#Companies Act 2013

NCLAT Chennai held that at the first-motion stage of a scheme merger under Sections 230-232 of the Companies Act 2013, tribunals cannot reject the scheme merely because shareholders and creditors have not yet voted; the matter must proceed to their approval. The ruling clarifies that premature tribunal interference undermines the statutory merger process and affects companies seeking amalgamations.

NCLAT quashed NCLT orders directing ED and CBI investigations under Section 213(b) without recording satisfaction of statutory prerequisites or hearing affected parties, holding that procedural safeguards are mandatory before ordering corporate investigations.

By rejecting the writ, the Delhi High Court clarified that the proper forum for MCA investigations is the place where the substantive corporate dispute arises, reinforcing the nexus test for Article 226 jurisdiction. This guidance applies to companies facing regulatory probes across India.

The NCLAT ruled that a company struck off but still possessing assets cannot be merely dissolved; it must be restored and then wound up under the Companies Act. This clarifies that restoration claims require a winding-up proceeding, affecting shareholders and creditors of dormant firms.

NCLAT upheld NCLT’s ruling that a 100% share transfer and property transfer were illegal for non-compliance with mandatory deed requirements under Section 56(1) Companies Act. The decision underscores the strict procedural compliance needed for share transfers to be legally valid.

NCLAT affirmed NFRA's imposition of ₹3L and ₹5L penalties on a chartered accountant and his firm for professional misconduct in the Vikas WSP Limited audit. The ruling reinforces that audit firms and engagement partners share joint liability under Standards on Quality Control (SQC 1), setting a precedent for stricter accountability in statutory audits.

The Kerala High Court has ruled that criminal courts retain the authority to prosecute wrongful withholding of company property under Section 452 of the Companies Act, 2013, rejecting the argument that adjudication is exclusively vested in the Adjudicating Officer post-2020 amendments. This reaffirms the criminal liability of former employees who retain company assets, ensuring that civil disputes do not shield criminal misconduct from prosecution.

NCLAT rules that parties in oppression and mismanagement proceedings under Section 242(4) of the Companies Act have an absolute right to file a detailed para-wise reply after remand, reinforcing principles of natural justice. The judgment clarifies that this right cannot be denied even if procedural defects exist, ensuring fair adjudication in corporate disputes.

NCLAT Chennai reaffirms that High Courts cannot condone delays under Section 421 of the Companies Act, 2013, as the statute vests this power exclusively with the appellate tribunal. The ruling underscores the mandatory exhaustion of statutory remedies and bars writ jurisdiction for procedural lapses, impacting corporate litigants and insolvency practitioners.

The NCLAT has ruled that a company’s statutory duty to repay matured deposits under Section 74 cannot be suspended due to succession disputes or pending probate proceedings. The obligation to return deposits is absolute and must be honored, with assets held in trust for the estate until legal succession is determined - protecting depositors’ rights regardless of the deceased’s estate complexities.

Calcutta High Court ruled that mere payment of penalty does not constitute compliance with Section 149 of the Companies Act, 2013, requiring appointment of a woman director. The Court held that the question of compliance is a triable issue necessitating substantive evidence, impacting corporate governance standards for unlisted companies.

The Supreme Court ruled that courts must grant strong interim relief in oppression and mismanagement cases under Section 242 of the Companies Act, 2013, to prevent dissipation of disputed assets until final adjudication. The judgment rejects vague restraints and directs NCLT to dispose of such cases expeditiously, ensuring minority shareholders' rights are protected against prejudicial actions by majority stakeholders.

The Meghalaya High Court ruled that a landlord listed as 'C/o' in company records cannot be held liable under Section 92 of the Companies Act, 2013, for non-compliance by the company. Liability requires functional responsibility, not mere administrative registration. This clarifies that property ownership alone does not attract regulatory penalties under corporate law.

Calcutta High Court upholds Look Out Circular against petitioner who evaded summons, settled in China, and failed to submit documents in a Rs. 215 crore fraud case under Companies Act, 2013.

Bombay High Court holds that civil courts retain jurisdiction over share inheritance disputes involving fraud and title, excluding NCLT's exclusive domain under Companies Act, 2013.