Delhi High Court important judgments on Company Law and Insolvency Law

In Sanjeev Mahajan v. Aries Travels Private Limited [61], the Court held that non-compliance of Section 187C(4) of the Companies Act, 1956 (‘Companies Act’), which requires a company to inter-alia make a declaration and file a return with the Registrar of Companies (‘ROC’) qua transfer of a beneficial interest in share-holding would render the said transfer unenforceable in view of Section 187C(6), and in fact the prohibition contained under the Prohibition of Benami Property Transactions Act, 1988 (‘Benami Act’) would kick in. The Court further observed that even a person being a beneficial owner of shares in a company is not entitled to the possession of immovable properties of the said company on this ground alone, unless permitted by a resolution of the board of directors of the said company.

In Sunil Gandhi v. A. N. Buildwell Private Limited [62], the Court held that in a proposed scheme of compromise and arrangement under the provisions of the Companies Act, clauses which seek blanket waiver of criminal liabilities against the promoters of the company could not be approved. The Court, however, observed that once the scheme in question is implemented and the claims of the concerned creditors are accordingly addressed, then appropriate consequences would follow in the pending criminal proceedings.

In Narender Kumar Nehra v. Bhupinder Singh [63], the Court held that once the sale process of the property belonging to the company in liquidation had concluded with the deposit in the Court of the relevant sale consideration by the successful bidder, then, in the absence of any allegation of fraud or illegality in the sale process, the bidding process could not be re-opened at the instance of a party which was willing to offer a marginally higher price on a subsequent date inasmuch as this would adversely affect the finality attached to the bidding process undertaken by the Court. The Court, however, clarified that the position might be different in a case where a significantly higher amount is subsequently offered, and which by itself might be indicative of the unreasonableness of the initial price