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STUDY MATERIALPROFESSIONAL PROGRAMMEMULTIDISCIPLINARYCASE STUDIESMODULE 3PAPER 8i
THE INSTITUTE OF COMPANY SECRETARIES OF INDIATIMING OF HEADQUARTERSMonday to FridayOffice Timings – 9.00 A.M. to 5.30 P.M.Public Dealing TimingsWithout financial transactions – 9.30 A.M. to 5.00 P.M.With financial transactions – 9.30 A.M. to 4.00 si.eduE-mailinfo@icsi.eduInstructions to StudentsStudents may please note that the Case laws/Studies are indicative only. For detailedunderstanding of respective subjects, it is advised to refer to amendments related to Regulations/Rules/Act/Circular/ Notifications etc. The student are advised to study the orders relating to thesubjects under the syllabus, by different authorities/judiciaries including Supreme Court, HighCourt, NCLT, NCLAT, CCI, Income Tax authorities etc.Disclaimer :Although due care and diligence have been taken in preparation of this Study Material , the Institute shallnot be responsible for any loss or damage, resulting from any action taken on the basis of the contentsof this Study Material. Anyone wishing to act on the basis of the material contained herein should doso after cross checking with the original source.The Sample Case Studies & Suggested Solutions of Multidisciplinary Case Studies have beenprepared by competent persons to enable the students for preparing the Institute’s examinations. It is,however, to be noted that the answers are only model answers, and there can be alternative solutionsavailable for the questions. The Institute is not in any way responsible for the correctness or otherwiseof the answers. Students are expected to be well versed with the amendments in the Laws/ Rules madeupto six months prior to the date of examination.Laser Typesetting by AArushi Graphics, Prashant Vihar, New Delhi, andPrinted at SAP Printers, Mumbai/October 2020ii
PROFESSIONAL PROGRAMMEModule 3Paper 8Multidisciplinary Case Studies (Max Marks 100)SYLLABUSObjectiveTo test the students in their theoretical, practical and problem solving abilities.Detailed ContentsCase studies mainly on the following areas:1.Corporate Laws including Company Law2.Securities Laws3.FEMA and other Economic and Business Legislations4.Insolvency Law5.Competition Law6.Business Strategy and Management7.Interpretation of Law8.Governance Issuesiii
CONTENTSMULTIDISCIPLINARY CASE STUDIESS.No.Lesson TittlePage No.1.Corporate Laws Including Company Law12.Securities Laws453.FEMA and Other Economic and Business Legislations874.Insolvency Law1455.Competition Law1896.Business Strategy and Management2017.Interpretation of Law2198.Governance Issues263Sample Case Studies & Suggested Solutions353Test Paper391iv
1nCorporate Laws Including Company Law 11Corporate Laws IncludingCompany Law1
21)PP-MCS30.09. 2020 Mr. Pankaj Kumar Mishra (Appellant) vs. Registrar ofCompanies, Mumbai & Ors. (Respondents)NCLATCompany Appeal (AT)No. 121 of 2020Justice Jarat KumarJainMember (Judicial)Balvinder SinghMember (Technical)The Tribunal must give a reasonable opportunity of making representations and of being heard beforepassing an order, to the Registrar, the Company and all the persons concerned under Section 252 (1)of the Companies Act, 2013.Fact of the caseThe name of the Company (Viking Ship Mangers Pvt. Ltd.) was struck off by ROC Mumbai from the Registerof Companies. The Principal Commissioner of Income Tax-15, Mumbai (Respondent No. 2 herein) challengedthe order of ROC before the NCLT, Mumbai bench (Tribunal) under Section 252 of the Companies Act, 2013. Itis stated before the Tribunal that the Company has certain Financial transactions that have been entered intoby the Company for the Assessment year 2011-12 and information regarding this were received from the officeof ITO Income Tax Officer 15 (3) (2) Mumbai. However, no return of income has been filed. Therefore, noticeunder Section 148 of the IT Act, 1961 has been issued for Assessment year 2011-12 proposing to assess/reassess the income. The Company has been struck off from the Register of Companies. Therefore, it is difficultto assess the defunct Company and it will cause huge loss of revenue to the Government of India. Hence, it wasprayed that the name of the Company be restore in the