Bombay High Court Cancels Fraudulent Incorporation: Striking Name Similarity and Misuse of Automated Name Approval System Lead to Company Deregistration and Remittance of Funds - The Bombay High Court’s decision underscores that the statutory prohibition against the registration of companies with names identical or too nearly resembling existing entities is absolute and not subject to circumvention via automated systems or technicalities. The Court’s order to cancel the registration of the fraudulently incorporated company, direct the remittance of funds to the liquidation account, and initiate further inquiry highlights the seriousness with which fraudulent incorporations and misuse of corporate processes are viewed. Companies, regulators, and banks must ensure rigorous scrutiny at every stage of the incorporation process, with special attention to name similarity and address duplication.
NCLAT Chennai Refuses Interim Injunction to Director Removed in EGM Absent Principal Petition Challenge; Dismisses Appeal Amid Allegations of Forum Shopping and Contradictory Pleadings - The NCLAT’s decision reiterates that interim reliefs, especially those concerning directorship and board composition, cannot be granted unless the relief sought is clearly anchored in the principal company petition. Attempts to secure such relief via subsequent applications or by introducing new grounds after the filing of the original petition are not maintainable. Parties must ensure that all relevant allegations and challenges are included in the main petition to avoid procedural setbacks and denial of interim relief.
NCLT Ahmedabad Rules Mere Removal of Directors via EOGM Does Not Constitute Oppression or Mismanagement Absent Ongoing Oppressive Conduct - On the basis of the Tribunal’s findings, it is clear that mere removal of directors through a properly convened EOGM, even if accompanied by procedural irregularities, does not meet the threshold for oppression or mismanagement under Sections 241 and 242 of the Companies Act, 2013, unless it is part of a sustained, continuing oppressive conduct. Petitioners seeking relief under these provisions must establish a consistent pattern of prejudicial or oppressive behavior, rather than isolated incidents or matters of internal governance.
Bombay High Court Rules Special Court Can Independently Determine Interest in SEBI Penalty Compounding, Limits Retrospective Application of Section 28A - The High Court’s ruling establishes that in compounding proceedings under section 24A of the SEBI Act, the Special Court has the authority to determine the interest payable independently of SEBI’s Recovery Certificate. The statutory framework for interest under section 28A read with section 220 of the Income-tax Act applies only from 18-07-2013 onwards. For earlier periods, the Interest Act, 1978 governs the rate, capped at 6% per annum. The Court’s decision ensures that compounding is not frustrated by mechanical reliance on SEBI’s calculations and that interest is calculated in accordance with the law as it stood for different periods.
SAT Clarifies: Penalty Under SEBI Act for Fraudulent Trade Practices Can Be Reduced Below Statutory Minimum After Considering Mitigating Factors - Based on the Tribunal’s findings, it is now clear that the adjudicating authority, while considering penalties under Section 15HA for fraudulent and unfair trade practices, is empowered to reduce the penalty below the statutory minimum, provided there are adequate mitigating circumstances as per Section 15J. Hence, assessees facing such proceedings must ensure that all relevant mitigating factors are brought on record during adjudication.
Section 241 of the Companies Act, 2013 - NCLT Chandigarh Upholds Validity of Share Transfer and Loan Transactions Amid Allegations of Oppression and Mismanagement in Alchemist Group Entity - Based on the comprehensive examination of facts and legal principles, the Tribunal concluded that the petition lacked the requisite substantiation and specificity necessary for relief under sections 241 and 242. The respondents’ adherence to pre-emption rights and the regularisation of the loan transaction were legally sound. The absence of any demonstrated prejudice or oppressive conduct resulted in the dismissal of the petition.
NCLAT Upholds Interim Orders Restraining Director Payments and Third-Party Asset Dealings Amid Section 167(1)(b) Disqualification Dispute - In conclusion, the NCLAT has reaffirmed the primacy of interim orders in safeguarding the status quo, especially where reliefs have been specifically sought in the underlying petition and where no urgent or substantiated need for modification is demonstrated by the appellant. The Tribunal’s insistence on procedural discipline and the proper channeling of requests for relief reinforces the importance of comprehensive pleadings and timely applications.
