Amendments in MCS

Latest Cases
added for December 2023 examination

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 Summary of additional cases (16)

Chapter S.no. Name Take away

Company 1 Durga Builders Pvt Ltd NCLAT set aside the order passed by the NCLT. The name of the
vs. Registrar of Appellant Company be restored to the Register of Companies
Law Companies & Anr subject to prescribed compliances.
(NCLAT)
2 IFB Agro Industries Ltd 1. even though Section 111(7) of the 1956 Act seemingly enlarges
vs. Sicgil India Ltd (SC) the power of the CLB, the power of rectification continues to
remain summary in nature and if any seriously disputed questions
arise. 2. the Appellant is not justified in invoking the jurisdiction of
the CLB under Section 111A of the Act for violation of SEBI
regulations.
3 Garish Oberoi & Ors vs. The acts as stated in petition, clearly constitute acts of ‘oppression
Hotel and Restaurant and mismanagement’.
Association of Western
India & Anr (NCLAT)

4 Mukesh Kumar Gupta vs. NCLAT set aside the order passed by the NCLT. The name of the
Registrar of Companies Appellant Company be restored to the Register of Companies
(NCLAT) subject to prescribed compliances.
5 Thyagaraja vs. The If the Petitioner does not satisfy any of the requirements as per
Church of South India Section 2(55) of the Companies Act, 2013, he cannot seek any
Trust& Ors (NCLAT) exemption under Section 244 of the Companies Act, 2013.
 Summary of additional cases (16)
Chapter S.no. Name Take away
6 Union Of India vs. The application/proceedings under section 140(5) of the Act, 2013
Deloitte Haskins And is held to be maintainable even after the resignation of the
Sells LLP (SC) concerned auditors.
7 Official Liquidator, The taxes payable to the respondent during the post- liquidation
Calcutta vs. Ujjain Nagar period would directly amount to the costs and expenses of
Palika Nigam & Ors. (SC) liquidation.
Economic 8 Union of India through The statute (FEMA) itself provides for a penalty up to thrice the sum
Deputy Legal Adviser, involved in such contravention and thereby gives explicit scope to
Law Directorate of the Adjudicating Authority to exercise his discretion, albeit
Enforcement vs. Kamal
Chand (Appellate
judiciously, for imposition of penalty.
Tribunal Under SAFEMA)
Insolvency 9 Andhra Pradesh State The Adjudicating Authority in detail considered the various parts of
Financial Corporation vs. the plan which has been held to be compliant to the Section 30 of
Law Kalptaru Steel Rolling the Code. And there are no grounds made out to interfere with the
Mills Ltd & Ors (NCLAT)
order approving the Resolution Plan.
10 Shahi Md Karim vs. Even if there is an arbitration clause, in the Agreement. The scope
Kabamy India LLP & Anr and objective of the Code is ‘Resolution’, and not a ‘Recovery Mode
(NCLAT) / Forum’.
11 Supriyo Kumar The Adjudicating Authority has gone beyond its jurisdiction in
Chaudhuri & Anr vs. ordering payment of rent by the corporate debtor during the period
Jhunjhunwala Oil Mills of moratorium.
Ltd & Anr (NCLAT)
 Summary of additional cases (16)

Chapter S.no. Name Take away

12 Moser Baer Karamchari Section 327(7) of the Act, 2013 cannot be said to be arbitrary
Union vs. Union of India and/or violative of Article 21 of the Constitution of India.
& Ors (SC)

