(1)CASE STUDY

Pharma Limited is a company listed with Bombay Stock Exchange. The company is having 500 small 50 shareholders with shareholding of 1200 equity shares of Rs. 10 each, have proposed to appoint Amar as a Director as their representative on the Board of Directors of the company. One of the director of the Board contended that appointment of Amar is not valid due to lack of holding of any shares in the company.

Based on the above details and referring to the provisions of the Companies Act, 2013, you are requested to answer the following MCQs:

(1)CASE STUDY

Pharma Limited is a company listed with Bombay Stock Exchange. The company is having 500 small 50 shareholders with shareholding of 1200 equity shares of Rs. 10 each, have proposed to appoint Amar as a Director as their representative on the Board of Directors of the company. One of the director of the Board contended that appointment of Amar is not valid due to lack of holding of any shares in the company.

Based on the above details and referring to the provisions of the Companies Act, 2013, you are requested to answer the following MCQs:

CASE STUDY

PCR Limited has appointed Mr. Vivek, a person resident in India, as a Managing Director who has taken a charge of the post on 1stJune, The remuneration package sanctioned to him is as below:

It has, further, been informed that-

• Vivek has availed the Leave Travel Concession Package which will not be pro-rated for 2021-22.
• Vivek is not proved guilty during the financial year 2021 -22 with respect to the above insurance policy.

Based on the above details and referring to the provisions of the Companies Act, 2013, you are requested to answer the following MCQs:

CASE STUDY

PCR Limited has appointed Mr. Vivek, a person resident in India, as a Managing Director who has taken a charge of the post on 1stJune, The remuneration package sanctioned to him is as below:

It has, further, been informed that-

• Vivek has availed the Leave Travel Concession Package which will not be pro-rated for 2021-22.
• Vivek is not proved guilty during the financial year 2021 -22 with respect to the above insurance policy.

Based on the above details and referring to the provisions of the Companies Act, 2013, you are requested to answer the following MCQs:

CASE STUDY

PCR Limited has appointed Mr. Vivek, a person resident in India, as a Managing Director who has taken a charge of the post on 1stJune, The remuneration package sanctioned to him is as below:

It has, further, been informed that-

• Vivek has availed the Leave Travel Concession Package which will not be pro-rated for 2021-22.
• Vivek is not proved guilty during the financial year 2021 -22 with respect to the above insurance policy.

Based on the above details and referring to the provisions of the Companies Act, 2013, you are requested to answer the following MCQs:

CASE STUDY

Daily Needs Ltd. is a unlisted public company, engaged in the business of supplying the daily needs of the house hold. It receives orders, on online basis and make supplies to the customers at their door

As on 31.03.2021, the total number of shareholders were 500. The share capital of the company is 100 lakh rupees.

Gyan Singh is the Managing Director of the company. He joined this company in April 2020. Prior to joining this company, Gyan Singh was the General Manager in a NBFC. From the media sources, it came into picture that Gyan Singh was involved in sanctioning the proposal of big loans without

insisting the security from the borrowers and many of the loan accounts during his tenure turned into NPA. It shows the intention of Gyan Singh that he might have been involved in accepting the bribe in sectioning the clean loans.

After joining this company, Gyan Singh started ordering his employees to supply the goods at the shops of the retailers also on credit. Whereas the company’s policy was to supply the essential daily needs at the door steps of consumers only. Many of retailers used to visit the MD’s office to supply the goods on credit. In some of the cases the recovery from that retailers became difficult and the company had to write-off these debts while finalising the annual accounts as of 31.03.2021.

Aggrieved from this, some 10 members of the company made an application before the Tribunal making the company and its MD as respondents, that the affairs of the company are being conducted in a manner prejudicial to the public interest and requested for removal of the Managing Director.

The Tribunal turned down the application of the members mentioning therein that the members who applied for are not eligible to apply.

When Dharmesh, one of the shareholder came into the knowledge that the Tribunal has turned down the application of 10 member, he himself alone applied to the Tribunal making the company and its MD as respondent. Dharmesh is holding 2 lakh of shares, consisting the face value of Rs 20 lakh. He is also the Member of the Parliament.

After accepting the application, the Tribunal heard both the parties and observed that Gyan Singh was involved in mal-practices, on the basis of his past track record and the present working. It opined that this person is not a fit and proper person to continue as MD of the company and ordered for removal of Gyan Singh from the post of Managing Director. The Managing Director claimed for the compensation for removal of the office from the company, from the date of removal to the remaining period.

CASE STUDY

Daily Needs Ltd. is a unlisted public company, engaged in the business of supplying the daily needs of the house hold. It receives orders, on online basis and make supplies to the customers at their door

As on 31.03.2021, the total number of shareholders were 500. The share capital of the company is 100 lakh rupees.

Gyan Singh is the Managing Director of the company. He joined this company in April 2020. Prior to joining this company, Gyan Singh was the General Manager in a NBFC. From the media sources, it came into picture that Gyan Singh was involved in sanctioning the proposal of big loans without

insisting the security from the borrowers and many of the loan accounts during his tenure turned into NPA. It shows the intention of Gyan Singh that he might have been involved in accepting the bribe in sectioning the clean loans.

After joining this company, Gyan Singh started ordering his employees to supply the goods at the shops of the retailers also on credit. Whereas the company’s policy was to supply the essential daily needs at the door steps of consumers only. Many of retailers used to visit the MD’s office to supply the goods on credit. In some of the cases the recovery from that retailers became difficult and the company had to write-off these debts while finalising the annual accounts as of 31.03.2021.

Aggrieved from this, some 10 members of the company made an application before the Tribunal making the company and its MD as respondents, that the affairs of the company are being conducted in a manner prejudicial to the public interest and requested for removal of the Managing Director.

The Tribunal turned down the application of the members mentioning therein that the members who applied for are not eligible to apply.

When Dharmesh, one of the shareholder came into the knowledge that the Tribunal has turned down the application of 10 member, he himself alone applied to the Tribunal making the company and its MD as respondent. Dharmesh is holding 2 lakh of shares, consisting the face value of Rs 20 lakh. He is also the Member of the Parliament.

After accepting the application, the Tribunal heard both the parties and observed that Gyan Singh was involved in mal-practices, on the basis of his past track record and the present working. It opined that this person is not a fit and proper person to continue as MD of the company and ordered for removal of Gyan Singh from the post of Managing Director. The Managing Director claimed for the compensation for removal of the office from the company, from the date of removal to the remaining period.

CASE STUDY

Daily Needs Ltd. is a unlisted public company, engaged in the business of supplying the daily needs of the house hold. It receives orders, on online basis and make supplies to the customers at their door

As on 31.03.2021, the total number of shareholders were 500. The share capital of the company is 100 lakh rupees.

Gyan Singh is the Managing Director of the company. He joined this company in April 2020. Prior to joining this company, Gyan Singh was the General Manager in a NBFC. From the media sources, it came into picture that Gyan Singh was involved in sanctioning the proposal of big loans without

insisting the security from the borrowers and many of the loan accounts during his tenure turned into NPA. It shows the intention of Gyan Singh that he might have been involved in accepting the bribe in sectioning the clean loans.

After joining this company, Gyan Singh started ordering his employees to supply the goods at the shops of the retailers also on credit. Whereas the company’s policy was to supply the essential daily needs at the door steps of consumers only. Many of retailers used to visit the MD’s office to supply the goods on credit. In some of the cases the recovery from that retailers became difficult and the company had to write-off these debts while finalising the annual accounts as of 31.03.2021.

Aggrieved from this, some 10 members of the company made an application before the Tribunal making the company and its MD as respondents, that the affairs of the company are being conducted in a manner prejudicial to the public interest and requested for removal of the Managing Director.

The Tribunal turned down the application of the members mentioning therein that the members who applied for are not eligible to apply.

When Dharmesh, one of the shareholder came into the knowledge that the Tribunal has turned down the application of 10 member, he himself alone applied to the Tribunal making the company and its MD as respondent. Dharmesh is holding 2 lakh of shares, consisting the face value of Rs 20 lakh. He is also the Member of the Parliament.

After accepting the application, the Tribunal heard both the parties and observed that Gyan Singh was involved in mal-practices, on the basis of his past track record and the present working. It opined that this person is not a fit and proper person to continue as MD of the company and ordered for removal of Gyan Singh from the post of Managing Director. The Managing Director claimed for the compensation for removal of the office from the company, from the date of removal to the remaining period.

CASE STUDY

Daily Needs Ltd. is a unlisted public company, engaged in the business of supplying the daily needs of the house hold. It receives orders, on online basis and make supplies to the customers at their door

As on 31.03.2021, the total number of shareholders were 500. The share capital of the company is 100 lakh rupees.