NCLT Ahmedabad Orders Transmission of Shares to Legal Heirs Without Probate or Share Certificates Where Company Fails to Comply with Section 56 of Companies Act - The NCLT Ahmedabad has allowed the appeal and ordered that the names of the legal heirs be entered in the Register of Members of KFPL in respect of shares held by the deceased ‘M.’ The Tribunal held that where the legal heirs have established their entitlement and submitted the required documents, the company cannot insist upon probate or original share certificates for the purpose of transmission. The order directs immediate rectification of the Register of Members without further procedural impediments.
SAT Mumbai Reduces SEBI Penalty on RTA for Procedural Lapses and Technical Non-Compliance, Considers Director’s Age and COVID-19 Hardships - The order establishes that regulatory penalties under Section 15HB of the SEBI Act, 1992, must be proportionate and take into account bona fide explanations and extraordinary hardships faced by regulated entities. In this instance, the SAT found that the non-compliance was not deliberate or egregious, and therefore, a reduced penalty of Rs. 2 lakhs was deemed appropriate. Entities facing similar circumstances must document and present bona fide reasons and mitigating factors with supporting evidence to seek relief in adjudication proceedings.
Section 59 of the Companies Act, 2013 - NCLT Ahmedabad Orders Rectification of Share Register After Company Fails Due Diligence in Duplicate Share Issuance and Dematerialisation Fraud - On the basis of the above findings, the Tribunal concluded that the deletion of the appellants’ names from the register of members was wrongful and that the respondent company and its agents had failed to exercise due care as mandated by law. The Tribunal therefore directed rectification of the register of members to restore the appellants’ names and accorded them appropriate relief. This decision serves as a clear directive for companies to adhere strictly to legal requirements regarding share transfers, duplicate issuance, and dematerialisation processes.
SAT Mumbai Directs SEBI to Re-examine VBL's Concealment of SPA Termination under Regulation 30 of LODR - The SAT’s decision mandates that listed entities must ensure all material events, particularly those concerning the termination or cancellation of significant agreements, are disclosed conspicuously and unambiguously in their main stock exchange filings. Disclosures that are relegated to notes or ancillary documents do not satisfy the requirements of Regulation 30 and may be treated as non-disclosure, exposing companies to regulatory action. SEBI has been instructed to re-examine the matter, signaling stricter scrutiny of disclosure practices.
Supreme Court Declines to Entertain SLP in View of Unexplained 406-Day Delay; Upholds Bombay High Court Decision - The Supreme Court’s decision underscores the imperative for litigants to adhere strictly to statutory timelines and to provide cogent reasons for any delay in seeking appellate remedies. Mere invocation of administrative or procedural lapses will not suffice for condonation of delay, particularly where the delay is excessive. Furthermore, the Court’s readiness to examine the merits even at the stage of condonation indicates its commitment to judicial efficiency and the finality of lower court orders in the absence of substantial cause.
Section 59 of the Companies Act, 2013 - NCLT Bengaluru Rejects Impleadment Plea in Shareholding Dispute for Want of Documentary Evidence and Statutory Compliance - The NCLT, Bengaluru Bench, held that, in the absence of a valid share transfer form, supporting payment evidence, and disclosure in statutory filings, the applicant’s claim to shareholding was unfounded. Consequently, the application for impleadment in the Section 59 rectification proceedings between the original shareholder and the company was dismissed as not maintainable.
Orissa High Court Rules RERA Registration Not Mandatory for Projects Completed Before Act’s Enforcement; Completion Certificate Valid Despite Absence of Fire Safety Certificate - Based on the above findings, the Orissa High Court concluded that real estate projects with completion certificates issued prior to the commencement of the RERA Act are outside the purview of the Act’s registration requirements. Furthermore, as per the extant local regulations (Regulation 67), the absence of a fire safety certificate does not invalidate a completion certificate if a NOC has been obtained from the competent authority. Developers in similar situations are not legally obligated to seek RERA registration for such projects.
Orissa High Court Sets Aside MSME Facilitation Council Award, Orders Fresh Hearing on Supplier Status and Conciliation Compliance - This decision mandates strict compliance with the statutory conciliation process under Section 18(2) of the MSMED Act before any arbitration can commence. The Council must also proactively determine its jurisdiction, including the supplier status of the claimant, by examining all relevant materials and providing both parties a fair opportunity to be heard. Awards passed without adherence to these procedural requirements are liable to be set aside.
