2021 (11) TMI 27 - Tri - Companies Law

Tribunal Grants Rectification & Modification Under Companies Act, 2013

Minda I Connect Private Limited Versus Minda Industries Limited

The Tribunal partially allowed the application under Section 420 of the Companies Act, 2013, granting rectification and modification of the order dated ... Rectification of mistake - error apparent on the face of record - Section 420 of Companies Act, 2013 read with Rule 11, 32 and 154 of NCLT Rules, 2016 - HELD THAT:- From the conjunct reading of Section 420(2) of Companies Act 2013 with Rule 154 of NCLT Rules 2016, it is observed that this Tribunal has jurisdiction only to rectify any mistake or error arising out of any accidental slip or omission, which is apparent on the face of record. This Bench has fixed the minimum quorum consciously, which cannot be termed as a mistake apparent on the face of record. That under the garb of modification and rectification, the Applicant Companies are seeking review of the aforesaid direction which is not permissible under the Companies, Act 2013. Since this Tribunal as well as the Appellate Tribunal have time and again held that this Tribunal is having no power to review its own order. The remuneration of Chairman, Alternate Chairman and Scrutinizer of each of the meetings is fixed at ₹ 1,00,000/- only each. That since the number of shareholders is quite high, both the chairman and alternate chairman shall work together for facilitating conduct of the meeting - That the date of the Shareholders meeting as well as the meeting of the unsecured creditors of the Transferee Company is modified to 16.12.2021 at the same time as mentioned in the order dated 31.08.2021 at the venue specified in this order. The Application is accordingly allowed partially. Issues:Application under Section 420 of Companies Act, 2013 seeking rectification and modification of an order dated 31.08.2021.Analysis:1. Rectification of Order:- Applicant Companies sought rectification of the order dated 31.08.2021 on various grounds related to errors in the order.- Errors pointed out included venue details, mode of issuing notices, quorum for meetings, and misidentification of creditors.- Tribunal rectified the order by fixing the venue for meetings, correcting the mode of issuing notices, and addressing quorum concerns.2. Modification of Order:- Applicant Companies also sought modification of the order regarding the remuneration of officials and the quorum for meetings.- Tribunal addressed the modification requests by fixing the remuneration of officials and modifying the quorum for meetings of creditors.- Tribunal clarified that certain directions were consciously fixed and not subject to modification under the Companies Act, 2013.3. Legal Provisions:- Tribunal analyzed Section 420(2) of Companies Act, 2013 and Rule 154 of NCLT Rules 2016 to determine its jurisdiction in rectifying mistakes apparent from the record.- Tribunal concluded that it can rectify errors arising from accidental slips or omissions that are apparent on the face of the record.4. Decision and Rulings:- Tribunal rectified errors related to venue details, mode of issuing notices, and creditor identification in the order dated 31.08.2021.- Tribunal modified the remuneration of officials and the date of meetings while addressing concerns raised by the Applicant Companies.- Tribunal clarified that certain directions, like setting the minimum quorum for meetings, were consciously decided and not subject to modification under the law.5. Final Outcome:- The application was allowed partially, with the Tribunal granting rectification and modification on specific grounds while upholding certain directions as originally issued.- The Tribunal emphasized the limitations on its power to review its own orders, highlighting the boundaries within which modifications can be sought under the Companies Act, 2013.