director .............................................................. 18.8 18.5.6 Statutory limits........................................................................... 18.8 18.5.7 Distinct penalty for companies .................................................. 18.8 18.5.8 Frauds ........................................................................................ 18.8 18.5.9 Provisions for reducing delays ................................................... 18.8 18.5.10 Technical defaults ...................................................................... 18.9 18.5.11 Disclosures of offences .............................................................. 18.9 18.5.12 Compulsory filing ...................................................................... 18.9 18.5.13 Adjudication of penalty ............................................................. 18.9 18.5.14 Protection to whistle blowers ..................................................... 18.9 18.5.15 Trial of offenses ....................................................................... 18.10 18.6 Can offences be compounded? ....................................................................... 18.10 18.6.1 What offences can be compounded?........................................ 18.10 18.6.2 What offences cannot be compounded?................................... 18.10 18.6.3 Who is authorised to compound an offence? ........................... 18.10 18.6.4 When can they be compounded? ............................................. 18.11 18.6.5 Quantum of fees ....................................................................... 18.11 18.6.6 Procedure for compounding ..................................................... 18.11 18.6.7 Bar on compounding ................................................................ 18.12 18.6.8 Effects of compounding ........................................................... 18.12 18.6.9 Penalty ..................................................................................... 18.12 18.7 Cognizable and Non-Cognizable Offences .................................................... 18.12 xlii

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18.7.1 What are cognizable offences? ................................................ 18.12 18.7.2 What are non-cognizable offences? ......................................... 18.13 18.8 Appendix A: Penalties Under the Old and New Provisions ........................... 18.13 18.9 Appendix B: Imprisonment Increased (Illustrative sample provisions where the quantum of imprisonment has increased) ...................................... 18.35 18.10 Appendix C: New Imprisonment Provisions ................................................. 18.39 18.11 Procedure for Compounding of Offence ........................................................ 18.44 18.12 Comparison Chart Compounding of Offence ................................................ 18.45 18.12.1 Comparison of New Act with Old Act .................................... 18.45 18.12.2 Comparison of Old Act with New Act .................................... 18.46 Chapter 19 Miscellaneous Powers of Tribunal 19.1 Introduction ...................................................................................................... 19.3 19.2 Change in Financial Year ................................................................................. 19.3 19.2.1 Application to Tribunal ............................................................. 19.3 19.2.2 Who can apply? ......................................................................... 19.4 19.2.3 Period of financial year.............................................................. 19.4 19.2.4 Procedure for making application under section 2(41) .......................................................................................... 19.4 19.3 Tribunal Approved Company Conversion ....................................................... 19.5 19.3.1 Conversion of companies .......................................................... 19.5 19.3.1.1 Permissibility of conversion................................ 19.5 19.3.1.2 General process of conversion ............................ 19.5 19.3.2 Conversion of public company into private company ............... 19.6 19.3.2.1 Conditions for conversion ................................... 19.6 19.3.2.2 Consequential changes ........................................ 19.7 19.3.2.3 Impact on debts and contracts ............................. 19.8 19.3.2.4 Effective date of conversion................................ 19.8 19.3.2.5 Listed companies ................................................ 19.8 19.3.2.6 Procedure for conversion of public into private company .................................................. 19.9 19.4 Extension of Time for Redemption of Preference Shares .............................. 19.12 19.4.1 Who can approach? ................................................................. 19.14 19.4.2 Approval .................................................................................. 19.15 19.4.3 Inability to redeem................................................................... 19.15 19.4.4 Nature of order ........................................................................ 19.17 19.4.5 Applicability of previous judgments ....................................... 19.17 19.4.6 Usefulness of section 55(3) ..................................................... 19.17 19.4.7 Procedure for seeking extension of time for redemption of preference shares .............................................. 19.17 19.5 Consolidation of Shares ................................................................................. 19.18

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19.6

19.7 19.8

19.5.1 In what all cases is approval necessary? .................................. 19.20 19.5.2 Procedure for consolidation of shares under the Act ............... 19.20 Rights of Debentures Holders to Seek Reliefs ............................................... 19.23 19.6.1 Application under section 71(9) for interim reliefs.................. 19.24 19.6.1.1 Who can apply? ................................................. 19.24 19.6.1.2 In which case? ................................................... 19.24 19.6.1.3 Who will be given opportunity of being heard? ................................................................ 19.25 19.6.1.4 Nature of reliefs? ............................................... 19.25 19.6.2 Application to Tribunal for seeking repayment ....................... 19.25 19.6.3 Penalty ..................................................................................... 19.25 19.6.4 Procedure for Application Under Section 71(9) Seeking Interim Reliefs by Debenture Trustee ........................ 19.25 19.6.5 Procedure for Filing Application under Section 71(10) for Failure to Redeem Debentures [NCLT r 73] ......................... 19.26 Inspection of Minutes ..................................................................................... 19.27 19.7.1 Procedure for making application for inspection ..................... 19.28 Injunction on Representations by Outgoing Directors ................................... 19.28 19.8.1 Scope of the application ........................................................... 19.29 19.8.2 Who can apply? ....................................................................... 19.29 19.8.3 Under which instances? ........................................................... 19.30 19.8.4 What relief? ............................................................................. 19.30 19.8.5 Procedure for making application under section 169 ............... 19.30

Chapter 20 Powers of Tribunal under other Acts 20.1 Introduction ...................................................................................................... 20.1 20.2 Power under RBI Act ....................................................................................... 20.1 20.3 Power under Limited Liability Partnership Act, 2008...................................... 20.2 20.3.1 Power to reduce/waive penalty .................................................. 20.3 20.3.2 Power to Enforce Filing ............................................................. 20.3 20.3.3 Investigations ............................................................................. 20.4 20.3.4 Merger and Amalgamations ....................................................... 20.5 20.3.5 Winding up of LLP .................................................................... 20.8 20.4 Competition Act ............................................................................................... 20.9 Chapter 21 Appeals, Reviews and Writs 21.1 Introduction ...................................................................................................... 21.2 21.2 Appeal from order of NCLT ............................................................................ 21.2 21.2.1 Section 421 of the Companies Act, 2013................................... 21.3 21.2.2 Section 10F of the Companies Act, 1956 .................................. 21.3 21.2.3 Section 25 of SICA .................................................................... 21.3

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21.2.4

21.3

21.4 21.5 21.6

Distinction between section 10F of Companies Act, 1956 and section 421 of the Companies Act, 2013 ................... 21.4 21.2.5 Similarities/distinction under SICA and Companies Act, 2013 ................................................................................... 21.4 21.2.6 Applicability of case laws under Companies Act, 1956? ......................................................................................... 21.4 21.2.7 What orders can be appealed against? ....................................... 21.6 21.2.7.1 Dictionary meaning ............................................. 21.6 21.2.7.2 Case laws on meaning of the term ‘order’ .......... 21.6 21.2.8 Who can appeal?........................................................................ 21.8 21.2.8.1 Dictionary meaning of “person aggrieved” ......... 21.8 21.2.8.2 Case laws on “person aggrieved” ........................ 21.8 21.2.8.3 Analysis of the term “person aggrieved” under Companies Act, 2013 .............................. 21.12 21.2.9 Time period for filing an appeal .............................................. 21.13 21.2.10 Sufficient cause ....................................................................... 21.13 21.2.10.1 Test laid down to determine sufficient cause .... 21.13 21.2.11 Consent orders ......................................................................... 21.19 21.2.12 Grounds of appeal.................................................................... 21.20 Appeal to the Supreme Court ......................................................................... 21.21 21.3.1 Similar provisions in other Acts .............................................. 21.21 21.3.1.1 The Electricity Act, 2003 .................................. 21.21 21.3.1.2 The National Green Tribunal Act, 2010............ 21.22 21.3.1.3 The Telecom Regulatory Authority of India Act, 1997 ........................................................... 21.22 21.3.1.4 The Securities and Exchange Board of India Act, 1992 ........................................................... 21.22 21.3.1.5 Companies Act, 1956 ........................................ 21.23 21.3.2 Terms used in the section ........................................................ 21.23 21.3.3 Period of filing the appeal ....................................................... 21.23 21.3.4 Scope of appeal........................................................................ 21.23 21.3.4.1 Difference between a “questions of law” and “questions of fact .............................................. 21.24 Power to Review ............................................................................................ 21.26 Writ Jurisdiction............................................................................................. 21.26 Further Reading ............................................................................................. 21.37

Chapter 22 General Practice and Procedure 22.1 Introduction ...................................................................................................... 22.3 22.2 General Procedure & Practice .......................................................................... 22.3 22.2.1 Territorial Jurisdiction ............................................................... 22.3 22.2.2 Filing of Petition/Application .................................................... 22.3 xlv

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22.3

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22.2.2.1 Who can file ........................................................ 22.3 22.2.2.2 Modes of filing .................................................... 22.4 22.2.2.3 How to file an application/petition ...................... 22.4 22.2.3 Documents to Accompany the petition or Application ................................................................................ 22.4 22.2.4 Scrutiny of Application/Petition ................................................ 22.5 22.2.5 Advertisement [Rule 35] ............................................................ 22.5 22.2.6 Notice to Opposite Party [Rule 37] ............................................ 22.6 22.2.7 Filing of Affidavit of Service/Advertisement ............................ 22.6 22.2.8 Service of notice and Processes Issued by the Tribunal [Rule 38] ..................................................................... 22.7 22.2.9 Filing of Reply and other Documents by the Respondents [Rule 41] ............................................................... 22.7 22.2.10 Filing of Rejoinder [Rule 42]..................................................... 22.7 22.2.11 Additional Pleadings .................................................................. 22.7 22.2.12 Framing of Issues ....................................................................... 22.8 22.2.13 Admission and denial of documents/discover and production of documents ........................................................... 22.8 22.2.14 Filing of Affidavit of Evidence [Rule 39] .................................. 22.9 22.2.15 Cross Examination of any Deponent [Rule 39] ......................... 22.9 22.2.16 Summoning the Witness and Method of Recording Evidence [Rule 52] .................................................................... 22.9 22.2.17 Oath to witness [Rule 47] ........................................................ 22.11 22.2.18 Hearing of petition or application [Rule 44] ............................ 22.11 22.2.19 Action on Application for Applicants Default [Rule 48] ............. 22.11 22.2.20 Ex-parte hearing and disposal of petition or application [Rule 49] ............................................................... 22.12 22.2.21 Decision of the Tribunal .......................................................... 22.12 22.2.22 Order to be Passed and Signed [Rule 149 & 150] ................... 22.12 22.2.23 Filing of order of the Tribunal ................................................. 22.13 22.2.24 Application for Execution ........................................................ 22.13 22.2.25 Effect of Non-compliance [Rule 58]........................................ 22.13 22.2.26 Procedure for Imposition of Penalty Under the Act [Rule 59] .... 22.14 22.2.27 Preservation of Record [Rule 103] .......................................... 22.14 22.2.28 Fees .......................................................................................... 22.14 Representation before NCLT/NCLAT.............................................................. 22.15 22.3.1 Authorised representative ........................................................ 22.15 22.3.1.1 Right to legal representation.............................. 22.15 22.3.1.2 Special authorized representatives .................... 22.16 22.3.1.3 Amicus curiae .................................................... 22.16 22.3.1.4 Dress for the authorised representatives ............ 22.17

Detailed table of contents

22.3.2

Dress for and for the parties in person ..................................... 22.17 22.3.2.1 Memorandum of appearance ............................. 22.18 22.3.2.2 Clerk of authorised interns ................................ 22.18 22.4 Schedule A: schedule of fees............................................................................ 22.18 Annexure I- Checklist NCLT .................................................................................... 22.21 Annexure II- Naming of old matters ......................................................................... 22.24 Chapter 23 Jurisdiction and Limitation 23.1 Introduction ...................................................................................................... 23.2 23.1.1 What is jurisdiction? .................................................................. 23.2 23.1.2 Why is it relevant? ..................................................................... 23.2 23.1.3 What are the types of jurisdiction? ............................................ 23.3 23.1.3.1 Jurisdiction over the subject-matter .................... 23.3 23.1.3.2 Territorial jurisdiction ......................................... 23.3 23.1.3.3 Pecuniary jurisdiction ......................................... 23.3 23.1.3.4 Original or appellate jurisdiction ........................ 23.4 23.1.3.5 Division bench & single bench ........................... 23.4 23.1.4 Bar on civil court jurisdiction .................................................... 23.4 23.1.4.1 Case laws and their applicability......................... 23.5 23.2 Limitation Period ........................................................................................... 23.10 23.2.1 Applicability of Limitation Act ............................................... 23.10 23.2.1.1 Scope of applicability........................................ 23.10 23.2.1.2 Interpretation of the term “as far as may be” .... 23.13 23.2.1.3 Calculation of limitation period ........................ 23.13 23.2.2 General principles of limitation ............................................... 23.14 23.2.2.1 Dismissal of petition/application....................... 23.14 23.2.2.2 Extension of period ........................................... 23.14 23.2.2.3 Expansion of time on showing sufficient cause.... 23.14 23.2.2.4 Exclusions on account minority etc. ................. 23.14 23.2.2.5 Continuous running of time .............................. 23.14 23.2.2.6 Other exclusions ................................................ 23.15 23.2.2.7 Manner of computation of time limit ................ 23.15 23.2.2.8 Ownership by prescription ................................ 23.16 23.2.2.9 Miscellaneous provisions .................................. 23.16 23.2.2.10 Schedule I: Limitation Period ........................... 23.16 23.2.2.11 Enlargement of time by Tribunal [NCLT Rule 153] .............................................. 23.17 Annexure I—Subject-wise jurisdiction of NCLT ......................................................... 23.17 Annexure II—State-wise jurisdiction of NCLT ........................................................ 23.18 Annexure III—Pecuniary jurisdiction of NCLT ....................................................... 23.20 Annexure IV—Divisional and Single Member bench .................................................. 23.21 xlvii

NCLT and NCLAT Law Practice and Procedure, 5e

Chapter 24 The Insolvency and Bankruptcy Code, 2016 24.1 Background ...................................................................................................... 24.5 24.2 Structure of the Code........................................................................................ 24.6 24.3 Meaning of Insolvency and Bankruptcy........................................................... 24.8 24.4 Applicability ..................................................................................................... 24.9 24.5 Insolvency Framework ................................................................................... 24.10 24.5.1 Insolvency professionals .......................................................... 24.11 24.5.2 Insolvency professional agencies ............................................. 24.14 24.5.3 Information Utilities ................................................................ 24.14 24.5.4 Insolvency Regulator/the Board .............................................. 24.15 24.5.5 Adjudicatory Authorities ......................................................... 24.17 24.6 Insolvency Resolution Process (IRP) of Corporate Persons .......................... 24.18 24.7 Key highlights of the insolvency resolution process under IBC (Chapter II Part II) .......................................................................................... 24.20 24.7.1 To whom is the process applicable? ........................................ 24.20 24.7.2 When can it be initiated? ......................................................... 24.20 24.7.3 Quantum of default .................................................................. 24.21 24.7.4 Who can initiate? ..................................................................... 24.21 24.7.4.1 Financial Creditor .............................................. 24.22 24.7.4.2 Operational Creditor .......................................... 24.25 24.7.4.3 Corporate Applicant .......................................... 24.28 24.7.4.4 Member of company ......................................... 24.28 24.7.4.5 Person managing operations .............................. 24.28 24.7.4.6 Person in control and supervisor of the company .. 24.28 24.7.4.7 When can corporate applicant apply?

