Corporate Insolvency Resolution Process under I&B Code is barred if no returns have been filed by the company: NCLT [Read Order]

Corporate Insolvency Resolution Process - NCLT - Taxscan

The National Company Law Tribunal (NCLT) dismissed the application for Corporate Insolvency Resolution Process under Section 10 of Insolvency Bankruptcy Code filed by M/s Neesa Infrastructure Limited on the grounds that  no returns have been filed by the company.

An authorised signatory, Mr. Sanjay Gupta on behalf of M/s. Neesa Infrastructure Limited filed the petition under Section 10 of The Insolvency and Bankruptcy Code, 2016 read with Rule 7 of The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, as operational creditor/applicant.

On issuance of notice, the financial creditors namely State Bank of India, Central Bank of India, Indian Overseas Bank and Small Industries Development Bank of India (SIDBI) appeared through counsel and filed objections.

The tribunal after considering the record noted that as per the record of the financial creditor – Central Bank of India, there are five directors. However, subsequently, when it is verified with the MCA portal it is found that the pattern and status of the Directors have been changed and the same has never been informed to the financial creditors in relation to CBI.

Further, the tribunal also noted that Ms. Neelu Gupta has never been a Director on the Board of the applicant company and as such she cannot execute SPA in favour of Mr. Sanjay Gupta.

The tribunal, on perusal of the record found that no Board Resolution is ever passed by the company authorising Mr. Sanjay Gupta to file the instant application. Further, on perusal of the record it appears that Mr. Sanjay Gupta obtained Special Power of Attorney in his favour issued by Ms. Neelu Gupta flouting all the norms of the Companies Act thereby the very power given in favour of Mr. Sanjay Gupta is bad in the eye of law and as such the application is not maintainable for want of proper authorisation.

The tribunal consisting of Technical Member, Chockalingam Thirunavukkarasu and Judicial Member, Ms. Manorama Kumari held that under the head “deferred tax liability” an amount of Rs.10,34,37,089 has been shown thereby meaning that no returns have been filed by the company.

The Tribunal noted that the objector banks have already initiated proceedings under RDDB Act, 1993 and SARFAESI Act, 2002 and to install the said proceedings, the applicant has filed the instant application, so as to initiate moratorium and to get stayed the proceedings initiated by the banks.

“Under such circumstances, the instant application has no merits and, therefore, requires to be dismissed,” NCLT said.

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