Register of Companies.The Authorized representative for the Registrar of Companies submitted before the Tribunal that they do nothave any objection to restore the name of the Company in the Register of Companies. The NCLT, Mumbai Benchby the impugned order allowed the Appeal and directed to restore the name of the Company in the Register ofCompanies. However, before passing of impugned order no notice has been served on the Company, but theCompany was arrayed as the Respondent.Being aggrieved with this order, the Appellant Ex-Director and Majority Shareholder and Power of AttorneyHolder of the Company has filed this Appeal. Appellant submitted that Section 252 (1) of the Companies Act,2013, provides that before passing any order under this Section, the Tribunal must give a reasonable opportunityof making representations and of being heard to the Registrar, the Company and all the persons concerned.Rule 37 of the NCLT Rules, 2016 also provides that the Tribunal shall issue notice to the Respondent to showcause against the Application or Petition on date of hearing to be specified in the notice.IssueThe main contention of Appellant was:Whether the order given by the Tribunal of restoring the name of the company in Register of Companies issustainable in Law, as it has been passed without giving any reasonable opportunity of making representationsor of being heard to the Appellant?JudgementThe NCLAT held that without giving any opportunity of being heard, the order has been passed by the NCLT.
1nCorporate Laws Including Company Law 3Hence, the order is not sustainable in law. Therefore, it is set aside, and the matter is remitted back to the NCLT,Mumbai bench with the direction that after hearing the parties decide the said appeal under Section 252 of theCompanies Act, 2013, as per law without influence by its earlier Order.2)23.09. 2020 Alibaba Nabibasha (Petitioner) vs. Small Farmers AgriBusiness Consortium & Ors.(Respondents)Delhi High CourtCRL. M.C. 1602/2020,CRL. M.A. 9935/2020Justice V. KameswarRaoAfter resignation, Director can’t be held responsible for daily affairs of Company including Chequesissued and dishonouredFact of the caseThe petition was filed seeking quashing of five complaint cases initiated against the Petitioner. These complaintcases are primarily grounded on the return of five cheques which were issued on behalf of the RespondentNo.2 company for a total amount of Rs. 45 Lakhs. Petitioner submitted that he ceased to be the Director ofthe Respondent No.2 company w.e.f. 27. 10. 2010, at least eight years prior to the issuance of the cheques inquestion and the resignation of the Petitioner was also notified to the Registrar of Companies by the RespondentNo.2 by filing Form 32 dated 04. 01.2011, which is a public document.The Petitioner contended that he was not the Director when the underlying contract was executed between theRespondent No.1 and Respondent No.2, nor when the cheques were issued and when they were presented.According to the Respondent, the Petitioner was involved in the discussion before an agreement was executedbetween the Respondent No.1 and the Respondent No.2. Further, the Petitioner being a responsible Director ofaccused Respondent No.2 Company participated in meetings and assisted the officials of the Respondent No.1who had visited the Respondent No.2 for verification of its financial and physical status.Issue:The contention of the Petitioner was:Whether Director of the Company after resignation is still held responsible for daily affairs of Company includingCheques issued and dishonoured?JudgementDelhi High Court held that, in cases where the accused has resigned from the Company and Form 32 has alsobeen submitted with the Registrar of Companies then in such cases if the cheques are subsequently issuedand dishonoured, it cannot be said that such an accused is in-charge of and responsible for the conduct ofthe day-to-day affairs of the Company, as contemplated in Section 141 of the NI Act. Thus, Petitioner after hisresignation cannot continue to be held responsible for the actions of the Company including the issuance ofcheques and dishonour of the same. Hence, complaint cases filed under Section 138 of the NI Act, against thepetitioner are quashed.
