SALE CERTIFICATE ISSUED BY DRT IN AUCTION SALE THE REGISTRATION WITH THE REGISTRAR IS NOT COMPULSORY SAYS MADYAPRADESH HIGH COURT IN SUKH SAGAR AGRO INDUSTRIES Vs PUNJAB NATIONAL BANK & OTHERS

 SALE CERTIFICATE ISSUED BY DRT IN AUCTION SALE THE REGISTRATION WITH THE REGISTRAR IS NOT COMPULSORY SAYS MADYAPRADESH HIGH COURT IN SUKH SAGAR AGRO INDUSTRIES Vs PUNJAB NATIONAL BANK & OTHERS

On 8 February 2025, the DRT gives the buyer a sale document.”

The buyer goes to the Registrar's office to record the document, but the Registrar refuses.

5. The buyer goes to the High Court.

6. The State disagrees. The State refers to an older Supreme Court decision to support its position.

The buyer shows other Supreme Court decisions. A sale certificate issued by the proper authority after an auction does not always need compulsory registration.

The High Court considers the law. The Judge decides that the same principle applies to this DRT auction sale certificate.

 The buyer wins the case.

The High Court allows the petition and directs the authorities to record the sale certificate and make the necessary entry in Book No. 1 under Section 89(4)

                      KEY TAKE AWAY

The buyer won the property in a DRT auction, the Registrar refused to record the sale certificate, and the High Court ordered the authorities to make the required official entry.

                      IMPORTANT LESSON:

A sale certificate issued by the proper authority after a DRT auction does not necessarily need compulsory registration.

#R V SEKAR FCS,LLB 79047 19295,

WHETHER RESIGNATION OF INDEPENDENT DIRECTOR GAUTAM DOSHI FROM SUN PHARMACEUTICAL INDUSTRIES LTD WITHOUT SIGNING HIS RESIGNATION LETTER AND NOT AFFIXING HIS DSC AND INTIMATION TO THE COMPANY THROUGH HIS LAWYER IS VALID UNDER THE COMPANIES ACT 2013?

 WHETHER RESIGNATION OF INDEPENDENT DIRECTOR GAUTAM DOSHI FROM SUN PHARMACEUTICAL INDUSTRIES LTD WITHOUT SIGNING HIS RESIGNATION LETTER AND NOT AFFIXING HIS DSC AND INTIMATION TO THE COMPANY THROUGH HIS LAWYER IS VALID UNDER THE COMPANIES ACT 2013?

·       Unsigned resignation letter + no DSC + sent only by lawyer → Not valid compliance under Section 168.

·       The director must personally sign (physical or digital) the resignation notice.

·       Intimation through a lawyer without authorization is insufficient.

·       Until a proper resignation is filed, Gautam Doshi would continue to be shown as director in MCA records.

LEGAL FRAMEWORK

Section 168(1), Companies Act, 2013

·       A director may resign by giving a notice in writing to the company.

·       The resignation takes effect from the date the notice is received by the company or the date specified in the notice, whichever is later.

Rule 15 of Companies (Appointment and Qualification of Directors) Rules, 2014 says

·       The company must file Form DIR‑12 with the Registrar within 30 days of receiving the resignation.

·       The resigning director may also forward a copy of the resignation to the Registrar in Form DIR‑11 (though after 2017 amendment, filing DIR‑11 is optional for the director).

·       Key Compliance Questions 

·       Form of Resignation: 

·       The law requires a written notice. It does not mandate that the director must sign with a Digital Signature Certificate (DSC). A physical signature or even an authenticated communication can suffice.

·       However, if the resignation is sent through a lawyer without the director’s own signature, the company may question its validity unless the lawyer is expressly authorized (via power of attorney or mandate).

MODE OF INTIMATION:

·       Resignation must be personally communicated by the director. Courts have generally held that a resignation is a unilateral act — once communicated, it is effective. But communication through a lawyer without the director’s signature raises doubts about authenticity.

JUDICIAL VIEW

Courts (e.g., Moti Ram v. Param Dev, SC) have emphasized that resignation is effective once communicated, even without acceptance.

Resignation of an Independent Director must be personally signed and communicated. A lawyer’s intimation without signature/DSC is not valid under the Companies Act, 2013.

JUDICIAL PRECEDENTS

CASE	COURT	PRINCIPLE ESTABLISHED
Moti Ram v. Param Dev (SC)	Supreme Court	Resignation is a unilateral act effective upon communication to competent authority.
Dr. J.S. Gambhir v. Millennium Health Institute & Diagnostics (P.) Ltd.	Delhi HC	Resignation effective once communicated; acceptance not required.
S.S. Lakshmana Pillai v. ROC	Madras HC	Resignation is unilateral unless Articles specify otherwise.
Latchford Premier Cinema Ltd. v. Ennion and Paterson [1932] 2 Comp. Case 106 (CD)	UK precedent often cited	Even verbal resignation accepted if Articles permitted; Indian law now requires written resignation.
T. Murari v. State of Tamil Nadu	Madras HC	Communication of intention is sufficient; board cannot refuse.

