NCLAT Dismisses Appellant’s Rectification Plea for Suppressing Fact on Rejection of Initial Appeal Against AA’s Order

Case Details: Hemendra Aran v. Aranca (Mumbai) (P.) Ltd. - [2023] 155 taxmann.com 26 (NCLAT-New Delhi)

Judiciary and Counsel Details

• • Rakesh Kumar, Judicial Member & Dr Alok Srivastava, Technical Member
  • K.D. Chatterjee, Sr. Adv., Anuj Tiwari, Swankit Nanda, Nikhil Anand & Rahul Kumar, Advs. for the Appellant.
  • N. Ganapathy, Sr. Adv., Dhiraj Mhetre, Manpreet Lamba, Ms Shivani Sharma, Advs., Krishnendu Datta, Sr. Adv., Ms Shivani Sharma, Ms Neha, Satyasrikant Virtha, Advs., Dhruva Mukherjee, Sr. Adv., Anmol Chandan, Rishi Gautam, Anando Mukherjee and Manpreet Lamba, Advs. for the Respondent.

Facts of the Case

In the instant case, in a petition filed under section 241 of the Companies Act, 2013 against the respondent company, an order was passed by the Adjudicating Authority (NCLT) directing the appellant (i.e. director of the respondent company) to deposit an amount with registrar of the NCLT and counsel of the appellant gave consent on behalf of the appellant for depositing the said amount within three weeks.

The NCLT granted three weeks to deposit the said amount. The appellant preferred an appeal against the said order before the instant court and the same was rejected. Thereafter, the appellant filed an application for rectification of the said directions before the NCLT but the same was rejected by the impugned order.

NCLT Held

The NCLT held the appellant guilty of disobeying the said order of depositing the amount.

The appellant filed an instant appeal against the impugned order and contended that consent was given by the counsel of the appellant appearing before the NCLT without its authorization for depositing the said amount.

The NCLAT observed that since the initial appeal was dismissed, the appellant was not authorized to file a rectification petition in view of the proviso of section 420(2) of the Companies Act, 2013.

The NCLAT held that since the appellant had suppressed/concealed the fact regarding the rejection of the initial appeal in the instant appeal and the appellant had not approached the instant Tribunal with clean hands, the instant appeal was to be dismissed.

List of Cases Reviewed

• • Aranca (Mumbai) (P.) Ltd. v. Hemendra Aran [2023] 155 taxmann.com 25 (NCLT – Mum.) (para 30) affirmed [See Annex].

List of Cases Referred to

• • Sri. Swami Krishnanand Govindanand v. M.D. Oswal Hosiery (Regd.) [2002] 3 SCC 39 (para 5)
  • Prestige Lights Ltd. v. State Bank of India [2007] 78 SCL 467 (SC) (para 16)
  • Svenska Handelsbanken v. Indian Charge Chrome Ltd. [1994] 2 SCC 155 (para 17).