[Section 10] ....................................................... 24.29 24.7.5 Process of Insolvency Resolution [Section 12]........................ 24.31 24.7.6 Application for Insolvency Resolution .................................... 24.32 24.7.7 Impact of Admission of Application [Section 13 of IBC].............. 24.32 24.7.8 Insolvency Commencement Date ............................................ 24.32 24.7.9 Moratorium [Section 14 of IBC].............................................. 24.33 24.8 Public announcement [Section 15] ................................................................. 24.36 24.9 Appointment of Interim Resolution Professional [Section 16] ...................... 24.37 24.10 Powers and duties of the Interim Resolution Professional ............................. 24.38 24.10.1 Management of the affairs of the corporate debtor by the interim resolution professional [Section 17] ...................... 24.38 24.10.2 Duties of the interim resolution professional [Section 18] ...... 24.40 24.10.2.1 Collection of information .................................. 24.40 24.10.2.2 Collation of all claims against the corporate debtor................................................................. 24.41 24.10.2.3 Constitution of the committee of creditors ........ 24.42 xlviii

Detailed table of contents

24.10.2.4

24.11 24.12 24.13

24.14 24.15 24.16 24.17

24.18 24.19 24.20

24.21

Monitor assets, manage operations, and file information in relation to the coroporate debtor ....24.42 24.10.2.5 Take control and custody of assets of the corporate debtor ................................................ 24.43 24.10.3 Personnel of corporate debtor to extend cooperation to the interim resolution professional in managing the affairs of the corporate debtor [Section 19] ....................... 24.43 24.10.3.1 Management of operations of the corporate debtor [Section 20] ........................................... 24.44 24.10.4 Committee of creditors [Section 21]........................................ 24.44 24.10.4.1 Financial creditors ............................................. 24.44 24.10.4.2 Operational creditors ......................................... 24.46 Appointment of Insolvency Resolution Professional [Section 22] ................ 24.46 Resolution professional to conduct corporate insolvency resolution process [Section 23] ....................................................................................... 24.47 Meeting of the Committee Of Creditors [Section 24] .................................... 24.48 24.13.1 Notice of meeting and participation ........................................ 24.48 24.13.2 Voting share ............................................................................ 24.49 Duties of the Resolution Professional [Section 25]........................................ 24.50 Avoidance of transactions not to affect corporate insolvency Resolution process [Section 26]......................................................................................... 24.51 Right to replace resolution professional [Section 27] .................................... 24.51 Resolution professional to act with the approval of the committee of creditors [Section 28] ..................................................................................... 24.52 24.17.1 Prior approval of the committee of creditors ........................... 24.52 24.17.2 Actions of the resolution professional without approval of the committee of creditors are void ...................... 24.53 Preparation of information memorandum [Section 29].................................. 24.54 Persons not eligible to be a resolution applicant ............................................ 24.55 Resolution plan [Section 30] .......................................................................... 24.56 24.20.1 What is a resolution plan? ....................................................... 24.56 24.20.2 Who can submit a resolution plan? .......................................... 24.57 24.20.3 Mandatory requirements of every resolution plan ................... 24.57 24.20.4 Measures for implementation of resolution plan ..................... 24.58 24.20.5 Approval of committee of creditors ......................................... 24.59 24.20.6 Resolution applicant may be present at meeting of committee of creditors ............................................................. 24.60 Approval of resolution plan [Section 31] ....................................................... 24.60 24.21.1 Conditions for approval ........................................................... 24.60 24.21.2 Approval of the NCLT is binding ............................................ 24.60 24.21.3 Moratorium shall terminate upon approval of resolution plan ..... 24.60 24.21.4 Record of proceedings to be filed with the Board ................... 24.61 xlix

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24.22 Rejection and appeal [Section 32] .................................................................. 24.61 24.23 Liquidation ..................................................................................................... 24.61 24.23.1 Involuntary Liquidation under Chapter III Part II of the IBC....... 24.62 24.23.1.1 Who can initiate the process of involuntary liquidation? ........................................................ 24.62 24.23.1.2 In which circumstance will the NCLT pass an order for Liquidation? ....................................... 24.62 24.23.1.3 Suo motu Initiaition of Liquidation by NCLT... 24.64 24.23.1.4 Application by Insolvency Resolution Professional ....................................................... 24.65 24.23.1.5 Application by Affected Persons ....................... 24.65 24.23.2 Nature of Order for liquidation ................................................ 24.65 24.23.3 Effect of liquidation order........................................................ 24.66 24.23.3.1 Stay on initiation of suits & proceedings [Section 33(5) of IBC]....................................... 24.66 24.23.3.2 Discharge of Employees [Section 33(7) of IBC] .. 24.66 24.23.3.3 Cessation of Powers of Board [Section 34(2) of IBC] .............................................................. 24.66 24.23.4 Appointment of Liquidator ...................................................... 24.66 24.23.4.1 Who will be the liquidator? ............................... 24.66 24.23.5 Powers of Liquidator ............................................................... 24.67 24.23.5.1 Power of Management....................................... 24.67 24.23.5.2 Assistance by personnel of corporate debtor ..... 24.67 24.23.5.3 Powers & Duties to be execercised subject to direction of NCLT [Section 35 of IBC]............. 24.67 24.23.6 Fee of Liquidator ..................................................................... 24.69 24.23.7 Liquidation Estate [Section 36(3) of IBC] ............................... 24.70 24.23.8 Rights of Creditors ................................................................... 24.71 24.23.9 Consolidation of Claims [Section 38] ...................................... 24.71 24.23.10 Verification of Claims ............................................................. 24.72 24.23.11 Secured Creditor in Liquidator Proceedings [Section 52 of IBC] .................................................................. 24.72 24.23.12 Priority of Payment in distribution of Assets [Section 53 of IBC] .................................................................. 24.73 24.23.12.1 Priotiy cannot be modified contracutally........... 24.74 24.23.13 Dissolution of Corporate Debtor [Section 54 of IBC] ............. 24.75 24.23.14 Transaction that can be questioned in liquidation .................... 24.75 24.23.14.1 Preferential Transactions [Section 43 of IBC] .. 24.75 24.23.14.2 Transaction not considered preferenrial transaction ......................................................... 24.76 24.23.14.3 Undervalued Transaction [Section 45 of IBC] .. 24.77 l

Detailed table of contents

24.23.14.4

Transactions defrauding creditors [Section 49 of IBC] .............................................................. 24.79 24.23.14.5 Extortionate Credit Transaction [Section 50].... 24.79 24.24 Further reading ............................................................................................... 24.80 Annexures to the book Annexure 1 National Company Law Tribunal Rules, 2016..................................... A1-1 Annexure 2 National Company Law Appellate Tribunal Rules, 2016 ................... A2-1 Annexure 3 The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 ............................................................... A3-1 Annexure 4 The National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016.............................................. A4-1 Annexure 5 The Companies (Transfer of Pending Proceedings) Rules, 2016 ........ A5-1 Bibliography............................................................................................................... B1-1 Contents of attached CD ................................................................................................liii

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NCLT and NCLAT Law Practice and Procedure, 5e

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Contents of attached CD The Companies Act 2013 The Companies (Amendment) Act 2017 Relevant Notified Rules under Companies Act 1. Companies (Acceptance of Deposit) Rules, 2014 2. NCLT Rules with amendments 3. NCLAT Rules with amendments 4. Companies (Transfer of Pending Proceedings) Rules, 2016 5. The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 6. NCLT (Procedure for Reduction of share capital of Company) Rules, 2016 7. NCLT (Salary, Allowances and other Terms and Conditions of Service of President and other Members) Rules, 2015 8. NCLAT (Salaries and Allowances and other terms and conditions of service of the Chairperson and other Members) Rules, 2015 9. Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 10. Companies (Inspection, Investigation and Inquiry) Rules, 2014 11. Companies (Mediation and Conciliation) Rules, 2016 12. Companies (Management and Administration) Rules, 2014 13. Companies (Meetings of Board and its Powers) Rules, 2014 14. Companies (Registered Valuers and Valuation) Rules, 2017 The Insolvency and Bankruptcy Code, 2016 - BLRC Report - Joint Committee Report on Insolvency and Bankruptcy Code 2015 Insolvency Code - Rules and Regulations 1. Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016

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2.

Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 3. Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 4. Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 5. Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 6. Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 7. Insolvency and Bankruptcy Board of India (Insolvency Professional Agencies) Regulations, 2016 8. Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 9. Insolvency and Bankruptcy Board of India (Procedure for Governing Board Meetings) Regulations, 2017 10. Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 11. Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017 12. Insolvency and Bankruptcy Board of India (Advisory Committee) Regulations, 2017 13. Insolvency and Bankruptcy Board of India (Engagement of Research Associates and Consultants) Regulations, 2017 14.Insolvency and Bankruptcy Board of India (Salary, Allowances and other Terms and Conditions of Service of Chairperson and members) Rules, 2016 15.Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017

NCLT and NCLAT Law Practice and Procedure, 5e 16. Insolvency and Bankruptcy Board of India (Employees’ Service) Regulations, 2017 Other Old Draft Rules for reference 1. Draft Rules on Prevention of Oppression and Mismanagement 2. Rules on Revival and Rehab of Sick Cos

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3. Draft Winding up Rules  SICA Repeal Act, 2003  Chapter 16 Revival and Rehabilitation of Sick Companies

NCLT, NCLAT and Supreme Court Rulings Achenbach Buschhutten GmbH & Co. v Arcotech Ltd. Company Appeal (AT) (Insv) No. 97 of 2017 ...................................................................... R-75 Agarwal Coal Corporation Private Limited v Impex Ferro Tech Limited ....................................................................................................... R-13, R-14 Alchemist Asset Reconstruction Company Limited v M/s. Hotel Goudavan Pvt. Ltd. and Ors. ................................................................................ R-27 Allied Media Network Pvt. Ltd. v M/s Sunraa Media Ltd. Company Appeal (AT) (Insv) No. 226 of 2017 .................................................................... R-42 Alpha & Omega Diagnostics (India) Ltd. v Asset Reconstruction Company of India Ltd. & Ors. Company Appeal (AT) (Insv) No. 116 of 2017 ........................................................................................................... R-71 Anil Mahindroo & Anr v Earth Iconioc Infrastructure (P) Limited.

Company Appeal (AT) (Insv) No. 74 of 2017...................................................... R-48 Annapurna Infrastructure Pvt. Ltd. and Anr. v M/s. SORIL Infra Resources Ltd. Company Appeal (AT) (Insv) No. 32 of 2017 ............................. R-77 Ardor Global Pvt. Ltd v Nirma Industries Pvt Ltd. Company Appeal (AT) (Insv) No. 137 of 2017................................................................................. R-69 Asian Natural Resources (India) Ltd v IDBI Bank Limited and Bhatia Global Trading Ltd. v IDBI Bank Ltd. Company Appeal (AT) (Insv) No. 60 of 2017 & Company Appeal (AT) (Insv) No. 62 of 2017 ...................................................................................................................... R-51 B.K. Educational Services Pvt. Ltd. v Parag Gupta & Associates ............................. R-37 Bank of New York Mellon London Branch v Zenith Infotech Limited. .................... R-21 Bharti Defence and Infrastructure Limited v Edelweiss Asset Reconstruction Company Limited. Company Appeal (AT) (Insv) No.71 of 2017 ....................................................................................................... R-55 Bhash Software Labs Pvt. Ltd v M/s Mobme Wireless Solutions Ltd. Company Appeal (AT) (Insv) No. 79 of 2017 ...................................................... R-80 Black Pear Hotels Pvt. Ltd v Planet M Retail Ltd. ..................................................... R-81 Byram Pestonji Gariwala v. UBOI ............................................................................. R-18 Canara Bank v Deccan Chronicle Holidays Limited Company Appeal (AT) (Insv) No. 147 of 2017................................................................................. R-53 Della Constructions Pvt Ltd. v MIs Rei Agro Ltd & Anr Company Appeal (AT) (Insv) No. 35 of 2017 ...................................................................... R-51 Ellora Paper Mills Limited & Anr v Ajithnath Steels Pvt. Ltd. Company Appeal (AT) (Insv) No 122 of 2017 ..................................................... R-54 lv

NCLT and NCLAT Law Practice and Procedure, 5e

Engenious Engineering Pvt. Ltd. v Onaex Natura Pvt Ltd. Company Appeal (AT) (Insv) No. 249 of 2017 ....................................................................R-47 Era Infra Engineering Ltd. v Prideco Commercial Projects Pvt. Ltd. Company Appeal (AT) (Insv) No. 31 of 2017 ......................................................R-50 Forech India Pvt. Ltd. v Edelweiss Assets Reconstruction Company Ltd. & Anr. Company Appeal (AT) (Insv) No. 202 of 2017 ................................R-64 Gurdeep Singh Sahani v Berger Paints India Ltd & Ors. Company Appeal (AT) (Insv) No. 294 of 2017 ....................................................................R-40 Hind Motors India Ltd. v Adjudicating Authority NCLT, Chandigarh.