13 Vistra ITCL (India) Ltd vs. Appellant would be treated as a secured creditor in respect of
Dinkar pledged shares.
Venkatasubramanian
(SC)
Competiti 14 United Breweries Ltd. As the statute does not speak about inclusion of Judicial Member
vs. CCI & Ors (NCLAT) the objection raised by learned counsel for appellant that in
on Law
absence of Judicial Member order impugned is illegal has got no
substance.
Interpreta 15 Cholamandalam As the arbitrator was dejure ineligible to perform his functions and
Investment and Finance therefore lacked inherent jurisdiction or competence to adjudicate
tion of Company Ltd. vs.
Law the disputes in hand, the impugned award cannot be accorded the
Amrapali Enterprises
and Ors. (HC)
privileged status of an award.
 1
DURGA BUILDERS PVT LTD VS. REGISTRAR OF COMPANIES & ANR (NCLAT)
Brief • Appeal filed by Directors of the Company invoking the provisions of Section 252 of the
Facts Companies Act, 2013 for restoration of the name of the Company in the Register maintained
by the the RoC has been rejected.
• Appellant being aggrieved and dissatisfied filed present appeal.
Decision NCLAT set aside the order passed by the NCLT. The name of the Appellant Company be restored to
the Register of Companies subject to prescribed compliances.
Reason • NCLAT observe that the Appellant Company is in litigation therefore, it has not filed the financial
statements and without giving opportunity of hearing, Registrar of Companies struck off the name
of the Appellant Company’s from the Register maintained by him,
• the Bank Statements of the Appellant Company shows that the Appellant Company is having
substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant
Company is not carrying on any business or operations.
• NCLAT set aside the impugned order passed by the NCLT. The name of the Appellant Company be
restored to the Register of Companies subject to the following compliances.
i. Appellant shall pay costs of Rs. 50,000/- to the ROC within 08 weeks from passing of this
Judgment.
ii. After restoration of the Company’s name, the Company shall file all their Annual Returns and
Balances Sheets. The Company shall also pay requisite charges/fee as well as late fee/charges as
applicable within 08 weeks thereafter.
iii. Inspite of present orders, RoC will be free to take any other steps punitive or otherwise under
the Companies Act, 2013 for non- filing/late filing of statutory returns/ documents against the
Company and Directors. The instant Appeal is allowed to the above extent.

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 2
IFB AGRO INDUSTRIES LTD VS. SICGIL INDIA LTD (SC)
Brief • the NCLT passed an order allowing petition under Section 111A of the Companies Act, 1956,
Facts (which is Section 59 of the 2013 Act), for rectification of Members Register.
• The Tribunal, directed the Appellant to buy-back its shares which were held by the
Respondents. In appeal, NCLAT set aside this direction on the ground that the Tribunal
exceeded its jurisdiction.
• It is this order of the Appellate Tribunal which was challenged before the Supreme Court.
• Having heard both sides, we formulate the following questions for our consideration.
I. What is the scope and ambit of Section 111A of the 1956 Act, as amended by Section 59 of
the 2013 Act, to rectify the register of members?
II. Which is the appropriate forum for adjudication and determination of violations and
consequent actions under the SEBI (SAST) Regulations 1997 and the SEBI (PIT) Regulations
1992?
Decision Appeals dismissed. (1. even though Section 111(7) of the 1956 Act seemingly enlarges the power of
the CLB, the power of rectification continues to remain summary in nature and if any seriously
disputed questions arise. 2. the Appellant is not justified in invoking the jurisdiction of the CLB
under Section 111A of the Act for violation of SEBI regulations.)
Reason Question 1:
• This Court, in Standard Chartered Bank v. Andhra Bank Financial Services Ltd. & Ors, and Jai Mahal
Hotels (P) Ltd. v. Devraj Singh & Ors held that even though Section 111(7) of the 1956 Act
seemingly enlarges the power of the CLB, the power of rectification continues to remain summary
in nature and if any seriously disputed questions arise, the Company Court should relegate parties
to a forum which is more appropriate for investigation and adjudication of such disputed questions.
Latest cases (Sheet 1) COMPANY LAW
 2
IFB AGRO INDUSTRIES LTD VS. SICGIL INDIA LTD (SC)
• The principle enunciated in Ammonia’s case relating to the jurisdiction of a Tribunal with respect to
the rectification of the register is well-recognized and consistently followed.
• SC held that the company petition under Section 111A of the 1956 Act for a declaration that the
acquisition of shares by the Respondents as null and void is misconceived. The Tribunal should have
directed the Appellant to seek such a declaration before the appropriate forum. The Appellate
Tribunal is, therefore, justified in allowing the appeal and setting aside the order of the Tribunal.

