2024 (9) TMI 1610 - Tri - Companies Law

NCLT dismisses petition for inspector appointment under Section 213(b) due to unsubstantiated fraud allegations

NCLT Delhi dismissed petition seeking appointment of inspector to investigate respondent companies under Section 213(b) of Companies Act, 2013. Petitioner ... Seeking direction to appoint an Inspector to carry out the Investigation into the affairs of the Respondent Companies in terms of the Section 213 (b) of the Companies Act, 2013 - fraud under Section 447 of the Companies Act, 2013 - HELD THAT:- The present Petition has been filed under sub-section (b) of Section 213 of the Companies Act, 2013 and as per the said Section the Petitioner is required to satisfy this Tribunal that there are circumstances suggesting that the business of the Respondent companies is being conducted with intent to defraud its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose. The issue raised by Supertech does not warrant any intervention by RBI. Even otherwise, the issue essentially is a matter of reconciliation of accounts between lender-borrower and to be dealt with as per the grievance redressal mechanisms in place. However, Indiabulls is advised to complete the adjustment of Rs. 9.75 crore mentioned above and inform the position to Supertech with in 15 days of receipt of this order. The averments made in the Petition by the Petitioners are not supported by any material documents in order to substantiate such allegations. The documents filed by the Petitioner along with the Petition would show that the allegations made by the Petitioner are not corroborated with the documents filed therewith. Prima facie, the Petitioner has miserably failed to make out a case under Section 213(b) of the Companies Act, 2013 and also failed to satisfy this Tribunal that the affairs of the Respondent Company have been conducted in a fraudulent manner or unlawful purpose and on the said count itself this Petition is liable to be dismissed. On the perusal of the documents submitted by the Petitioner and the in view of the discussion made, the Petition as filed by the Petitioner under Section 213 of the Companies Act, 2013 stands dismissed in limine. Issues Involved:1. Investigation into the affairs of the Respondent Companies under Section 213(b) of the Companies Act, 2013.2. Allegations of fraud under Section 447 of the Companies Act, 2013.3. Multiple litigations initiated by the Petitioners against the Respondents on the same cause of action.4. Jurisdiction and authority of NCLT vis-`a-vis RBI's regulatory oversight.5. Maintainability of a joint petition under Section 213(b) of the Companies Act, 2013.Detailed Analysis:1. Investigation into the Affairs of the Respondent Companies:The Petitioners, Supertech Realtors Private Limited and Revital Realty Private Limited, filed a petition under Section 213(b) of the Companies Act, 2013, seeking an investigation into the affairs of the Respondent Companies, Indiabulls Housing Finance Limited and Indiabulls Commercial Credit Limited. The Petitioners alleged that the Respondent Companies conducted their business with fraudulent and unlawful purposes, defrauding the Petitioners and the public at large, including misappropriating Rs. 277.23 crores from escrow accounts in violation of statutory provisions.2. Allegations of Fraud under Section 447 of the Companies Act, 2013:The Petitioners accused the Respondent Companies of committing fraud by usurping funds and failing to provide account details. They cited the Supreme Court's decision in Barium Chemicals Ltd. v. Company Law Board to support their claims. The Petitioners provided various documents, including loan agreements, escrow agreements, bank statements, and a calculation sheet outlining fraudulent deductions, to substantiate their allegations.3. Multiple Litigations:The Respondent Companies argued that the petition should be dismissed as it was a counterblast to recovery proceedings initiated under Section 13(4) of the SARFAESI Act and an Original Application filed before the DRT-II, New Delhi. They highlighted that the Petitioners had initiated multiple litigations on the same cause of action, including petitions under Section 9 of the Arbitration and Conciliation Act, 1996, and writ petitions before the Delhi High Court. The Respondents also mentioned that the RBI had already examined the issues and found them to be matters of account reconciliation, not warranting further investigation.4. Jurisdiction and Authority of NCLT:The Respondents contended that the RBI, as the sectoral regulator, had the necessary authority to scrutinize the allegations. They cited the Supreme Court judgment in IBF Agro Industries Limited v. SICGIL India Limited, which emphasized the regulatory body's role in overseeing sectoral transactions. The RBI had examined the issues raised by the Petitioners and concluded that no intervention was warranted, advising Indiabulls to adjust Rs. 9.75 crores and inform Supertech.5. Maintainability of a Joint Petition:The Respondents argued that the joint petition by the Petitioners was not maintainable under Section 213(b) of the Companies Act, 2013, as the provision does not envisage filing a joint petition. They also pointed out that the Petitioners had not disclosed their involvement in multiple litigations against the Respondents on the same cause of action.Tribunal's Findings:The Tribunal reviewed the submissions and documents provided by both parties. It noted that the Petitioners failed to substantiate their allegations with material evidence. The Tribunal emphasized that the RBI had already examined the issues, and the Petitioners had not demonstrated a prima facie case under Section 213(b) of the Companies Act, 2013. The Tribunal also found that the Petitioners had not satisfied the requirement of locus standi to file the petition and had not disclosed their involvement in multiple litigations.Conclusion:The Tribunal dismissed the petition in limine, concluding that the Petitioners failed to make out a case under Section 213(b) of the Companies Act, 2013, and did not satisfy the Tribunal regarding their entitlement to file the application. The Tribunal reiterated the importance of following due process and forming a prima facie opinion before directing any investigation. No costs were awarded.