Company Appeal (AT) (Insv) No. 11 of 2017 ......................................................R-70 ICICI Bank Ltd. v Innoventive Industries Ltd. ...........................................................R-28 Impex Ferro Tech Limited v Agarwal Coal Corporation Private Limited ..................................................................................................................R-14 Indian Overseas Bank vs Mr. Dinkar T. Venkatsubramaniam Resolution Professional for Amtek Auto Ltd. Company Appeal (AT) (Insv) No. 267 of 2017 .................................................................................R-55 Innoventive Industries Ltd. v ICICI Bank & Anr. ............................................ R-30, R-31 JEKPL Private Limited v Export Import Bank of India Company Appeal (AT) (Insv) No. 188 of 2017 ....................................................................R-40 JK Jute Mill Mazdoor Morcha v Juggilal Kamlapat Jute Mills Co. Ltd. Company Appeal (AT) (Insv) No. 82 of 2017 ......................................................R-78 JK Jute Mills Company Limited v M/s Surendra Trading Company. ........................R-18 Jord Engineers India Ltd. v Valia & Company. Company Appeal (AT) (Insv) No. 158 of 2017 ..........................................................................................R-80 K. Kishan v Vijay Nirman Company Private Limited. [Civil Appeal No. 21824/2017) ...................................................................................................R-38 Kaliber Associates Pvt. Ltd. v Tripat Kaur Company Appeal (AT) (Insv) No. 52 of 2017 ............................................................................................R-66 Kee Projects Limited v Sharda Rawat Company Appeal (AT) (Insv) No. 139 of 2017 ....................................................................................................R-41 Kirusa Software Private Limited v Mobilox Innovations Private Limited ................................................................................ R-22, R-23,, R-76 KKV Naga Prasad v Lanco Infratech Ltd. Company Appeal (AT) (Insv) No. 10 of 2017 ............................................................................................R-80 Ksheeraabad Constructions PVT Ltd v M/s Vijay Nirman Company Pvt Ltd [Civil Appeal No. 21825 of 2017] ...........................................................R-37 Leo Duct Engineers & Consultants ltd. v 1. Canara Bank, 2.Standard Chatered Bank Company Appeal (AT) (Insv) No. 100 of 2017 ...........................R-71 Lokhandwala Kataria Construction Private Ltd v Nisus Finance and Investment managers LLP .......................................................................... R-27, R-28 Macquarie Bank Limited v Shilpi Cable Technologies Ltd. ............................ R-15, R-17

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Madhur Engineers Pvt Ltd. & Anr v Facor Steels Ltd. Company Appeal (AT) (Insv) No. 136 of 2017 .................................................................... R-69 MCL Global Steel Pvt ltd. v M/s Essar Projects India Ltd. & Anr. Company Appeal (AT) (Insv) No. 26 of 2017 ...................................................... R-44 Meyer Apparel Ltd & Anr vs M/s Surbhi Body Products Pvt Ltd. Company Appeal (AT) (Insv) No. 33 of 2017 ...................................................... R-47 Meyer Apparel Ltd & Anr v M/s Godolo & Godolo Exports Pvt Ltd. Company Appeal (AT) (Insv) No. 34 of 2017...................................................... R-47 Mindtree Exports Private Limited v M/s Ashmita Multitrade Private Limited & Anr Company Appeal (AT) (Insv) No. 98 of 2017 ............................. R-68 Mintri Tea Company Limited., Bhaveh Mintri, Purnima Mintri, Shiwaani Mintri. v Punjab National Bank. Company Appeal (AT) (Insv) No. 237 of 2017.......................................................................................... R-64 Mobilox Innovations Private Limited v Kirusa Software Private Limited ................................................................................................................. R-24 Mona Pharmachem v Uttara Foods & Feed Private Limited ..................................... R-14 Mother Pride Dairy India Pvt. Ltd v Portrait Advertising & Marketing Pvt. Ltd. ................................................................................................................ R-28 Neelkanth Township and Construction Private Limited v Urban Infrastructure Trustees Limited .................................................................. R-34, R-36 Nikhil Mehta & Sons v AMR Infrastructure Ltd. Company Appeal (AT) (Insv) No. 07 of 2017................................................................................... R-59 P.K Ores Pvt Limited v Tractors India Private Limited. Company Appeal (AT) (Insv) No. 56 of 2017 ...................................................................... R-74 Palogix Infrastructure Private Limited v ICICI Bank Limited Company Appeal (AT) (Insv) No. 30 of 2017 ...................................................... R-57 Parag Gupta & Associates v B.K. Educational Services Pvt. Ltd. ................... R-36, R-37 PEC Ltd. v Sree Ramakrishna Alloys Ltd. Company Appeal (AT) (Insv) No. 225 of 2017.......................................................................................... R-50 PEC Ltd. v M/s Sree Gangadhar Steels Ltd Company Appeal (AT) (Insv) No. 236 of 2017.......................................................................................... R-50 PEC Ltd. v M/s Sree Gangadhar Steels Ltd. Company Appeal (AT) (Insv) No. 121 of 2017.......................................................................................... R-52 PEC Ltd. v M/s Sree Ramakrishna Alloys Ltd. Company Appeal (AT) (Insv) No. 120 of 2017.......................................................................................... R-52 Philips India Ltd v Goodwill Hospital & Research Centre Ltd. Company Appeal (AT) (Insv) No. 14 of 2017 ...................................................... R-47 Philips India Ltd v Karina Healthcare Pvt. Ltd. Company Appeal (AT) (Insv) No. 15 of 2017 ........................................................................................... R-47 Poorani Nagarajan (Shareholder in M/s Infinitas Energy Solutions Pvt. Ltd. v Indian Bank & Ors. Company Appeal (AT) (Insv) No. 318 of 2017 .................................................................................................................. R-56

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R.G Shaw & Sons Private Limited & Anr v M/s Naviplast Traders Private Limited & Ors. Company Appeal (AT) (Insv) No. 63 of 2017 ..................................................................................................................R-56 Rajendra Kapoor v Anil Kumar (Interim Reslution Professional & Ors.) Company Appeal (AT) (Insv) No. 198 of 2017 ...........................................R-73 Rubina Chadha & Anr. v AMR Infrastructure Ltd and Sajive Kanwar v AMR Infrastructure Ltd. Company Appeal (AT) (Insv) No. 8 of 2017 & Company Appeal (AT) (Insv) No. 12 of 2017 .........................................R-42 S3 Electrical & Electronics Private Ltd v Brian Lau Company Appeal (AT) (Insv) No. 186 of 2017 .................................................................................R-49 Sandeep Reddy & Anr v Jaycon Infrastructure Ltd. Company Appeal (AT) (Insv) No. 228 of 2017 .................................................................................R-79 Satish Mittal v Ozone Builders & Developers Pvt. Ltd. Company Appeal (AT) (Insv) No. 75 of 2017 ......................................................................R-80 Schweitzer Systemtek India Pvt. Ltd v Phoenix ARC Pvt. Ltd. & Ors. Company Appeal (AT) (Insv) No. 129 of 2017 ....................................................R-70 Seema Gupta v Supreme Infrastructure India Ltd. & Ors. Company Appeal (AT) (Insv) No. 53 of 2017 ......................................................................R-79 Senthil Kumar Karmegam v 1. Dolphin Offshore Enterprises (Mauritius) Pvt. Ltd, 2. Unison Engineering & Construction Ovt. Ltd. Company Appeal (AT) (Insv) No. 154 of 2017 ............................................R-74 Sh Sumeet Ahuja v Union Bank of India & Anr. Company Appeal (AT) (Insv) No. 128 of 2017 .................................................................................R-69 Shilpi Cable Technologies Ltd. v Macquarie Bank Limited ......................................R-16 Shri D.R. Balakrishna Raja v Indian Bank M/s B.K.R. Hotels & Resorts Pvt Ltd. Company Appeal (AT) (Insv) No. 123 of 2017 .........................R-59 Smart Timing Steel Ltd. Creditor v National Steel and Agro Industries Ltd. Company Appeal (AT) (Insv) No. 28 of 2017 ..............................................R-75 Sree Metalliks Ltd v M/s Srei Equipments Finance Ltd. Company Appeal (AT) (Insv) No. 3 of 2017 ........................................................................R-41 Starlog Enterprises Limited v ICICI Bank Ltd. Company Appeal (AT) (Insv) No. 5 of 2017 ..............................................................................................R-65 State Bank of India v S. Muthuraju & Ors. Company Appeal (AT) (Insv) No. 105 of 2017 ..........................................................................................R-40 Steamline Industries Ltd. v Tecpro Systems Ltd. & Anr. Company Appeal (AT) (Insv) No. 229 of 2017 ....................................................................R-51 Steel Konnect (India) Pvt. Ltd. v Hero Fincorp Ltd. Company Appeal (AT) (Insv) No. 51 of 2017 ...................................................................................R-66 Surendra Trading Company. v M/s. J.K Jute Mills Company Limited and Others. ............................................................................................................R-20 T. Vinayak Ravi Reddy v Canara Bank & Anr. Company Appeal (AT) (Insv) No. 110 of 2017 ..........................................................................................R-41

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T.R Jawahar & Anr v Edelweiss Asset & Anr. Company Appeal (AT) (Insv) No. 274 of 2017.......................................................................................... R-59 Teknow Consultants & Engineers Pvt Ltd. v M/s Bharat Heavy Electricals Limited Company Appeal (AT) (Insv) No. 224 of 2017 .......... R-38, R-39 Transparent Technologies Pvt Ltd. v Multi Trade. Company Appeal (AT) (Insv) No. 207 of 2017................................................................................. R-43 Unigreen Global Private Limited v 1. Punjab National Bank, 2.Corporation Bank., 3. Vijaya Bank, 4.Oriental Bank of Commerce, Company Appeal (AT) (Insv) No. 81 of 2017 .................................. R-72 Unimark Remedies Ltd v Ashok Alco Chem Ltd. Company Appeal (AT) (Insv) No. 45 of 2017................................................................................... R-43 Urban Infrastructure Trustee Limited v Neelkanth Township & Construction Pvt Ltd. .................................................................................. R-31, R-32 Uttam Galva Steels Limited v DF Deutsche Forfait AG & Anr. Company Appeal (AT) (Insv) No. 39 of 2017...................................................... R-76 Uttara Foods And Feeds Private Limited v Mona Pharmachem ................................ R-15 West Bengal Essential Commodities Supply Corporation Ltd. v Bank of Maharashtra Company Appeal (AT) (Insv) No. 90 of 2017............................. R-75

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Table of cases 63 Moons Technologies Limited v Union of India & ors (NCLAT order dated 9/3/2017-Company Appeal (AT)-3/2017) ........................................23.10 Achenbach Buschhutten GmbH & Co. v Arcotech Ltd. Company Appeal (AT) (Insv) No. 97 of 2017 ......................................................................R-75 Additional Registrar of Companies v Perfect Benefit Fund Ltd. [(1999) 97 Comp. Case 731 (Madras)] ..................................................................9.25 Adelaide Electric Co. v Prudential Assurance 1934 A.C. 122 ......................................6.9 Adi Pherozshah Gandhi v. H.M. Seervai, Advocate General of Maharashtra, Bombay [MANU/SC/0044/1970, AIR1971SC385, (1970)2SCC484, [1971]1SCR863 .........................................................................21.8 Agarwal Coal Corporation Private Limited v Impex Ferro Tech Limited ........................................................................................................ R-13, R-14 Ajit Singh v. Union of India(Civil Writ 710-D of 1966) ...........................................13.73 Akshay Motilal Vani & anr. v Registrar of Companies & anr. ...................................5.19 Alabama New Orleans, Texas & Pacific Junction Railway In re (1981) 1 Ch 213 at 238, 239 (CA). ..................................................................................13.25 Alchemist Asset Reconstruction Company Limited v M/s. Hotel Goudavan Pvt. Ltd. and Ors. .................................................................................R-27 Ali Jawab Ameerhasan Rizvi v. Indo French Biotech Enterprise Ltd. [(2000) 25 SCL 272 (Bombay)] .............................................................................9.25 Allied Media Network Pvt. Ltd. v M/s Sunraa Media Ltd. Company Appeal (AT) (Insolvency) No. 226 of 2017 ................................................. R-42, 3.14 Alpha & Omega Diagnostics (India) Ltd. v Asset Reconstruction Company of India Ltd. & Ors. Company Appeal (AT) (Insv) No. 116 of 2017 ...........................................................................................................R-71 Amchem Prods., Inc. v Windsor, 521 U.S. 591, 617 (1997) .......................................15.4 Amit Upadhyay v Union of India & anr. .....................................................................5.19 Ammonia Supplies Corpn. (P) Ltd. v Modern Plastic Containers (P) Ltd. MANU/SC/0585/1998 : 1998 (7) SCC 105....................................................7.20 Amrit Lal Seth v Seth Hotels Private Limited (2009) 148 Com Cases 651. ......................................................................................................................14.30 Anil Mahindroo & Anr v Earth Iconioc Infrastructure (P) Limited.

