In
deciding an appeal in the matter of MAIF Investment India PTE Ltd. v/s
Ind-Barath Power Infra Limited & Ors., Company Appeal (AT) No. 334
of 2018, NCLAT has reviewed and decided on the issue of exclusive jurisdiction
of NCLT in all the company matters and to bar the jurisdiction of civil courts
including complex and contentious one.
The
appeal was against the order given by NCLT, Hyderabad, where the NCLT,
Hyderabad bench declined to entertain the petition under Section 59 of the
Companies Act, 2013 for seeking a rectification in the register of members.
The
alleged dispute involved conversion of compulsory convertible debentures
without requisite consent and quorum.
NCLT,
Hyderabad dismissed the petition stating the reason that issue raised were
complex or contentious issue which required the examination of the Arbitration
Act, 1996 & Insolvency & Bankruptcy Code, 2016.
While
dismissing the petition, NCLT, Hyderabad had relied on Supreme Court’s 1998 judgement in Ammonia Supplies Corporation (P) Ltd. v.
Modern Plastic Containers Pvt. Ltd. & Ors., where the Supreme Court
has held that- “if the rectification
petition raises serious disputes relating to title, matter has to be examined
by civil courts.”
However,
on reviewing the appeal, NCLAT in its order relied on Supreme Court order in
case of Shashi Prakash Khemka v. NEPC Micon & Ors., 2014, where the
Supreme Court has held that- “if a dispute had emerged after
the 2013 Act, the civil suit remedy would be completely barred and the power
would be vested with the National Company Law Tribunal (NCLT) under Section 59
of the said Act.”
Further,
in an earlier case of Smiti Golyan & Ors. v. Nulon India
Limited & Ors., NCLAT has already held that – “Ammonia Supplies decision was no longer applicable in the context of
changed law.”
In
the present matter, while deciding the appeal, NCLAT it was been held by
Justice A I S Cheema that- "we
are of the view that with change of law now under Section 59 of the Act, NCLT
can deal with rectification and all questions including incidental and
peripheral questions raised with regard to rectification for the purpose of
deciding legality of the rectification" "NCLT which exercises widest
possible powers in a matter under Section 241, 242 of the Act; which even
otherwise is expected to always keep interest of the Company in forefront,
cannot be treated as unequipped only because the Petition is under Section 59
of the Act."
The NCLAT allowed the appeal and held that there were
no complex or contentious issues involved and allowed the rectification as
sought by the appellant.
The
said decision of NCLAT has reaffirmed the provision of Section 430 of the
Companies Act, 2013 which bars the jurisdiction of civil courts in the matters
which are assigned to NCLT or NCLAT.
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corporate litigation, bankruptcy & insolvency, NCLT or any other matter
under Companies Act, 2013, please connect with us at admin@equicorplegal.com / +91 8448824659
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