Gyan Singh is the Managing Director of the company. He joined this company in April 2020. Prior to joining this company, Gyan Singh was the General Manager in a NBFC. From the media sources, it came into picture that Gyan Singh was involved in sanctioning the proposal of big loans without

insisting the security from the borrowers and many of the loan accounts during his tenure turned into NPA. It shows the intention of Gyan Singh that he might have been involved in accepting the bribe in sectioning the clean loans.

After joining this company, Gyan Singh started ordering his employees to supply the goods at the shops of the retailers also on credit. Whereas the company’s policy was to supply the essential daily needs at the door steps of consumers only. Many of retailers used to visit the MD’s office to supply the goods on credit. In some of the cases the recovery from that retailers became difficult and the company had to write-off these debts while finalising the annual accounts as of 31.03.2021.

Aggrieved from this, some 10 members of the company made an application before the Tribunal making the company and its MD as respondents, that the affairs of the company are being conducted in a manner prejudicial to the public interest and requested for removal of the Managing Director.

The Tribunal turned down the application of the members mentioning therein that the members who applied for are not eligible to apply.

When Dharmesh, one of the shareholder came into the knowledge that the Tribunal has turned down the application of 10 member, he himself alone applied to the Tribunal making the company and its MD as respondent. Dharmesh is holding 2 lakh of shares, consisting the face value of Rs 20 lakh. He is also the Member of the Parliament.

After accepting the application, the Tribunal heard both the parties and observed that Gyan Singh was involved in mal-practices, on the basis of his past track record and the present working. It opined that this person is not a fit and proper person to continue as MD of the company and ordered for removal of Gyan Singh from the post of Managing Director. The Managing Director claimed for the compensation for removal of the office from the company, from the date of removal to the remaining period.

CASE STUDY

Daily Needs Ltd. is a unlisted public company, engaged in the business of supplying the daily needs of the house hold. It receives orders, on online basis and make supplies to the customers at their door

As on 31.03.2021, the total number of shareholders were 500. The share capital of the company is 100 lakh rupees.

Gyan Singh is the Managing Director of the company. He joined this company in April 2020. Prior to joining this company, Gyan Singh was the General Manager in a NBFC. From the media sources, it came into picture that Gyan Singh was involved in sanctioning the proposal of big loans without

insisting the security from the borrowers and many of the loan accounts during his tenure turned into NPA. It shows the intention of Gyan Singh that he might have been involved in accepting the bribe in sectioning the clean loans.

After joining this company, Gyan Singh started ordering his employees to supply the goods at the shops of the retailers also on credit. Whereas the company’s policy was to supply the essential daily needs at the door steps of consumers only. Many of retailers used to visit the MD’s office to supply the goods on credit. In some of the cases the recovery from that retailers became difficult and the company had to write-off these debts while finalising the annual accounts as of 31.03.2021.

Aggrieved from this, some 10 members of the company made an application before the Tribunal making the company and its MD as respondents, that the affairs of the company are being conducted in a manner prejudicial to the public interest and requested for removal of the Managing Director.

The Tribunal turned down the application of the members mentioning therein that the members who applied for are not eligible to apply.

When Dharmesh, one of the shareholder came into the knowledge that the Tribunal has turned down the application of 10 member, he himself alone applied to the Tribunal making the company and its MD as respondent. Dharmesh is holding 2 lakh of shares, consisting the face value of Rs 20 lakh. He is also the Member of the Parliament.

After accepting the application, the Tribunal heard both the parties and observed that Gyan Singh was involved in mal-practices, on the basis of his past track record and the present working. It opined that this person is not a fit and proper person to continue as MD of the company and ordered for removal of Gyan Singh from the post of Managing Director. The Managing Director claimed for the compensation for removal of the office from the company, from the date of removal to the remaining period.

CASE STUDY

Based at Shivamogga, Karnataka, Lotus Switchgears Limited (LSL) is a noted manufacturer, exporter and supplier of electrical products like Miniature Circuit Breakers (MCBs), Molded Case Circuit Breakers (MCCBs), Residual Current Circuit Breakers (RCCBs), Electric Leakage Circuit Breakers (ELCBs), Solar water Pumping Systems, Wires and Cables, etc. and has a good network of factories and distribution channels. The business grew by leaps and bounds due to the sincere and dedicated efforts of the said founding directors in the following capacity:                                           

However, the company is facing some difficult times for the past four years or so.

In a quest to overcome the difficulties faced by the company, Raghuram, a visionary, was appointed as the Executive Director at the EGM held on 12th January, 2020.

Shruthi Components Private Limited (SCPL) is one of the subsidiaries of LSL. The Board of Directors of LSL wished to exercise the power to dispose of its whole investment in SCPL. Accordingly, Mahadevan, whole-time Company Secretary of the company was directed to ascertain the procedure for disposing of company’s investment in SCPL.

Following data was extracted from the Audited Financial Statements of LSL for the year ending 31.03.2023:

Based on the above data and considering Section 2 (57) of the Companies Act, 2013, Mahadevan

calculated the ‘net worth’ of LSL as under:

In view of the ‘net worth’ of Rs. 100 crore, Mahadevan informed the Board that as per the relevant

provisions, SCPL was an undertaking of LSL.

Earlier during April, 2022, in the course of normal business, LSL entered into a contract for the continuous supply of some consumables and components with Anant Supplies Private Limited (ASPL) for a period of 3 years to be renewed with mutual consent thereafter. Ramesh, the Whole-time Director of LSL, was not an interested party at the time of entering into this Supply Contract with ASPL. However, during the second year of the Supply Contract, Rajesh, son of Ramesh, purchased about 30% of the equity shares of ASPL through one of his family owned business entities and also lent Rs.25 lakh as unsecured loan to ASPL. Ramesh did not inform LSL or the Board of Directors regarding the new developments since he was of the opinion that there was no need for such d isclosure. However, the Company Secretary and the Board had their own reservations, after the matter came to their knowledge from a third party.

During the statutory audit for the F.Y. 2022-23, while verifying the earlier years’ documents in connection with certain matter, the newly appointed auditors observed that the appointment of Raghuram as an Executive Director was invalid by reason of certain defects and also disqualification. During the month of August, 2023, the statutory auditors discussed the issue of irregular appointment with the Board of Directors of LSL.

The Board apprised the auditors that since his appointment as Executive Director of the company, Raghuram had participated in several Board Meetings and assented to various decisions, which had both pecuniary and operational impact. In addition, the Board had also passed several resolutions during that period. Accordingly, the Board, in one of its meetings, decided by passing a resolution that the wrongfully appointed Director Raghuram shall make good the losses, if any, for the period he remained Executive Director but all the resolutions passed during his period shall be valid and stand good.

One of the investors, Raman had invested substantially in the equity shares of LSL. However, he was quite worried about his investment after going through the latest Audited Financial Statements of 2022- 23, for he found that there was continuous downward trend in earning per share (EPS). He was of the opinion that the Directors of LSL have been getting exorbitant remuneration, resulting in lesser profits for the company.

Accordingly, he approached the Registered Office of the company at Shivamogga and requested for inspection of the copies of the recent Service Contracts of Arjun, the Managing Director as well as Ramesh and Ripudaman, the Whole-time Directors of the company. He was utterly surprised when he was informed by the official concerned that the Service Contracts with Arjun, Ramesh and Ripudaman were not in writing and therefore, could not be produced for inspection. However, he was also informed that only copies of the written Memorandum setting out the terms and conditions of the service could be provided for inspection. Raman was not convinced and thought it to be a fraudulent practice for which the company and every defaulting officer of the company must be punished.

LSL, after complying with the required legal formalities, had made some political contributions and had incurred certain expenses during the financial year 2022-23. The details are as under:

• Payment of 10,00,000 as contributions to LMS party.
• Donation of 2,00,000 for a public function and a dance program of Ravi Shankar, a film star and it can be reasonably presumed that his activities support Janta Welfare Party.
• Publication cost of Rs. 1,00,000 incurred for inserting an advertisement in the Souvenir published on behalf of Janta Welfare Party.
• Publication of pamphlets costing Rs.1,00,000 though not meant for any political party but incurred for promoting a candidate of political party who is going to contest in upcoming

LSL disclosed in its financial statements Rs.11,00,000 as political contributions and Rs.3,00,000 as

‘Advertisement and Business Promotion Expenses’.

CASE STUDY

Based at Shivamogga, Karnataka, Lotus Switchgears Limited (LSL) is a noted manufacturer, exporter and supplier of electrical products like Miniature Circuit Breakers (MCBs), Molded Case Circuit Breakers (MCCBs), Residual Current Circuit Breakers (RCCBs), Electric Leakage Circuit Breakers (ELCBs), Solar water Pumping Systems, Wires and Cables, etc. and has a good network of factories and distribution channels. The business grew by leaps and bounds due to the sincere and dedicated efforts of the said founding directors in the following capacity:                                           

However, the company is facing some difficult times for the past four years or so.

