Topic
NCLAT upheld the Swiss Challenge method as a valid share-valuation tool in oppression cases under Sections 241-242 of the Companies Act 2013, stressing that notice must precede any director disqualification and giving family firms way to break deadlocks.
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.
Kerala High Court sets aside an interim injunction order after finding the lower court relied on an incorrect factual assumption about the defendants' directorship in a family-corporate property dispute. The matter is remanded for fresh consideration, reinforcing that interim relief cannot stand on flawed factual premises.
NCLAT affirms that a tribunal-approved scheme of arrangement under the Companies Act binds dissenting creditors, even if it mandates withdrawal of pending civil suits and assigns claims to a third party. The ruling reinforces the legal sanctity of court-sanctioned compromises over individual creditor objections, impacting creditor rights in corporate debt restructuring.
The Andhra Pradesh High Court ruled that a winding-up petition under Section 433(e) of the Companies Act, 1956 can proceed if the debtor admits the debt but fails to substantiate a bona fide dispute, even if the company is commercially solvent. Mere assertions of dispute without effective communication or evidence are insufficient to halt proceedings, reinforcing creditor rights in insolvency disputes.
Madras High Court rules that directors of a company cannot be arrested in execution proceedings for a decree against the company without proper legal process and means inquiry under Order XXI CPC.