Chapter 11 Appearance before NCLT/NCLAT – Corporate Restructuring Insolvency Liquidation & Winding Up Notes is designed strictly as per the latest syllabus and exam pattern.
Appearance before NCLT/NCLAT – Corporate Restructuring Insolvency Liquidation & Winding Up Study Material
Question 1.
Write a note on the following:
Court craft. (Dec 2012, 4 marks)
Answer:
- Company Secretaries Act as an authorized representative before various Tribunals/quasi judicial bodies.
- It is necessary for them to learn the art of advocacy or Court craft for effective delivery of results to their clients when they act as an authorized representative before any tribunal or quasi judicial body.
- The aim of advocacy is to make the judge prefer your version of the truth.
- Apart from the legal side of the profession, advocacy is often useful and sometimes vital, in client interviewing, in negotiation and in meetings, client seminars and public lectures.
- Technical and legal knowledge about the area in which Company Secretaries are acting is essential.
- Better their knowledge, the better their advocacy skills and the greater their impact. Good advocacy or negotiating skills will not compensate for lack of appropriate knowledge.
Question 2.
Write a note on the following:
Right to legal representation under the Companies Act, 2013. (Dec 2014, 4 marks)
Answer:
Right to Legal Representation Under the Companies Act
Section 432 of the Companies Act, 2013 dealing with right to legal representation envisages that the applicant or the appellant may either appear in person or authorise one or more Chartered Accountants or Company Secretaries or Cost Accountants or Legal Practitioners or any Officer to present his or its case before the Tribunal or the Appellate Tribunal, as the case may be.
Question 3.
Write notes on the following:
Court craft . (June 2018, 4 marks)
Answer:
Court Craft
Court Craft / Advocacy is learned when a professional enter the practicing side of the profession. It is necessary for them to learn art of advocacy or Court Craft for effective delivery of results to their clients when they act as an authorized representative before any tribunal or quasi – judicial body.
Technical and legal knowledge about the area in which Company Secretaries are acting is essential. Better their knowledge, the better their advocacy skills and the greater their impact. Good advocacy or negotiating skills will not compensate for lack of appropriate knowledge.
Question 4.
Write notes on the following:
Advocacy Tips. (Dec 2018, 4 marks)
Answer:
Advocacy tips are as under:
- Clarity: The judge’s time is limited, so make the most of it.
- Credibility: The judge needs to believe that what you are saying is true and that you are on the right side.
- Demeanour: We don’t I have a phrase “hearing is believing”. The human animal which includes the human judge, is far more a video than an audio, Most of the information is collated through our eyesight.
- Be likeables: One should possess the ability to create more likeability in the minds of judge/ (s) so that they symphatise/ emphatise with you.
- Psychology : Since advocacy entails convincing the judge with your argument or version of truth so it is imperative to comprehend the minds of the judges.
- Eye contract: While pleading, maintain eye contract with your judge,
- Voice modulation: Voice modulation is equally important. Modulating your voice allows you to emphasize the points you want to emphasize. Be very careful about raising your voice. Anger in advocacy to be used tactfully and should be used rarely.
Notwithstanding, efforts should be towards controlling the anger. - Develop listening skills.
- Entertain your judge. Humour will often bail you out of a tough spot.
Question 5.
What are the advocacy tips to be borne in mind by a Practicing Company Secretary while appearing before a tribunal? (Dec 2012, 10 marks)
Answer:
Advocacy tips to professlooals : Company Secretaries should be able to formula and present a coherent submission based upon facts, general pnnciples and legal authority in a structured, concise and persuasive manner. They should understand the crucial importance of preparation and the best way to undertake it and be able to demonstrate an understanding of the basic skills in the presentation of cases before the tribunals.