In a quest to overcome the difficulties faced by the company, Raghuram, a visionary, was appointed as the Executive Director at the EGM held on 12th January, 2020.

Shruthi Components Private Limited (SCPL) is one of the subsidiaries of LSL. The Board of Directors of LSL wished to exercise the power to dispose of its whole investment in SCPL. Accordingly, Mahadevan, whole-time Company Secretary of the company was directed to ascertain the procedure for disposing of company’s investment in SCPL.

Following data was extracted from the Audited Financial Statements of LSL for the year ending 31.03.2023:

Based on the above data and considering Section 2 (57) of the Companies Act, 2013, Mahadevan

calculated the ‘net worth’ of LSL as under:

In view of the ‘net worth’ of Rs. 100 crore, Mahadevan informed the Board that as per the relevant

provisions, SCPL was an undertaking of LSL.

Earlier during April, 2022, in the course of normal business, LSL entered into a contract for the continuous supply of some consumables and components with Anant Supplies Private Limited (ASPL) for a period of 3 years to be renewed with mutual consent thereafter. Ramesh, the Whole-time Director of LSL, was not an interested party at the time of entering into this Supply Contract with ASPL. However, during the second year of the Supply Contract, Rajesh, son of Ramesh, purchased about 30% of the equity shares of ASPL through one of his family owned business entities and also lent Rs.25 lakh as unsecured loan to ASPL. Ramesh did not inform LSL or the Board of Directors regarding the new developments since he was of the opinion that there was no need for such d isclosure. However, the Company Secretary and the Board had their own reservations, after the matter came to their knowledge from a third party.

During the statutory audit for the F.Y. 2022-23, while verifying the earlier years’ documents in connection with certain matter, the newly appointed auditors observed that the appointment of Raghuram as an Executive Director was invalid by reason of certain defects and also disqualification. During the month of August, 2023, the statutory auditors discussed the issue of irregular appointment with the Board of Directors of LSL.

The Board apprised the auditors that since his appointment as Executive Director of the company, Raghuram had participated in several Board Meetings and assented to various decisions, which had both pecuniary and operational impact. In addition, the Board had also passed several resolutions during that period. Accordingly, the Board, in one of its meetings, decided by passing a resolution that the wrongfully appointed Director Raghuram shall make good the losses, if any, for the period he remained Executive Director but all the resolutions passed during his period shall be valid and stand good.

One of the investors, Raman had invested substantially in the equity shares of LSL. However, he was quite worried about his investment after going through the latest Audited Financial Statements of 2022- 23, for he found that there was continuous downward trend in earning per share (EPS). He was of the opinion that the Directors of LSL have been getting exorbitant remuneration, resulting in lesser profits for the company.

Accordingly, he approached the Registered Office of the company at Shivamogga and requested for inspection of the copies of the recent Service Contracts of Arjun, the Managing Director as well as Ramesh and Ripudaman, the Whole-time Directors of the company. He was utterly surprised when he was informed by the official concerned that the Service Contracts with Arjun, Ramesh and Ripudaman were not in writing and therefore, could not be produced for inspection. However, he was also informed that only copies of the written Memorandum setting out the terms and conditions of the service could be provided for inspection. Raman was not convinced and thought it to be a fraudulent practice for which the company and every defaulting officer of the company must be punished.

LSL, after complying with the required legal formalities, had made some political contributions and had incurred certain expenses during the financial year 2022-23. The details are as under:

• Payment of 10,00,000 as contributions to LMS party.
• Donation of 2,00,000 for a public function and a dance program of Ravi Shankar, a film star and it can be reasonably presumed that his activities support Janta Welfare Party.
• Publication cost of Rs. 1,00,000 incurred for inserting an advertisement in the Souvenir published on behalf of Janta Welfare Party.
• Publication of pamphlets costing Rs.1,00,000 though not meant for any political party but incurred for promoting a candidate of political party who is going to contest in upcoming

LSL disclosed in its financial statements Rs.11,00,000 as political contributions and Rs.3,00,000 as

‘Advertisement and Business Promotion Expenses’.

CASE STUDY

Based at Shivamogga, Karnataka, Lotus Switchgears Limited (LSL) is a noted manufacturer, exporter and supplier of electrical products like Miniature Circuit Breakers (MCBs), Molded Case Circuit Breakers (MCCBs), Residual Current Circuit Breakers (RCCBs), Electric Leakage Circuit Breakers (ELCBs), Solar water Pumping Systems, Wires and Cables, etc. and has a good network of factories and distribution channels. The business grew by leaps and bounds due to the sincere and dedicated efforts of the said founding directors in the following capacity:                                           

However, the company is facing some difficult times for the past four years or so.

In a quest to overcome the difficulties faced by the company, Raghuram, a visionary, was appointed as the Executive Director at the EGM held on 12th January, 2020.

Shruthi Components Private Limited (SCPL) is one of the subsidiaries of LSL. The Board of Directors of LSL wished to exercise the power to dispose of its whole investment in SCPL. Accordingly, Mahadevan, whole-time Company Secretary of the company was directed to ascertain the procedure for disposing of company’s investment in SCPL.

Following data was extracted from the Audited Financial Statements of LSL for the year ending 31.03.2023:

Based on the above data and considering Section 2 (57) of the Companies Act, 2013, Mahadevan

calculated the ‘net worth’ of LSL as under:

In view of the ‘net worth’ of Rs. 100 crore, Mahadevan informed the Board that as per the relevant

provisions, SCPL was an undertaking of LSL.

Earlier during April, 2022, in the course of normal business, LSL entered into a contract for the continuous supply of some consumables and components with Anant Supplies Private Limited (ASPL) for a period of 3 years to be renewed with mutual consent thereafter. Ramesh, the Whole-time Director of LSL, was not an interested party at the time of entering into this Supply Contract with ASPL. However, during the second year of the Supply Contract, Rajesh, son of Ramesh, purchased about 30% of the equity shares of ASPL through one of his family owned business entities and also lent Rs.25 lakh as unsecured loan to ASPL. Ramesh did not inform LSL or the Board of Directors regarding the new developments since he was of the opinion that there was no need for such d isclosure. However, the Company Secretary and the Board had their own reservations, after the matter came to their knowledge from a third party.

During the statutory audit for the F.Y. 2022-23, while verifying the earlier years’ documents in connection with certain matter, the newly appointed auditors observed that the appointment of Raghuram as an Executive Director was invalid by reason of certain defects and also disqualification. During the month of August, 2023, the statutory auditors discussed the issue of irregular appointment with the Board of Directors of LSL.

The Board apprised the auditors that since his appointment as Executive Director of the company, Raghuram had participated in several Board Meetings and assented to various decisions, which had both pecuniary and operational impact. In addition, the Board had also passed several resolutions during that period. Accordingly, the Board, in one of its meetings, decided by passing a resolution that the wrongfully appointed Director Raghuram shall make good the losses, if any, for the period he remained Executive Director but all the resolutions passed during his period shall be valid and stand good.

One of the investors, Raman had invested substantially in the equity shares of LSL. However, he was quite worried about his investment after going through the latest Audited Financial Statements of 2022- 23, for he found that there was continuous downward trend in earning per share (EPS). He was of the opinion that the Directors of LSL have been getting exorbitant remuneration, resulting in lesser profits for the company.

Accordingly, he approached the Registered Office of the company at Shivamogga and requested for inspection of the copies of the recent Service Contracts of Arjun, the Managing Director as well as Ramesh and Ripudaman, the Whole-time Directors of the company. He was utterly surprised when he was informed by the official concerned that the Service Contracts with Arjun, Ramesh and Ripudaman were not in writing and therefore, could not be produced for inspection. However, he was also informed that only copies of the written Memorandum setting out the terms and conditions of the service could be provided for inspection. Raman was not convinced and thought it to be a fraudulent practice for which the company and every defaulting officer of the company must be punished.

LSL, after complying with the required legal formalities, had made some political contributions and had incurred certain expenses during the financial year 2022-23. The details are as under:

• Payment of 10,00,000 as contributions to LMS party.
• Donation of 2,00,000 for a public function and a dance program of Ravi Shankar, a film star and it can be reasonably presumed that his activities support Janta Welfare Party.
• Publication cost of Rs. 1,00,000 incurred for inserting an advertisement in the Souvenir published on behalf of Janta Welfare Party.
• Publication of pamphlets costing Rs.1,00,000 though not meant for any political party but incurred for promoting a candidate of political party who is going to contest in upcoming

LSL disclosed in its financial statements Rs.11,00,000 as political contributions and Rs.3,00,000 as

‘Advertisement and Business Promotion Expenses’.