Company Appeal (AT) (Insv) No. 74 of 2017 ......................................................R-48 Anil.R.Chhabria v Finolex Industries Ltd [2009]99 Comp Cas 168(CLB) ...............................................................................................................7.25 Ankit Suresh Wadhawa v Union of India & anr. .........................................................5.19

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Annapurna Infrastructure Pvt. Ltd. and Anr. v M/s. SORIL Infra Resources Ltd. Company Appeal (AT) (Insv) No. 32 of 2017 ............................. R-77 Ansal Properties and Infrastructure Ltd., [CLB- DEL: CP 25/9/2014] ....................... 9.24 Ardor Global Pvt. Ltd v Nirma Industries Pvt Ltd. Company Appeal (AT) (Insv) No. 137 of 2017................................................................................. R-69 ARG Auto Components (P.) Ltd. v Atlas Pet Plas Industries Ltd. MANU/CL/0001/2015 : [2015]126CLA12(CLB) : [2015]130SCL77(CLB) ......................................................................................... 7.22 Arunachalam Muthu v. Nafan BV [MANU/MH/1954/2012 : 2013 (2) ALLMR 127 : 2013 (7) Bom CR 407 : [2013] 115 CLA 252 (Bom) : [2013] 179 CompCas 249 (Bom) : [2013] 119 SCL 434 (Bom)], .................................................................................................................. 21.6 Asian Natural Resources (India) Ltd v IDBI Bank Limited and Bhatia Global Trading Ltd. v IDBI Bank Ltd. Company Appeal (AT) (Insv) No. 60 of 2017 & Company Appeal (AT) (Insv) No. 62 of 2017 ...................................................................................................................... R-51 B.K. Educational Services Pvt. Ltd. v Parag Gupta & Associates ............................. R-37 Bachan Singh v Dhian Das, AIR 1974 SC 708 ......................................................... 21.25 Bagree Cereals (P.) Ltd. and Ors. v Hanuman Prasad Bagri and Ors. [MANU/WB/0256/2000 : [2001]105CompCas465(Cal) : (2001)2CompLJ397(Cal) : 105CWN729] ........................................................... 14.20 Bajaj Auto Limited v N.K.Firodia [1971] 41 Comp Cas 1(SC) .................................. 7.23 Bajaj Auto Ltd. v N.K. Firodia MANU/SC/0036/1970 : 1970 (2) SCC 550, 557 ................................................................................................................. 7.20 Bajaj Auto Ltd. v Western Maharashtra Development Corporation Ltd MANU/MH/0820/2015 : 2015(4)ARBLR470(Bom) : 2015(4)Bom CR499 ......................................................................................................................... 7.30 Bangalore Turf Club Ltd. v. Union of India [MANU/KA/3515/2014 : 2015 (2) AKR 82 : (2015) 277 CTR (Kar) 221 : ILR 2015 KARNATAKA 1825 : [2015] 228 TAXMAN 234 (Kar)] .................................. 21.27 Bank of New York Mellon London Branch v Zenith Infotech Limited [CIVIL APPEAL NO.3055 OF 2017(Arising out of S.L.P.(C) No.1587 of 2015)] ................................................................................................. 3.24 Bank of New York Mellon London Branch v Zenith Infotech Limited. .................... R-21 Basawaraj & Anor v. Spl. Land Acquisition officer AIR 2014 SC 746 : (2013) 14 SCC 81, Civil Appeal No.6974 of 2013............................................ 21.18 Bede Steamship Company Limited [1970] 1 Ch 123 (CA) ......................................... 7.24 Bennet Coleman & Co. v Union of India 1997 (MANU/MH/0054/1977 : 47 Comp.Cases 92 Paras 116 onwards) ..................... 14.34 Bharamgouda Adgouda Patil and Ors. v Sanjay Founders Pvt. Ltd. and Ors. MANU/MH/1866/2015, CP 17 of 2007 .................................................. 7.21

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Bharat's; Dinesh Vrajlal Lakhani v Parke Davis (India) Ltd. (2003) 47 SCL 80 (Bom): (2005) 124 Comp Cas 728 (Bom) ..............................................13.25 Bharti Defence and Infrastructure Limited v Edelweiss Asset Reconstruction Company Limited. Company Appeal (AT) (Insv) No.71 of 2017 .......................................................................................................R-55 Bhash Software Labs Pvt. Ltd v M/s Mobme Wireless Solutions Ltd. Company Appeal (AT) (Insv) No. 79 of 2017 ......................................................R-80 Billcare Ltd [CLB-Delhi: CP NO. 76 (MB) 2015] ......................................................9.22 Bina Engineer v Union of India & anr. ........................................................................5.18 Birla Cotsyn India Ltd., [CLB-Mum: CA 5 of 2015] ..................................................9.24 Black Pear Hotels Pvt. Ltd v Planet M Retail Ltd. .....................................................R-81 Brijesh Kumar v State of Haryana & Ors., MANU/SC/0217/2014 : AIR 2014 SC 1612 ...............................................................................................21.18 British and American Trustee and Financial Corporation Limited v Couper [(1894) A.C. 399 (HL)] .............................................................................8.11 Budhia Swain v Gopinath Deb - (1999) 4 Supreme Court Cases 396 ...........................4.8 Bushell v Faith [1970] AC 1099 ....................................................................................6.7 Byram Pestonji Gariwala v. UBOI .............................................................................R-18 Canara Bank v Deccan Chronicle Holidays Limited Company Appeal (AT) (Insv) No. 147 of 2017 .................................................................................R-53 Cannanore Whole Body C.T. Scan and Research Centre Pvt.Ltd. and Ors. v Mrs. Saibunnisa S.V. [C.A. No. 129/167/SRB of 1997; MANU/CL/0024/1998]..........................................................................................10.6 Chand Mall Pincha v. Hathi Mall Pincha (1999) 35 Com Cases 368 ........................21.24 Chander Krishan Gupta v Pannalal Girdhari lal (P.) ltd.

MANU/DE/0242/1981 : 1984 55 CompCas 702 Delhi : 1982 (3) DRJ 295 .................................................................................................... 14.21, 14.40 Cine & Supply Corpn. (P.) Ltd., In re [2002] 35 SCL 683 ........................................14.41 CIT v. Scindia Steam Navigation Co. Ltd. AIR 1961 SC 1633 : MANU/SC/0194/1961 : [1961]42 ITR 589 (SC).................................................21.25 Commissioner of Income Tax-8 v Registrar of Companies and Ors (Company Petition 643 of 2014) ............................................................................3.16 Cumbrian Newspapers Group Ltd v Cumberland & Westmorland Herald Newspaper & Printing Co Ltd [1986] BCLC 286 ........................................6.6 Dadu Dayal Mahasabha v Sukhdev Arya - (1990) 1 Supreme Court Cases 189 .................................................................................................................4.8 Deccan Cements Ltd v Geekay Exim (India) Ltd. [2002]112 Comp cas 616(CLB) .........................................................................................................7.25 Della Constructions Pvt Ltd. v MIs Rei Agro Ltd & Anr Company Appeal (AT) (Insv) No. 35 of 2017 ......................................................................R-51 Dinesh Gandhi v Bayer Diagnostics India Limited [2002] 111 Comp Cas 547 (CLB) .......................................................................................................7.23 lxii

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Dinesh Vrajlal Lakhani V. Parke Davis (India) Ltd. (2003) 47 SCL 80 (Bom): (2005) 124 Comp Cas 728 (Bom) ........................................................... 13.25 EITA India Ltd. AIR 1997 Cal 208 ........................................................................... 13.77 Elder Pharmaceutical Limited [CLB- MUM :CA – 50/2014] ..................................... 9.22 Elder's Case, AIR 1952 SC 49................................................................................... 14.18 Eley v Positive Government Security Life Assurance Co Ltd, 1 Ex D 88 ............................................................................................................................. 6.7 Ellora Paper Mills Limited & Anr v Ajithnath Steels Pvt. Ltd. Company Appeal (AT) (Insv) No 122 of 2017 ..................................................... R-54 Engenious Engineering Pvt. Ltd. v Onaex Natura Pvt Ltd. Company Appeal (AT) (Insv) No. 249 of 2017 .................................................................... R-47 Era Infra Engineering Ltd. v Prideco Commercial Projects Pvt. Ltd. Company Appeal (AT) (Insv) No. 31 of 2017 ...................................................... R-50 Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy & Ors., [MANU/SC/0932/2013, 2013 AIR SCW 6158] ..................... 21.14 Essar Steel Ltd. v Unknown [2006]130CompCas123(Guj) : (2006)5CompLJ83(Guj) : [2005]59SCL457(Guj) : MANU/GJ/0085/2005) ............................................................................................ 6.9 Exports Pvt. Ltd. v T.V. Chandran [MANU/KE/0078/1993].................................... 14.18 Eye Foundation Ltd. v Lasik Centre (India) P. Ltd.[MANU/TN/2220/2012 : (2013) 176 Com. Cases 345 (Mad))]...................... 13.8 Forech India Pvt. Ltd. v Edelweiss Assets Reconstruction Company Ltd. & Anr. Company Appeal (AT) (Insv) No. 202 of 2017 ................................ R-64 Foss v Harbottle (1843) 67 ER 189 : (1843) 2 Hare 461............................................. 14.3 Futura Polyesters Ltd. [CLB-MUM: CP – 53/2014] ................................................... 9.22 Ganga Bai v Vijay Kumar and Ors. [MANU/SC/0020/1974: (1974) 2 SCC 393] ............................................................................................................... 23.9 Gaurishankar Neeklanth Kalyani and Ors. v Sulochana Neeklanth Kalyani and Ors. MANU/CL/0020/2015, CLB-Mum ........................................... 7.19 Girdharlal Nathubhai Dalal v K.C. Agro Pvt. Ltd. and Ors. [MANU/CL/0038/2015 ....................................................................................... 14.34 Girish Kumar Kharia v Industrial Forge and Engineering Co. Ltd. and Ors. (1999(3)BLJR1755 : [2001]103CompCas150(Patna) : MANU/BH/0057/1999) ......................................................................................... 6.10 Greenhalgh v Arderne Cinemas [1946] 1 All. E.R 512 CA .......................................... 6.9 Gulabrai Kalidas Naik And Ors. v Laxmidas Lailubhai Patel MANU/GJ/0001/1978 : 1978 48 Comp Cas 438 Guj .......................................... 14.30 Gurdeep Singh Sahani v Berger Paints India Ltd & Ors. Company Appeal (AT) (Insv) No. 294 of 2017 .................................................................... R-40 Hansberry v Lee, 311 U.S. 32, 41, 61 S.Ct. 115, 118 (1940) ...................................... 15.3 Hind Motors India Ltd. v Adjudicating Authority NCLT, Chandigarh.

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Hindustan Lever Employees Union v Hindustan Lever Ltd., and Miheer H. Mafatlal Industries Ltd. ......................................................................13.27 Hindustan Lever Employees’ Union v Hindustan Lever Ltd. (1994) 14 CLA 397 (Bom) ...................................................................................................13.25 Hindusthan Commercial Bank Ltd. v Hindusthan General Electrical Corporation Ltd (AIR1960Cal637: 64CWN458 : 64CWN458 : MANU/WB/0172/1960) ........................................................................................6.15 Hriday Nath Roy v Ram Chandra, (A.I.R. 1921 Cal. 34) ............................................23.2 Hungerford Divestment Trust Ltd., Re v Turner Morrison & Co. Ltd. [1972 (I) Cal, 286] .................................................................................................23.5 ICICI Bank Ltd. v Innoventive Industries Ltd. ...........................................................R-28 Idea India ka Innovations Private Limited v Registrar of Companies Mumbai ..................................................................................................................5.38 Impex Ferro Tech Limited v Agarwal Coal Corporation Private Limited ..................................................................................................................R-14 In Re : – Brown Ex. p. Debtor v. Official Receiver [1943] Ch. D. D. 177 ......................21.9 – Hoare and Co. Ltd. and Reduced ((1910) W. N. 87, Nevile J.,) .......................6.16 – Kitson, Ex. p. Sugden (Thomas) and Sons Ltd. [1911] 2 K. B. 109 ....................................................................................................................21.9 – Lamb Ex., p. Board of Traded [1894] 2 Q. B. D. 805 per Lord Esher .................................................................................................................21.9 – Mangalore Chemicals and Fertilizers Ltd. [MANU/CL/0005/1994 : [1994] 79 CompCas 551 (CLB)] [ CLB(SRB) Company Petition No. 60/80A/SRB/93 dated 08.12.1993] .....................................................................................................19.15 – PMP Auto Industries Limited MANU/MH/0112/1991 : [1994] 80 Comp. Cases 289 .........................................................................................13.8 – Rallis India Limited [IV (2005) BC 187 : 2005 (3) BomCR 618 : 2005 125 CompCas 268 Bom : (2005) 5 CompLJ 234 Bom : 2005 59 SCL 219 Bom] ......................................................................................8.9 – Rampuria Cotton Mills Ltd. AIR1959Cal253 : 63CWN11 : 63CWN11 : MANU/WB/0063/1959 ................................................................6.19 – Side-botham Ex. J. Sidebotham (1880) 14 Ch. D. 458 C.A. .............................21.9 – Sindhri Iron Foundry (P) Ltd., [l964 (34) C.C.510]..........................................23.5 – Woods Ex. P. Ditton [1879] 40 L. T. 297 C.A. 79 ...........................................21.9 Indian Bank v Satyam Fibres (India) Pvt. Ltd. - (1996) 5 Supreme Court Cases 550 .......................................................................................................4.7 Indian Overseas Bank vs Mr. Dinkar T. Venkatsubramaniam Resolution Professional for Amtek Auto Ltd. Company Appeal (AT) (Insv) No. 267 of 2017 .................................................................................R-55 Innoventive Industries Ltd. v ICICI Bank & Anr. ......................................................R-30 lxiv

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Innoventive Industries Ltd. v ICICI Bank & Anr. ...................................................... R-31 Jai Mahal Hotels Pvt. Ltd. v Rajkumar Devraj and Ors. 2015(10)SCALE14 : MANU/SC/1059/2015 ......................................................... 7.20 Jai Prakash Association Ltd. [CLB – DEL: CA 25/10/2015] ...................................... 9.24 Jay Vidhyachandra Shah & anr. v Union of India & anr............................................. 5.19 Jayant Dwivedy & anr.v Union of India & anr. ...Respondents .................................. 5.18 JEKPL Private Limited v Export Import Bank of India Company Appeal (AT) (Insv) No. 188 of 2017 .................................................................... R-40 JK Jute Mill Mazdoor Morcha v Juggilal Kamlapat Jute Mills Co. Ltd. Company Appeal (AT) (Insv) No. 82 of 2017...................................................... R-78 JK Jute Mills Company Limited v M/s Surendra Trading Company. ........................ R-18 Jord Engineers India Ltd. v Valia & Company. Company Appeal (AT) (Insv) No. 158 of 2017.......................................................................................... R-80 Jorhat Tea and Industries (P) Ltd v. State of Meghalaya [(2006) 72 SCL 310 (Gauhati)] ............................................................................................... 9.24 JVA Trading Pvt. Limited and C&S Electric Ltd Company Application No.A.l/PB/2017order dated 13th January 2017 by Principle Bench of NCLT .................................................................................... 13.20 K. Kishan v Vijay Nirman Company Private Limited. [Civil Appeal No. 21824/2017) ................................................................................................... R-38 K. Radhakrishnan v Thirumani Asphalts and Felts (P) Ltd., [MANU/TN/0129/1998, 1998(1) CTC 682].......................................................... 23.8 Kailash Singh v. State of U.P. and Ors. [MANU/UP/1196/2015]............................. 21.11 Kaliber Associates Pvt. Ltd. v Tripat Kaur Company Appeal (AT) (Insv) No. 52 of 2017 ........................................................................................... R-66 Kee Projects Limited v Sharda Rawat Company Appeal (AT) (Insv) No. 139 of 2017 .................................................................................................... R-41 Kerala High Court in R. Prakasam v Sree Narayana Dharma Paripalana Yogam [[1980] 50 Comp Cas 611] ...................................................... 10.6 Killick Nixon Limited v Dhanraj Mills Pvt. Ltd. [1983] 54 Comp Cas 432 (Bom) .............................................................................................................. 7.24 Kirusa Software Private Limited v Mobilox Innovations Private Limited ............................................................................................. R-22, R-23, R-76 KKV Naga Prasad v Lanco Infratech Ltd. Company Appeal (AT) (Insv) No. 10 of 2017 ........................................................................................... R-80 Konathala Sriramulu v Board of Revenue (C.T.) - AIR 1965 Andhra Pradesh 395 ............................................................................................................. 4.8 Ksheeraabad Constructions PVT Ltd v M/s Vijay Nirman Company Pvt Ltd [Civil Appeal No. 21825 of 2017] ........................................................... R-37 Kumar Exporters P. Ltd. v Naini Oxygen and Acetylene Gas Ltd. [1986] 60 Comp Cas 984 (All) .............................................................................. 7.25 Kunal Mahendra Bhakta v Union of India & anr. ....................................................... 5.18 lxv