KEY TAKEAWAY

However, in corporate practice, unsigned or unauthenticated letters are treated as irregular. The ROC may also raise objections if DIR‑12 is filed based on such a document.

#R V SEKAR FCS,LLB 79047 19295,

LOAN RECEIVED FROM A LENDER HELD REPAYABLE AS DEPOSIT UNDER COMPANIES ACT HELD BY NCLT, ALLAHABAD.

 LOAN RECEIVED FROM A LENDER HELD REPAYABLE AS DEPOSIT UNDER COMPANIES ACT  HELD BY NCLT, ALLAHABAD.

Company’s own balance sheets continued to disclose the amount as Long-Term Borrowings and it cannot refuse to repay the loan.

A company cannot retain funds admittedly received as loan and then refuse repayment by contending that the lender was not its member.

Companies cannot avoid loan repayment obligations merely by raising technical objections regarding the status of the lender.

NCLT ALLAHABAD VS. DHANRAJ BUILDWELL PRIVATE LIMITED

 Companies cannot avoid loan repayment obligations merely by raising technical objections regarding the status of the lender.

M/s Dhanraj Builders advanced around ₹2.33 crore to Dhanraj Buildwell Private Limited in 2014 as financial assistance for its business operations. Except for a partial repayment of ₹5 lakh, the balance amount remained unpaid.

The lender approached NCLT seeking repayment under Sections 73 and 74 of the Companies Act, 2013.

The borrower opposed on the following grounds

The amount was not a deposit under the Companies Act.

The lender was not a member of the company and therefore could not invoke Section 73(4).

The NCLT held that:

·       Money received by the company as a loan fell within the definition of deposit under Section 2(31), as it did not fall under any prescribed exclusion.

·       The alleged repayment was not proved, particularly when the company’s own balance sheets continued to disclose the amount as Long-Term Borrowings.

·       A company cannot escape repayment merely because the amount was received from a non-member.

The NCLT directed the company to repay the outstanding amount along with applicable interest within 30 days.

#R V SEKAR FCS,LLB 79047 19295,

GST RETURN REFORMS FROM APRIL 2027 WHAT ARE THE KEY PROPOSED CHANGES?

 GST RETURN REFORMS FROM APRIL 2027

WHAT ARE THE KEY PROPOSED

 CHANGES?

·       New Electronic Statement for Reverse Charge Mechanism (RCM)

·       A Mechanism to Correct Tax Liability

·       Invoice-Level Details in Form GST DRC-03

·       Improvements to the Invoice Management System (IMS)

·       Electronic Credit Reversal and Reclaim Statement

·       Correction Mechanism for ITC Reporting

IF IMPLEMENTED EFFECTIVELY, THE CHANGES COULD HELP:

·       Reduce mismatches between reported tax liabilities and ITC.

·       Minimise avoidable demand notices and system-generated intimations.

·       Improve the accuracy of ITC reversal and reclaim reporting.

·       Strengthen reconciliation between supplier-reported invoices and recipient ITC claims.

·       Make GST return filing more consistent and transparent.

#R V SEKAR FCS,LLB 79047 19295,

CAN DEPRECIATION BE CLAIMED ON GOODWILL, BRANDS AND DISTRIBUTION NETWORKS RECOGNIZED FOR THE FIRST TIME DURING A DEMERGER?

 CAN DEPRECIATION BE CLAIMED ON GOODWILL, BRANDS AND DISTRIBUTION NETWORKS RECOGNIZED FOR THE FIRST TIME DURING A DEMERGER?

The Kolkata ITAT examined this important question in Tata Consumer Products Ltd. vs. ACIT

Yes, Depreciation was allowed on goodwill, brands and distribution networks recognized upon demerger, although these assets were not recorded in the demerged company’s books.

The Finance Act, 2021 amended the Income-tax Act to exclude goodwill from depreciable intangible assets with effect from AY 2021–22.

The Tribunal allowed depreciation for AY 2020–21 under the law applicable to that year.

The ruling distinguishes between assets already included in the demerged company's depreciable block and intangible assets identified and valued for the first time when the resulting company acquires the business for consideration.

R V SEKAR FCS,LLB 79047 19295

WRONGFUL CESSATION OF A DIRECTOR AND APPOINTMENT OF ANOTHER DIRECTOR THROUGH FILING FORM DIR-12 ONLY DESPITE THERE BEING NO RESIGNATION, NO BOARD RESOLUTION OR VALID APPOINTMENT.

 WRONGFUL CESSATION OF A DIRECTOR AND APPOINTMENT OF ANOTHER DIRECTOR THROUGH FILING FORM DIR-12 ONLY DESPITE THERE BEING NO RESIGNATION, NO BOARD RESOLUTION OR VALID APPOINTMENT.