CASE STUDY

Based at Shivamogga, Karnataka, Lotus Switchgears Limited (LSL) is a noted manufacturer, exporter and supplier of electrical products like Miniature Circuit Breakers (MCBs), Molded Case Circuit Breakers (MCCBs), Residual Current Circuit Breakers (RCCBs), Electric Leakage Circuit Breakers (ELCBs), Solar water Pumping Systems, Wires and Cables, etc. and has a good network of factories and distribution channels. The business grew by leaps and bounds due to the sincere and dedicated efforts of the said founding directors in the following capacity:                                           

However, the company is facing some difficult times for the past four years or so.

In a quest to overcome the difficulties faced by the company, Raghuram, a visionary, was appointed as the Executive Director at the EGM held on 12th January, 2020.

Shruthi Components Private Limited (SCPL) is one of the subsidiaries of LSL. The Board of Directors of LSL wished to exercise the power to dispose of its whole investment in SCPL. Accordingly, Mahadevan, whole-time Company Secretary of the company was directed to ascertain the procedure for disposing of company’s investment in SCPL.

Following data was extracted from the Audited Financial Statements of LSL for the year ending 31.03.2023:

Based on the above data and considering Section 2 (57) of the Companies Act, 2013, Mahadevan

calculated the ‘net worth’ of LSL as under:

In view of the ‘net worth’ of Rs. 100 crore, Mahadevan informed the Board that as per the relevant

provisions, SCPL was an undertaking of LSL.

Earlier during April, 2022, in the course of normal business, LSL entered into a contract for the continuous supply of some consumables and components with Anant Supplies Private Limited (ASPL) for a period of 3 years to be renewed with mutual consent thereafter. Ramesh, the Whole-time Director of LSL, was not an interested party at the time of entering into this Supply Contract with ASPL. However, during the second year of the Supply Contract, Rajesh, son of Ramesh, purchased about 30% of the equity shares of ASPL through one of his family owned business entities and also lent Rs.25 lakh as unsecured loan to ASPL. Ramesh did not inform LSL or the Board of Directors regarding the new developments since he was of the opinion that there was no need for such d isclosure. However, the Company Secretary and the Board had their own reservations, after the matter came to their knowledge from a third party.

During the statutory audit for the F.Y. 2022-23, while verifying the earlier years’ documents in connection with certain matter, the newly appointed auditors observed that the appointment of Raghuram as an Executive Director was invalid by reason of certain defects and also disqualification. During the month of August, 2023, the statutory auditors discussed the issue of irregular appointment with the Board of Directors of LSL.

The Board apprised the auditors that since his appointment as Executive Director of the company, Raghuram had participated in several Board Meetings and assented to various decisions, which had both pecuniary and operational impact. In addition, the Board had also passed several resolutions during that period. Accordingly, the Board, in one of its meetings, decided by passing a resolution that the wrongfully appointed Director Raghuram shall make good the losses, if any, for the period he remained Executive Director but all the resolutions passed during his period shall be valid and stand good.

One of the investors, Raman had invested substantially in the equity shares of LSL. However, he was quite worried about his investment after going through the latest Audited Financial Statements of 2022- 23, for he found that there was continuous downward trend in earning per share (EPS). He was of the opinion that the Directors of LSL have been getting exorbitant remuneration, resulting in lesser profits for the company.

Accordingly, he approached the Registered Office of the company at Shivamogga and requested for inspection of the copies of the recent Service Contracts of Arjun, the Managing Director as well as Ramesh and Ripudaman, the Whole-time Directors of the company. He was utterly surprised when he was informed by the official concerned that the Service Contracts with Arjun, Ramesh and Ripudaman were not in writing and therefore, could not be produced for inspection. However, he was also informed that only copies of the written Memorandum setting out the terms and conditions of the service could be provided for inspection. Raman was not convinced and thought it to be a fraudulent practice for which the company and every defaulting officer of the company must be punished.

LSL, after complying with the required legal formalities, had made some political contributions and had incurred certain expenses during the financial year 2022-23. The details are as under:

• Payment of 10,00,000 as contributions to LMS party.
• Donation of 2,00,000 for a public function and a dance program of Ravi Shankar, a film star and it can be reasonably presumed that his activities support Janta Welfare Party.
• Publication cost of Rs. 1,00,000 incurred for inserting an advertisement in the Souvenir published on behalf of Janta Welfare Party.
• Publication of pamphlets costing Rs.1,00,000 though not meant for any political party but incurred for promoting a candidate of political party who is going to contest in upcoming

LSL disclosed in its financial statements Rs.11,00,000 as political contributions and Rs.3,00,000 as

‘Advertisement and Business Promotion Expenses’.

CASE STUDY

Based at Shivamogga, Karnataka, Lotus Switchgears Limited (LSL) is a noted manufacturer, exporter and supplier of electrical products like Miniature Circuit Breakers (MCBs), Molded Case Circuit Breakers (MCCBs), Residual Current Circuit Breakers (RCCBs), Electric Leakage Circuit Breakers (ELCBs), Solar water Pumping Systems, Wires and Cables, etc. and has a good network of factories and distribution channels. The business grew by leaps and bounds due to the sincere and dedicated efforts of the said founding directors in the following capacity:                                           

However, the company is facing some difficult times for the past four years or so.

In a quest to overcome the difficulties faced by the company, Raghuram, a visionary, was appointed as the Executive Director at the EGM held on 12th January, 2020.

Shruthi Components Private Limited (SCPL) is one of the subsidiaries of LSL. The Board of Directors of LSL wished to exercise the power to dispose of its whole investment in SCPL. Accordingly, Mahadevan, whole-time Company Secretary of the company was directed to ascertain the procedure for disposing of company’s investment in SCPL.

Following data was extracted from the Audited Financial Statements of LSL for the year ending 31.03.2023:

Based on the above data and considering Section 2 (57) of the Companies Act, 2013, Mahadevan

calculated the ‘net worth’ of LSL as under:

In view of the ‘net worth’ of Rs. 100 crore, Mahadevan informed the Board that as per the relevant

provisions, SCPL was an undertaking of LSL.

Earlier during April, 2022, in the course of normal business, LSL entered into a contract for the continuous supply of some consumables and components with Anant Supplies Private Limited (ASPL) for a period of 3 years to be renewed with mutual consent thereafter. Ramesh, the Whole-time Director of LSL, was not an interested party at the time of entering into this Supply Contract with ASPL. However, during the second year of the Supply Contract, Rajesh, son of Ramesh, purchased about 30% of the equity shares of ASPL through one of his family owned business entities and also lent Rs.25 lakh as unsecured loan to ASPL. Ramesh did not inform LSL or the Board of Directors regarding the new developments since he was of the opinion that there was no need for such d isclosure. However, the Company Secretary and the Board had their own reservations, after the matter came to their knowledge from a third party.

During the statutory audit for the F.Y. 2022-23, while verifying the earlier years’ documents in connection with certain matter, the newly appointed auditors observed that the appointment of Raghuram as an Executive Director was invalid by reason of certain defects and also disqualification. During the month of August, 2023, the statutory auditors discussed the issue of irregular appointment with the Board of Directors of LSL.

The Board apprised the auditors that since his appointment as Executive Director of the company, Raghuram had participated in several Board Meetings and assented to various decisions, which had both pecuniary and operational impact. In addition, the Board had also passed several resolutions during that period. Accordingly, the Board, in one of its meetings, decided by passing a resolution that the wrongfully appointed Director Raghuram shall make good the losses, if any, for the period he remained Executive Director but all the resolutions passed during his period shall be valid and stand good.

One of the investors, Raman had invested substantially in the equity shares of LSL. However, he was quite worried about his investment after going through the latest Audited Financial Statements of 2022- 23, for he found that there was continuous downward trend in earning per share (EPS). He was of the opinion that the Directors of LSL have been getting exorbitant remuneration, resulting in lesser profits for the company.

Accordingly, he approached the Registered Office of the company at Shivamogga and requested for inspection of the copies of the recent Service Contracts of Arjun, the Managing Director as well as Ramesh and Ripudaman, the Whole-time Directors of the company. He was utterly surprised when he was informed by the official concerned that the Service Contracts with Arjun, Ramesh and Ripudaman were not in writing and therefore, could not be produced for inspection. However, he was also informed that only copies of the written Memorandum setting out the terms and conditions of the service could be provided for inspection. Raman was not convinced and thought it to be a fraudulent practice for which the company and every defaulting officer of the company must be punished.

LSL, after complying with the required legal formalities, had made some political contributions and had incurred certain expenses during the financial year 2022-23. The details are as under:

• Payment of 10,00,000 as contributions to LMS party.
• Donation of 2,00,000 for a public function and a dance program of Ravi Shankar, a film star and it can be reasonably presumed that his activities support Janta Welfare Party.
• Publication cost of Rs. 1,00,000 incurred for inserting an advertisement in the Souvenir published on behalf of Janta Welfare Party.
• Publication of pamphlets costing Rs.1,00,000 though not meant for any political party but incurred for promoting a candidate of political party who is going to contest in upcoming

LSL disclosed in its financial statements Rs.11,00,000 as political contributions and Rs.3,00,000 as

‘Advertisement and Business Promotion Expenses’.