Some of the tips given by legal experts which professionals like Company Secretaries should bear in mind while appearing before Tribunals or other quasi-judicial bodies are given herein below. They say while pleading, a judge in your pleadings looks for:
| (i) | Clarity | The judge’s time is limited, so make the most of it. |
| (ii) | Credibility | The judge needs to believe that what you are saying is true and that you are on the right side. |
| (iii) | Demeanour | We don’t have a phrase “hearing is believing”. The human animal which includes the human judge, is far more video than audio. The way we collect most of our information is through our eyesight. |
| (iv) | Eye contact | While pleading, maintain eye contact with your judge. |
| (v) | Voice modulation | Voice modulation is equally important. Modulating your voice allows you to emphasize the points you want to emphasize. Be very careful about raising your voice. Use your anger strategically. But use it rarely. Always be in control of it. |
| (Vi) | Psychology | Understand judge’s psychology as your job is to make the judge prefer your version of the truth. |
| (vii) | Be likeable | At least be more likeable than your opponent. If you can convert an unfamiliar Bench into a group of people who are sympathetic to you personally, you perform a wonderful service to your client. |
| (viii) | Learn to listen | |
| (ix) | Entertain your judge | Humour will often bail you out of a tough spot. |
Question 6.
What is meant by professional etiquettes? Mention any ten communication etiquettes to be observed by a successful Company Secretary. (June 2013, 10 marks)
Answer:
In todays corporate world professionals need to know the way to conduct themselves with in the business world. One of the best ways to do so is to practice good professional etiquette. Practicing good professional etiquette is necessary for professional success in the emerging business scenario which is constantly changing and making the market pLace more competitive and contestable.
Corporates look for those candidates who possess manners, a professional look and demeanour and the ability to converse appropriately with business colleagues and clients. Good professional etiquette indicates to potential employers that you are a mature, responsible adult who can aptly represent their company.
Being corporate professionals, you must practice some basic etiquette tips that would help you to go up the ladder of success in the workplace.
Communication Etiquettes
- Always speak politely. Listen to others attentively. A good listener is always dear to every client.
- While speaking over telephones, always greet the other person while starting and ending the call.
- Speak only when the other person has finished talking Instead of interrupting in between.
- Question another person in a friendly, not prying, manner.
- Make eye contact when talking to others.
- keep your conversations short and to the point.
- Maintain your sobriety and politeness even if the client speaks something offensive or rude and avoid replying back in harsh tone/words.
Question 7.
Explain and comment on the following:
Etiquette is the art of behaving in front of others. (Dec 2013, 3 marks)
Answer:
Correct
It is a set of practices and forms which are followed in a wide variety of situations. Many people consider it to be a branch of decorum, or general social behavior. Each society has its own distinct etiquette and various cultures within a society also have their own rules and social norms.
Question 8.
Highlight Important professional etiquettes necessary for success in career. (Dec 2014, 8 marks)
Answer:
Professional Etiquettes:
in today’s world of business, professionals need to know how to conduct themselves within the business world. One of the best ways to do so is to practice good professional etiquette. Practicing good professional etiquette is necessary for professional success in the emerging business scenario which is constantly changing and making the market place more competitive and contestable.
Corporates look for those candidates who possess manners, a professional look and demeanor and the ability to converse appropriately with business colleagues and clients. Though your academic knowledge and skills may be spectacular, but not knowing proper etiquette required to be successful in the professional career could be a roadblock preventing you to achieve success in the professional life and business relationships. Good professional etiquette indicates to potential employers that you are a mature, responsible adult who can aptly represent their company.
Dressing Etiquette :
With every organization program comes the inevitable question: What do I wear? Knowing what to wear, or how to wear something, is key to looking great in any event.
- Always wear neat, and nicely pressed formal clothes. Choose corporate shades while you are picking up clothes for your office wear.
- Ties for men should compliment.
- Women should avoid wearing exposing dresses and opt for little but natural make-ups. Heels should be of appropriate or modest height.
- Men need to keep their hair (including facial hair) neatly trimmed and set.