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Lakshmidhar Misra v. Rangalal MANU/PR/0121/1934............................................21.24 Landeros v Flood, 17 Cal. 3d 399, 551 P.2d 389 97 ALR 3d 324 ...............................15.4 Leo Duct Engineers & Consultants ltd. v 1. Canara Bank, 2.Standard Chatered Bank Company Appeal (AT) (Insv) No. 100 of 2017 ...........................R-71 Lokhandwala Kataria Construction Private Ltd v Nisus Finance And Investment managers LLP .......................................................................... R-27, R-28 Luxmi Tea Co. Limited v Pradip Kumar Sarkar MANU/SC/0290/1989 : 1989 Supp. (2) SCC 656 ................................................7.20 M. Sampath v AKMN Cylinders Pvt. Ltd. [(1998) 29 CLA 455 (CLBSB)] ........................................................................................................................10.6 M.G. Amirthalingam v Gudiyatham Textiles Private Ltd. [1972] 42 Comp Cas 350 (Mad) .............................................................................................7.25 M.S.D.C. Radharamanan v M.S.D. Chandrashekhar MANU/SC/1342/2008 : 2008 (143) Comp.Cases 97 (SC) : 2008 (1) UJ SC 0583 (paras 15 and 17) ........................................................................14.34 Mace v Van Ru Credit Corp., 109 F.3d 388, 344 (7th Cir. 1997) ...............................15.4 Macquarie Bank Limited v Shilpi Cable Technologies Ltd. ............................ R-15, R-17 Madhur Engineers Pvt Ltd. & Anr v Facor Steels Ltd. Company Appeal (AT) (Insv) No. 136 of 2017 ....................................................................R-69 Madras Bar Association v Union of India (UOI) and Ors. [2015VII AD (S.C.) 229 : [2015]126CLA111(SC) : (2015)3CompLJ1(SC) : (2015)4MLJ184(SC) : 2015(6)SCALE331 : [2015]131SCL26(SC) : MANU/SC/0610/2015 .................................................................................... 1.7, 1.9 Mahaamba Investment Limited v IDI Limited (2001) 105 CompCase 16 .........................................................................................................3.11 Maharani Lalita Rajya Lakshmi v Indian Motor Company (Hazaribagh) ltd. AIR 1962 Cal 127 : 1962 32 CompCas 207 Cal : 66 CWN 63 ..........................................................................................................14.40 Manibhai Hathibhai Patel v.

C.W.E. Arbuthnot [MANU/MH/0123/1946 : AIR 1947 Bom 413 : 1947(49) BOMLR 454] ......................................................................................................................21.26 Manohar Lal Chopra v Bahadur Rao Raja Seth Hiralal MANU/SC/0056/1961 : AIR 1962 SC 527 .............................................................4.8 Manoharan v. Sivarajan & Ors. [MANU/SC/1192/2013, (2014) 4 SCC 163]...........................................................................................................21.15 Maruti Udyog Ltd v Pentamedia Graphics Ltd [2002]111Comp Cas 56(CLB) .................................................................................................................7.25 Mathew Michael v TEKOY (India) Ltd. [1990] 69 Comp Cas 145 (Ker) .......................................................................................................................7.24 Mayyar Fabrics Ltd., [CLB-MUM-CA 10/2014] ........................................................9.22 MCL Global Steel Pvt ltd. v M/s Essar Projects India Ltd. & Anr. Company Appeal (AT) (Insv) No. 26 of 2017 ......................................................R-44

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Meenakshi Mills Co. Ltd. v. CIT, AIR 1957 SC 49 .................................................. 21.24 Mekaster Valves and Engineering Services Private Limited MANU/GJ/0354/2008 : [2009] Comp. Cases 593 ................................................. 13.8 Meyer Apparel Ltd & Anr vs M/s Surbhi Body Products Pvt Ltd. Company Appeal (AT) (Insv) No. 33 of 2017 ...................................................... R-47 Meyer Apparel Ltd & Anr v M/s Godolo & Godolo Exports Pvt Ltd. Company Appeal (AT) (Insv) No. 34 of 2017 ...................................................... R-47 Meyer's case, AIR 1965 SC 381 ................................................................................ 14.18 Miheer H. Mafatlal v Mafatlal Industries Ltd. (1996) 87 Com Cases 792(SC) ......................................................................................................... 6.8 Mindtree Exports Private Limited v M/s Ashmita Multitrade Private Limited & Anr Company Appeal (AT) (Insv) No. 98 of 2017 ............................. R-68 Mintri Tea Company Limited., Bhaveh Mintri, Purnima Mintri, Shiwaani Mintri. v Punjab National Bank. Company Appeal (AT) (Insv) No. 237 of 2017.......................................................................................... R-64 Mobilox Innovations Private Limited v Kirusa Software Private Limited ................................................................................................................. R-24 Mona Pharmachem v Uttara Foods & Feed Private Limited ..................................... R-14 Mothers Pride Dairy India Private Ltd v Portrait Advertising and Marketing Pvt Ltd ................................................................................................. R-28 Mr. Senthil Kumar Karmegam v 1. Dolphin Offshore Enterprises (Mauritius) Pvt. Ltd, 2. Unison Engineering & Construction Ovt. Ltd. Company Appeal (AT) (Insv) No. 154 of 2017 ............................................ R-74 Mr. T. Vinayak Ravi Reddy v Canara Bank & Anr. Company Appeal (AT) (Insv) No. 110 of 2017................................................................................. R-41 Mudhit Madanlal Gupta v Registrar of Companies & anr. ......................................... 5.19 Mysore Cements Limited MANU/KA/0013/2009 : [2009] 150 Comp.

Cases 623. .............................................................................................................. 13.8 N.R. Harikumar v WW Apparels (India) Private Limited and Ors. [MANU/TN/0894/2015 : 2015-2-LW987 : (2015)5MLJ422] ........................ 6.5, 7.18 Nafar Chandra Pal v Shukur (1918) 45 IA 183 at 187 .............................................. 21.25 National Insurance Co. Ltd. [MANU/SC/0314/1998 : [1998] 2 SCR 1199] .......................................................................................................... 23.9 National Textile Corporation (Uttar Pradesh) Ltd. v Swadeshi Polytex Ltd. and Ors. [Company Petition No. 9/167/97-CLB; MANU/CL/0018/1998] ......................................................................................... 10.4 Needle Industries (India) Ltd. v Needle Industries Newey (India) holdings Limited MANU/SC/0050/1981 : AIR 1981 SC 1298 (paras 171 and 172) ............................................................................................. 14.34 Neelkanth Township & Construction Pvt Ltd. v Urban Infrastructure Trustee Limited........................................................................................... R-34, R-36

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Neo Finance Pvt. Ltd. and Ors. v Rakesh Soni and Ors. MANU/CL/0040/2015, C.P. No. 15 of 2014(CLB-MUM) ...................................7.20 Net 4 India Ltd. [CLB-DEL: CP 10/1/2015] ...............................................................9.23 Nikhil Mehta & Sons v AMR Infrastructure Ltd. Company Appeal (AT) (Insv) No. 07 of 2017 ...................................................................................R-59 P.K Ores Pvt Limited v Tractors India Private Limited. Company Appeal (AT) (Insv) No. 56 of 2017 ......................................................................R-74 Pallavi Gems Pvt Ltd & Anr v Haresh N Mataliya & ors (NCLAT order dated 22/3/2017- Company Appeal (AT) No. 73/2017) .............................23.11 Palogix Infrastructure Private Limited v ICICI Bank Limited Company Appeal (AT) (Insv) No. 30 of 2017 ......................................................R-57 Parag Gupta & Associates v B.K. Educational Services Pvt. Ltd. ................... R-36, R-37 PEC Ltd. v M/s Sree Gangadhar Steels Ltd Company Appeal (AT) (Insv) No. 236 of 2017 ..........................................................................................R-50 PEC Ltd. v M/s Sree Gangadhar Steels Ltd. Company Appeal (AT) (Insv) No. 121 of 2017 ..........................................................................................R-52 PEC Ltd. v M/s Sree Ramakrishna Alloys Ltd. Company Appeal (AT) (Insv) No. 120 of 2017 ..........................................................................................R-52 PEC Ltd. v Sree Ramakrishna Alloys Ltd. Company Appeal (AT) (Insv) No. 225 of 2017 ..........................................................................................R-50 Philips India Ltd v Goodwill Hospital & Research Centre Ltd. Company Appeal (AT) (Insv) No. 14 of 2017 ......................................................R-47 Philips India Ltd v Karina Healthcare Pvt. Ltd. Company Appeal (AT) (Insv) No. 15 of 2017 ............................................................................................R-47 Poole and Ors v National Bank of China Limited [(1907) A.C. 229 (HL)].......................................................................................................8.11 Poorani Nagarajan (Shareholder in M/s Infinitas Energy Solutions Pvt. Ltd. v Indian Bank & Ors. Company Appeal (AT) (Insv) No. 318 of 2017 ..................................................................................................................R-56 PPI Enterprises Private Limited & Ors. v Registrar of Companies (2015 SCC OnLine Del 13748) .............................................................................5.14 Prag Bosini Synthetics Limited v. 3A Capital Limited (NCLAT order 11/7/2016) ..............................................................................................................3.21 Pratibha Industries Ltd., [CLB-Mum :CA - 21/2015] .................................................9.23 Purnima Manthena and Ors. v. Renuka Datla and Ors.[ MANU/SC/1121/2015] ..........................................................................................21.5 R. v London County Keepers of the Peace and Justices [1890] 20 Q. B. D. 357 ................................................................................................................21.9 R.G Shaw & Sons Private Limited & Anr v M/s Naviplast Traders Private Limited & Ors. Company Appeal (AT) (Insv) No. 63 of 2017 ..................................................................................................................R-56

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Rajendra Kapoor v Anil Kumar (Interim Reslution Professional & Ors.) Company Appeal (AT) (Insv) No. 198 of 2017 ........................................... R-73 Rajesh Patil v Moonshine Films Pvt. Ltd. (2008) 141 CompCas 482 CLB : (2006) 6 CompLJ 161 CLB ...................................................................... 14.30 Rajmundhry Electricty Corporation v Nageshwar Rao [AIR (1956) SC 213] ................................................................................................................ 14.29 Ram Chandra Singh v Savitri Devi - 2004-2-L. W. 70 ................................................. 4.7 Rangpur Tea Associations Limited v Makkanlal Samaddar [1973] 43 Comp Cas 58 (Cal) ................................................................................................ 7.23 Ravalgaon Sugar Farms Ltd., [CLB Mum:CA - 9/2015] ............................................ 9.23 Rishima SA Investments LLC v. Registrar of Companies, West Bengal & ors. (2017 SCC OnLine Cal 350) .......................................................... 5.15 Rubina Chadha & Anr. v AMR Infrastructure Ltd and Sajive Kanwar v AMR Infrastructure Ltd. Company Appeal (AT) (Insv) No. 8 of 2017 & Company Appeal (AT) (Insv) No. 12 of 2017 ......................................... R-42 S3 Electrical & Electronics Private Ltd v Brian Lau Company Appeal (AT) (Insv) No. 186 of 2017................................................................................. R-49 Sabari Inn Pvt. Ltd. v M/s. Rameesh Associates Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 117 of 2017........................................................... 3.14 Sandeep Reddy & Anr v Jaycon Infrastructure Ltd. Company Appeal (AT) (Insv) No. 228 of 2017................................................................................. R-79 Sandeep Singh and anr. v Registrar of Companies and ors. ........................................ 5.30 Sandvik Asia Limited v Bharat Kumar Padamsi and Ors. [2009] 92 SCL 272 ................................................................................................................. 8.11 Sangramsinh P. Gaekwad and Ors. v Shantadevi P. Gaekwad (Dead) thr. Lrs. and Ors. [MANU/SC/0052/2005 : AIR 2005 SC 809 : [2005] 123 CompCas 566 (SC) : (2005) 3 CompLJ 385 (SC) : JT 2005 (1) SC 581 : 2005 (2) SCALE 46 : (2005) 11 SCC 314 : [2005] 57 SCL 476 (SC) : [2005] 2 SCR 624 : 2005 (1) UJ 284] ......................... 14.8 Sanjay Mukim v United Spirit Limited and Ors. [MANU/CL/0046/2015, C.P. No. 7/2014-CB(Mad)] ............................................ 7.14 Sardar Sarovar Narmada Nigam Ltd. [CLB MUM: CA 7/2015] ................................ 9.23 Satish Mittal v Ozone Builders & Developers Pvt. Ltd. Company Appeal (AT) (Insv) No. 75 of 2017 ...................................................................... R-80 Satyanarayana Rathi v Annamalaiar Textiles Private Limited [1999] 95 Comp Cas 386 (CLB) ....................................................................................... 7.24 Schweitzer Systemtek India Pvt. Ltd v Phoenix ARC Pvt. Ltd. & Ors. Company Appeal (AT) (Insv) No. 129 of 2017 .................................................... R-70 Scottish Co-Operative Wholesale Society Limited v Meyer [1959] AC 324................................................................................................................... 14.6