CASE STUDY

Paavan Nidhi Limited having its Registered Office at Karol Bagh, New Delhi, has been declared as Nidhi by notification published in the Official Gazette. The company is incorporated with the object of cultivating the habit of thrift and savings among its members, receiving deposit from, and lending to, its members only, for their mutual benefit.

Paavan Nidhi Limited has six Directors, namely, Padam, Prakash, Puneet, Pratima, Poorva and Piyush and two hundred fifty members. All the Directors are shrewd businessmen having full dedication to the cause of the company. They are committed to run the company in accordance with the Nidhi Rules, 2014 and being law-abiding persons shall not do anything which is not permitted in case of a Nidhi like carrying on the business of chit fund or hire-purchase finance or leasing finance or insurance, etc. Padam is the senior-most Director with vast experience in the field of finance and therefore, he has been honoured by the company to hold Directorship for a term up to ten consecutive years.

The company offers following services for the benefit of its members:

1. Fixed Deposit Plans of different maturities;
2. Recurring Deposit Plans for members who do not wish to deposit lump-sum;
3. Opening of Savings Accounts in the name of members;
4. Gold Loans to the needy members on easy terms;
5. Mortgage Loans,

PQR Traders Private Limited, having its Registered Office at Munirka, New Delhi, was incorporated last year. It had a chance to go through the operations of Paavan Nidhi Limited and finding them to be on sound footing, it applied for becoming its member. The Nidhi company is analysing the proposals received.

During the current year, Mr. Kshitij, a member of Paavan Nidhi Limited deposited ` 1,00,000 in the name of his minor son Rudra who is of 12 years of age. Mr. Kshitij also desires that Rudra becomes a member of Paavan Nidhi and for that purpose he is negotiating with the company. As regards the validity of this matter, Piyush, one of the Directors has raised certain objections. The company wants to sort out the issue amicably.

CASE STUDY

Paavan Nidhi Limited having its Registered Office at Karol Bagh, New Delhi, has been declared as Nidhi by notification published in the Official Gazette. The company is incorporated with the object of cultivating the habit of thrift and savings among its members, receiving deposit from, and lending to, its members only, for their mutual benefit.

Paavan Nidhi Limited has six Directors, namely, Padam, Prakash, Puneet, Pratima, Poorva and Piyush and two hundred fifty members. All the Directors are shrewd businessmen having full dedication to the cause of the company. They are committed to run the company in accordance with the Nidhi Rules, 2014 and being law-abiding persons shall not do anything which is not permitted in case of a Nidhi like carrying on the business of chit fund or hire-purchase finance or leasing finance or insurance, etc. Padam is the senior-most Director with vast experience in the field of finance and therefore, he has been honoured by the company to hold Directorship for a term up to ten consecutive years.

The company offers following services for the benefit of its members:

1. Fixed Deposit Plans of different maturities;
2. Recurring Deposit Plans for members who do not wish to deposit lump-sum;
3. Opening of Savings Accounts in the name of members;
4. Gold Loans to the needy members on easy terms;
5. Mortgage Loans,

PQR Traders Private Limited, having its Registered Office at Munirka, New Delhi, was incorporated last year. It had a chance to go through the operations of Paavan Nidhi Limited and finding them to be on sound footing, it applied for becoming its member. The Nidhi company is analysing the proposals received.

During the current year, Mr. Kshitij, a member of Paavan Nidhi Limited deposited ` 1,00,000 in the name of his minor son Rudra who is of 12 years of age. Mr. Kshitij also desires that Rudra becomes a member of Paavan Nidhi and for that purpose he is negotiating with the company. As regards the validity of this matter, Piyush, one of the Directors has raised certain objections. The company wants to sort out the issue amicably.

CASE STUDY

Paavan Nidhi Limited having its Registered Office at Karol Bagh, New Delhi, has been declared as Nidhi by notification published in the Official Gazette. The company is incorporated with the object of cultivating the habit of thrift and savings among its members, receiving deposit from, and lending to, its members only, for their mutual benefit.

Paavan Nidhi Limited has six Directors, namely, Padam, Prakash, Puneet, Pratima, Poorva and Piyush and two hundred fifty members. All the Directors are shrewd businessmen having full dedication to the cause of the company. They are committed to run the company in accordance with the Nidhi Rules, 2014 and being law-abiding persons shall not do anything which is not permitted in case of a Nidhi like carrying on the business of chit fund or hire-purchase finance or leasing finance or insurance, etc. Padam is the senior-most Director with vast experience in the field of finance and therefore, he has been honoured by the company to hold Directorship for a term up to ten consecutive years.

The company offers following services for the benefit of its members:

1. Fixed Deposit Plans of different maturities;
2. Recurring Deposit Plans for members who do not wish to deposit lump-sum;
3. Opening of Savings Accounts in the name of members;
4. Gold Loans to the needy members on easy terms;
5. Mortgage Loans,

PQR Traders Private Limited, having its Registered Office at Munirka, New Delhi, was incorporated last year. It had a chance to go through the operations of Paavan Nidhi Limited and finding them to be on sound footing, it applied for becoming its member. The Nidhi company is analysing the proposals received.

During the current year, Mr. Kshitij, a member of Paavan Nidhi Limited deposited ` 1,00,000 in the name of his minor son Rudra who is of 12 years of age. Mr. Kshitij also desires that Rudra becomes a member of Paavan Nidhi and for that purpose he is negotiating with the company. As regards the validity of this matter, Piyush, one of the Directors has raised certain objections. The company wants to sort out the issue amicably.

CASE STUDY

Paavan Nidhi Limited having its Registered Office at Karol Bagh, New Delhi, has been declared as Nidhi by notification published in the Official Gazette. The company is incorporated with the object of cultivating the habit of thrift and savings among its members, receiving deposit from, and lending to, its members only, for their mutual benefit.

Paavan Nidhi Limited has six Directors, namely, Padam, Prakash, Puneet, Pratima, Poorva and Piyush and two hundred fifty members. All the Directors are shrewd businessmen having full dedication to the cause of the company. They are committed to run the company in accordance with the Nidhi Rules, 2014 and being law-abiding persons shall not do anything which is not permitted in case of a Nidhi like carrying on the business of chit fund or hire-purchase finance or leasing finance or insurance, etc. Padam is the senior-most Director with vast experience in the field of finance and therefore, he has been honoured by the company to hold Directorship for a term up to ten consecutive years.

The company offers following services for the benefit of its members:

1. Fixed Deposit Plans of different maturities;
2. Recurring Deposit Plans for members who do not wish to deposit lump-sum;
3. Opening of Savings Accounts in the name of members;
4. Gold Loans to the needy members on easy terms;
5. Mortgage Loans,

PQR Traders Private Limited, having its Registered Office at Munirka, New Delhi, was incorporated last year. It had a chance to go through the operations of Paavan Nidhi Limited and finding them to be on sound footing, it applied for becoming its member. The Nidhi company is analysing the proposals received.

During the current year, Mr. Kshitij, a member of Paavan Nidhi Limited deposited ` 1,00,000 in the name of his minor son Rudra who is of 12 years of age. Mr. Kshitij also desires that Rudra becomes a member of Paavan Nidhi and for that purpose he is negotiating with the company. As regards the validity of this matter, Piyush, one of the Directors has raised certain objections. The company wants to sort out the issue amicably.

CASE STUDY

Paavan Nidhi Limited having its Registered Office at Karol Bagh, New Delhi, has been declared as Nidhi by notification published in the Official Gazette. The company is incorporated with the object of cultivating the habit of thrift and savings among its members, receiving deposit from, and lending to, its members only, for their mutual benefit.

Paavan Nidhi Limited has six Directors, namely, Padam, Prakash, Puneet, Pratima, Poorva and Piyush and two hundred fifty members. All the Directors are shrewd businessmen having full dedication to the cause of the company. They are committed to run the company in accordance with the Nidhi Rules, 2014 and being law-abiding persons shall not do anything which is not permitted in case of a Nidhi like carrying on the business of chit fund or hire-purchase finance or leasing finance or insurance, etc. Padam is the senior-most Director with vast experience in the field of finance and therefore, he has been honoured by the company to hold Directorship for a term up to ten consecutive years.

The company offers following services for the benefit of its members:

1. Fixed Deposit Plans of different maturities;
2. Recurring Deposit Plans for members who do not wish to deposit lump-sum;
3. Opening of Savings Accounts in the name of members;
4. Gold Loans to the needy members on easy terms;
5. Mortgage Loans,

PQR Traders Private Limited, having its Registered Office at Munirka, New Delhi, was incorporated last year. It had a chance to go through the operations of Paavan Nidhi Limited and finding them to be on sound footing, it applied for becoming its member. The Nidhi company is analysing the proposals received.