- Always polish your shoes.
Handshake Etiquette :
Etiquette begins with meeting and greeting. A handshake is a big part of making a positive first impression. A firm shake is an indication of being confident and assertive. The following basic rules will help you get ahead in the workplace:
- Always rise when introducing or being introduced to someone.
- Shake hands with your right hand.
- Shake hands firmly (but not with a bone crushing or fish-limp grip) and with only one squeeze.
- Hold it for a few seconds (only as long as it takes to greet the person) and pump up and down only once or twice.
- Make eye contact while shaking hands.
Communication Etiquettes :
- Always speak politely. Listen to others attentively. A good listener is always dear to every client.
- While speaking over telephones, always greet the other person while starting and ending the call.
- Speak only when the other person has finished talking instead of interrupting in between.
- Show interest in what other people are doing and make others feel good.
- Stand about an arm’s length away while talking to others.
Invitation Etiquette :
How you respond to an invitation says volumes about your social skills. It reflects negatively on your manners if your response (or lack of response) to an invitation costs time or money for your host.
- Reply by the date given in the invitation, so that the host or hostess knows what kind of arrangements to make for the event, food is not wasted and unnecessary expense is eliminated.
- If an RSVP card is not included, respond by calling or sending a brief note.
- If you cancel after initially accepting an invitation, phone your regrets as soon as possible. Send a note of regret following the phone conversation.
Dining Etiquettes :
- Always be courteous while official dinners. Offer the seat to your guest first. If you are the guest, be punctual and thank the host for the dinner.
- Wait until you receive your host’s signal.
- Initiate conversations while waiting for the food.
- Never begin eating any course until everyone has been served or the host/hostess has encouraged you to do so.
- Chew quietly; don’t speak with your mouth full.
Question 9.
Minu Limited was incorporated by furnishing false informations. As per the Companies Act, 2013, state the power of the Tribunal in this regard. (Dec 2017, 7 marks) [CMA – III]
Answer:
Order of the Tribunal: where a company has been got incorporated by furnishing false or incorrect information or representation or by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company or by any fraudulent action, the Tribunal may, on an application made to it, on being satisfied that the situation so warrants:
(a) pass such orders, as it may think fit, for regulation of the management of the company including changes, if any, in its memorandum and articles, in public interest or in the interest of the company and its members and creditors, or
(b) direct that liability of the members shall be unlimited, or
(c) direct removal of the name of the company from the register of companies, or
(d) pass an order for the winding up of the company, or
(e) pass such other orders as it may deem fit.
Question 10.
What are the guide Lines for professional dress code of members of the Institute of Company Secretaries of India.
(i) Dress code for Male members
(ii) Dress code for Female members
(iii) Dress code before the tribunals
(iv) Dress code while in employment (Dec 2017, 4 marks)
Answer:
(i) The professional dress for male members will be Navy Blue suit and white shirt with a tie (preferably of the ICSI) or navy blue buttoned-up coat over a pant or a navy blue safari suit.
(ii) The professional dress for female members will be saree or any other dress of a sober colour with a navy blue jacket.
(iii) Practising Company Secretaries appearing before any tribunal or quasi-judicial body should adhere to dress code if any prescribed for appearing before such tribunal or quasi-judicial body or if allowed the aforesaid professional dress.
(iv) Members in employment may wear the dress/uniform as specified by the employer for all employees or if allowed the aforesaid professional dress.
Question 11.
Aggrieved by an Order of NCLT dated 05.05.2018, passed without the consent of the parties, Madhruk Ltd. Decided to file an appeal before NCLAT. Meanwhile, the employees and officers of the Company went on a strike from 10.05.2018 demanding higher pay and allowances and as a result of which, the operational and management activities were badly affected. The strike was called-off on 15.06.2018. Thereafter, the appeal was filed on 25.06.2018 before NCLAT with a prayer for condoning the delay in filing the appeal. A single judicial member of NCLT started the hearing. With reference to the provisions of the Companies Act, 2013, examine the following:
(i) Whether the appeal is admissible?