43)PP-MCS21.09. 2020 Dr. Rajesh Kumar Yaduvanshi (Petitioner) vs. SeriousFraud Investigation Office (SFIO) & Anr. (Respondents)Delhi High CourtCRL. REV. P. 1308/2019and CRL. M.A. Nos.43209/2019, 3644/2020,7626/2020, 7627/2020 &10502/2020Justice Vibhu BakhruPerson as a Nominee Director of the Company can’t be summoned for offences in respect of Sections128, 129, 448 read with Section 447 of the Companies Act, 2013, without any specific allegations againsthim in Investigation report of being complicit or having acted in bad faith, when he is not involved in theday to day affairs of the company as well as not assigned with any of executive work of the company.Fact of the caseThe petitioner has filed the present petition impugning a summoning order dated August 16, 2019 issued bythe learned ASJ in Complaint Case No. 770/2019 captioned “Serious Fraud Investigation Office (SFIO) vs.Bhushan Steel Limited and Ors.”, to the limited extent that it directs issuance of summons to the petitioner. Thelearned Court had found that there was sufficient material placed on record against the petitioner for him to faceprosecution in respect of offences under Sections 128, 129, 448 read with Section 447 of the Companies Act,2013. The petitioner was Punjab National Bank Limited’s nominee on the Board of Directors of Bhushan SteelLimited (‘BSL’) at the material time.Issue:The principal issue that arises for consideration is:lwhether the petitioner can be prosecuted for the alleged fraud committed by BSL and/or promoterssolely for the reason that the petitioner was a director of BSL and,lWhether there is any material on record to indicate that the petitioner was complicit in the commissionof the alleged offence.The Petitioner submitted that there is no specific allegation in the SFIO report that the petitioner was evenremotely connected or aware of the same and, therefore, his name does not feature as being involved in thefraudulent routing of funds. Further, it was submitted that merely mentioning the petitioner’s name as being oneof the persons who is allegedly liable to be prosecuted under Sections 128, 129 and 448 of the Companies Act,2013, without ascribing any specific role or pointing out any culpable conduct would not constitute sufficientmaterial to persuade any Court to issue summons. Hence, there was no allegation in the complaint that thepetitioner has connived with the Promoters or any other person to falsify the accounts and, therefore, theimpugned order is wholly erroneous.The Respondent submitted that the petitioner was a Nominee Director appointed by PNB on the Board of BSLand was expected to be independent, vigilant and cautious against any fraudulent acts committed by BSL. Hewas also required to raise red flags and inform PNB of any fraudulent activity.JudgementDelhi High Court observed that there is no allegation that the petitioner was involved in the affairs of BSL exceptin his capacity as a Nominee Director of PNB. In such capacity, he was not assigned any executive work of BSLbut was merely required to attend and participate in the Board Meetings of BSL.Even, SFIO investigation report does not contain any specific allegations against the Petitioner of being complicitor having acted in bad faith.
1nCorporate Laws Including Company Law 5There is a material difference between the allegation that a Nominee Director has been negligent or has failed todischarge his responsibility and an allegation that he has connived or has been complicit in approving financialstatements, which he knows to be false or conceal material information. While the latter may constitute anoffence under Section 448 of the Companies Act, 2013, the former does not constitute any such offence.Hence, the reasoning of the learned Trial Court that the petitioner had connived with the Promoters and is liableto be proceeded against, is clearly unsustainable and not supported by the allegations made in the complaint orthe SFIO Investigation Report. Hence, the impugned summons issued to the petitioner and the impugned order,to the limited extent that it directs issuance of summons to the petitioner, are set aside.4)14 .09.2020 QVC Exports Pvt. Ltd. & Ors. (Appellants) vs. CosmicFerro Alloys Ltd. & Ors. (Respondents)NCLATCompany Appeal (AT)No.92 and 93 of 2020Justice Jarat KumarJain Member (Judicial)Mr. Balvinder SinghMember (Technical)Dr. Ashok Kumar DixitMember (Technical)Removal of Nominee Director with majority vote in duly convened EGM giving special noticeFact of the case:1st Appellant and 2nd Respondent jointly entered into a Consortium Agreement and agreed to form a partnershipto submit a Resolution Plan to take over 1st Respondent Company. Resolution plan was submitted and approvedby the COC as well as ratified by NCLT, Kolkata under Section 31 of Insolvency & Bankruptcy Code, 2016. Asper the Resolution Plan, Appellants are 34% shareholders and the 2nd Respondent is 51% shareholder. Theremaining 15% shares are yet to be issued to the Employees’ Trust and in effect the Appellants are holding 40%and 2nd Respondent is holding 60% shares of 1st Respondent. Accordingly, as per the mutual understandingnominee directors of both the parties were appointed in 1st Respondent Company.Appellant argued that due to several disputes which arose between both the parties, special notice was issuedfor removal of nominee director of Appellant from directorship and the resolution was passed in an EGM, therebyousting the appellant from the consortium without giving a fair opportunity to give representation. Further, it wasstated that in a quasi-partnership company or closely held company, a nominee director of the two partnerscannot be removed, that too without any reason.Respondents argued that there is no bar for removal of nominee of minority shareholder under the CompaniesAct, 2013. Further, in spite of giving notice, no shareholders from 1st to 3rd appellant were present and thus theydid not raise any objection to passing of the resolution for removal of nominee director and the removal hasalready been approved by the Registrar of Companies.Issue:Whether Nominee Directors appointed in a quasi-partnership company or closely held company by mutualunderstanding between partners can be removed by passing majority vote in EGM after giving special notice?Judgement:The NCLAT held that as proper notice was issued to convene EGM and the same was received by the appellants
6PP-MCSincluding the nominee director, but they did not make any representation and the EGM voted for removal ofnominee director with majority. Thus, there is no illegality in this process and dismissed the appeal.5)24.08.2020Economy Hotels India Services Private Limited (Appellant)vs. Registrar of Companies & Anr. (Respondents)NCLATCompany Appeal (AT)No. 97 of 2020.Justice VenugopalM, Member (Judicial),Mr. Kanthi Narahari,Member (Technical)Reduction of Capital’ under Section 66 of the Companies Act, 2013Fact of the caseThe Appellant / Petitioner has focused the instant Company Appeal (AT) No. 97 of 2020 being dissatisfied withthe order dated 27.05.2020 passed by the ‘National Company Law Tribunal’, Bench V in Company Petition No.149/66/ND/2019 in rejecting the petition filed under Section 66(1)(b) of the Companies Act, 2013 and grantingliberty to file fresh application after complying with all the requirements of Section 66 of the Companies Act,2013.The Appellant / Company is a closely held private Company, limited by shares, incorporated on 08.08.2012under the provisions of Companies Act, 1956. The authorized share capital of the Company as on March 31st,2018 was Rs. 90 lakhs only divided into 9 lakhs equity shares of Rs. 10/- each and that the issued, subscribedand paid up share capital of the Company as on 31.03.2019 was Rs. 30 lakhs divided into 3 lakhs equity sharesof Rs. 10/- each. Further, the Company had 67,17,900 unsecured fully compulsory convertible debentures ofRs. 100/- each as on 31.03.2019.The Appellant / Company had filed a petition under Section 66(1)(b) of the Companies Act praying for passingof an order for confirming the reduction of share capital.The pre-mordial plea of the Appellant is that the ‘National Company Law Tribunal’ had failed to appreciatethe creeping in of an ‘inadvertent typographical error’ figuring in the extract of the ‘Minutes of the Meeting’characterising the ‘special resolution’ as ‘unanimous ordinary resolution’. Moreover, the Appellant/Petitionerhad fulfilled all the statutory requirements prescribed u/s 114 of the Companies Act, 2013 and as such theimpugned order of the Tribunal is liable to set aside.The Appellant has also submitted that only due