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Secretary of State for India in Council v Rameswaram Devasthanam MANU/PR/0121/1934, (1934) 3 AWR 713, 38CWN533, (1934)ILR 57PR652, 1934-39-LW613, 61M.I.A.163 .........................................21.24 Seema Gupta v Supreme Infrastructure India Ltd. & Ors. Company Appeal (AT) (Insv) No. 53 of 2017 ......................................................................R-79 Serum Institute of India v Inderjit Properties Private Limited (2006) 129 CompCas 757 CLB : 2005 64 SCL 33 CLB : MANU/CL/0105/2004 .........................................................................................14.30 Sh Sumeet Ahuja v Union Bank of India & Anr. Company Appeal (AT) (Insv) No. 128 of 2017 .................................................................................R-69 Shailendrajit Charanjit Rai & anr. v The Registrar of Companies, Maharashtra, Mumbai & anr. .................................................................................5.18 Shailesh Prabhudas Mehta v Calico Dyeing and Printing Mills Limited [1994] 80 Comp Cas 64(SC) ....................................................................7.23 Shanti Kumar R. Chanji v Home Insurance Co. of New York, MANU/SC/0017/1974MANU/SC/0017/1974: AIR 1974 SC 1719 ....................21.12 Shanti Prasad Jain v Kalinga Tubes Ltd. [MANU/SC/0368/1965 : AIR1965SC1535 : [1965]35 CompCas351(SC) : (1965)1CompLJ193(SC) : [1965]2SCR720]: AIR 1965 SC 1535. 14.17, 14.18, 14.34 Shapoorji Pallonji Finance Limited v Mideast (India) Ltd. [2002] 110 Comp Cas 868 (CLB) ............................................................................................7.23 Shaw Wallace and Co. Ltd. v Union of India (UOI) [MANU/WB/0376/1998 : 2CWN11 : (1999)ILR 2Cal429] ................ 4.7, 7.12, 13.59 Sheikh Rahim Bux v. Sheikh Muhammad Jamshed Ali [MANU/WB/0382/1953, (1955) ILR 1Cal25].....................................................21.19 Shilpi Cable Technologies Ltd. v Macquarie Bank Limited ......................................R-16 Shobha Kirloskar & ors v M/s Ghatge Patil Industries Ltd, CP 106/2014 : CLB(MUM), order dated 25 November 2014 ...................................14.30 Shri D.R. Balakrishna Raja v Indian Bank M/s B.K.R. Hotels & Resorts Pvt Ltd. Company Appeal (AT) (Insv) No. 123 of 2017 .........................R-59 Shri V.S. Krishnan and Ors. v Westfort Hi-tech Hospital Ltd. and Ors. [MANU/SC/7193/2008 : 2 (2008) CLT 823 : [2008] 142 CompCas 235 (SC) : (2008) 2 Comp LJ1 (SC) : ILR 2008 (2) Kerala 253 : 2008-4-LW356 : (2008) 2 MLJ 1192 (SC) : 2008 (3) SCALE 184 : (2008) 3 SCC 363 : [2008] 83 SCL 44 (SC) : (2008)2MLJ1192(SC) : 2008(3)SCALE184 ............................................... 14.7, 14.18 Shyama Prasad Mudrarka v. Calcutta Stock Exchange Association Ltd. [2002] 108 Comp Cas 703 (CLB) ..................................................................7.26 Shyamsunder Nathmal Todi v Registrar of Companies & anr. ...................................5.18 Sivakumar Spinning Mills Pvt., Ltd. v. Shanmughavelayutham and Ors. [MANU/TN/3760/2009 : 2009 (6) CTC 847] ..............................................21.23 Smart Timing Steel Ltd. Creditor v National Steel and Agro Industries Ltd. Company Appeal (AT) (Insv) No. 28 of 2017 ..............................................R-75 lxx

Table of cases

Smt. Gangabai v Ratankumar - AIR 1983 Bombay 291 ............................................... 4.7 Smt. Pushpa Katoch v Manu Maharani Hotels Ltd. (2001) 34 SCL 298 .................................................................................................. 4.7 Sovereign Life Assurance Company v Dodd [(1892) 2 QB 573(CA)] ..................... 13.16 Spindel Fabrik Suessen v Suessen Textile Bearing Limited (1989) 2 CORPT. LA. 202 (BOMBAY), ............................................................................... 6.9 Sree Metalliks Ltd v M/s Srei Equipments Finance Ltd. Company Appeal (AT) (Insv) No. 3 of 2017 ........................................................................ R-41 Sri Ramdas Motor Transport Ltd. v Karedla Suryanarayana and others MANU/AP/0922/2001 : (2002) 110 Comp.Cases 193 (Paragraph 116 onwards) ....................................................................................................... 14.34 Standard Chartered Bank v Andhra Bank Financial Services Ltd. MANU/SC/2534/2006 : 2006 (6) SCC 94 ............................................................. 7.20 Starlog Enterprises Limited v ICICI Bank Ltd. Company Appeal (AT) (Insv) No. 5 of 2017 ............................................................................................. R-65 State Bank of India v S. Muthuraju & Ors. Company Appeal (AT) (Insv) No. 105 of 2017.......................................................................................... R-40 State of Karnataka v Mysore Coffee Curing Works Ltd. [19841 55 Comp Cas 70 ......................................................................................................... 6.17 State of Rajasthan & Ors. v Union of India & Ors., MANU/SC/0370/1977MANU/SC/0370/1977 : AIR 1977 SC 1361 ................... 21.12 Steamline Industries Ltd. v Tecpro Systems Ltd. & Anr. Company Appeal (AT) (Insv) No. 229 of 2017 .................................................................... R-51 Steel Konnect (India) Pvt. Ltd. v Hero Fincorp Ltd. Company Appeal (AT) (Insv) No. 51 of 2017................................................................................... R-66 Strdiewell Leathers (P) Ltd. v Bhankarpur Simbhaoli Beverages (P) Ltd. [1994 (79) C.C. 139] ...................................................................................... 23.7 Sulochana Amma v Narayanan Nair [MANU/SC/0047/1994 : 1994 ECR 195 (SC)]....................................................................................................... 23.9 Surendra Trading Company. v M/s. J.K Jute Mills Company Limited and Others. ............................................................................................................ R-20 Suresh Lokhomal Wadhawa v Union of India & anr. ................................................. 5.19 Suresh Sanwarmal Todi v Registrar of Companies & anr. .......................................... 5.18 T.R Jawahar & Anr v Edelweiss Asset & Anr. Company Appeal (AT) (Insv) No. 274 of 2017.......................................................................................... R-59 Tarlok Chand Khanna v Raj Kumar Kapoor [1983] 54 Comp Cas 12 (Delhi).................................................................................................................... 7.23 Teknow Consultants & Engineers Pvt Ltd. v M/s Bharat Heavy Electricals Limited ........................................................................................................

Thapar Agro Mills Ltd [(1998) 93 Comp. Case (CLB – NB)] .................................... 9.25

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The Madras High Court in Nungambakkam Dhanarakshaka Saswaiha Nidhi Limited v Registrar of Companies [[1972] 42 Comp Cas 632] .................................................................................................................10.6 The Securities & Exchange Board of India (SEBI) v Sterlite Industries (India) Ltd MANU/MH/0339/2002 : [2003]113CompCas273(Bom) : [2003]45SCL475(Bom)......................................13.9 The South India Insurance Co., Ltd. v Lakshmi - AIR 1967 MDS 464 ........................4.8 Thiruvalluvar Velanmai Kazhagam (P) Ltd. v M.K. Seethai Achi [1988 (64) C.C. 304] ..............................................................................................23.6 Transparent Technologies Pvt Ltd. v Multi Trade. Company Appeal (AT) (Insv) No. 207 of 2017 .................................................................................R-43 Ultrafilter (India) Pvt. Ltd. v Ultrafilter GmbH [2002] 38 SCL 573. ........................14.41 Unigreen Global Private Limited v 1. Punjab National Bank, 2.Corporation Bank., 3. Vijaya Bank, 4.Oriental Bank of Commerce, Company Appeal (AT) (Insv) No. 81 of 2017...................................R-72 Unimark Remedies Ltd v Ashok Alco Chem Ltd. Company Appeal (AT) (Insv) No. 45 of 2017 ...................................................................................R-43 Union of India (UOI) v Sterlite Industries (India) Ltd.................................................13.9 Union of India v Company Law Board, Mumbai Bench and Others [MANU/MH/2163/2013, 2014(7)BomCR630 : [2013]181CompCas290 (Bom), [2014]123SCL199 (Bom)] ...............................14.34 Union of India v R. Gandhi, President, Madras Bar Association [MANU/SC/0378/2010 : (2010)2CompLJ577(SC) : 2010(3)CTC517 : 2010(261)ELT3(S.C.) : JT2010(5)SC553(1) : (2010)4MLJ734(SC) : 2010(5)SCALE514 : (2010)11SCC1 : [2010]100SCL142(SC) : 2010(6)UJ2945] ........................................................ 1.6, 1.9 Unitech Ltd. [CLB- DEL:CP 10/18/2015] ..................................................................9.23 United Bank of India v United India Credit & Development Co. Ltd. 47 CC 689 ............................................................................................................13.77 United India Insurance Co. Ltd. v Rajendra Singh - AIR 2000 Supreme Court 1165 ................................................................................................4.8 Urban Infrastructure Trustee Limited v Neelkanth Township & Construction Pvt Ltd. .................................................................................. R-31, R-32 Uttam Galva Steels Limited v DF Deutsche Forfait AG & Anr. Company Appeal (AT) (Insv) No. 39 of 2017 ......................................................R-76 Uttara Foods And Feeds Private Limited v Mona Pharmachem ................................R-15 V. Balachandran v Union of India and another [1993 (76) C.C.67] ............................23.6 V.B. Rangaraj v V.B. Gopalakrishnan and Ors. MANU/SC/0076/1992, AIR1992 SC453 : [1992]73Comp Cas201(SC) : JT1991(4)SC430 : (1992)IIMLJ11(SC) : 1991(2)SCALE1135 : (1992)1SCC160 : [1991]Supp3SCR1 ................................7.27 Van Gemert v. Boeing Co., 259 F. Supp. 125 (S.D.N.Y. 1966) ..................................15.5

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Vankamamidi Venkata Subba Rao v Chatlapalli Seetharamaratna Ranganayakamma [MANU/SC/0800/1997: [1997]3SCR530] .............................. 23.7 Vardhman Publishers Limited v Mathrubhumi Printing and Publishing Company Limited [1991] 71 Comp Cas 1(Ker) .................................................... 7.22 Vasant Investment Corporation Limited v Official Liquidator, Colaba Land and Mill Co. Ltd. MANU/MH/0074/1979 : (1981) 51 Comp.

Case 20 .................................................................................................................. 13.8 Vikas Jalan v Hyderabad Industries Limited [1997] 88 Comp Cas 551 (CLB) ..................................................................................................................... 7.24 Vilasini Jayaprakash v. St. Mary’s Finance Ltd. [(2000) 99 Comp.

Case (Kerala)] ........................................................................................................ 9.25 Wali Mohammad v. Mohammad Baksh MANU/PR/0054/1949 : AIR 1950 PC 56 .......................................................................................................... 21.24 Wali Mohammad v. Mohammad Baksh MANU/PR/0230/1929 : 1930 (32) BOMLR 380 ................................................................................................ 21.24 West Bengal Essential Commodities Supply Corporation Ltd. v Bank of Maharashtra Company Appeal (AT) (Insv) No. 90 of 2017............................. R-75 World Wide Agencies Private Limited v Margarat T. Desor & ors [(1990) 1 SCC 536] ............................................................................................. 14.30 World Wide Agencies Pvt. Ltd. & Anr. v Mrs. Margarat T. Desor & Ors. MANU/SC/0137/1990 : 1990 1 SCC 536 .................................................... 14.30 Yogendra H. Desai v Spatial Holodynamics (India) (P.) Ltd [Company Application No. 1/167/CLB/WR/2002; MANU/CL/0059/2002........................................................................................... 10.5

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lxxiv

Key to reading this book Readers are requested to take a note of some of the important points before reading the book.

Overview of changes Many chapters begin with an overview of changes. This is an executive summary/snapshot of the changes brought in by Companies Act, 2013 and their impact which are discussed in detail thereafter. In winding up chapter, I have also introduced an overview of changes brought about by the Insolvency and Bankruptcy Code.

Decoding the Law “Decoding of Law” provides pertinent question inserted in the form of a box under various topics. They raise issues that are sought to be answered in subsequent paragraphs to better understand and interpret the new law in light of the changes introduced.

Applicability Under this section, the author has taken select case laws, analysed them and then tried to test their applicability/relevance to the new provisions in light of the changes introduced. It will help the readers to understand the applicability of old case laws to the new Act. Observation Interpretation of some provisions is tricky and therefore, such provisions have been analysed under “observations” where there is a possibility of multiple interpretations; or interpretation is leading to an absurdity; or constitutionality of a provision is questionable; or its applicability is unclear or the like.

Rules The NCLT and related rules published during 2016 and 2017 have been provided either as annexures to this book or in the form of a CD. Each set of Rules is given an abbreviation in the Act; for instance, rules under compromise and arrangement are referred to as M&A Rules. The abbreviations page provides full forms of these rules.

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Procedures ● The procedures discussed under each topic in the book are based on the current rules. Only in the winding up chapter are the procedures based on draft rules as these rules are yet to be notified. ● Chapter-22 on “General Practice and Procedure” provides for the general procedure which is a default procedure to be followed under NCLT; unless expressly specified otherwise under the NCLT Rules or other rules or unless it is necessarily implied. ● Only the procedures under the company law have been discussed in this book. Other related compliances under other laws/regulations like LODR are not provided.

Further Reading This book provides a perspective of how to read the new law and the changes therein. However, the subjects like oppression and mismanagement etc. are very vast and have thousands of relevant cases and material to refer. In such chapters, a list of relevant reference material under the heading “Further Reading” has been provided, so that when a professional reads this book on the new law, the reader would also get a perspective, as to what all other books/material can be referred to.

Reference of Companies Act 2013 Unless expressly or impliedly provided otherwise, all the sections pertain to Companies Act, 2013, with one exception, viz., the chapter on Insolvency and Bankruptcy Code.

Comparison charts In addition to the above, comparison charts under the new and old Act have been extensively used in the book to make the readers understand the relevance and applicability of various sections. Where ever possible, questions and answers have been discussed on crucial topics to analyse the new provisions.

FAQ Wherever possible, questions and answers have been discussed on crucial topics to analyse new provisions.