Delhi High Court Rules MSMED Registration Must Precede Contract and Service for Act’s Protection: MSEFC Reference Set Aside in Hotel Renovation Dispute - The Delhi High Court has clarified that the benefits of the MSMED Act, 2006, including recourse to the Facilitation Council under Section 18, are available only when the supplier is registered as a micro or small enterprise at the time of entering into the contract and rendering of services. Registration obtained after contract execution or service completion does not entitle the entity to the Act’s protections or remedies. Entities engaging in contracts must ensure their MSMED registration is in place prior to contract formation and service commencement to claim statutory benefits.
NCLAT Clarifies Limitation Period in Share Transfer Disputes: Prior Knowledge Bars Rectification Petition on Grounds of Fraud - In summary, the NCLAT held that the appellants’ petition for rectification of the register of members was barred by limitation, as they had knowledge of the alleged fraudulent share transfers well before the date claimed. The invocation of Section 17 of the Limitation Act was rejected, as the facts necessary to pursue a remedy were known to the appellants more than a decade prior to filing the petition. Thus, the appeal was dismissed, upholding the order of the lower tribunal.
Delhi High Court Upholds MSEFC Jurisdiction for Payment Dispute Where Supplier Reclassified Post-Contract: Three-Year Benefit Window Affirmed - In light of the above, the Delhi High Court’s decision clarifies that enterprises reclassified to a higher category under the MSMED Act do not lose the right to seek redress before the MSEFC for disputes related to contracts made during their earlier classification for a period of three years from reclassification. This actionable conclusion allows suppliers to confidently pursue claims even if their enterprise status changes post-contract, provided the reference is made within the prescribed window.
Delhi High Court Rules Mere Procurement from MSMEs Does Not Confer ‘Supplier’ Status under MSME Act—Facilitation Council’s Jurisdiction Quashed in Toll Management Dispute - The High Court’s decision definitively establishes that only those entities who directly supply goods or render services as micro or small enterprises, or are otherwise recognized as ‘suppliers’ under Section 2(n) of the MSME Act, can invoke the jurisdiction of the Facilitation Council under Sections 17 and 18. Mere procurement of goods from MSMEs, without a direct supply arrangement between the MSME and the buyer, is insufficient to confer ‘supplier’ status. The Facilitation Council’s award, rendered without such jurisdiction, is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Calcutta High Court Restrains Arbitral Award's Interest Rate: Medium Enterprises Not Entitled to Statutory Interest under MSMED Act, Substitutes 24.6% with 8% p.a. - The Calcutta High Court decisively ruled that medium enterprises are excluded from the special statutory interest regime under section 16 of the MSMED Act, due to the restrictive definition of ‘supplier’ in section 2(n). As a direct result, the arbitral tribunal’s award of 24.6% interest was set aside and replaced with a more reasonable 8% per annum for the purposes of stay. This outcome clarifies that medium enterprises cannot claim the benefit of enhanced interest rates under the MSMED Act, and any such award by arbitral tribunals is liable to be corrected by the courts.
Bombay High Court Authorizes Transfer of Rs. 84 Crores with Accrued Interest to Settlement Account in Accordance with NCLT-Approved Scheme, Upholds Judicial Oversight - After a meticulous review of the Scheme of Arrangement and the NCLT’s order dated 28.11.2025, the Bombay High Court has permitted the transfer of Rs. 84 crores, along with accrued interest, from the Registry to the Settlement Account. This decision is conditional upon adherence to any extant or future judicial orders, reinforcing the principle that court-sanctioned schemes do not override judicial authority. Parties are reminded to seek further directions from the relevant courts as and when required, particularly if any new issues or objections arise.
NCLAT Upholds Scheme of Arrangement Despite MPID Act Attachments: Minority Creditor’s Challenge Dismissed for Lack of Locus - Based on the overwhelming support for the scheme, the lack of sufficient interest or standing on the part of the appellant, and judicial precedent affirming that the NCLT’s approval does not impinge upon the statutory rights preserved under the MPID Act or interfere with criminal or civil court proceedings, the NCLAT dismissed the appeal. This decision affirms that only those parties meeting the statutory thresholds may challenge such schemes and that approved schemes do not override or nullify statutory attachments or criminal proceedings under other laws.