to a ‘typographical error’ in the extract of ‘Minutes’, a resolutionpassed unanimously by the shareholders will not ceased to be a ‘special resolution’.IssueWhether as inadvertent ‘typographical error’ in the extract of ‘Minutes’, characterising the ‘special resolution’ as‘unanimous ordinary resolution’ will render a resolution passed as ‘special resolution’ as invalid?Judgement:NCLAT observed that ‘Reduction of Capital’ under Section 66 of the Companies Act, 2013 is a ‘DomesticAffair’ of a particular Company in which, ordinarily, a Tribunal will not interfere because of the reason that it is a‘majority decision’ which prevails.As the Appellant has admitted its typographical error in the extract of the Minutes of the Meeting characterisingthe ‘special resolution’ as ‘unanimous ordinary resolution’ and also taking into consideration of the fact that
1nCorporate Laws Including Company Law 7the Appellant had filed the special resolution with ROC, which satisfies the requirement of Section 66 of theCompanies Act, 2013.NCLAT allowed the Appeal, thereby confirming the reduction of share capital of the Appellant Company.6)17.08.2020K.V. Brahmaji Rao (Appellant) vs. Union of India(Respondent)NCLATCompany Appeal (AT)No. 126 of 2019Justice Jarat KumarJainMember (Judicial)Balvinder SinghMember (Technical)Kanthi NarahariMember (Technical)The person who may be the head of some other organizations cannot be roped and his/her Assetscannot be attached in exercising the powers under Sections 337 & 339 of the Companies Act, 2013.Fact of the caseThe Appellant K.V. Brahmaji Rao has preferred this Appeal under Section 421 of the Companies Act, 2013against the order dated 31.01.2019 passed by National Company Law Tribunal, Mumbai Bench, at Mumbai inM.A. No. 406 of 2019 and M.A. No. 407 of 2019 in CP No. 277 of 2018. Whereby impleaded the Appellant in CPNo. 277 of 2018 as Respondent No. 83 and passed the order of attachment of Appellant’s Assets.The Respondent herein had initiated petition against the persons who had been named as accused in theFIR dated 31.01.2018 and further on 15.02.2018 filed by Punjab National Bank (In Short ‘PNB’). FIRs wereregistered against some known and unknown accused who had been alleged to be perpetration of the hugeFinancial Scam against the PNB. The Respondent ordered investigation into the affairs of 107 Companies and7 LLPs under the provisions of the Companies Act, 2013 and LLP Act, 2008 and also sought to supplement theinvestigation by seeking indulgence of the Tribunal as per the provisions of Sections 221, 222, 241, 242 and246 r/w Section 339 of the Companies Act, 2013.At the relevant time the Appellant was Executive Director, PNB, Head Office, New Delhi. NCLT, Mumbai bench,by the impugned order allowed the Applications and passed the order for frizzing Assets of the Appellant andinjuncted him from disposing movable and immoveable Properties/Assets.The Appellant submits that the impugned order has been passed in violation of Principle of Natural Justicesince the Appellant was not served with advance copy of the said Application and without giving opportunity ofhearing impugned order has been passed.Issue:Whether any person who is head of some other organizations can be roped and his/her Assets can be attachedin exercising the powers under Sections 337 & 339 of the Companies Act, 2013?JudgementThe NCLAT observed that the person who may be the head of some other organizations cannot be roped andhis or her Assets cannot be attached in exercising the powers under Sections 337 & 339 of the Companies
8PP-MCSAct, 2013. Admittedly, the Appellant was the Executive Director of PNB, Head Office, New Delhi i.e. employeeof other organization. Therefore, he cannot be impleaded as Respondent in the case against the Nirav ModiGroup and Gitanjali Group of Companies. Thus, the impugned order of NCLT, Mumbai bench is set aside, andthe Appeal is allowed.7)04.08.2020Vijay Goverdhandas Kalantri & Anr. (Petitioners) vs. Unionof India & Ors. (Respondents)Punjab & Haryana HighCourtCWP-11209-2020 (O&M)Justice Alka SarinThe jurisdiction of the High Court is limited to the territorial jurisdiction of the State(s) of which it is theHigh CourtFacts of the caseThis petition was filed as a civil writ petition under Articles 226/227 of the Constitution of India for issuance