01/12/2023

Whether the rectificatory jurisdiction under Section 59 of the Companies Act, 2013, which is summary in nature can be exercised where there are contested facts and disputed questions? – Gireesh Kumar Sanghi v. Sanghi Industries Ltd. and 19 Ors. – NCLAT Chennai

Hon’ble NCLAT held that once the legislature has created a complete bar of the jurisdiction of the Civil Court by enacting Section 430 in the Companies Act, 2013, there is no shred of doubt that the jurisdiction to decide the rectificatory jurisdiction under Section 59 of the Act shall be available to be exercised even where there are contested facts and disputed questions. Appeal allowed and set aside impugned order.

Whether the rectificatory jurisdiction under Section 59 of the Companies Act, 2013, which is summary in nature can be exercised where there are contested facts and disputed questions? – Gireesh Kumar Sanghi v. Sanghi Industries Ltd. and 19 Ors. – NCLAT Chennai Read Post »

Clean Slate Principle envisaged under IBC is also binding on Equity Shareholders | After approval of Resolution Plan, Share Holder/Director/Former Director of Corporate Debtor has no locus to continue LPA, particularly when no leave of NCLT had been obtained to pursue LPA – Lalan Kumar Singh v. The Hongkong and Shanghai Banking Corporation Ltd. and Ors. – Himachal Pradesh High Court

Hon’ble High Court of Himachal Pradesh held that once approval of the Resolution Plan was granted by the NCLT and the Resolution Applicants have taken control of the Corporate Debtor, and the existing equity share capital of the Corporate Debtor stood written off in view of the Clean Slate Principle envisaged under the IBC, the said order is binding on the appellant as well. The appellant has no locus either as a Share Holder or as a Director or as a Former Director of the Corporate Debtor to continue this Letters Patent Appeal, particularly when no leave of the NCLT had been obtained to pursue this Letters patent Appeal by him.

Clean Slate Principle envisaged under IBC is also binding on Equity Shareholders | After approval of Resolution Plan, Share Holder/Director/Former Director of Corporate Debtor has no locus to continue LPA, particularly when no leave of NCLT had been obtained to pursue LPA – Lalan Kumar Singh v. The Hongkong and Shanghai Banking Corporation Ltd. and Ors. – Himachal Pradesh High Court Read Post »

Whether the amalgamation between a Sole Proprietorship Firm and a Company is valid in the eyes of the law or not? – SVS Marketing Sanitaryware Pvt. Ltd. v. Kajaria Bathware Pvt. Ltd. – NCLT New Delhi Bench Court-II

NCLT New Delhi Bench Court-II held that:
(i) Both/or all the entities involved in the Amalgamation Scheme under Section 230-232 of the Companies Act 2013 have to be necessarily “Companies” as defined under Section 2(20) of the Companies Act 2013. In the instant case, the applicant has merged its “proprietorship firm” with a “company” in disregard to and without resorting to the provisions of Section 230-232 of the Companies Act 2013.
(ii) However, keeping all this analysis aside, when we re-visit the Amalgamation Agreement placed on record, we find that though the heading of the Agreement starts with the word Amalgamation, but no characteristics of Amalgamation are found present/followed in executing said document. Merely what ought to have been an “assignment deed” is executed and named as an “Amalgamation Agreement”. Therefore, in the interest of justice, we would not like to reject the Application and still examine the “debt” of the Applicant on its merits.
(iii) It is the settled law that no pecuniary liability in regard to a claim for damages arises till a competent court adjudicates upon the claim for damages and holds that the defaulting party has committed a breach and incurred a liability to compensate the non-defaulting party for the loss. An alleged default or breach gives rise only to a right to sue for damages and not to claim any debt.
(iv) Even otherwise, once agreeing to purchase the goods and subsequently, denying the purchase will not constitute an “Operational Debt” since there is neither any flow of goods/services nor any payment of consideration from one party to another in this chain.

Whether the amalgamation between a Sole Proprietorship Firm and a Company is valid in the eyes of the law or not? – SVS Marketing Sanitaryware Pvt. Ltd. v. Kajaria Bathware Pvt. Ltd. – NCLT New Delhi Bench Court-II Read Post »

Role of NFRA vs. ICAI | Role of Statutory Auditors of a Company V/s Statutory Auditors of Branches of the company | Standards of Auditing (SA) mandatory or Advisory | Key aspects of the Standard on Auditing (SAs) | What is professional misconduct for member of ICAI – Mr. Harish Kumar T.K v. National Financial Reporting Authority (NFRA) – NCLAT New Delhi

This judgment covers:
A. Role of NFRA vs. ICAI on disciplinary matters of Chartered Accountant
B. Retrospective or prospective applicability of provisions as contained in Section 132 of Companies Act, 2013 as well as NFRA Rules, 2018
C. Violation of Principle of natural justice V/s separate division of NFRA
D. Role of Statutory Auditors of the Company V/s Statutory Auditors of the Branches of the company
E. Are Standards of Auditing (SA) mandatory or Advisory or to be treated as guidance notes to Auditors
F. What is professional misconduct for member of ICAI and legal provisions
G. True intent of Standard of Audits and other related standards relevant for audit and issue regarding alleged violation by the Appellants herein
G.1 Legal status and details of Standards of Auditing and other related Standards in India
G.2 Key aspects of the Standard on Auditing

Role of NFRA vs. ICAI | Role of Statutory Auditors of a Company V/s Statutory Auditors of Branches of the company | Standards of Auditing (SA) mandatory or Advisory | Key aspects of the Standard on Auditing (SAs) | What is professional misconduct for member of ICAI – Mr. Harish Kumar T.K v. National Financial Reporting Authority (NFRA) – NCLAT New Delhi Read Post »

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