Question 2:
• The scrutiny and examination of a transaction allegedly in violation of the SEBI (PIT) Regulations will
have to be processed through the regulations and remedies provided therein.
• the Appellant is not justified in invoking the jurisdiction of the CLB under Section 111A of the Act
for violation of SEBI regulations.
• The Tribunal committed an error in entertaining and allowing the company petition filed under
Section 111A of the 1956 Act. Though we are not in agreement with the reasoning adopted by the
Appellate Tribunal in the impugned order, we are in agreement with its conclusion that the Tribunal
exceeded its jurisdiction and therefore, the Appellate Tribunal was correct in setting aside the
judgment.

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 3
GARISH OBEROI & ORS VS. HOTEL AND RESTAURANT ASSOCIATION OF WESTERN INDIA & ANR
(NCLAT)
Brief • The two appeals have been filed under section 421 of the Companies Act, 2013 by the respective
Facts Appellants assailing the impugned order passed by the “NCLT”. The appellants are the sitting
managerial persons.
• The three issues that arise for consideration in the instant appeals are as follows:-
(i) Whether petitioners in the original petition were entitled to maintain the said Company Petition
under sections 241-242 of the Companies Act and whether the waiver granted to them under section
244 to prefer such a petition is correct;
(ii) Whether the alleged acts of oppression and mismanagement as claimed by the petitioners actually
amount to oppression and mismanagement as are required for a section 241-242 petition; and
(iii) Whether the AoA regarding election of President of FHRAI have been followed properly in letter
and spirit in the election of President of FHRAI for the year 2018-19, as was required by law?
Decision Appeals dismissed. The acts as stated in petition, clearly constitute acts of ‘oppression and
mismanagement’.
Reason • On the first issue: NCLAT held that
i. Looking to the facts and circumstances the acts of oppression and mis- management have
continued in one form or the other right from the filing of the Casino Hotels petition, and
ii. therefore, in the interest of corporate democracy and to ensure proper functioning of FHRAI in
accordance with the AoA and to examine the alleged acts of oppression and mismanagement,
NCLAT is of the view that, it is a case whether exceptional circumstances demand grant of waiver
under section 244 of the Companies Act to enable the petitioners to raise their grievances which
could then be adjudicated upon. The Impugned Order is correct on this account.