of awrit of certiorari for setting aside the impugned action of Respondent Nos.1, 2 and 3 disqualifying the petitionersto act as Director from 01.11.2018 under Section 164(2)(a) of the Companies Act, 2013. In the present case,admittedly, both the Petitioners are residents of Mumbai and the Company-Respondent no.4 itself is registeredwith the Registrar of Companies, Mumbai (Respondent no.3) and has no connection with the Registrar ofCompanies, Punjab and Chandigarh (Respondent no.2). The counsel for the petitioners has been unable toshow how the present writ petition was maintainable before this Court.Faced with this situation, Petitioners contended that since the petitioners wish to invest in a company within thejurisdiction of this Court, hence, the present writ petition has been filed.Issue:Whether the High Court can exercise power outside the territorial jurisdiction of the State(s) of which it is theHigh Court?JudgementPunjab & Haryana High Court observed that there is no ground whatsoever made out for invoking the jurisdictionof this Court under Articles 226/227 of the Constitution of India in as much as neither the Petitioners areresidents of Punjab, Haryana or UT Chandigarh nor is the Company-Respondent no.4, qua which the Petitionerswere disqualified to act as Directors, registered with the Registrar of Companies, Punjab and Chandigarh(Respondent no.2). The jurisdiction of the High Court is limited to the territorial jurisdiction of the State(s) ofwhich it is the High Court. Article 226 of the Constitution of India, in clear terms, empowers the High Court toentertain a writ petition if the cause of action to file such a writ petition against the Respondents of the said writpetition has arisen wholly or in part within the territorial jurisdiction of the High Court.In the present case the petitioners have been unable to show as to what part of the cause of action arosewithin the territorial jurisdiction of this Court. Thus, the present writ petition seems to have been filed only togain benefit of the interim order passed by the Court of Punjab & Haryana in CWP. No.24977 of 2017 ‘GurdeepSingh & Ors. vs. Union of India & Anr.’ and other similar cases, though the initiation of the writ proceedingsbefore this High Court is clearly unsustainable and an abuse of jurisdiction. In view of the above, the presentwrit petition is dismissed with exemplary costs.
18)06.07.2020nCorporate Laws Including Company Law 9Aruna Oswal (Appellant) vs. Pankaj Oswal & Ors. Supreme Court of India(Respondents)Civil Appeal No.9340,9399 & 9401 of 2019Justice Arun MishraJustice S. Abdul NazeerDispute of Inheritance of Shares is a civil dispute, it cannot be decided under section 241/242 of theCompanies Act, 2013Fact of the case:The brief facts of the case are that Late Mr. Abhey Kumar Oswal, during his lifetime, held as many as 5,35,3,960shares in M/s. Oswal Agro Mills Ltd., a listed company. He died on 29.3.2016. Mr. Abhey Kumar Oswal filed anomination according to Section 72 of the Companies Act, 2013 in favour of Mrs. Aruna Oswal, his wife. Twowitnesses duly attested the nomination in the prescribed manner. The name of Mrs. Aruna Oswal, the Appellant,was registered as a holder on 16.4.2016 as against the shares held by her deceased husband.Pankaj Oswal (Respondent no. 1), son of late Abhay Oswal filed a partition suit in High Court claiming entitlementto 1/4th of the estate of his father including the deceased’s shareholdings. The High Court passed an interimorder to maintain status quo concerning shares and other immoveable property.While the suit was pending in High Court, Mr. Pankaj Oswal- Respondent No.1 filed Company Petition No.56/CHD/PB/2018, Pankaj Oswal v. Oswal Agro Mills Ltd. & Ors., alleging oppression and mismanagement underSection 241/242 of the Companies Act, 2013 in the affairs of Respondent No.2 company in NCLT, Chandigarh.A prayer was also made against M/s. Oswal Greentech. Ltd.Respondent No.1 claimed eligibility to maintain the petition on the ground of being a holder of 0.03% shareholdingand claiming entitlement and legitimate expectation to 9.97% shareholding of M/s. Oswal Agro Mills Ltd. byvirtue of his being the son of deceased Abhey Kumar Oswal. The Appellant challenged the maintainability ofthe petition. The NCLT directed filing of reply to the