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| The Tax Publishers 2025 TaxPub(CL) 1016 (NCLAT- New Del) COMPANIES ACT, 2013
Section 421
When adjudicating authority called for report from RoC to investigate and verify existence of companies at address mentioned, the authority ought to have awaited the report for proceeding further in the matter and it was not necessary for the adjudicating authority to ask director to submit an explanation or be physically present before the adjudicating authority on the next date.
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Appeals from order of Tribunal - Adjudicating Authority directed RoC to investigate and verify existence of companies at address mentioned - Requirement of director to submit an explanation or be physically present before adjudicating authority -
Bank filed complaints against some companies as the same were no longer existing at the given address. Adjudicating authority directed their director to submit explanation or be physically present on next date. Further, direction was also issued to RoC to investigate and verify the existence of these companies at the registered address given in the letterhead and submit the report. By subsequent order, the adjudicating authority noticed that no response had been filed, it further granted one-week time subject to costs of Rs. 25,000 upon each of the companies to file a response. The companies filed an appeal against the order on the ground that when the adjudicating authority had already directed the RoC to carry on the investigation and submitted a report there was no requirement to carry on the same exercise by the adjudicating authority.Held: When the adjudicating authority had called for the report from the RoC to investigate and verify the existence of the companies at the address mentioned, the authority ought to have awaited the report for proceeding further in the matter and it was not necessary for the adjudicating authority to ask the director to submit an explanation or be physically present before the adjudicating authority on the next date. Directions of the adjudicating authority for directing the director to physically present is not called for at this stage and in the facts of the present case no order was required for imposing cost of Rs. 25,000 each upon the company for submitting the reply within a week. Thus, the directions to the director to be physically present and imposing cost of Rs. 25,000 each upon the company for submitting the reply were set aside.
REFERRED :
FAVOUR : In favour of appellant.
A.Y. :
IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI - LB
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