Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): A Bench of S.J. Mukhopadhaya, Chairperson and Justice A.I.S Cheema, Member (Judicial) and Kanthi Narahari, Member (Technical) upheld the impugned decision whereby the appellant’s (Operational Creditor’s) application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed against the respondent (Corporate Debtor) was rejected.

Operational Creditor’s case was that despite repeated requests, the Corporate Debtor failed to make payments. Per contra, the Corporate Debtor submitted that it was willing to pay the entire amount subject to the condition that the Operational Creditor gets himself registered under the Goods and Services Tax, 2017. The Corporate Debtor also offered a demand draft to the Operational Creditor, which he refused to accept.

Aditya Diwan, Arpit Marwah and Karan Nagpal, Advocates appeared for the Operational Creditor. Per contra, the Corporate Debtor was represented by Y. Suryanarayana, Advocate.

On considering the facts and circumstances, the Appellate Tribunal was of the view that the Operational Creditor initiated the Corporate Insolvency Resolution Process (“CIRP”) with fraudulent and malicious intent for any purpose other than the resolution of insolvency or liquidation and therefore it was clearly covered under Section 65 IBC (fraudulent or malicious initiation of proceedings).

In such view of the matter, the Appellate Tribunal was inclined to interfere with the impugned order. The appeal was, thus, dismissed. [Praveen Kumar Mundra v. CIL Securities Ltd., 2019 SCC OnLine NCLAT 334, decided on 14-05-2019]

Case BriefsHigh Courts

Punjab & Haryana HC: The Bench of Raj Mohan Singh, J. dismissed a revision petition on the ground of insufficient evidence but granted liberty to file a fresh revision petition with better particulars.

The present matter pertained to the validity of an agreement of sale executed by petitioner and one Sukhchain Singh, being contested before the lower court. The petitioner’s submission before lower court was that one Girdhari Lal had obtained her signatures on some blank papers and the said agreement of sale was the outcome of such fraud. She filed an application for leading examination of handwriting and fingerprint expert as additional evidence in order to prove the said forgery. However, the trial court dismissed the application on the premise that the petitioner had admitted her signature on the agreement. Comparison of the signature was not sought to be made with any other document. The handwriting and fingerprint expert cannot opine whether the signatures appended on blank papers were prior in point of time or subsequent thereof. Aggrieved by the said order, the instant revision petition was filed.

The Court observed that the petitioner could not furnish any explanation as to how Sukhchain Singh’s signatures came to be appended on an agreement to sell. The story advanced by her was in the context of her signing the blank papers and not by Sukhchain Singh in the presence of any witness. In view thereof, it was held that the impugned order did not suffer from any error of jurisdiction or perversity of any type.[Jaspal Kaur v. Girdhari Lal, 2019 SCC OnLine P&H 56, decided on 15-01-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Securities and Exchange Board of India (SEBI): The whole time member of SEBI,  G.Mahalingam in accordance to the interim order given earlier issued directions under Section 19 of the Securities and Exchange Board of India Act, 1992 and Sections 11(1), 11(B) and 11(4) thereof and regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999  to NICL India Ltd. for engaging in Collective Investment Schemes without ‘certificate of  registration’ from SEBI.

NICL  India Ltd. was involved in illegal mobilization of funds from the public through ‘Collective Investment Schemes’, without obtaining the certificate of registration resulting in the contravention of Section 12(1B) of the SEBI Act, 1992 with Section 11 AA and Regulation 3 of CIS Regulations. It has also been stated that NICL was alleged of contravention of Regulation 4(2)(t) of ‘Prohibition of Fraudulent & Unfair Trade Practice Relating to Securities Market Regulations, 2003.

The interim order that had been said to be passed carried certain directions towards the NICL directors and further in reference to that,  they were asked to file reply, if any.  NICL through the further correspondence of letters kept asking for the extension of time to refund the investor’s money.

SEBI received complaints subsequently in which one was from RBI as well, in regard to the ‘mobilization of public fund’, after NICL had claimed to adhered all the stated directives in the interim order.

Therefore, it was noted by the board that, after providing opportunity of personal hearing and absenteeism in that, SEBI had to conclude by stating that ‘Noticees’ that were engaged in the Collective investment scheme had failed to address prima facie conclusions in the interim order, for which the directors of NICL would be liable which further lead SEBI for the issuance of certain directions that involved the winding up of the NICL’s Collective Investment Scheme and certain other directives for refund of the invested funds. [NICL India Ltd., In Re,2018 SCC OnLine SEBI 128, order decided on 21-06-2018]