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 3
Garish Oberoi & Ors vs. Hotel and Restaurant Association of Western India & Anr (NCLAT)
• On the second issue:
i. in instant petition, it is clear that there is certainly an under-current of feeling against the Eastern
Region members, and Mr. Sudesh Kumar Poddar among the Western and Northern Regions
members which arose from the time of the Casino Hotels case.
ii. the procedure being adopted in the election of the President of FHRAI for the year 2018-19 as
interpreted by the siting President Mr. Garish Oberoi is clearly an act of oppression and
mismanagement, which if not checked at nascent stage right in the beginning, can result in
further oppression of FHRAI’s members and mismanagement of the affairs of the company to the
detriment of the functioning of the company FHRAI and against the legitimate interests of its
members.
iii. The intent of sections 241-242 is to protect the company’s members from acts of oppression and
mis- management and to also protect and preserve the interest of the company, and in that light
we are of the clear view that in the present case, the acts as stated in petition, clearly constitute
acts of ‘oppression and mismanagement’.
• On the third issue:
By not completing the process of election of President for the year 2018-19, and presiding over the
Executive Committee as sitting President and also electing the office bearers including the .Vice
Presidents and others, Mr. Garish Oberoi not only exhibited a blatant and high-handed oppressive
behaviour nefariously assisted by some other members who were acting like a ‘clique’, he also
disregarded provisions of the AoA and acted in an oppressive manner.
 4
MUKESH KUMAR GUPTA VS. REGISTRAR OF COMPANIES (NCLAT)
Brief • Appeal filed by Appellant Company for restoration of the name of the Company in the
Facts Register maintained by the Registrar of Companies (RoC), NCT of Delhi and Haryana was
dismissed by the Tribunal.
• Appellant being aggrieved and dissatisfied filed present appeal.
Decision NCLAT set aside the order passed by the NCLT. The name of the Appellant Company be restored to
the Register of Companies subject to prescribed compliances.
Reason • NCLAT observe the Audited Financial Statements for the Financial Years from 2014-15 to 2015-16
shows that the Appellant Company is having substantial movable and immovable assets and the
Company was/is in operation when the name was struck off. Therefore, it cannot be said that the
Appellant Company is not carrying on any business or operations.
• the order passed by the National Company Law Tribunal as well as Registrar of Companies is not
sustainable in law.
• NCLAT set aside the impugned order passed by the NCLT. The name of the Appellant Company be
restored to the Register of Companies subject to the following compliances.
i. Appellant shall pay costs of Rs. 200,000/- to the ROC, NCT Delhi & Haryana within 08 weeks
from passing of this Judgment.
ii. After restoration of the Company’s name, the Company shall file all their Annual Returns and
Balances Sheets. The Company shall also pay requisite charges/fee as well as late fee/charges as
applicable.
iii. Inspite of present orders, RoC will be free to take any other steps punitive or otherwise under
the Companies Act, 2013 for non- filing/late filing of statutory returns/ documents against the
Company and Directors. The instant Appeal is allowed to the above extent.

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 5
THYAGARAJA VS. THE CHURCH OF SOUTH INDIA TRUST& ORS (NCLAT)
Brief • Aggrieved by impugned order passed by the NCLT, the Appellant preferred the Appeal,
Facts challenging the dismissal of the Company Petition by the NCLT.
Decision Appeal dismissed. If the Petitioner does not satisfy any of the requirements as per Section
2(55) of the Companies Act, 2013, he cannot seek any exemption under Section 244 of the
Companies Act, 2013.
Reason • In the instant case, apart from not being a party to the main Petition, the Appellant was,
admittedly, only a Member of the Church and he has not filed any documentary evidence to
substantiate that any of the requirements under Section 2(55) of the Companies Act, 2013, is met.
• NCLAT was of the earnest view that merely because a person is a Member of Church, he does not
have the locus standi to file a Petition under Sections 241 & 242 of the Companies Act, 2013,
against a Section 8 Company of which, he is admittedly, not a ‘Member’.
• as the Petitioner does not satisfy any of the requirements stipulated under Section 2(55) of the
Companies Act, 2013, he cannot seek any exemption under Section 244 of the Companies Act,
2013.
• NCLAT, does not find any illegality or infirmity, in the well-considered and reasoned order of the
Tribunal (NCLT).

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UNION OF INDIA VS. DELOITTE HASKINS AND SELLS LLP (SC)
Brief • the High Court has interpreted section 140(5) of the Act, 2013 and has set aside the order passed
Facts by the NCLT upholding the maintainability of Section 140(5) petition and has quashed Section
140(5) petition and has set aside/quashed the directions issued by the Ministry of Corporate Affairs
and the SFIO and also has quashed/ set aside criminal proceedings instituted by the SFIO.
• Hence, the present appeals.
Decision The application/proceedings under section 140(5) of the Act, 2013 is held to be maintainable even
after the resignation of the concerned auditors.
Reason • Subsequent resignation of an auditor after the application is filed under section 140(5) by itself
shall not terminate the proceedings under section 140(5). Resignation and/or removal of an
auditor cannot be said to be an end of the proceedings under section 140(5).
• The impugned order passed by the High Court quashing and setting aside the
application/proceedings under section 140(5) is hereby quashed and set aside.
• Consequently, the impugned judgment and order passed by the High Court quashing and setting
aside the NCLT order is hereby quashed and set aside.
• The application/proceedings under section 140(5) of the Act, 2013 is held to be maintainable even
after the resignation of the concerned auditors and now the NCLT therefore to pass a final order on
such application after holding enquiry in accordance with law and thereafter on the basis of such
final order, further consequences as provided under the second proviso to section 140(5) shall
follow.
• However, SC have not expressed anything on merits on the allegations against the concerned
auditors and it is ultimately for the NCLT/Tribunal to pass a final order on the application filed by
the Central Government under section 140(5) of the Act, 2013.