During the current year, Mr. Kshitij, a member of Paavan Nidhi Limited deposited ` 1,00,000 in the name of his minor son Rudra who is of 12 years of age. Mr. Kshitij also desires that Rudra becomes a member of Paavan Nidhi and for that purpose he is negotiating with the company. As regards the validity of this matter, Piyush, one of the Directors has raised certain objections. The company wants to sort out the issue amicably.

CASE STUDY

GenTech Engineering and Consultancy Limited (GECL), having its Registered Office in Kolkata, West Bengal, was incorporated way back in January, The Central Government holds 21% of its paid - up share capital while the State Government of Gujarat and Navyug Engineering Limited, a government company, hold 23% and 10% respectively.

As GECL was interested in ascertaining the market value of its assets, it invited tenders and after thorough scrutiny it shortlisted the following Registered Valuers:

• Anant: He has set up his valuation practice in London for the last 5 years. He came to visit India on December 24, 2021, for a short span of around one month during which, in terms of the tender submitted by him, he was proposed by GECL to undertake the assignment relating to valuation of its assets.
• Aloknath: He is a valuer member of a registered valuers’ organisation and is one of the partners of M/s ALP & Associates, a Kolkata based valuation firm. Mr. Aloknath was given second preference by GECL if Mr. Anant refused the assignment relating to the valuation of assets.
• M/s MNC Valuers & Associates, LLP: It is a Limited Liability Partnership, based at Kolkata, and all the partners of the firm are valuer members of a registered valuers’ organisation. It was given third preference by GECL for undertaking the valuation of its assets.

GECL holds 15% paid-up share capital of Prayas Marketing Limited (PML). However, the jurisdictional Registrar of Companies (RoC), having reasonable cause to believe that the PML was not carrying on any business or operations, ordered a physical verification of the Registered Office of PML.

After physical verification of the Registered Office of PML, the Registrar formed an opinion that the company, in actuality, was not carrying on any business or operations and therefore, he issued a notice to the company and all of its Directors indicating his intention to remove the name of the company from the Register of Companies, if no explanation along with copies of relevant documents were filed within a period of 30 days from the date of the notice. Since no cause to the contrary was shown by the company and its Directors, the Registrar, after following the requisite procedure, removed the name of the PML from the Register of Companies and a notice dated 30.10.2021 to this effect was published in the Official Gazette. On publication of this notice i n the Official Gazette and also its placement on the official website of the Ministry of Corporate affairs, PML was dissolved.

After dissolution as above of the PML effective from 30.10.2021 under Section 248 of the Companies Act, 2013, it ceased to operate as a company and Certificate of Incorporation was deemed to have been cancelled from such date.

CASE STUDY

GenTech Engineering and Consultancy Limited (GECL), having its Registered Office in Kolkata, West Bengal, was incorporated way back in January, The Central Government holds 21% of its paid - up share capital while the State Government of Gujarat and Navyug Engineering Limited, a government company, hold 23% and 10% respectively.

As GECL was interested in ascertaining the market value of its assets, it invited tenders and after thorough scrutiny it shortlisted the following Registered Valuers:

• Anant: He has set up his valuation practice in London for the last 5 years. He came to visit India on December 24, 2021, for a short span of around one month during which, in terms of the tender submitted by him, he was proposed by GECL to undertake the assignment relating to valuation of its assets.
• Aloknath: He is a valuer member of a registered valuers’ organisation and is one of the partners of M/s ALP & Associates, a Kolkata based valuation firm. Mr. Aloknath was given second preference by GECL if Mr. Anant refused the assignment relating to the valuation of assets.
• M/s MNC Valuers & Associates, LLP: It is a Limited Liability Partnership, based at Kolkata, and all the partners of the firm are valuer members of a registered valuers’ organisation. It was given third preference by GECL for undertaking the valuation of its assets.

GECL holds 15% paid-up share capital of Prayas Marketing Limited (PML). However, the jurisdictional Registrar of Companies (RoC), having reasonable cause to believe that the PML was not carrying on any business or operations, ordered a physical verification of the Registered Office of PML.

After physical verification of the Registered Office of PML, the Registrar formed an opinion that the company, in actuality, was not carrying on any business or operations and therefore, he issued a notice to the company and all of its Directors indicating his intention to remove the name of the company from the Register of Companies, if no explanation along with copies of relevant documents were filed within a period of 30 days from the date of the notice. Since no cause to the contrary was shown by the company and its Directors, the Registrar, after following the requisite procedure, removed the name of the PML from the Register of Companies and a notice dated 30.10.2021 to this effect was published in the Official Gazette. On publication of this notice i n the Official Gazette and also its placement on the official website of the Ministry of Corporate affairs, PML was dissolved.

After dissolution as above of the PML effective from 30.10.2021 under Section 248 of the Companies Act, 2013, it ceased to operate as a company and Certificate of Incorporation was deemed to have been cancelled from such date.

CASE STUDY

GenTech Engineering and Consultancy Limited (GECL), having its Registered Office in Kolkata, West Bengal, was incorporated way back in January, The Central Government holds 21% of its paid - up share capital while the State Government of Gujarat and Navyug Engineering Limited, a government company, hold 23% and 10% respectively.

As GECL was interested in ascertaining the market value of its assets, it invited tenders and after thorough scrutiny it shortlisted the following Registered Valuers:

• Anant: He has set up his valuation practice in London for the last 5 years. He came to visit India on December 24, 2021, for a short span of around one month during which, in terms of the tender submitted by him, he was proposed by GECL to undertake the assignment relating to valuation of its assets.
• Aloknath: He is a valuer member of a registered valuers’ organisation and is one of the partners of M/s ALP & Associates, a Kolkata based valuation firm. Mr. Aloknath was given second preference by GECL if Mr. Anant refused the assignment relating to the valuation of assets.
• M/s MNC Valuers & Associates, LLP: It is a Limited Liability Partnership, based at Kolkata, and all the partners of the firm are valuer members of a registered valuers’ organisation. It was given third preference by GECL for undertaking the valuation of its assets.

GECL holds 15% paid-up share capital of Prayas Marketing Limited (PML). However, the jurisdictional Registrar of Companies (RoC), having reasonable cause to believe that the PML was not carrying on any business or operations, ordered a physical verification of the Registered Office of PML.

After physical verification of the Registered Office of PML, the Registrar formed an opinion that the company, in actuality, was not carrying on any business or operations and therefore, he issued a notice to the company and all of its Directors indicating his intention to remove the name of the company from the Register of Companies, if no explanation along with copies of relevant documents were filed within a period of 30 days from the date of the notice. Since no cause to the contrary was shown by the company and its Directors, the Registrar, after following the requisite procedure, removed the name of the PML from the Register of Companies and a notice dated 30.10.2021 to this effect was published in the Official Gazette. On publication of this notice i n the Official Gazette and also its placement on the official website of the Ministry of Corporate affairs, PML was dissolved.

After dissolution as above of the PML effective from 30.10.2021 under Section 248 of the Companies Act, 2013, it ceased to operate as a company and Certificate of Incorporation was deemed to have been cancelled from such date.

CASE STUDY

Atul is an employee of the company ABC Limited, and an investigation is going on him under the provisions of Companies Act, 2013. The company wants to terminate Mr. Atul as investigation is going against him. The company has filed the application with the Tribunal for approval of Mr. Atul’s termination. The company has not received any reply from the Tribunal within 30 days of filling an application. After expiry of 30 days, the company considered it as deemed approval and terminated Mr. Atul.

On the basis of the Companies Act, 2013, answer the following questions:

CASE STUDY

Atul is an employee of the company ABC Limited, and an investigation is going on him under the provisions of Companies Act, 2013. The company wants to terminate Mr. Atul as investigation is going against him. The company has filed the application with the Tribunal for approval of Mr. Atul’s termination. The company has not received any reply from the Tribunal within 30 days of filling an application. After expiry of 30 days, the company considered it as deemed approval and terminated Mr. Atul.

On the basis of the Companies Act, 2013, answer the following questions:

CASE STUDY

FLY-FISH Limited is a listed company provided the following month-wise grievance position of the investors' complaints for the financial year 2022-2023.

Requirement: Referring to the applicable Regulation made under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, advise the Company about the grievance redressal position of investors' complaints to be filed during the month of April 2023 with the recognised stock exchanges where the securities of the Company are listed by answering the following Multiple Choice Questions:                                                                                                                       

CASE STUDY

FLY-FISH Limited is a listed company provided the following month-wise grievance position of the investors' complaints for the financial year 2022-2023.

Requirement: Referring to the applicable Regulation made under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, advise the Company about the grievance redressal position of investors' complaints to be filed during the month of April 2023 with the recognised stock exchanges where the securities of the Company are listed by answering the following Multiple Choice Questions:                                                                                                                       

Pawan Limited operates in the aerospace segment and is planning to roll out an Initial Public Offer. One of its 12 directors was barred from assessing the capital market by SEBI. Though restrictions were imposed upon the promoter group as well, they were later removed after representations made by them in this regard. A subsidiary company of Pawan Limited, Vayu Limited, defaulted on the repayment of the deposit around nine months ago, which is now rectified.