COMPANY CAME TO KNOW APPOINTMENT AND CESSATION OF DIRECTORS THROUGH EMAIL FROM MCA

BRIJSONS HOTEL PRIVATE LIMITED & ANR. VS UNION OF INDIA & ORS. (CALCUTTA HIGH COURT)

The private respondents questioned maintainability of the writ petition because proceedings were pending before the NCLT and referred to Rule 11 concerning verification of supporting documents in cases of vacation or removal of directors.

Under the second proviso to Rule 10(1), the Registrar has authority to examine an e-form filed through the straight through process upon receipt of information or a complaint even after its filing

Plaintiff has relied Rule 11 of the Rules, 2014 and submits that in the event of vacation or removal of directors before approving or invalidating form no. DIR-12, the Registrar shall verify the documents as to correctness of contents and whether adequate supporting documents namely, copy of board resolution, copy of notices sent for calling board meeting or copy of minutes of board of directors reflecting voted for or against.

Calcutta High Court directed the Registrar of Companies (ROC) to consider within four weeks the representation filed by Brijsons Hotel Private Limited and another petitioner challenging the alleged wrongful cessation of a director and appointment of another director through Form DIR-12.

The petitioners alleged that cessation of Rajeev Nain Mishra as director and appointment of Parvati Mishra, both with effect from 6 January 2026, had been recorded through DIR-12 despite there being no resignation, board resolution or valid appointment.

IMPORTANT POINT TO CONSIDER

The petitioners only discovered the change through an MCA portal email dated 20 Jan 2026. Who has filed the DIR-12 in the MCA portal using the login and password of the company?

STRAIGHT‑THROUGH PROCESSING (STP):

ROC argued that e‑forms like DIR‑12 are auto‑approved under STP, with responsibility lying on the authorized signatory and professional certifying the form.

Issue	Court’s Position	Compliance Implication
Resignation under Sec. 168	Must be in writing and filed; absence invalidates cessation.	Companies must retain resignation letters and file DIR‑12 correctly.
Board Resolution	Mandatory for appointment/removal.	Minutes and resolutions must be properly recorded.
DIR‑12 Filing	STP approval does not validate fraudulent filings.	Certifying professionals bear liability; ROC must act on complaints.
ROC’s Role	Cannot remain passive; must adjudicate representations.	Companies can seek redress if wrongful filings occur.

KEY TAKEAWAY

The Calcutta High Court reinforced that wrongful cessation/appointment of directors via DIR‑12 without statutory backing is invalid, and ROC must actively adjudicate such complaints. This case is a strong precedent for challenging fraudulent filings under the Companies Act, 2013.

# R V Seckar, FCS,LLB 79047 19295,

SEBI–TARAPUR TRANSFORMERS: ₹31.46 CRORE DIVERSION — BUT WHERE IS THE RECOVERY?

 SEBI–TARAPUR TRANSFORMERS: ₹31.46 CRORE DIVERSION — BUT WHERE IS THE RECOVERY?

SEBI’s action in the Tarapur Transformers matter raises an important question about the effectiveness of securities market enforcement: Is punishing misconduct enough when the company’s funds have allegedly been diverted?

According to the facts stated in the order, ₹31.46 crore was diverted from Tarapur Transformers to connected entities.

The regulatory action included:

🔹 Market Ban: SEBI barred the company and its promoter-director from the securities market.

🔹 Monetary Penalties: Two individuals were penalised ₹32 lakh each.

🔹 No Penalty on the Company: SEBI chose not to impose a monetary penalty on the company, recognising that the financial burden could ultimately fall on its shareholders.

THE CORPORATE GOVERNANCE CONCERN

The decision not to penalise the company may be defensible from the perspective of protecting innocent shareholders from bearing an additional financial burden.

However, a more fundamental question remains unanswered:

What happens to the ₹31.46 crore allegedly diverted from the company?

A market ban restricts participation in the securities market. A monetary penalty punishes the persons held responsible. But neither measure, by itself, restores funds to the company.

The crucial distinction is between punishing misconduct and recovering the company’s money.

Where diversion of corporate funds is established, effective enforcement should also examine the available legal mechanisms for recovery, restitution and accountability, subject to the applicable law and the findings of the order.

MY VIEW

Protecting shareholders from an additional penalty is one objective. Protecting the company’s assets and restoring value to shareholders is another.

Both objectives matter.

The ultimate test of effective corporate governance enforcement is not merely whether wrongdoers are punished, but also whether appropriate steps are taken to protect the company’s interests and pursue recovery of its funds.

A MARKET BAN MAY PUNISH MISCONDUCT. IT DOES NOT, BY ITSELF, REPAIR THE COMPANY.

The question that deserves attention is simple:

Who will bring the ₹31.46 crore back to Tarapur Transformers, if recovery has not already been pursued through other proceedings?

— R V SECKAR, FCS, LLB