S.274 Companies Act | NCLT Can Only Direct Company & Not It's Shareholders To File Written Statement & Objections During Winding Up: Kerala HC

The Kerala High Court recently laid down that the National Company Law Tribunal (NCLT) can only direct the Company to file its objections along with the statement of affairs when a petition for winding up of the Company before the Tribunal had been filed by any person other than the Company itself. 

Justice C. Jayachandran, passed the order on perusing Section 274(1) of the Companies Act, which stipulates the 'directions for filing statement of affairs'. 

The NCLT, Kochi Bench had in this case, directed the petitioner to place on record a copy of the statement of affairs, subject to payment of Rs.50,000/-.

The petitioner thus challenged the order on the basis of Section 274(1) of the Companies Act, 2013, which contemplates such an order only as against the company, and not against the petitioner, who was only a shareholder of the Company. 

The Court, on perusal of the aforementioned statutory provision, found merit in the petitioner's contention and set aside the impugned direction finding the same to be 'per se illegal'. 

"The winding up proceedings will continue in accordance with law, directing the company to produce the statement of affairs, if it is found necessary to proceed with the matter," it observed, while disposing the case.

Counsel for the Petitioner: Advocates Philip Mathew, Vinay Mathew Joseph, K.R. Jinan, K.J. Karthika, and Feba B. Panicker

Counsel for the Respondents: Advocates Anil D. Nair, K.R. Rajkumar, Telma Raju, and Aaditya Nair

Citation: 2023 LiveLaw (Ker) 722

Case Title: K.N. Abdul Gafoor v. M/S Kasmisons Builders Pvt. Ltd. & Ors. 

Case Number: OP(C) No. 2251 of 2023

Click Here To Read/Download The Judgment