Fire Limited is among the major suppliers of Pawan Limited. It also offers consultancy services on energy management and space shuttle technology, in addition to trading in solar energy-based devices. Mr. Alok, CFO of Fire Limited, which is a listed entity, heard from someone that composite

issues can be made on the Indian Stock Market.

He seeks input from Mr. Bhavesh, the Company Secretary, regarding the type of securities specified to be issued in this way and what nature of issue or placement can be composed together. He is also not sure and has promised to revert after consulting the expert on the matter.

Finally, Fire Limited issued the red prospectus on the stock exchange, where its securities were not listed earlier. But made revisions to the price band notified earlier. Mr. Bhavesh suggests to the Board that they need to extend the bidding period from the current tenor of 5 days. Mr. Alok asked him to do the needful to extend the bidding.

Unfortunately, Fire Limited fails to obtain listing or trading permission from the stock exchanges where the specified securities were to be listed. Mr. Bhavesh is aware of the regulation that it shall refund through verifiable means the entire monies received upon receipt of the intimation from stock exchanges rejecting the application for listing of the specified securities, hence, he started making the necessary arrangements.

You are an expert on Securities Laws, and are professionally engaged to answer the following questions by identifying the most appropriate option based upon provisions contained in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Pawan Limited operates in the aerospace segment and is planning to roll out an Initial Public Offer. One of its 12 directors was barred from assessing the capital market by SEBI. Though restrictions were imposed upon the promoter group as well, they were later removed after representations made by them in this regard. A subsidiary company of Pawan Limited, Vayu Limited, defaulted on the repayment of the deposit around nine months ago, which is now rectified.

Fire Limited is among the major suppliers of Pawan Limited. It also offers consultancy services on energy management and space shuttle technology, in addition to trading in solar energy-based devices. Mr. Alok, CFO of Fire Limited, which is a listed entity, heard from someone that composite

issues can be made on the Indian Stock Market.

He seeks input from Mr. Bhavesh, the Company Secretary, regarding the type of securities specified to be issued in this way and what nature of issue or placement can be composed together. He is also not sure and has promised to revert after consulting the expert on the matter.

Finally, Fire Limited issued the red prospectus on the stock exchange, where its securities were not listed earlier. But made revisions to the price band notified earlier. Mr. Bhavesh suggests to the Board that they need to extend the bidding period from the current tenor of 5 days. Mr. Alok asked him to do the needful to extend the bidding.

Unfortunately, Fire Limited fails to obtain listing or trading permission from the stock exchanges where the specified securities were to be listed. Mr. Bhavesh is aware of the regulation that it shall refund through verifiable means the entire monies received upon receipt of the intimation from stock exchanges rejecting the application for listing of the specified securities, hence, he started making the necessary arrangements.

You are an expert on Securities Laws, and are professionally engaged to answer the following questions by identifying the most appropriate option based upon provisions contained in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Pawan Limited operates in the aerospace segment and is planning to roll out an Initial Public Offer. One of its 12 directors was barred from assessing the capital market by SEBI. Though restrictions were imposed upon the promoter group as well, they were later removed after representations made by them in this regard. A subsidiary company of Pawan Limited, Vayu Limited, defaulted on the repayment of the deposit around nine months ago, which is now rectified.

Fire Limited is among the major suppliers of Pawan Limited. It also offers consultancy services on energy management and space shuttle technology, in addition to trading in solar energy-based devices. Mr. Alok, CFO of Fire Limited, which is a listed entity, heard from someone that composite

issues can be made on the Indian Stock Market.

He seeks input from Mr. Bhavesh, the Company Secretary, regarding the type of securities specified to be issued in this way and what nature of issue or placement can be composed together. He is also not sure and has promised to revert after consulting the expert on the matter.

Finally, Fire Limited issued the red prospectus on the stock exchange, where its securities were not listed earlier. But made revisions to the price band notified earlier. Mr. Bhavesh suggests to the Board that they need to extend the bidding period from the current tenor of 5 days. Mr. Alok asked him to do the needful to extend the bidding.

Unfortunately, Fire Limited fails to obtain listing or trading permission from the stock exchanges where the specified securities were to be listed. Mr. Bhavesh is aware of the regulation that it shall refund through verifiable means the entire monies received upon receipt of the intimation from stock exchanges rejecting the application for listing of the specified securities, hence, he started making the necessary arrangements.

You are an expert on Securities Laws, and are professionally engaged to answer the following questions by identifying the most appropriate option based upon provisions contained in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

CASE STUDY

Venus Limited is a listed company that manufactures and trades in perfumes, attars, essential oils, natural extracts, and fragrance-based cosmetic and personal care items. It has the largest manufacturing plant for rose water extractions in Kannauj, the perfume capital of India and often referred to as the Grasse (France) of the East.

Venus Limited has 12 directors on its board, and Mr. Vinod Kapadia was appointed as managing director just a month ago. Mars Limited, another listed company, holds 12% of the equity shares and paid-up share capital of Venus Limited.

An Audit Committee was constituted, consisting of six directors, of whom three are independent and one is non-executive. Ms. Krishna, who is an independent director, was appointed as the chairperson of the Audit Committee. The Audit Committee of Venus Limited during 2021–22 and 2022–23 met on following dates:

Since Mr. Vinod Kapadia is appointed as MD recently hence he is willing to know about the time within which the quarterly results need to be reported from end of the quarter in ordinary course of business.

Multiple Choice Questions:                                                                                       (10 Marks)

You are an expert on securities laws, who is being professionally engaged to answer the following questions (specified as MCQs) by identifying the most appropriate option based upon provisions contained in the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

CASE STUDY

Venus Limited is a listed company that manufactures and trades in perfumes, attars, essential oils, natural extracts, and fragrance-based cosmetic and personal care items. It has the largest manufacturing plant for rose water extractions in Kannauj, the perfume capital of India and often referred to as the Grasse (France) of the East.

Venus Limited has 12 directors on its board, and Mr. Vinod Kapadia was appointed as managing director just a month ago. Mars Limited, another listed company, holds 12% of the equity shares and paid-up share capital of Venus Limited.

An Audit Committee was constituted, consisting of six directors, of whom three are independent and one is non-executive. Ms. Krishna, who is an independent director, was appointed as the chairperson of the Audit Committee. The Audit Committee of Venus Limited during 2021–22 and 2022–23 met on following dates:

Since Mr. Vinod Kapadia is appointed as MD recently hence he is willing to know about the time within which the quarterly results need to be reported from end of the quarter in ordinary course of business.

Multiple Choice Questions:                                                                                       (10 Marks)

You are an expert on securities laws, who is being professionally engaged to answer the following questions (specified as MCQs) by identifying the most appropriate option based upon provisions contained in the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

CASE STUDY

Venus Limited is a listed company that manufactures and trades in perfumes, attars, essential oils, natural extracts, and fragrance-based cosmetic and personal care items. It has the largest manufacturing plant for rose water extractions in Kannauj, the perfume capital of India and often referred to as the Grasse (France) of the East.

Venus Limited has 12 directors on its board, and Mr. Vinod Kapadia was appointed as managing director just a month ago. Mars Limited, another listed company, holds 12% of the equity shares and paid-up share capital of Venus Limited.

An Audit Committee was constituted, consisting of six directors, of whom three are independent and one is non-executive. Ms. Krishna, who is an independent director, was appointed as the chairperson of the Audit Committee. The Audit Committee of Venus Limited during 2021–22 and 2022–23 met on following dates:

Since Mr. Vinod Kapadia is appointed as MD recently hence he is willing to know about the time within which the quarterly results need to be reported from end of the quarter in ordinary course of business.

Multiple Choice Questions:                                                                                       (10 Marks)

You are an expert on securities laws, who is being professionally engaged to answer the following questions (specified as MCQs) by identifying the most appropriate option based upon provisions contained in the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

CASE STUDY

Venus Limited is a listed company that manufactures and trades in perfumes, attars, essential oils, natural extracts, and fragrance-based cosmetic and personal care items. It has the largest manufacturing plant for rose water extractions in Kannauj, the perfume capital of India and often referred to as the Grasse (France) of the East.

Venus Limited has 12 directors on its board, and Mr. Vinod Kapadia was appointed as managing director just a month ago. Mars Limited, another listed company, holds 12% of the equity shares and paid-up share capital of Venus Limited.

An Audit Committee was constituted, consisting of six directors, of whom three are independent and one is non-executive. Ms. Krishna, who is an independent director, was appointed as the chairperson of the Audit Committee. The Audit Committee of Venus Limited during 2021–22 and 2022–23 met on following dates:

Since Mr. Vinod Kapadia is appointed as MD recently hence he is willing to know about the time within which the quarterly results need to be reported from end of the quarter in ordinary course of business.

