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TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 554
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.... Appeals arises out of similar facts and grounds hence, they have been heard together and are being decided by this common Judgment. It shall be sufficient to refer to the pleadings in Comp. App. (AT) (Ins.) No. 1610/2024, for deciding both the Appeals. 3. Brief facts of the case necessary to be noticed for deciding the Appeals are: i. A Section 7 Application was filed by JKM Infrastructure Private Limited, the Respondent herein against the Appellant on which C.P. (IB) No.211(ND)/2022 was registered. The total amount of debt claimed in the Part IV of the Application was Rs.5,73,75,000/- as on 01.03.2022. ii. Application was filed by the Financial Creditor on 04.03.2022. The Application under Section 7 was through Authorised Representative, Vinod Sachdeva, one of the Directors of the Financial Creditor. iii. Similarly, Section 7 Application was filed by the Financial Creditor against the Appellant on which C.P. (IB) No. 210(ND)/2022 was registered in which Application in Part IV, the amount of debt claimed was Rs.26,56,25,000/- as on 01.03.2022. Application under Section 7 was filed by the Financial Creditor through its Authorised Representative, Mr. Vi....
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....dicating Authority held that disqualification under Section 164(2) shall extend only to the defaulting Company, i.e., Airwill Infracon and shall have no implication on the sister Company i.e., the Financial Creditor. ix. It was held that provisions contained under proviso to Section 161(1)(a) are not applicable in the present case hence the disqualification shall not extend to Airwill JKM Infrastructure Pvt. Ltd. (the Financial Creditor herein). x. Aggrieved by the Order, rejecting I.A.5670(ND)/2023, Comp. App. (AT) (Ins.) No. 1610/2024 has been filed and similarly against the Order dated 13.06.2024, rejecting I.A. No. 5682(ND)/2023, Comp. App. (AT) (Ins.) No. 1611/2024 has been filed. 4. We have heard Learned Counsel Mr. Sajeve Deora appearing for the Appellant and Learned Counsel. Mr Gaurav Mitra appearing for the Respondent. 5. Learned Counsel for the Appellant challenging the Order submits that Adjudicating Authority has made erroneous interpretation of the Judgment of the Delhi High Court in the matter of `Mukul Pathak & Ors.' Vs. `Union of India & Anr.' in Writ Petition (Civil) 9088/2018. The conclusion of Adjudicating Authority that disqualification r....
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.... has been struck off from the Register of the Companies not on account of any default under Section 164(2) but it has been struck off on the ground of its failure to commence business operation for a continuous period of 2 preceding Financial Year and also for not preferring any Application for seeking status of dormant Company. Learned counsel for the Respondent has referred to the Notice dated 18.06.2018 issued by RoC and further Notice dated 08.08.2018 issued by RoC. It is submitted that Infracon Company was struck off on account of it not carrying any business or operation for a period of 2 immediate preceding Financial Year and not on account of Section 164(2), hence the Application filed by the Corporate Debtor was misconceived. It is further contended that there is no deemed disqualification in terms of Section 164(2) of the Act. There is no adjudication and decision by the RoC regarding disqualification of Directors of Infracon Company under Section 164(2). Application filed by Corporate Debtor was only on the basis of assumptions and presumptions. The DIN status of Vinod Kumar Sachdeva is still available on Official Website of the Ministry of Corporate Affairs (MCA). Infra....
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....racts the disqualification of the Directors under Section 164. 10. Learned Counsel for the Appellant relies on Section 164(2) of the Act, which provision is as follows: "164. Disqualifications for appointment of director. (2) No person who is or has been a director of a company which-- (a) has not filed financial statements or annual returns for any continuous period of three financial years; or (b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more, shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so: Provided that where a person is appointed as a director of a company which is in default of clause (a) or clause (b), he shall not incur the disqualification for a period of six months from the date of his appointment." 11. Relying on Section 164(2), Counsel for the Appellant has also relied on Section 167(1) proviso which ha....
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....years and have not made any application within such period for obtaining the status of dormant company under Section. 455 of the Companies Act, 2013. And therefore, proposes to remove/strike off the names of the above mentioned companies from the Register of companies and dissolve them unless a cause is shown to the contrary, within thirty days from the date of this notice. Any person objecting to the proposed removal/striking off nature of the companies from the Register of companies may send his/her objection to the office address mentioned hereabove within thirty days from the date of publication of this notice." 14. Along with the Notice, the list of 31,250 Companies were enclosed wherein at Item No. 916, Airwill Infracon has been mentioned. Subsequent to issue of above Notice dated 18.06.2018, a Notice for striking off the Resolution of the Company was published on 08.08.2018 by Government of India, where 24,280 Companies were struck off with effect from 08.08.2018. The name of Airwill Infracon is mentioned as Item No. 1250 thus by Order 08.08.2018 Airwill Infracon was struck off. The Order dated 08.08.2018 was issued in reference to the Show Cause Notice ....
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....obtaining the status of a dormant company under 3[section 455; or] [(d) the subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10A; or (e) the company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.] he shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice." 16. The basis of the submission of the Appellant that Airwill Infracon has not filed Financial Statement for continuous last 3 years hence the Directors have become disqualified does not commend us. Further for applicability of Section 164(2), essential condition is that the Company has not filed Financial Statement or Annual Return for ....
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....being annexed herein and marked as Annexure R - 4." 17. Now we come to the sheet anchor of the submission of the Appellant which is Section 167(1) proviso. The submission of the Counsel for the Appellant is that in event, disqualification under sub-Section (2) of Section 164, the Office of Director becomes vacant in all the Companies other than the Company which is in default under the sub-Section (2). The Counsel for the Appellant contended that in view of the default committed by Airwill Infracon not filing the Financial Statement under sub-Section (2) of Section 164, the Office of the Director of all the Companies including Financial Creditor, where Vinod Sachdeva is the Director shall be vacated. It is relevant to notice that proviso has been inserted by Act of 01/2018 with effect from 07.05.2018. There are two reasons for which the said submission advanced by the Appellant cannot be accepted. Firstly, as noted above present is not a case of incurring a disqualification under sub-Section (2) of Section 164 by Infracon Company as noticed above. Striking off Infracon Company was not on account of any default under sub-Section (2) of Section 164, rather was default under Sectio....
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....y had failed to file its annual returns within a period of thirty days from the holding of the AGM or from the last date for holding such meeting for the financial year 2013-14, it would be in default under the provisions of the Act. There is no reason for excluding such default for the purposes of considering defaults in respect of three financial years as contemplated under Section 164(2) of the Act. Plainly, a director cannot be heard to contend that he had acquired a vested right not to be penalised for this default since it pertains to filing returns for a financial year that had closed prior to Section 164 of the Act coming into force. The date on which such default occurred is after the date on which Section 164 of the Act had become effective. This Court finds it difficult to understand as to which right of the petitioners has been impaired by considering such default for the purposes of Section 164 of the Act." 20. Even if we accept the submission of the Appellant that default prior to insertion of proviso maybe relevant for applicability of Section 167(1) proviso. As noted above the default under Section 164(2) has neither been proved nor is the basis of striking off t....