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Abbreviations 1956 Act 2010 NCLT Case 2013 Act 2015 NCLT case Apex Court Appellate Tribunal AAIFR AGM BIFR BoD Board/IBBI CA CCI CDR CEO CESTAT CFO CG CLB CPC CrPC CS DRT DRAT EOGM FEMA FY HC IAS IBC

Companies Act, 1956 Order passed on 11 May 2010 in Union of India v R Gandhi Companies Act, 2013 Madras Bar Association v Union of India (UOI) and Ors. Supreme Court NCLAT Appellate Authority for Industrial and Financial Reconstruction Annual General Meeting Board for Industrial and Financial Reconstruction Board of Directors Insolvency and Bankruptcy Board of India Chartered Accountant Competition Commission of India Corporate Debt Restructuring Chief executive officer Customs, Excise and Service Tax Appellate Tribunal Chief Financial Officer Central Government Company Law Board Civil Procedure Code Criminal Procedure Code Company Secretary Debts Recovery Tribunal Debts Recovery Appellate Tribunal Extra Ordinary General Meeting The Foreign Exchange Management Act, 1999 Financial Year High Court Indian Accounting Standards Insolvency and Bankruptcy Code, 2016 lxxvii

NCLT and NCLAT Law Practice and Procedure, 5e

ICAI ICSI IFRS INV Rules INC Rules IRP ITAT KMP Limitation Act LLP MCA MD MoA M&A Rules NACAS NBFC NCLAT NCLT NCLAT Rules NCLT Rules New Act NFRA O&M Old Act OL O&M Rules

OPC PAC lxxviii

Institute of Chartered Accountants of India Institute of Company Secretaries of India International Financial Reporting Standards Inspection, Inquiry and Investigation Draft Rules released in 2013 (No separate final rules notified – NCLT Rules apply which are discussed in relevant Chapter) Companies (Incorporation) Rules, 2014 Insolvency Resolution Process Income Tax Appellate Tribunal Key Managerial Personnel Limitation Act, 1963 (Act 36 of 1963) Limited Liability Partnership Ministry of Corporate Affairs Managing Director Memorandum of Association Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 released on 14th December 2016 and effective on 15th December 2016 National Advisory Council on Accounting Standards Non Banking Financial Companies National Company Law Appellate Tribunal National Company Law Tribunal National Company Law Appellate Tribunal Rules notified on 21st July 2016 National Company Law Tribunal Rules, 2015 notified on 21st July 2016 Companies Act, 2013 National Financial Reporting Authority Oppression and Mismanagement Companies Act, 1956 Official Liquidator Draft Companies (Prevention of Oppression and Mismanagement) Rules, 2016 issued in January 2016 (No separate final rules notified – NCLT Rules apply which are discussed in relevant Chapter) One Person Company Person Acting in Concert

Abbreviations

RBI ROC RD RSC Rules SC SEBI Section 8 companies SICA SFIO SRR Rules WOS WTD WUP Rules

Reserve of Bank of India Registrar of Companies Regional Director National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016 notified on 15th December 2016.

Supreme Court Securities and Exchange Board of India Charitable Companies registered under Section 8 of 2013 Act Sick Industrial Companies (Special Provisions) Act, 1985 Serious Fraud Investigation Office Draft Companies (Revival and Rehabilitation of Sick Companies) Rules, 2016 (Chapter XIX is omitted).

Wholly Owned Subsidiary Whole Time Director Draft Companies (Winding up) Rules released in 2013 (No rules notified as yet)

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lxxx

Chapter 1

Introduction Synopsis 1.1.

Introduction ................................................................................................ 1.1

1.2.

Meaning of NCLT and NCLAT ................................................................ 1.2

1.2.1.

New enforcement mechanism—place of tribunals ............................... 1.3

1.2.2.

Difference between NCLT and NCLAT ............................................... 1.3

1.2.3.

Court v Tribunal .................................................................................... 1.3

1.3.

Introduction of Concept of NCLT in India – Eradi Committee ................................................................................................... 1.4

1.4.

2002 Amendment Challenged ................................................................... 1.5

1.5.

JJ Irani Committee .................................................................................... 1.6

1.6.

Introduction of Tribunal in Companies Act, 2013 ................................. 1.6

1.6.1.

Nature of Challenge under 2013 Act..................................................... 1.7

1.6.2.

Reasons for establishing tribunals ......................................................... 1.8

1.7.

Further Reading ......................................................................................... 1.9

Annexure I—Constitution of NCLT and NCLAT ................................................ 1.10 Annexure II—Notification of sections of Companies Act, 2013 and notification of constitution of benches of NCLT ........................................... 1.11

1.1.

INTRODUCTION

NCLT & NCLAT were constituted on 1st June 2016. On the same day, CLB was dissolved and all the matter that were pending in CLB on that date were transferred to NCLT. In December 2016, the second tranche of provisions were notified. As a result, many of the matters pending in High Court were transferred to NCLT. The cases pending in BIFR stood abated. The notification constituting the Tribunals is annexed as Annexure I to this chapter. The provisions of Companies Act, 2013 that 1.1

NCLT and NCLAT Law Practice and Procedure, 5e

Chapter 1

were notified in May, June, Sep. and December 2016 are annexed as Annexure II at the end of this chapter.

This chapter provides a brief background on Tribunals. The Companies Act, 2013 has introduced two tribunals, one is the National Company Law Tribunal (hereinafter referred to as ‘Tribunal’ or ‘NCLT’) and the other one is National Company Law Appellate Tribunal (hereinafter referred to as ‘NCLAT’ or “Appellate Tribunal”). NCLAT is the forum for dealing with appeals arising out of the orders of NCLT. Together the two are referred to as “Tribunals”.

This chapter provides answers to the following questions that may arise in the minds of the readers as well:

Decoding the Law  What is NCLT/Tribunal?  What is NCLAT/Appellate Tribunal?  What is the difference between NCLT and NCLAT?  What is the difference between a tribunal and a court?  Who first brought forth the idea of these Tribunals?  When the Tribunals were first introduced?  Why didn’t the Tribunals get notified under the Companies Act, 1956?  Who challenged the constitutionality of the Tribunals?  What was the challenge all about?  Is the concept of Tribunals under the Companies Act, 1956 (1956 Act) and the Companies Act, 2013 (2013 Act) identical?  Why was the constitution of Tribunals challenged again under the Companies Act, 2013? What were the grounds for challenging it? What exactly had happened?

1.2.

MEANING OF NCLT AND NCLAT

The NCLT or “Tribunal” is a quasi-judicial authority created under the Companies Act, 2013 to handle corporate civil disputes arising under the Act. It is an entity that has powers and procedures like those vested in a court of law or judge. NCLT is obliged to objectively determine facts, decide cases in accordance with the principles of natural justice and draw conclusions from them in the form of orders.

Such orders can remedy a situation, correct a wrong or impose legal penalties/costs and may affect the legal rights, duties or privileges of the specific parties. The Tribunal is not bound by the strict judicial rules of evidence and procedure. It can decide cases by following the principles of natural justice.

NCLAT or “Appellate Tribunal” is an authority provided for dealing with appeals arising out of the decisions of the Tribunal. It is formed for correcting the errors made by the Tribunal. It is an intermediate appellate forum where the appeals lie after order of the Tribunal. The decisions 1.2

Chapter 1

Introduction

of Appellate Tribunal can further be challenged in the Supreme Court. Any party dissatisfied by any order of the Tribunal may bring an appeal to contest that decision. The Appellate Tribunal reviews the decisions of the Tribunal and has power to set aside, modify or confirm it.

1.2.1.

New enforcement mechanism—place of tribunals

The chart below provides a holistic view about the enforcement mechanism contemplated under the Companies Act, 2013 and the place of Tribunals in this machinery.

In the new framework that is created for enforcement of the Act, the authorities like Registrar of Companies (ROC) and Regional Directors (RD) are retained. The powers of Central Government are also revisited. The Companies Act, 2013 provides for specialised judicial mechanism consisting of NCLT & NCLAT to deal with civil matter and Special Courts to deal with corporate criminal cases. Serious Fraud Investigation Office is recognised under the Act to investigate into the cases of serious frauds. For listed companies, powers of Central Government and SEBI are sought to be clearly demarcated.

1.2.2.

Difference between NCLT and NCLAT

The NCLT has primary jurisdiction whereas NCLAT has appellate jurisdiction.

NCLAT is a higher forum than NCLT. Evidence and witnesses are generally presented before NCLT for taking the decisions and NCLAT generally reviews decisions of NCLT and checks it on a point of law or fact. Fact finding and evidence collection is primarily a task of Tribunal whereas the Appellate Tribunal decide cases based on already collected evidences and witnesses.

1.2.3.

Court v Tribunal

Civil Courts are judicial institutions that deal with any and every civil disputes that arise in India (provided the jurisdiction of civil courts in not barred). Tribunals are 1.3

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Chapter 1

specified quasi-judicial bodies for resolution disputes that arise under the Companies Act and other specified acts (RBI Act, LLP Act etc.).

Like Courts, Tribunals are also independent of the executive and the legislative bodies of governance. They are also open to public that can access them for redressal of their grievances under the Companies Act, 2013 (where the Tribunal is empowered to deal with cases).

Both Courts and Tribunals are transparent, as they need to give reasoned orders.

Orders of both the institutions are subject to appeal.

In Courts, the matters are strictly decided on the basis of rules of evidence and civil procedure code. In Tribunals, the decisions are taken in an informal manner. The strict rule of procedure and evidence do not apply to Tribunals.

Only lawyers can appear in the court whereas in Tribunal, the party can be represented by a wide variety of persons including different professionals.

Courts have the power to adjudicate in a variety of cases whereas Tribunals specialise in a particular area.

In terms of cost, courts are very expensive as compared to Tribunals that provide a cheaper and quicker forum for resolution of disputes.

Tribunal has lesser powers than a Court. For example, Courts are vested with wide powers under CPC whereas the Companies Act, 2013 confers only some of these powers on the Tribunal.

1.3.

INTRODUCTION OF CONCEPT OF NCLT IN INDIA – ERADI COMMITTEE

The concept of forming the Tribunal for dealing with various activities of companies was first introduced in the Companies Act, 1956 by the Company (Second Amendment) Act, 2002.

The Tribunal was proposed to be established partly as a result of the recommendations of Eradi Committee. In 2010, the Union of India constituted a High Level Committee on 'Law relating to Insolvency of Companies' under the Chairmanship of Justice V. Balakrishna Eradi, a retired Judge of the Hon’ble Supreme Court. The purpose of the committee was to examine the existing laws relating to winding-up proceedings of the company in order to remodel it in line with the latest developments and innovations in the corporate laws and governance and to suggest reforms to procedures to be followed at various stages during insolvency proceedings of the company to avoid unnecessary delay in tune with international practices in the field.

The said Committee identified the following areas which contributed to inordinate delay in finalisation of winding-up/dissolution of companies: (a) filing statement of affairs; (b) handing over of updated books of accounts; 1.4

Chapter 1

Introduction

(c) realization of debts; (d) taking over possession of the assets of the company and sale of assets; (e) non-availability of funds for the Official Liquidator to discharge his duties and functions (f) settlement of the list of creditors; (g) settlement of list of contributories and payment of calls; (h) finalisation of income-tax proceedings; (i) disposal of misfeasance proceedings.

The Committee found that multiplicity of court proceedings is the main reason for the abnormal delay in dissolution of companies. It also found that different agencies dealing with different areas relating to companies - Board for Industrial & Financial Reconstruction (BIFR) and Appellate Authority for Industrial & Financial Reconstruction (AAIFR) dealt with references relating to rehabilitation and revival of companies. High courts dealt with winding-up of companies and Company Law Board (CLB) dealt with matters relating to prevention of oppression and mismanagement etc. Considering the laws on corporate insolvency prevailing in industrially advanced countries, the Committee recommended various amendments to provisions of the Companies Act, 1956 for setting-up a National Company Law Tribunal which will combine the powers of the CLB under the Companies Act, 1956, BIFR and AAIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 and the jurisdiction and powers relating to winding-up presently vested with the High Courts.

1.4.

2002 AMENDMENT CHALLENGED

The Tribunals were never constituted under the Companies Act, 1956 as the constitutionality of the Companies (Second Amendment) Act, 2002 was challenged by the Madras Bar Association in 2003.

The Madras High Court by its order dated 30March 2004 held that creation of the NCLT and vesting the powers hitherto exercised by the High Courts and CLB in the Tribunal was unconstitutional. It referred to and listed the defects in several provisions (mainly sections 10FD(3)(f)(g)(h), 10FE, 10FF, 10FL(2), 10FR(3), 10FT) in Parts IB and IC of the Companies Act,1956. Therefore, it declared that until the provisions of Part IB and IC of the Act, introduced by the Amendment Act which were defective being in violation of the basic constitutional scheme (of separation of judicial power from the Executive and Legislative power and independence of judiciary enabling impartial exercise of judicial power) are duly amended by removing the defects that were pointed out, it will be unconstitutional to constitute a Tribunal and Appellate Tribunal to exercise the jurisdiction now exercised by the High Court or the Company Law Board.

The Union of India accepted certain defects pointed out by the High Court in Parts IB and IC of the Act and agreed to amend the relevant provisions to remove the defects.

1.5

NCLT and NCLAT Law Practice and Procedure, 5e

Chapter 1

However, it did not accept certain suggested changes and thus the matter went to the Apex Court. The Supreme Court in its order passed on 11 May 2010 in Union of India v R. Gandhi, President, Madras Bar Association [MANU/SC/0378/2010 : (2010)2CompLJ577(SC) : 2010(3)CTC517 : 2010(261)ELT3(S.C.) : JT2010(5)SC553(1) : (2010)4MLJ734(SC) : 2010(5)SCALE514 : (2010)11SCC1 : [2010]100SCL142(SC) : 2010(6)UJ2945] declared that certain provision of the said sections were unconstitutional and passed judgement. This decision was passed in 2010 by the Supreme Court and is hereinafter referred to as “2010 NCLT Case”.

1.5.

JJ IRANI COMMITTEE

JJ Irani Committee was formed for making suggestion for enactment of a new company law. In its report dated 31 May 2005, the Committee noted the importance of establishment of Tribunal and welcomed the move to establish specialised Tribunals under the new company law. It observed that: “Corporate issues will also require a quick resolution. The time taken in the existing framework needs to be reviewed. This is particularly so in the context of rehabilitation, liquidation and winding up. Mergers and amalgamations also need to be facilitated to take place through a speedier process. Through the Companies (Second Amendment) Act, 2002 the Government has envisaged setting up of the National Company Law Tribunal and the National Company Law Appellate Tribunal. We welcome this move. It is time the forum with specialization to deal with corporate issues, bringing together expertise from various disciplines, is established. We are informed that there are certain legal issues to be resolved before these institutions can be set up. We hope that this process is speedily concluded so that a single forum is available for an informed consideration of corporates issues.”

1.6.

INTRODUCTION OF TRIBUNAL IN COMPANIES ACT, 2013

In the Companies Act, 2013, the concept of Tribunals was introduced again. The nomenclature namely “NCLT” and “NCLAT” was retained. However, the powers and scope of the Tribunals were much wider under the new legislation (check table Power of NCLT: At a Glance).

