Non-Disclosure of fact that a petition under S. 213 Companies Act is pending before NCLT, would amount to concealment of facts? Dwarka Courts answers

Dwarka Courts, New Delhi: Noting the complaint to be a complete abuse of process of law or in a manner sort of forum shopping, Sumit Dass, Additional Sessions Judge—03, dismissed the complaint expressing that,

“ would be apt to nip this litigation in the bud rather than keeping it pending and burdening the docket of the Court.”

The present order shall dispose of the present complaint filed by the company under Section 439(2) read with Section 436(1)(A) and (D) read with Section 212 of the Companies Act, 2013 read with Section 62(1) of the Companies Act, 1956 read with Section 193 of the Code of Criminal Procedure, 1973.

  • Complainant company had filed a petition under Section 213 of the Companies Act 2013 which was pending before the NCLT and to that aspect the complainant’s counsel submitted that the said petition was pending and infact they had also sought for an SFIO probe/exhaustive probe insofar as the violation and the criminal acts committed by the Company and its management.

Court’s opinion:

Bench held that since the petition had been pending before the NCLT, there was no reason to file the present complaint.

This Court cannot and should not overreach and rather should lay its hands off and let those proceedings continue/attain finality.

Further, the Court also expressed that,

NCLT is a designated tribunal for the said purposes and in eventuality if any probe or any investigation is ordered the same would cover or encompass the allegations made in the complaint.

High Court stated that the complainant ought to have come before this Court with clean hands and informed that such a petition was pending/prosecuted before the NCLT.

Non-Disclosure of the said facts amounts to concealment of facts. 

Instant complaint only mentioned a petition filed under Sections 241 and 242 of the Companies Act, 2013 and does not mention the petition which had been filed under Section 213 of the Companies Act.

In Court’s opinion, any pending litigation is a material fact that should be placed before the Court.

While adjudicating the application under Section 156(3) of the CrPC, in view of the Supreme Court decision in Priyanka Srivastava v. State of U.P., (2015) 6 SCC 287, the complainant is enjoined to file a detailed affidavit mentioning all the relevant facts.

Insofar as the complaints under the Companies Act, 2013 are concerned the complainant should disclose all the material facts by way of a detailed affidavit.

Another significant point was with respect to Section 439(2) of the Companies Act, which is read as under:

“No Court shall take cognizance of any offence under this Act which is alleged to have been committed by any company or any officer thereof except on the complaint in writing of the Registrar, a shareholder of the company, or of a person authorized by the Central Govt. in that behalf.” [emphasise mine].” 

The said section vests a shareholder with a right to prefer a complaint seeking action under the Companies Act, 2013 however the shareholder should be in a sense an “undisputed shareholder” qua which there should not be any sort of dispute pending.

The Court can take cognizance of the grievances of the “shareholder” but cannot decide as to whether the complainant is a “shareholder” or not.

Deciding whether the complainant is a shareholder or not, would be venturing into the uncharted territory/travelling beyond the jurisdiction of this Special Court constituted under the Companies Act.

In view of the above discussion, the present complaint does not lie before this Court as it would be a futile exercise to continue with the same – rather would not be in consonance with judicial propriety on account of the pendency of the matter before the NCLT, also this Court cannot adjudicate the right of the complainant being a shareholder or otherwise aggrieved of which the complainant could vindicate by filing a criminal complaint.[Green Edge Infrastructure (P) Ltd. v. Magic Eye Developers (P) Ltd., CC No. 693 of 2020, decided on 4-3-2022]

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