(ii) Maximum period allowed for condonation
(iii) Is the appeal transferable to a Bench consisting of two members? (Nov 2018, 8 marks) [CAFG -1]
Answer:
(i) As per Sec. 421 of the Companies Act, 2013, any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal (AT). No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties.
In this case, Madhruk Ltd. decided to file appeal before Appellate Tribunal (NCLAT) without the consent of the parties. So, appeal filed is admissible.
(ii) Every appeal under Sub-section (1) (i.e. appeal to AT against order of Tribunal) shall be filed within a period of 45 days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and accompanished by such fees, as may be prescribed:
Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days from the date aforesaid, but within a further period of not exceeding 45, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.
In this case, order of NCLT has been received by Madhruk Ltd. on 05.05.2018, so if it is aggrieved by the order can file appeal against such order in NCLAT within 45 days. The period of 45 days ends on 19th June, 2018. But due to strike of employees and officers of the company. The company can file appeal on 25.06.2018. So, the company can apply NCLAT for condonation delay for extending period of filing the appeal by application. If NCLAT if satisfied on the grounds provided by Madhruk Ltd., the NCLAT may give time for filing appeal of not exceeding 45 days further.
(iii) Where the appeal is entertained by a member, at any stage of the hearing of any such case or matter, it appears to the member that the case or matter is of such a nature that it ought to be heard by a bench consisting two Members, the case or matter as may be transferred by the President, or, as the case may be, referred to him for transfer, to such Bench as the President may deem fit.
Question 12.
EST Ltd. is aggrieved by the order of National Company Law T ribunal (NCLT) and seeks your advice for further steps in the matter. (June 2019, 5 marks)
Answer:
As per Section 421 of the Companies Act, 2013, EST Ltd. can prefer appeal to the National Company Law Appellate Tribunal (NCLAT). The appeal shall be filed within a period of forty-five days from the date on which a copy of the order of the National Company Law Tribunal (NCLT) is made available to EST Ltd. and shall be in such form, and accompanied by such fees, as may be prescribed.
The NCLAT may entertain an appeal after the expiry of the said period of forty-five days from the date aforesaid, but within a further period not exceeding forty-five days, if it is satisfied that the appellant EST Ltd. was prevented by sufficient cause from filing the appeal within that period.
On the receipt of an appeal the NCLAT shall, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. The NCLAT shall send a copy of every order made by it to the NCLT and the parties to appeal.
As per Section 423 of the Companies Act, 2013, if EST Ltd. is further aggrieved by the order of the NCLAT, it may file an appeal to the Supreme Court within sixty days from the date of receipt of the order of the NCLAT on any question of law arising out of such order.
Question 13.
The National Company Law Tribunal (NCLT) has confirmed the reduction of share capital of MGF Ltd. Explain when the reduction of share capital will take place as per the Companies Act, 2013. (June 2019, 5 marks)
Answer:
As per Section 66(5) of the Companies Act, 2013, MGF Ltd. shall deliver a certified copy of the order of the Tribunal and of a Minute approved by the Tribunal showing –
(a) the amount of share capital;
(b) the number of shares into which it is to be divided;
(c) the amount of each share; and
(d) the amount, if any, at the date of registration deemed to be paid-up on each share, to the Registrar of Companies (RoC) within thirty days of the receipt of the copy of the order, who shall register the same and issue a certificate to that effect.
The reduction of share capital takes effect only on registration of the order and Minutes and not before. The RoC will then issue a certificate of registration which will be conclusive evidence that the requirements of the Companies Act, 2013 have been complied with and that the share capital is now as set out in the Minutes. The Memorandum has to be altered accordingly.
Question 14.