The Companies Act, 2013 introduced the provisions for formation of NCLT and NCLAT. Many of the suggestions set out by the Supreme Court in the 2010 judgement were essentially complied with and the provisions pertaining to the Tribunal and Appellate Tribunal were suitably introduced in the revised format.

However, the Madras Bar Association (MBA) again filed a case challenging the said provision in the Supreme Court in 2013 and the matter was referred to a 5 judge bench of the Supreme Court.

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Chapter 1

1.6.1.

Introduction

Nature of Challenge under 2013 Act

In Madras Bar Association v Union of India (UOI) and Ors. [2015VII AD (S.C.) 229 : [2015]126CLA111(SC) : (2015)3CompLJ1(SC) : (2015)4MLJ184(SC) : 2015(6)SCALE331 : [2015]131SCL26(SC) : MANU/SC/0610/2015 (‘2015 NCLT Case’), Madras Bar Association raised a three-fold challenge which were decided as follows:

Issue No. 1 Challenge to the validity of the constitution of NCLT and NCLAT; Held Constitutional Issue No. 2 Challenge to the prescription of qualifications including term of office and salary allowances etc. of President and Members of the NCLT as well as Chairman and Members of the NCLAT; Held The Supreme Court held that “having regard to the aforesaid clear and categorical dicta in 2010 judgment, tinkering therewith would evidently have the potential of compromising with standards which 2010 judgment sought to achieve, nay, so zealously sought to secure. Thus, we hold that sec 409(3)(a) and (c) are invalid as these provisions suffer from same vice. Likewise, sec 411(3) as worded, providing for qualifications of technical Members, is also held to be invalid. For appointment of technical members to the NCLT, directions contained in sub-para (ii), (iii), (iv), (v) of para 120 of 2010 judgment will have to be scrupulously followed and these corrections are required to be made in sec 409(3) to set right the defects contained therein. We order accordingly, while disposing of issue No. 2”.

Issue No. 3 Challenge to the structure of the Selection Committee for appointment of President/Members of the NCLT and chairperson/members of the NCLAT. Held The Selection process was held unconstitutional. The prime consideration in the mind of the Bench was that it is the Chairperson, viz. Chief Justice of India, or his nominee who is to be given the final say in the matter of selection with right to have a casting vote. The 2010 judgment specifically provided that a casting vote should be provided to the Chairperson of the Selection Committee which was sought to avoided by the Companies Act, 2013. Therefore, the Supreme Court held that provisions of sec 412(2)of the Act was invalid and direction was issued to remove the defect by bringing this provision in accord with sub-para (viii) of para 120 of 2010 judgment.

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NCLT and NCLAT Law Practice and Procedure, 5e

1.6.2.

Chapter 1

Reasons for establishing tribunals

The necessity of establishing tribunals was discussed in the judgment of 2010 and 2015 and a brief overview is provided to understand the need for such an institutional set up under the Companies Act, 2013.

Under regular civil process, to ensure fair play and avoidance of judicial error, the procedural laws provide for appeals, revisions and reviews, and allow parties to file innumerable applications and raise vexatious objections as a result of which the main matters get pushed to the background.

All the litigations in the Courts get inevitably delayed, which leads to frustration and dissatisfaction among litigants. In view of the huge pendency, courts are not able to bestow attention and give priority to cases arising under the special legislations. Therefore, there is a need to transfer some selected areas of litigation dealt with by traditional courts to special Tribunals.

As Tribunals are free from the shackles of procedural laws and Evidence Law, they can provide easy access to speedy justice in a ‘cost- affordable’ and 'user-friendly' manner.

Tribunals can have both Judicial Member and a Technical Member. The Judicial Member will act as a bulwark against apprehensions of bias and will ensure compliance with basic principles of natural justice such as fair hearing and reasoned orders. The Judicial Member would also ensure impartiality, fairness and reasonableness in consideration. The presence of Technical Member ensures the availability of expertise and experience related to the field of adjudication for which the special Tribunal is created, thereby improving the quality of adjudication and decision-making.

In UK, the Committee constituted to undertake the review of delivery of justice through Tribunals chaired by Sir Andrew Leggatt. The Leggatt Committee in 2001 explained the advantages of Tribunals, provided they could function independently and coherently, thus: “Choosing a tribunal to decide disputes should bring two distinctive advantages for users. First, tribunal decisions are often made jointly by a panel of people who pool legal and other expert knowledge, and are the better for that range of skills. Secondly, tribunals' procedures and approach to overseeing the preparation of cases and their hearing can be simpler and more informal than the courts, even after the civil justice reforms. Most users ought therefore to be capable of preparing and presenting their cases to the tribunal themselves, providing they have the right kind of help.

Enabling that kind of direct participation is an important jurisdiction for establishing tribunals at all.”

De Smith's Judicial Review, (6th Edn., Page 50 Para 1.085) sets out the advantages of Tribunals, thus:

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“In the design of an administrative justice system, a Tribunal may be preferred to an ordinary court because its members have specialized knowledge of the subject-matter, because it will be more informal in its trappings and procedure, because it may be better at finding facts, applying flexible standards and exercising discretionary powers, and because it may be cheaper, more accessible and more expeditious than the High Court. Many of the decisions given to Tribunals concern the merits of cases with relatively little legal content, and in such cases a Tribunal, usually consisting of a legally qualified Tribunal judge and two lay members, may be preferred to a Court. Indeed dissatisfaction with the over-technical and allegedly unsympathetic approach of the courts towards social welfare legislation led to a transfer of functions to special Tribunals”.

1.7.

FURTHER READING (a) Madras Bar Association v Union of India (UOI) and Ors. [2015VII AD (S.C.) 229 : [2015]126CLA111(SC) : (2015)3CompLJ1(SC) : (2015)4MLJ184(SC) : 2015(6)SCALE331 : [2015]131SCL26(SC) : MANU/SC/0610/2015] (2015 NCLT case); (b) Union of India v R. Gandhi, President, Madras Bar Association [MANU/SC/0378/2010 : (2010)2CompLJ577(SC) : 2010(3)CTC517 : 2010(261)ELT3(S.C.) : JT2010(5)SC553(1) : (2010)4MLJ734(SC) : 2010(5)SCALE514 : (2010)11SCC1 : [2010]100SCL142(SC) : 2010(6)UJ2945] (2010 NCLT case); (c) Report of the High Level Committee on Law Relating to Insolvency And Winding Up of Companies (Committee chaired by Shri Justice V. Balakrishna Eradi and called the “Eradi Committee Report”) , 2000; (d) Interim Report of The Bankruptcy Law Reform Committee ( under the Chairmanship of Mr. T.K. Vishwanathan called the “BLRC Interim Report”) , February 2015; (e) Report on Company Law, Dr. Jamshed J. Irani, Chairman, Expert Committee on Company Law (called the “J.J Irani Report”), 31 May 2005. ♦♦♦♦

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Chapter 1

Annexure I—Constitution of NCLT and NCLAT NOTIFICATION

New Delhi, the 1st June, 2016

S.O. 1932(E).—In exercise of the powers conferred by section 408 of the Companies Act, 2013 (18 of 2013), the Central Government hereby constitutes the National Company Law Tribunal to exercise and discharge the powers and functions as are, or may be, conferred on it by or under the said Act with effect from the 1st day of June, 2016.

[F. No. A-45011/14/2016-Ad. IV] PRITAM SINGH, Addl. Secy.

NOTIFICATION New Delhi, the 1st June, 2016 S.O. 1933(E).—In exercise of the powers conferred by section 410 of the Companies Act, 2013 (18 of 2013), the Central Government hereby constitutes the National Company Law Appellate Tribunal for hearing appeals against the orders of the National Company Law Tribunal with effect from the 1st day of June, 2016.

[F. No. A-45011/14/2016-Ad. IV] PRITAM SINGH, Addl. Secy.

NOTIFICATION New Delhi, the 1st June, 2016 S.O. 1936(E).-In exercise of the powers conferred by clause (a) of subsection (1) of section 434 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 01st day of June, 2016, on which all matters or proceedings or cases pending before the Board of Company Law Administration (Company Law Board) shall stand transferred to the National Company Law Tribunal and it shall dispose of such matters or proceedings or cases in accordance with the provisions of the Companies Act, 2013 or the Companies Act, 1956.

[F. No. 1/30/CLB/2013/CL-V] PRITAM SINGH, Addl. Secy.

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Annexure II—Notification of sections of Companies Act, 2013 and notification of constitution of benches of NCLT NOTIFICATION

New Delhi, the 18th May, 2016 S.O.1795 (E).-In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 18th day of May, 2016 as the date on which the provisions of clause (iv) of sub-section (29) of section 2, sections 435 to 438 (both sections inclusive) and section 440 of the said Act shall come into force.

[F.No. 01/12/2009-CL-I (Vol.IV)] AMARDEEP SINGH BHATIA, Jt. Secy.

NOTIFICATION New Delhi, the 01st June, 2016 S.O. 1934(E).—In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 20l3 (18 of 20l3), the Central Government hereby appoints the 01st day of June, 2016 as the date on which the following provisions of the said Act shall come into force, namely :— Sl. No.

Section

1.

Sub-section (7) of section 7 [except clause (c) and (d)]

2.

Second proviso to sub-section (1) of section 14

3.

Sub-section (2) of section 14

4.

Sub-section (3) of section 55

5.

Proviso to Clause (b) of sub-section (1) of section 61

6.

Sub-sections (4) to (6) of section 62

7.

Sub-sections (9) to (11) of section 71

8.

Section 75

9.

Section 97

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Sl. No.

Chapter 1

Section

10.

Section 98

11.

Section 99

12.

Sub-section (4) of section 119

13.

Section 130

14.

Section 131

15.

Second proviso to sub-section (4) and sub-section (5) of section 140

16.

Sub-section (4) of section 169

17.

Section 213

18.

Sub-section (2) of Section 216

19.

Section 218

20.

Section 221

21.

Section 222

22.

Sub-sections (5) of section 224

23.

Sections 241, 242 [except clause (b) of sub-section (1), clause (c) & (g) of sub-section (2)], 243, 244, and 245

24.

Reference of word ‘Tribunal’ in sub-section (2) of section 399

25.

Sections 415 to 433 (both inclusive)

26.

Sub-section (1)(a) and (b) of section 434

27.

Sub-section (2) of section 434

28.

Section 441

29.

Section 466

[F. No. A-45011/14/2016-Ad.IV] PRITAM SINGH, Addl. Secy.

NOTIFICATION New Delhi, the 9 th September, 2016 S.O. 2912 (E).- In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 20l3 (18 of 20l3), the Central Government hereby appoints 9th September, 2016 as the date on which the provisions of section 227, clause (b) of sub-section (1) of section 242, clauses (c) and (g) of sub-section (2) of section 242, section 246 and

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Introduction

sections 337 to 341 (to the extent of their applicability for section 246), of the said Act shall come into force.

[F. No. A-45011/14/2016-Ad-IV] AMARDEEP SINGH BHATIA, Jt. Secy.

NOTIFICATION New Delhi, the 7th December, 2016 S.O. 3677(E).-In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 15th day of December, 2016 as the date on which the following provisions of the said Act shall come into force, namely :SL.No.

Section

1.

Clause (23) of section 2

2.

Clause (c) and (d) of sub-section (7) of section 7

3.

Sub-section (9) of section 8

4.

Section 48

5.

Section 66

6.

Sub-section (2) of section 224

7.

Section 226

8.

Section 230 [except sub-section (11) and (12)], and Sections 231 to

9.

Sections 235 to 240

10.

Sections 270 to 288

11.

Sections 290 to 303

12.

Section 324

13.

Sections 326 to 365

14.

Proviso to section 370

15.

Sections 372 to 373

16.

Sections 375 to 378

17.

Sub-section (2) of section 391

18.

Clause (c) of sub-section (1) of section 434 [F. No. 2/31/CAA/2013-CL-V-pt] AMARDEEP SINGH BHATIA, Jt. Secy.

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Chapter 1

NOTIFICATION New Delhi, the 1st June, 2016 S.O. 1935(E).—In exercise of the powers conferred by sub-section (1) of section 419 of the Companies Act, 2013 (18 of 2013), the Central Government hereby constitutes the following Benches of the National Company Law Tribunal mentioned in column (2) of the table below, located at the place mentioned in column (3) and to exercise the jurisdiction over the area mentioned in column (4), namely:— TABLE Serial Number

Title of the Bench

Location

Territorial Jurisdiction of the Bench

(1)

(2)

(3)

(4)

1.

(a) National Company Law Tribunal, Principal Bench. (b) National Company Law Tribunal, New Delhi Bench.

2.

National Company Law Tribunal, Ahmedabad Bench.

(1) State of Haryana.

(2) State of Rajasthan.

(3) Union territory of Delhi.

Ahmedabad

(1) State of Gujarat.

(2) State of Madhya Pradesh.

(3) Union territory of Dadra and Nagar Haveli.

(4) Union territory of Daman and Diu.

3.

National Company Law Tribunal, Allahabad Bench.

Allahabad

(1) State of Uttar Pradesh.

(2) State of Uttarakhand.

4.

National Company Law Tribunal, Bengaluru Bench.

Bengaluru

(1) State of Karnataka.

5.

National Company Law Tribunal, Chandigarh Bench.

Chandigarh

(1) State of Himachal Pradesh.

(2) State of Jammu and Kashmir.

(3) State of Punjab.

(4) Union territory of Chandigarh.

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Serial Number

Introduction

Title of the Bench

Location

Territorial Jurisdiction of the Bench

6.

National Company Law Tribunal, Chennai Bench.

Chennai

(1) State of Kerala.

(2) State of Tamil Nadu.

(3) Union territory of Lakshadweep.

(4) Union territory of Puducherry.

7.

National Company Law Tribunal, Guwahati Bench.

Guwahati

(1) State of Arunachal Pradesh.

(2) State of Assam.

(3) State of Manipur.

(4) State of Mizoram.

(5) State of Meghalaya.

(6) State of Nagaland.

(7) State of Sikkim.

(8) State of Tripura.

8.

National Company Law Tribunal, Hyderabad Bench.

Hyderabad

(1) State of Andhra Pradesh.

(2) State of Telangana.

9.

National Company Law Tribunal, Kolkata Bench.

Kolkata

(1) State of Bihar.

(2) State of Jharkhand.

(3) State of Odisha.

(4) State of West Bengal.

(5) Union territory of Andaman and Nicobar Islands.

10.

National Company Law Tribunal, Mumbai Bench.

Mumbai

(1) State of Chhattisgarh.

(2) State of Goa. (3) State of Maharashtra.

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Chapter 1