Facilitation Council's Authority Upheld: High Court Confirms MSMED Act Prevails Over Arbitration Clause in Supplier-Buyer Payment Dispute - The Court concluded that the writ petition was premature and not maintainable at this stage, as the petitioner had ample opportunity to raise its contentions before the MSEFC and, if aggrieved by the outcome, to pursue statutory remedies under the Arbitration and Conciliation Act, 1996. The special status of the MSMED Act was reaffirmed, and the writ petition was accordingly disposed of, allowing the proceedings before the Facilitation Council to continue.
NCLAT Upholds NCLT’s Discretion to Limit Oral Arguments—Written Submissions and One-Hour Hearing Satisfy Natural Justice - The NCLAT held that the appellant was afforded a reasonable and fair opportunity to present its case, both orally and in writing. The Tribunal reiterated that the principles of natural justice require a fair—not unlimited—chance to be heard. The NCLT’s regulatory authority over its own procedure was reaffirmed, and the appeal was dismissed, with the NCLT being requested to address all pending applications alongside the main matter.
Supreme Court Mandates NCLT to Pass Reasoned Order on Oppression and Mismanagement Allegations; Buy-Out Remedy Cannot Be Granted Without Merits Consideration - The Supreme Court's dismissal of the appeal and affirmation of the NCLAT’s remand order underscores the necessity for the NCLT to engage in a thorough, reasoned adjudication on the merits before granting any exit or buy-out remedies in oppression and mismanagement cases. Parties must ensure that all substantive allegations under Section 241/242 are addressed and proven before seeking any consequential relief. Interim orders do not revive automatically upon remand; fresh interim relief must be sought based on current circumstances if required.
NCLAT Upholds Dismissal of Section 213(b) Petition: No Evidence of Systemic Fraud, Only Recoverable Dues and Regulatory Lapses - In light of the above, the NCLAT’s decision to uphold the NCLT’s summary dismissal of the Section 213(b) petition is legally sound. The case reinforces that mere regulatory contraventions or debt recovery disputes, absent evidence of fraud or intent to defraud, do not meet the threshold for invoking the investigative jurisdiction of the Tribunal under Section 213(b). Actionable takeaway: aggrieved parties must distinguish between matters of regulatory enforcement and those warranting the extraordinary remedy of a Section 213(b) investigation.
NCLAT Directs Expeditious Disposal of Deferred AGM Agendas and Clarifies Procedure for Chairperson Appointment under Section 104 - The NCLAT’s decision underscores the imperative of procedural compliance under the Companies Act, particularly regarding the appointment of a Chairperson at AGMs. It declined to issue redundant directions on following interim orders, reiterating that statutory remedies are adequate to address potential violations. The Tribunal’s actionable outcome directs the NCLT to swiftly address and dispose of the remaining deferred agenda items at the next hearing.
Madras High Court Upholds MSME Status for Supplier; Orders Re-Arbitration Before New Arbitrator Following Set Aside of Award - The decision of the Madras High Court affirms that documentary evidence of MSME status is sufficient to invoke the jurisdiction of the MSEFC under the MSMED Act, irrespective of technical objections on the timing of registration. The Commercial Court is empowered to set aside arbitral awards on merits under Section 37 of the Arbitration and Conciliation Act, and where an arbitrator has pre-judged the matter, a new arbitrator must be appointed to ensure a fair hearing.
Telangana High Court Bars Section 11 Arbitration Amid Pending MSME Council Proceedings, Grants Conditional Liberty to Applicant - The Telangana High Court has reaffirmed that once the MSME supplier invokes Section 18 of the MSMED Act and proceedings are ongoing before the Facilitation Council, a parallel application under Section 11(6) of the Arbitration and Conciliation Act for appointment of an arbitrator is not maintainable. However, if the Facilitation Council’s proceedings fail to address the dispute fully, the applicant retains the right to approach the Court under Section 11(6) post-adjudication.
Calcutta High Court Quashes Look Out Circular Issued Without Cognizable Offence Under Ongoing SFIO Investigation - The Calcutta High Court held that a Look Out Circular cannot be issued solely on the basis of an ongoing investigation by SFIO under the Companies Act, 2013, unless a cognizable offence is made out and substantiated by a completed investigation report under Section 212(12). In the absence of such a report or any evidence suggesting risk of absconding, the LOC was found to be unjustified and was quashed. Petition was allowed.