Discuss the provision relating to appeal by a person aggrieved by the orders of National Company Law Tribunal. (Dec 2019, 5 marks)
Answer:
Provisions relating to appeal from orders of Tribunal given in Section 421 of the Companies Act, 2013 are as under:
1. Any person aggrieved by an order of the Tribunal (NCLT) may prefer an appeal to the Appellate Tribunal (NCLAT).
2. No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties.
3. Every appeal under sub-section (1) of Section 421 shall be filed within a period of forty-five days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and accompanied by such fees, as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days from the date aforesaid, but within a further period not exceeding forty-five days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.
4. On the receipt of an appeal under sub-Section (1) of Section 421, the Appellate Tribunal shall, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.
5. The Appellate Tribunal shall send a copy of every order made by it to the Tribunal and the parties to appeal.
Question 15.
Procedure as per Civil Procedure Code, 1908 need not be followed while trying Petitions, applications or appeals by National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) — Do you agree? (Aug 2021, 3 marks)
Answer:
In terms of Section 424 of the Companies Act, 2013, neither the National Company Law Tribunal (NCLT) nor National Company Law Appellate Tribunal (NCLAT) is bound by the procedure as stated in Civil Procedure Code, 1908 in disposing any proceeding before it either under the Companies Act, 2013 or Insolvency and Bankruptcy Code, 2016 but shall be guided by the principle of natural justice.
NCLT or NCLAT has the power to regulate their own procedure. Any orders passed may be enforced like a decree and can be enforced by the Court having jurisdiction to execute. Further, Section 424(2) enlists similar powers of a Civil Court such as summoning, documents discovery, receiving affidavits, requisitioning any public document, examining witnesses etc.
Question 16.
National Company Law Tribunal (NCLT) has the powers to entertain and adjudicate upon certain matters under the Companies Act, 2013. Describe at least 10 such sections under which NCLT has adjudication powers under the Companies Act, 2013. (June 2022, 5 marks)
Question 17.
ABC Ltd. wishes to draw a note on duties for its newly appointed Company Secretary with respect to Court, client and opponent while representing the company in a case .before the Competition Commission of India, New Delhi. Draw out a draft note of Company Secretary’s duties along these lines for consideration of the Chairman and Managing Director. (Dec 2012, 6 marks)
Answer:
Company Secretaries Act as an custodian of their client before various tribunals/quasi judicial bodies.
Company Secretaries should be able to formulate and present a coherent submission based upon facts, general principles and legal authority in a structured, concise and persuasive manner. They should understand the crucial importance of preparation and the best way to undertake it and be able to demonstrate an understanding of the basic skills in the presentation of cases before the tribunals.
Duty to the Court:
(i) A Company Secretary shall, during the presentation of his case and while otherwise acting before a Court, conduct himself with dignity and self-respect. He shall not be servile and whenever there is proper ground for serious complaint against a judicial officer, it shall be his right and duty to submit his grievance to proper authorities.
(ii) A Company Secretary shall maintain towards the Courts a respectful attitude, bearing in mind that the dignity of the judicial office is essential for the survival of a free community.
(iii) A Company Secretary shall not influence the decision of a Court by any illegal or improper means. Private communication with the judge relating to a pending case is forbidden.
(iv) A Company Secretary shall use his best efforts to restrain and prevent his client from resorting to sharp and unfair practices or from doing anything in relation to the Court, opposing counsel or parties which the Company Secretary himself ought not to do. A Company Secretary shall refuse to represent the client who persists in such improper conduct. He shall not consider himself a mere mouthpiece of the client and shall exercise his own judgment in the use of restrained language in correspondence, avoiding scurrilous attacks in pleadings and using intemperate language during arguments in Court.
(v) A Company Secretary shall not enter appearance, act, plead or practice in any way before a Court or any other Authority, if the sole or any member thereof is related to the Company Secretary.
(vi) A Company Secretary shall not appear in or before any Court or Tribunal or any other Authority for or against an organization or an institution, society or corporation, if he is a member of the Executive Committee of such organization or institution or society or corporation.
