ššš§ A ššš š¢šØš§šš„ šš¢š«ššššØš« OF MCA š«šš£ššš A #š¦šš«š šš«#šš©š©š„š¢šššš¢šØš§..?
The question came up for consideration before Hon'ble Bombay HC in Writ Petition No. 556/2019 in the matter of Asset Auto India Private Limited, Asset Motors Private Limited, Asset Education Centre Private Limited & Others V/s. Union of India, RD , ROC.
ššš¬šš«šÆššš¢šØš§š¬ šØš ššØš§'šš„š #ššØš¦ššš²#šš: (Judgement dt. 01.08.2024)
1. ššØš¦ššš² šš šš„š„šØš°š¬ #š°š«š¢š #š©ššš¢šš¢šØš§ šš¢š„šš šš² šš¬š¬šš šš®ššØ šš§šš¢š ššÆš. ššš. šš§š š¢šš¬ 4 š°š”šØš„š„š²-šØš°š§šš š¬š®šš¬š¢šš¢šš«š¢šš¬ (šššš¢šš¢šØš§šš« ššØš¬.) š¢š§ššš« šš„š¢š šš”šš„š„šš§š š¢š§š šš”š šØš«ššš« š©šš¬š¬šš šš² šš”š ššš š¢šØš§šš„ šš¢š«ššššØš«, šš¢š§š¢š¬šš«š² šØš ššØš«š©šØš«ššš ššššš¢š«š¬ (šš/ššš¬š©šØš§ššš§š) š«šš£šššš¢š§š šš”š šš©š©š„š¢šššš¢šØš§ ššØš« š©š«šØššš¬š¬š¢š§š šš”šš¢š« š¬šš”šš¦š šØš šš¦šš„š šš¦ššš¢šØš§.
2. Petitioner cos. submitted that the impugned order is without jurisdiction and bad in law because the Respondent has illegally rejected their application without any authority of law, since u/s 233 of the Companies Act, 2013, the Regional Director cannot pass an order of rejection, but can only file an application before the #NCLT stating its objections and requesting the Tribunal to consider the scheme, if it is of the opinion that such a scheme is not in the public interest or against the interest of company creditors.
3. šš š«šš£šštšš šš”š šš¦šš„š šš¦ššš¢šØš§ šš©š©š„š¢šššš¢šØš§ šØš§ šš”š š¬šØš„š š š«šØš®š§š šš”šš šš”š šššš¢šš¢šØš§šš« ššØš¬. šš«š š§šØš š¬šØš„šÆšš§š šš¬ š©šš« šš”šš¢š« ššš„šš§šš š¬š”šššš¬.
4. ššš«š®š¬š¢š§š ššš. 233 šØš šš”š ššØš¦š©šš§š¢šš¬ ššš š°š”š¢šš” š©š«šØšÆš¢ššš¬ šš”š š©š«š-ššØš§šš¢šš¢šØš§š¬ ššØš« š©šš«šš¢šš¬ ššØ ššØš¦š©š„š² ššššØš«š šš§ššš«š¢š§š š¢š§ššØ š š¬šš”šš¦š šØš š¦šš«š šš« šØš« šš¦šš„š šš¦ššš¢šØš§, šš š«šš£ššššš šš”š šš'š¬ ššØš§ššš§šš¢šØš§ šš”šš šš”š šššš¢šš¢šØš§šš« ššØš¬. š°šš«š š§šØš š¬šØš„šÆšš§š ššØš¦š©šš§š¢šš¬ šš§š, šš”šš«šššØš«š, šš”š ššš§šš«šš„ ššØšÆšš«š§š¦šš§š š”šš š©šØš°šš« ššØ š«šš£ššš šš”š š¬šš”šš¦š.
CONCLUSION
The Respondent could not have rejected the application but instead should have filed an application before the NCLT stating its objections and requesting that the Tribunal may consider the scheme under Sec. 232. This is a mandatory provision because the Respondent had to form an opinion that the scheme is not in public interest or in the interest of the creditors.
Thus, a Regional Director of MCA can reject a merger application only if
1. If the merger is against the public interest
2. If it is against the interest of Creditors
Otherwise , he can file an application before the NCLT stating hts objections and requesting that the Tribunal may consider the scheme under Sec. 232.
Yes, the Regional Director of MCA can reject the merger application if it does not comply with the legal requirements or there is any inconsistency in the application. It is very important to ensure all the paperwork is completed to avoid delays. Companies, even big ones like an app development company in the USA, need to follow regulations carefully to ensure a smooth process!
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