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 7
OFFICIAL LIQUIDATOR, CALCUTTA VS. UJJAIN NAGAR PALIKA NIGAM & ORS (SC)
Brief • the dispute is with regard to the rates and taxes for the period between 10.07.1997 (being
Facts the date on which the company was ordered to be wound up) and 04.07.2003 (being the
date on which the sale in favour of the purchaser was confirmed).
• whether the claims so made by the respondent No. 1 Nigam towards property tax and water
tax pertaining to the post- liquidation period, from the date of order of winding up and until
the date of confirmation of sale of assets to the auction purchaser, are admissible against the
appellant OL.
Decision Appeal dismissed. The taxes payable to the respondent during the post- liquidation period
would directly amount to the costs and expenses of liquidation.
Reason • The provisions contained in Sections 529A and 530 essentially relate to overriding preferential
payments as also preferential payments in relation to the classes of dues/debts specified therein.
• However, the question of payment of the same would arise after payment of costs and expenses of
winding up that are properly incurred by the appellant OL and are to be paid in priority.
• As aforesaid, the taxes payable to the respondent No. 1 Nigam during the period in question would
directly amount to the costs and expenses of liquidation.
• This being the position, in our view, the Company Court and then the Division Bench of the High
Court have rightly underscored the faults on the part of the appellant OL and have rightly held that
the liability on account of the property tax and water tax claimed by the respondent No. 1 to the
extent rejected by the appellant OL has been a post liquidation liability, which the OL was obliged
to discharge, in view of omission in the sale notice and then, in view of the operation of Rule 338 of
the Rules of 1959.

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 8
UNION OF INDIA THROUGH DEPUTY LEGAL ADVISER, DIRECTORATE OF ENFORCEMENT VS. KAMAL
CHAND (APPELLATE TRIBUNAL UNDER SAFEMA)
Brief • The present appeal is for enhancement of penalty of Rs. 16,00,00,000/- (Rupees Sixteen
Facts Crore only) imposed by the Adjudicating Authority on the respondent
• The grounds taken in the appeal for enhancement of penalty is to state that the penalty
imposed by the Adjudicating Authority is highly unreasonable and ridiculously low.
• The appellant has stated that the Adjudicating Authority has ignored the provisions of Section
13 (1) of FEMA which provides for imposition of penalty up to thrice the sum involved in the
contraventions.
Decision The statute (FEMA) itself provides for a penalty up to thrice the sum involved in such contravention
and thereby gives explicit scope to the Adjudicating Authority to exercise his discretion, albeit
judiciously, for imposition of penalty.
Reason • Appellate Tribunal in this case referred to the Supreme Court in State of MP and Ors. Vs.
Bharat Heavy Electricals in its order held that in a statute prescribing the provision for penalty
equal to ten times the amount of entry tax, the statute prescribed only a maximum limit and
did not prescribe an irreducible amount depriving the assessing authority of any discretion in
this regard.
• The stand of the State in the case supra conceded that the assessing authorities are not
bound to levy fixed penalty equal to ten times the amount of entry tax.
• In fact, in the present case the statute (FEMA) itself provides for a penalty up to thrice the
sum involved in such contravention and thereby gives explicit scope to the Adjudicating
Authority to exercise his discretion, albeit judiciously, for imposition of penalty.
Latest cases (Sheet 1) ECONOMIC LAW
 8
UNION OF INDIA THROUGH DEPUTY LEGAL ADVISER, DIRECTORATE OF ENFORCEMENT VS. KAMAL
CHAND (APPELLATE TRIBUNAL UNDER SAFEMA)
• In view of the appeal having failed to bring out the reasons that why the penalty imposed is low
and as to how the Adjudicating Authority has not exercised his discretion judiciously,
• It was observed that the order of the Adjudicating Authority cannot be interfered with. In view of
the aforementioned discussions and observations, the appeal fails and is dismissed