(vii) A Company Secretary should not act or plead in any matter in which he is himself pecuniarily interested.
Duty to Client:
(i) A Company Secretary shall not ordinarily withdraw from engagements once accepted, without sufficient cause and unless reasonable and sufficient notice is given to the client.
(ii) A Company Secretary shall not accept a brief or appear in a case in which he has reason to believe that he will be a witness and if being engaged in a case, it becomes apparent that he is a witness on a material question of fact, he should not continue to appear if he can retire without jeopardizing his client’s interest.
(iii) A Company Secretary shall at the commencement of his engagement and during the continuance thereof, make all such full and frank disclosures to his client relating to his connection with the parties and any interest in or about the controversy as are likely to affect his client’s judgment in either him or continuing the engagement.
(iv) It shall be the duty of a Company Secretary to fearlessly uphold the interest of his client by all fair and honourable means without regard to any unpleasant consequences to himself or any other. He shall defend a person accused of a crime regardless of his personal opinion as to the guilt of the accused, bearing in mind that his loyalty is to the law which requires that no man should be convicted without adequate evidence.
(v) A Company Secretary shall not at any time, be a party to fomenting of litigation. A Company Secretary shall not act on the instructions of any person other than his client or his authorized agent.
(vi) A Company Secretary shall not do anything whereby he abuses or takes advantage of the confidence reposed in him by his client.
Duty to Opponent:
- A Company Secretary shall not in any way communicate or negotiate upon the subject-matter of controversy with any party represented by an Advocate except through that Advocate.
- A Company Secretary shall do his best to carry out the legitimate promise/promises, made to the opposite-party.
Question 18.
Answer the following:
Mr. D was appointed as a Technical Member of the National Company LawTribunal (NCLT) on 1st July, 2012 for a period of 5 years. He will be completing 62 years on 30th June, 2017.
Whether he can be re-appointed on the NCLT on completion of his tenure in 2017? (May 2017, 4 marks) [CAFG -1]
Answer:
Under Sec. 413(2) of the Companies Act, 2013, a member of the Tribunal shall hold office as such unit he attains:
(a) in the case of the President, the age of sixty-seven years.
(b) in the case of any other member, the age of sixty-five years.
Present Case:
Mr. D was appointed as a technical Member of the NCLT on 1st July, 2012 for a period of 5 years. He will be completing 62 years on 30th June, 2017. Therefore he can also be re-appointed after his initial term of five years is over. But since he shall be attaining the age of 65 years as on 30th June, 2020, he will have to step down from the post on his attaining the age of 65 years i.e. on 30th June, 2020.
Thus,
Mr. D can be re-appointed on the NCLT on completion for next three years as he is attaining age of 65 years after three years.
Question 19.
JSK, a shareholder of CRI (Private) Ltd. filed an application before erstwhile Company Law Board, alleging various acts of oppression and mis-management in the affairs of the Company and sought certain relief measures. The petition was transferred to NCLT on its constitution. The NCLT passed an order on 5th October, 2017 without the consent of the parties. Aggrieved by the order, the shareholder decided to prefer an appeal. Nevertheless the shareholder was suffering from low blood pressure. He was medically advised not to move and he did not move. Therefore, he preferred the appeal with NCLAT on 5th December, 2017. Examine whether the appeal is admissible with reference to time limitation? Identify the provisions governing further appeal on the orders of NCLAT under Section 423 of the Companies Act, 2013. (May 2018, 8 marks) [CAFG -1]
Answer:
As per Section 421 of the Companies Act, 2013, any person aggrieved by an order of the tribunal may prefer an appeal to the Appellate Tribunal. No. appeal shall lie to the appellate Tribunal from an order made by the tribunal with the consent of parties.
