No order can be passed against the Directors/ companies, says NCLAT

Provision Involved:

Section 252 (1) of the Companies Act,2013
provides that before passing any order under this Section, the Tribunal shall give a reasonable opportunity of making representations and of being heard to the Registrar of the Company and all the persons concerned.

Facts of the case

• The name of the Company was struck off by ROC Mumbai.
• The Principal Commissioner of Income Tax challenged the order of ROC before the NCLT.
• It is stated before the Tribunal that the Company has certain Financial transactions that have been entered into by the Company for the Assessment year 2011-12 and information regarding this were received from the office of ITO Income Tax Officer. However, no return of income has been filed. Therefore, notice under Section 148 of the IT Act, 1961 has been issued for Assessment year 2011-12 proposing to assess/reassess the income.
• The NCLT, Mumbai allowed the Appeal of CIT and directed to restore the name of the Company in the Register of Companies without giving any notice or opportunity of being heard to the Company.
• Being aggrieved with this order, the Appellant Ex-Director and Majority Shareholder has filed this Appeal. Appellant submitted that Section 252 (1) of the Companies Act, 2013, provides that before passing any order for restoration, the Tribunal must give a reasonable opportunity of being heard to the Registrar, the Company and all the persons concerned.

Decision

The NCLAT held that before making any order for restoration, opportunity of being heard has to be given, and since in the given case opportunity for being heard was not given, the order of NCLT is set aside.

Reason

Tribunal must give a reasonable opportunity of making representations and of being heard before passing an order, to the Registrar, the Company and all the persons concerned under Section 252 (1) of the Companies Act, 2013.

Accordingly, NCLAT set aside the order of NCLT, and the matter is remitted back to NCLT.

Sahil Goyal, Audit Associate, SW India