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 9
ANDHRA PRADESH STATE FINANCIAL CORPORATION VS. KALPTARU STEEL ROLLING MILLS LTD &
ORS (NCLAT)
Brief • Two Appeals have been filed by the same Appellant challenging order passed by the NCLT,
Facts approving the Resolution Plan of the Corporate Debtor and another order allowing the
application filed by the Resolution Professionals seeking direction to the Appellant for
releasing original title deeds of the property mortgaged with the Appellant by the Corporate
Debtor.
Decision The appeal dismissed. The Adjudicating Authority in detail considered the various parts of the
plan which has been held to be compliant to the Section 30 of the Code. And there are no
grounds made out to interfere with the order approving the Resolution Plan.
Reason • The Adjudicating Authority in detail considered the various parts of the plan which has been
held to be compliant to the Section 30 of the Code.
• Learned counsel for the Resolution Professional has rightly placed reliance on the judgment
of Hon’ble Supreme Court in India Resurgence ARC Pvt. Ltd. vs. Amit Metaliks Ltd. & Anr,
where the SC has held that distribution of the amount to the Financial Creditors as per the
decision of the CoC cannot be permitted to be challenged.
• NCLAT thus, are satisfied that there are no grounds made out to interfere with the order
approving the Resolution Plan.
• Now, coming to the order passed by the Adjudicating Authority allowing the application filed
by the Resolution Professionals , suffice it to say that the order is a consequential order to
the approval of the plan, which needs no interference by this Appellate Tribunal. In result,
both the Appeals are dismissed.
Latest cases (Sheet 1) INSOVENCY LAW
 10
SHAHI MD KARIM VS. KABAMY INDIA LLP & ANR (NCLAT)
Brief • NCLT passed order, whereby it has admitted the application filed under Section 9 of the
Facts Insolvency and Bankruptcy Code, 2016,
• Aggrieved by the ‘Order’ the Suspended Director of the ‘Corporate Debtor’ preferred this
Appeal.
Decision Even if there is an arbitration clause, in the Agreement. The scope and objective of the Code is
‘Resolution’, and not a ‘Recovery Mode / Forum’.
Reason • NCLAT, does not find any tangible / substantial grounds to interfere with the impugned order.
• Even if there is an arbitration clause, in the Agreement. The scope and objective of the Code
is ‘Resolution’, and not a ‘Recovery Mode / Forum’.
• AA observed that there were recurring defaults on behalf of the Corporate Debtor and that
the Operational Creditor, has requested for full and final payment of the outstanding dues.
but the amounts were not paid.
• For all the aforenoted reasons and discussions, this Tribunal, does not find any illegality or
infirmity, in the passed by the Adjudicating Authority and this Appeal is dismissed
accordingly.

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 11
SUPRIYO KUMAR CHAUDHURI & ANR VS. JHUNJHUNWALA OIL MILLS LTD & ANR (NCLAT)
Brief • These appeals have been filed by the Appellants, who are aggrieved by the order passed by the
Facts NCLT in the three interlocutory applications.
• The Appellant/JOML was aggrieved by the part of the order whereby vacant possession of the said
premises has not been directed to be handed over to JOML and further the rent directed to be paid
is as per the assessment done by the District Magistrate and not the amount which was agreed to
between the two parties.
Decision The Adjudicating Authority has gone beyond its jurisdiction in ordering payment of rent by the
corporate debtor during the period of moratorium.
Reason • the present case is covered under section 14(1)(d) of the IBC, whereby the recovery of the
‘said premises’ in the possession of the corporate debtor, though owned by JOML, is
expressly prohibited during the moratorium period.
• The Adjudicating Authority has gone beyond its jurisdiction in ordering payment of rent by
the corporate debtor during the period of moratorium.
• The Adjudicating Authority did not adjudicate on the prayer made by the RP for restoration of
the possession of the ‘said premises’, which it should have done to settle the dispute early. In
view of the fact that liquidation order with respect to the corporate debtor has already been
passed by the Adjudicating Authority, no orders are now necessary in the present appeals.
• We thus hold that the Impugned Order is erroneous, and therefore, liable to be set aside. The
appeal is disposed of accordingly.