Time Period of Appeal:
Every appeal under this Section (i.e. ‘appeal to Appellate Tribunal against order of Tribunal) shall be filed within a period of forty five days from the date on which a copy of the order of the tribunal is made available to the person aggrieved and shall be in such form and accompanished by such fees, as may be prescribed.
Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty five days from the date aforesaid but within a further period of not exceeding forty five days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.
Present Case:
In this case, JSK Ltd. a shareholder of CRI (Private) Ltd. is aggrieved by the order, of (NCLT) Tribunal. He want to file an appeal against the order of Tribunal, so that he can file appeal to NCLAT (Appellate Tribunal) within a period of forty five days from date of order (i.e. 5th October, 2017) of NCLT. But here, Mr JSK has filed appeal on 5th December, 2017, (beyond the period of forty five days) against order of NCLT reason being he was suffering from low blood pressure.
So in light of above provisions time limit to file an appeal before Appellate Tribunal can be extended to further period of forty five days if it is satisfied that appellant was prevented by sufficient cause from filing the appeal within that period. Here, appellant was suffering from low blood pressure so it is a sufficient cause for extention of time limit for further period of forty five days. So, the appeal made is admissible with reference to time limitation subject to request made to Appellate Tribunal for extention of time period.
As per Sec. 423 of the Companies Act, 2013, any person aggrieved by any Order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of receipt of the order of the Appellate Tribunal to him on any question of law arising out of such order. Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period of not exceeding sixty days.
Question 20.
Explain the sub-rule (5) and sub-rule (6) in Rule 3 of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
Answer:
Rule 3(5): A member of the company shall make an application for arrangement, for the purpose of takeover offer in terms of sub-section (11) of section 230, when such member along with any other member holds not less than three-fourths of the shares in the company, and such application has been filed for acquiring any part of the remaining shares of the company.
Explanation I. – “shares” means the equity shares of the company carrying voting rights, and includes any securities, such as depository receipts, which entitles the holder thereof to exercise voting rights.
Explanation II. – Nothing in this sub-rule shall apply to any transfer or transmission of shares through a contract, arrangement or succession, as the case may be, or any transfer made in pursuance of any statutory or regulatory requirement.
Rule 3 (6): An application of arrangement for takeover offer shall contain:-
(a) the report of a registered valuer disclosing the details of the valuation of the shares proposed to be acquired by the member after taking into account the following factors:-
(i) the highest price paid by any person or group of persons for acquisition of shares during last twelve months;
(ii) the fair price of shares of the company to be determined by the registered valuer after taking into account valuation parameters including return on net worth, book value of shares, earning per share, price earning multiple vis-a-vis the industry average, and such other parameters as are customary for valuation of shares of such companies.
(b) details of a bank account, to be opened separately, by the member wherein a sum of amount not less than one-half of total consideration of the takeover offer is deposited.”
Schedule of Fees, for Application for compromise arrangement and amalgamation is ₹ 5,000/-.
Appearance before NCLT/NCLAT Notes
National Company Law Tribunal (NCLT)
The Central Government has constituted National Company Law Tribunal (NCLT) under section 408 of the Companies Act, 2013 w.e.f. 1 st June 2016 consisting of a President and such number of Judicial and Technical members, as the Central Government may deem necessary, to be appointed by it by notification, to exercise and discharge such powers and functions as are, or may be, conferred on it by or under this Actor any other law for the time being in force.
National Company Law Appellate Tribunal (NCLAT)
National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT), with effect from 1st June, 2016.
NCLAT is also the Appellate Tribunal for hearing appeals against the orders passed by NCLT(s) under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC), with effect from 1 st December, 2016.
NCLAT is also the Appellate Tribunal for hearing appeals against the orders passed by insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC.
NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI)
Appeal to Supreme Court (Section 423)
Any person aggrieved by any order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of receipt of the order of the Appellate Tribunal to him on any question of law arising out of such order.
