Tribunal Upholds NCLT Order Dismissing Winding Up Petition

The Tribunal dismissed the appeal challenging the legality of the NCLT's order dated 18.12.2019, which dismissed the winding up petition against the Respondent company. The dismissal was based on the similarity with a previous case and precedents, specifically "Registrar of Companies Vs. Apoorva Leasing Finance & Investment Company Limited." The Tribunal found no reason to deviate from the previous judgment, emphasizing the lack of proper sanction and procedural deficiencies in obtaining the sanction as critical factors. The appeal was dismissed, and the judgment was directed to be uploaded and sent to the NCLT, New Delhi Bench.

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Issues Involved:
1. Legality of the impugned order dated 18.12.2019.
2. Allegations of money laundering and fraudulent activities.
3. Procedural propriety and sanction for winding up.
4. Similarity with previous cases and precedents.

Detailed Analysis:

1. Legality of the Impugned Order:
The Appellant challenged the legality of the NCLT's order dated 18.12.2019, which dismissed the winding up petition against the Respondent company. The Tribunal based its dismissal on a precedent set by a similar case, "Registrar of Companies Vs. Apoorva Leasing Finance And Investment Company Ltd.," where the facts were identical. The Tribunal concluded that there was no reason to reach a different conclusion and dismissed the petition on grounds of lack of sanction and merit.

2. Allegations of Money Laundering and Fraudulent Activities:
The Appellant's case was based on an SFIO report dated 31.03.2016, which investigated the affairs of M/s NKS Holdings and its group companies, including the Respondent. The investigation revealed that the Jain Brothers controlled 49 companies involved in money laundering activities. The SFIO report detailed the modus operandi of these companies, including circular flow of money, creation of share capital through fraudulent means, and involvement in non-bank financial activities without proper registration. The SFIO recommended winding up these companies to prevent further fraudulent activities.

3. Procedural Propriety and Sanction for Winding Up:
The Appellant argued that the winding up petition was filed with proper sanction from the Central Government, as evidenced by a letter dated 29.08.2017. The Tribunal, however, found that the sanction process lacked procedural propriety, as it did not provide the Respondent company with a reasonable opportunity to make representations. This was in line with the precedent set by the case "Registrar of Companies Vs. Apoorva Leasing Finance & Investment Company Limited," where the lack of proper sanction and opportunity for representation led to the dismissal of the petition.

4. Similarity with Previous Cases and Precedents:
The Tribunal's decision heavily relied on the precedent set by the case "Registrar of Companies Vs. Apoorva Leasing Finance & Investment Company Limited," which was upheld by the NCLAT and subsequently not entertained by the Supreme Court due to procedural limitations. The Tribunal found that the facts of the current case were identical to the previous case, and thus, there was no merit in the appeal. The Tribunal emphasized that the lack of reasonable opportunity for representation and the procedural deficiencies in obtaining the sanction were critical factors in dismissing the petition.

Conclusion:
After considering the arguments and precedents, the Tribunal dismissed the appeal, finding no merit in it. The Tribunal's decision was consistent with the previous judgment in a similar case, which had attained finality. The Tribunal directed the registry to upload the judgment and send a copy to the National Company Law Tribunal, New Delhi Bench.

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