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MOSER BAER KARAMCHARI UNION VS. UNION OF INDIA & ORS (SC)
Brief • writ petition under Article 32 of the Constitution of India was filed
Facts • the petitioner - union has sought for an appropriate writ, direction or order striking down Section
327(7) of the Companies Act, 2013 as arbitrary and violative of Article 21 of the Constitution of
India.
• The petitioner has also sought for an appropriate direction so as to leave the statutory claims of
the “workmen’s dues” out of the purview of waterfall mechanism under Section 53 of the
Insolvency and Bankruptcy Code, 2016.
Decision Section 327(7) of the Act, 2013 cannot be said to be arbitrary and/or violative of Article 21 of the
Constitution of India.
Reason • Depending upon the facts, in some cases, the waterfall mechanism in the Code may be more
beneficial than the hierarchy provided under Section 326 of the Companies Act, 2013 and vice-
versa. Therefore, SC does not accepted the arguments of the petitioners.
• The unpaid dues of the workmen are adequately and significantly protected in line with the
objectives sought to be achieved by the Code and in terms of the waterfall mechanism prescribed
by Section 53 of the Code.
• Some sacrifices have to be always made for the greater good, and unless such sacrifices are prima
facie apparent and ex facie harsh and unequitable as to classify as manifestly arbitrary, these would
be interfered with by the court.
• as Section 327(7) of the Act, 2013 provides that Sections 326 and 327 of the Act, 2013 shall not be
applicable in the event of liquidation under the IBC, which has been necessitated in view of the
enactment of IBC and it applies with respect to the liquidation of a company under the IBC.

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MOSER BAER KARAMCHARI UNION VS. UNION OF INDIA & ORS (SC)
• Section 327(7) of the Act, 2013 cannot be said to be arbitrary and/or violative of Article 21 of the
Constitution of India.
• In case of the liquidation of a company under the IBC, the distribution of the assets shall have to be
made as per Section 53 of the IBC subject to Section 36(4) of the IBC, in case of liquidation of
company under IBC.
• In view of the above and for the reasons stated above, the writ petition(s) lack merits and the same
deserve to be dismissed and are accordingly dismissed. However, in the facts and circumstances of
the case, there shall be no order as to costs.