Procedures in respect of matters earlier dealt by other quasi-judicial bodies, courts and Tribunals
Notwithstanding anything contained in any other law for the time being in force an opening civil action or case arising out of the Act, or any other corresponding provision of the Companies Act, 1956 or Reserve Bank of India Act, 1934 is filed or pending before the Company Law Board on the date on which the Tribunal is constituted, and the relevant provisions of the Act dealing with the Tribunal have been given effect, or the Company Law Board has been dissolved in pursuance of the provisions of the Act, then all the cases on such date pending with the Company Law Board or such Benches shall stand transferred to the respective Benches of the Tribunal exercising corresponding territorial jurisdiction as if the case had been originally filed in the Tribunal or its Bench to which it is transferred on the date upon which it was actually filed in the Company Law Board or its Bench from which it was transferred:
Provided that the Tribunal shall consider any action taken under the regulations of the Company Law Board as deemed to have been taken or done under the corresponding provisions of these rules and the provisions of the Act, and shall thereupon continue the proceedings
Scope of services for Practicing Company Secretaries under NCLT
With establishment of NCLT and NCLAT opportunities for Company Secretaries has increased. Linder section 432 of the Companies Act, 2013, Company Secretaries have been authorized to appear before the Tribunal/. Appellate Tribunal. Before setting-up of the Tribunal, the matters dealt by the Tribunal were dealt by the High Court and so the appearances were taken by only advocates.
Areas of increased scope:
- Merger/Amalgamation/Compromise
- Revival of Companies
- Winding up
- Reduction of Capital
- Oppression and mismanagement
- Insolvency and Bankruptcy cases
Practicing Company Secretaries duty towards the Tribunal
- Act in a dignified manner
- Respect the Tribunal
- Not communicate in private .
- Refuse to act in an illegal manner towards the opposition
- Refuse to represent clients who insist on unfair means
- Appear in proper dress code
- Refuse to appear in front of relations
- Not appear in matters of pecuniary interest
- Not stand as surety for client
Court craft and pleading skills
Art of Advocacy
- Must File Memorandum of Appearance with Tribunal along with Pleadings
- Dress Code as Prescribed by Institute/ NCLT Rules
- Service of documents to opposite party, if any
- SWITCH OFF Mobile Phone or keep it in silent mode
- Standing position of councils- Petitioner at Left Hand Side of Judge & Defendant at Right Hand Side of Judge
- Case Summery/Fact Sheet of the Case
Basic preparatory Points
- Take minute facts from the client
- Lend your complete ears to all that client has to say
- Put questions to the client while taking facts
- Give correct picture of judicial View to the problem posed by the client
Drafting of Pleadings
- Quote relevant provisions in the petition
- Do not suppress facts
- Highlight material facts, legal provisions and Court decisions
If you are opponent
- File your reply to the petition at the earliest opportunity
- Take all possible preliminary contentions together with reference to relevant law point and judgements
- Submit your reply to each paragraph of the petition
If you are for the petitioner
- File your rejoinder upon receiving the reply at the earliest opportunity
- Meet clearly with the specific points raised by the opponent in the reply affidavit
Oral Pleadings
- Preparation before presentation of the case
- Carefully read your petition, provisions of law and judgements
- Jot down relevant points on a separate sheet of paper
- Keep copies of judgements to be relied ready for the Tribunal and for your opponent(s).
While presenting your case
- Submit a list of citations to the Court Master before opening of case
- Refer to the order sought to be challenged or reliefs sought to be prayed
- State brief facts
- Formulate issues/points, categorise them and address them one by one
- Take each point, state relevant facts, provisions of law and relevant binding decisions
- Complete all points slowly but firmly
- Take instructions from client in advance with respect to alternative reliefs
Advocacy Tips
- Clarity
- Credibility
- Demeanour
- Eye contact
- Voice modulation
- Psychology
- Be likeable
- Learn to listen
- Entertain your judge. Humour will often bail you out of a tough spot