petition, without deciding the question of maintainability.This was challenged before NCLAT by the Appellant, which in turn directed the NCLT to decide the question ofmaintainability of the petition. The NCLT thereafter dismissed the challenge to maintainability and held that theRespondent no.1, being a legal heir, was entitled to one-fourth of the property/shares. Therefore, the mattereventually reached the Supreme Court of India.Issue:lWhether the dispute raised as to the inheritance of the estate of the deceased is a civil dispute or couldbe said to be an act of oppression and mismanagement in the affairs of the Company?lWhether such a dispute could be adjudicated in a company petition filed during the civil suit’s pendency?Judgement:Supreme Court observed that the basis of the petition is the claim by way of inheritance of 1/4th shareholdingso as to constitute 10% of the holding. This is the right, which cannot be decided in proceedings under Section241/242 of the Companies Act, 2013. Thus, filing of the petition under sections 241 and 242 seeking waiver isa misconceived exercise as the, Respondent no.1 has to firmly establish his right of inheritance before a civilcourt to the extent of the shares he is claiming, more so, in view of the nomination made as per the provisionscontained in Section 71 of the Companies Act, 2013. In order to maintain the proceedings, the Respondentshould have waited for the decision of the right title and interest, in the civil suit concerning shares in question.The entitlement of Respondent No.1 is under a cloud of pending civil dispute. It is appropriate to direct the
10PP-MCSdropping of the proceedings filed before the NCLT regarding oppression and mismanagement under sections241 and 242 of the Companies Act, 2013 with the liberty to file afresh, on all the questions, in case of necessity,if the suit is decreed in favour of Respondent No.1 and shareholding of RespondentNo.1 increases to the extent of 10% required under section 244 of the Companies Act, 2013. Hence, the orderspassed by the NCLT as well as NCLAT are set aside, and the appeals are allowed.9)24.06.2020The Registrar of Companies, West Bengal (Appellant) vs.Karan Kishore Samtani (Respondent)NCLATCompany Appeal (AT)No. 13 of2019Justice Jarat KumarJain, Member (Judicial)Mr. Balvinder Singh,Member (Technical)Dr. Ashok KumarMishra,Member (Technical)The issue for consideration is, whether Tribunal can impose the compounding fees under Section 441(1) of the Companies Act, 2013 less than minimum fine prescribed for the offence under Section 165 (1)read with Section 165(6) of the Companies Act, 2013.Fact of the case:The Respondent was the Director, for more than 20 Companies till 31.03.2015. The Respondent tendered hisresignation as the Director of the Company M/s Fabius Properties Pvt. Ltd. The same was accepted by theBoard of Directors of the Companies on 29.12.2015. However, the intimation of his resignation was sent to theRegistrar of Companies vide Form DIR-12 on 10.02.2016.On 27.01.2016 the Registrar of Companies, West Bengal sent show cause notice and asking him as to whyprosecution under Section 165(1) read with Section 165(3) of the Companies Act, 2013 should not be initiatedagainst him on the ground that he was the Director of more than 20 Companies at once. The Respondentadmitted the guilty and sent representation to the Registrar with a request to compound the offence underSection 441(1) of the Companies Act, 2013. ROC forwarded the representation along with his report to theTribunal.After hearing the parties the NCLT Kolkata Bench (Tribunal) allowed the compounding application under Section441(1) of the Companies Act, 2013 subject to payment of compounding fees of Rs. 50,000/-. Being aggrievedwith this order ROC has filed this Appeal.The contention of the Appellant is as per the provisions of Section 165 (6) of the Companies Act, 2013Respondent is liable for minimum fine prescribed for the violation, whereas Tribunal has imposed compoundingfees Rs. 50,000/- which is less than the minimum fine pres
MULTIDISCIPLINARY CASE STUDIES S.No. Lesson Tittle Page No. 1. Corporate Laws Including Company Law 1 2. Securities Laws 45 3. FEMA and Other Economic and Business Legislations 87 4. Insolvency Law 145 5. Competition Law 189 6. Business Strategy and Management