Latest cases (Sheet 1) INSOVENCY LAW

 13
VISTRA ITCL (INDIA) LTD VS. DINKAR VENKATASUBRAMANIAN (SC)
Brief • The Resolution Professional of the corporate debtor filed application before the Adjudicating
Facts Authority seeking approval of the resolution plan.
• The AA dismissed the application filed by the appellants being I.A. No.62 of 2020 seeking to include
its claim in the resolution plan.
• the NCLT observed that the appellants not having advanced any money to the Corporate Debtor as
a financial debt would not be coming within the purview of financial creditor of the Corporate
Debtor. Making above observations, the NCLAT has dismissed the appeal.
• Hence the present appeal before the Supreme Court.
Decision Appellant would be treated as a secured creditor in respect of pledged shares.
Reason • SC give the option to the successful resolution to treat the Appellant No.1 – Vistra as a secured
creditor, who will be entitled to retain the security interest in the pledged shares, and in terms
thereof, would be entitled to retain the security proceeds on the sale of the said pledged shares
under Section 52 of the Code read with Rule 21A of the Liquidation Process Regulations.
• The second recourse available, would be almost equivalent in monetary terms for the Appellant
No. 1 Vistra, who is treated it as a secured creditor and is held entitled to all rights and obligations
as applicable to a secured creditor under Section 52 and 53 of the Code. This to our mind would be
a fair and just solution to the legal conundrum and issue highlighted before us.
• The impugned judgment of the NCLAT affirming the view taken by the NCLT is partly modified in
terms of our directions holding that appellant no.1 – M/s. Vistra ITCL (India) Limited would be
treated as a secured creditor, who would be entitled to all rights and obligations as applicable to a
secured creditor in terms of Sections 52 and 53 of the Code, and in accordance with the pledge
agreement dated 05.07.2016.
Latest cases (Sheet 1) INSOVENCY LAW
 14
UNITED BREWERIES LTD. VS. CCI & ORS (NCLAT)
Brief • The CCI formed an opinion that prima facie the conduct of appellants and private respondents in
Facts contravention of provisions of Section 3(1) read with Section 3(3)(a) of the Act and directed the
Director General to conduct investigation and submit report.
• The Commission, in terms of Section 27(a) of the Act, directs the parties to cease and desist in
future from indulging in any practice/conduct/activity, which has been found in the present order to
be in contravention of the provisions of Section 3 of the Act.
• Aggrieved by the Order of CCI Appeal before the NCLAT.
• the Appellants raised the contention that there was no 'judicial member' in the CCI and hence the
entire proceedings are void. The CCI inter alia submitted that the absence of judicial member does
not render the Impugned Order void.
Decision As the statute does not speak about inclusion of Judicial Member the objection raised by learned
counsel for appellant that in absence of Judicial Member order impugned is illegal has got no
substance.
Reason • NCLAT observed that on perusal of provisions it is evident that nowhere it has been indicated
that CCI must consist a Judicial Member.
• There is a selection committee presided over by Hon'ble the CJI or his nominee besides other
three Members.
• It is settled that if a statute speaks to do it in a particular manner that has to be done in the
same manner not in other way.
• Since the statute does not speak about inclusion of Judicial Member the objection raised by
learned counsel for appellant that in absence of Judicial Member order impugned is illegal
has got no substance.
Latest cases (Sheet 1) COMPETITION LAW
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CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LTD. VS. AMRAPALI ENTERPRISES AND
ORS. (HC)
Brief • This application was filed under Section 36 of the Arbitration and Conciliation Act, 1996 by the
Facts 'award holder' seeking execution of an arbitral award passed by Sole Arbitrator.
• the impugned award has been challenged under Section 34 of the Act before the City Civil Court.
However, the High Court understand that the same may be time barred.
• From the submissions made by the parties and perusal of the arbitral award, it is apparent that Sole
Arbitrator was unilaterally appointed by the award holder.
• Further, the arbitral proceedings were conducted without participation of the award debtors and
consequently, the arbitral award was passed ex-parte.
Decision As the arbitrator was dejure ineligible to perform his functions and therefore lacked inherent
jurisdiction or competence to adjudicate the disputes in hand, the impugned award cannot be
accorded the privileged status of an award.
Reason • It is a settled principle of law that compliance with Section 12(5) read with Schedule VII is sine qua
non for any arbitral reference to gain recognition and validity before the Courts.
• In the present facts in hand, an arbitral reference which itself began with an illegal act has vitiated
the entire arbitral proceedings from its inception and the same cannot be validated at any later
stage. Thus, it would be a logical inference to consider the aforesaid arbitral proceedings as void ab
initio.
• The High Court said that in my view, the impugned award, which was passed by a dejure ineligible
arbitrator, suffers from a permanent and indelible mark of bias and prejudice which cannot be
washed away at any stage including the execution proceedings.
• Hence, the impugned award cannot be accorded the privileged status of an award.

Latest cases (Sheet 1) INTERPRETATION OF LAW