Multiple Choice Questions:                                                                                       (10 Marks)

You are an expert on securities laws, who is being professionally engaged to answer the following questions (specified as MCQs) by identifying the most appropriate option based upon provisions contained in the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

CASE STUDY

Venus Limited is a listed company that manufactures and trades in perfumes, attars, essential oils, natural extracts, and fragrance-based cosmetic and personal care items. It has the largest manufacturing plant for rose water extractions in Kannauj, the perfume capital of India and often referred to as the Grasse (France) of the East.

Venus Limited has 12 directors on its board, and Mr. Vinod Kapadia was appointed as managing director just a month ago. Mars Limited, another listed company, holds 12% of the equity shares and paid-up share capital of Venus Limited.

An Audit Committee was constituted, consisting of six directors, of whom three are independent and one is non-executive. Ms. Krishna, who is an independent director, was appointed as the chairperson of the Audit Committee. The Audit Committee of Venus Limited during 2021–22 and 2022–23 met on following dates:

Since Mr. Vinod Kapadia is appointed as MD recently hence he is willing to know about the time within which the quarterly results need to be reported from end of the quarter in ordinary course of business.

Multiple Choice Questions:                                                                                       (10 Marks)

You are an expert on securities laws, who is being professionally engaged to answer the following questions (specified as MCQs) by identifying the most appropriate option based upon provisions contained in the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

CASE STUDY

Raman resident in India had gone to London [UK] on a temporary visit in August 2022 and to Bhutan in February 2023. He brought in India at the time of his return, currency notes of Government of India and RBI Notes Rs. 20,000 from London in the denomination of Rs. 200 and Rs. 1,00,000 from Bhutan in the denomination of Rs. 500.

Referring to the provisions of the Foreign Exchange Management Act, 1999, answer the following questions:

CASE STUDY

Raman resident in India had gone to London [UK] on a temporary visit in August 2022 and to Bhutan in February 2023. He brought in India at the time of his return, currency notes of Government of India and RBI Notes Rs. 20,000 from London in the denomination of Rs. 200 and Rs. 1,00,000 from Bhutan in the denomination of Rs. 500.

Referring to the provisions of the Foreign Exchange Management Act, 1999, answer the following questions:

CASE STUDY

Upalayam Old Student Association was formed with the object of providing Coaching & Hostel facilities to the students studying in the government school. Mr. Murugan, an Indian Origin, acquired American citizenship and settled in USA. However, he is an overseas citizen of India cardholders. Mr. Murugan donated Rs. 10 Lakh to the said Association from his personal savings earned in USA through the normal banking channel. Referring to the provisions of the Foreign Contribution (Regulation) Act, 2010, answer the following:

CASE STUDY

Upalayam Old Student Association was formed with the object of providing Coaching & Hostel facilities to the students studying in the government school. Mr. Murugan, an Indian Origin, acquired American citizenship and settled in USA. However, he is an overseas citizen of India cardholders. Mr. Murugan donated Rs. 10 Lakh to the said Association from his personal savings earned in USA through the normal banking channel. Referring to the provisions of the Foreign Contribution (Regulation) Act, 2010, answer the following:

CASE STUDY

Narsee Monjee is among the leading management institute of country. It offers state of art facilities in addition to global learning opportunities to its pupils through students exchange programme, wherein student has option to complete maximum upto two final semesters of their study program from any one of Ivy League foreign universities with which it has MOUs. Even faculty exchange program also in place to offer best blend of knowledge and teaching.

Ramesh Dayal and Manish Kandpal, two students (who are friends as well) of master level management program decided to complete final semester of their degree from one such foreign university under student exchange program. Therefore both of them left India on 23rd December, 2021. Despite earlier they have plan to come back to mother land by the June 30 th of 2022 i.e. after the end of the final semester, but Manish got good job placement there and decided to start working there only. He returned to India in X-mas holidays in 2022 to meet his family, while Mr. Ramesh Dayal who also got placement offer, denied to employment there and returned to India as per plan.

To support studies of his son, the father of Manish remit him USD 64,000 during 2021-22 and USD 17,800 during 2022-23, while his tuition fee at such Higher Educational Institutions (HEI) is only USD 27,500 (including all).

Canada chapter of alumni association of Narsee Monjee organised a re-union function. Narsee Monjee’s alumni club (constituted internally as part of university organisation structure) remit sponsorship (100000 Canadian dollars approximately equal to USD 75, 000) of cultural evening as part of such re-union function.

Narsee Monjee’s faculty of management also offers consultancy and Ministry of Defence Polices (MDPs). Recently (11th May to 20th May 2022) it delivered one such professional development in UAE to train the professionals their prior to roll out of Direct Tax. The invoice raised by MDP department on 22nd May for USD 10,000.      (8 Marks)

CASE STUDY

Narsee Monjee is among the leading management institute of country. It offers state of art facilities in addition to global learning opportunities to its pupils through students exchange programme, wherein student has option to complete maximum upto two final semesters of their study program from any one of Ivy League foreign universities with which it has MOUs. Even faculty exchange program also in place to offer best blend of knowledge and teaching.

Ramesh Dayal and Manish Kandpal, two students (who are friends as well) of master level management program decided to complete final semester of their degree from one such foreign university under student exchange program. Therefore both of them left India on 23rd December, 2021. Despite earlier they have plan to come back to mother land by the June 30 th of 2022 i.e. after the end of the final semester, but Manish got good job placement there and decided to start working there only. He returned to India in X-mas holidays in 2022 to meet his family, while Mr. Ramesh Dayal who also got placement offer, denied to employment there and returned to India as per plan.

To support studies of his son, the father of Manish remit him USD 64,000 during 2021-22 and USD 17,800 during 2022-23, while his tuition fee at such Higher Educational Institutions (HEI) is only USD 27,500 (including all).

Canada chapter of alumni association of Narsee Monjee organised a re-union function. Narsee Monjee’s alumni club (constituted internally as part of university organisation structure) remit sponsorship (100000 Canadian dollars approximately equal to USD 75, 000) of cultural evening as part of such re-union function.

Narsee Monjee’s faculty of management also offers consultancy and Ministry of Defence Polices (MDPs). Recently (11th May to 20th May 2022) it delivered one such professional development in UAE to train the professionals their prior to roll out of Direct Tax. The invoice raised by MDP department on 22nd May for USD 10,000.      (8 Marks)

CASE STUDY

Narsee Monjee is among the leading management institute of country. It offers state of art facilities in addition to global learning opportunities to its pupils through students exchange programme, wherein student has option to complete maximum upto two final semesters of their study program from any one of Ivy League foreign universities with which it has MOUs. Even faculty exchange program also in place to offer best blend of knowledge and teaching.

Ramesh Dayal and Manish Kandpal, two students (who are friends as well) of master level management program decided to complete final semester of their degree from one such foreign university under student exchange program. Therefore both of them left India on 23rd December, 2021. Despite earlier they have plan to come back to mother land by the June 30 th of 2022 i.e. after the end of the final semester, but Manish got good job placement there and decided to start working there only. He returned to India in X-mas holidays in 2022 to meet his family, while Mr. Ramesh Dayal who also got placement offer, denied to employment there and returned to India as per plan.

To support studies of his son, the father of Manish remit him USD 64,000 during 2021-22 and USD 17,800 during 2022-23, while his tuition fee at such Higher Educational Institutions (HEI) is only USD 27,500 (including all).

Canada chapter of alumni association of Narsee Monjee organised a re-union function. Narsee Monjee’s alumni club (constituted internally as part of university organisation structure) remit sponsorship (100000 Canadian dollars approximately equal to USD 75, 000) of cultural evening as part of such re-union function.

Narsee Monjee’s faculty of management also offers consultancy and Ministry of Defence Polices (MDPs). Recently (11th May to 20th May 2022) it delivered one such professional development in UAE to train the professionals their prior to roll out of Direct Tax. The invoice raised by MDP department on 22nd May for USD 10,000.      (8 Marks)

CASE STUDY

Narsee Monjee is among the leading management institute of country. It offers state of art facilities in addition to global learning opportunities to its pupils through students exchange programme, wherein student has option to complete maximum upto two final semesters of their study program from any one of Ivy League foreign universities with which it has MOUs. Even faculty exchange program also in place to offer best blend of knowledge and teaching.

Ramesh Dayal and Manish Kandpal, two students (who are friends as well) of master level management program decided to complete final semester of their degree from one such foreign university under student exchange program. Therefore both of them left India on 23rd December, 2021. Despite earlier they have plan to come back to mother land by the June 30 th of 2022 i.e. after the end of the final semester, but Manish got good job placement there and decided to start working there only. He returned to India in X-mas holidays in 2022 to meet his family, while Mr. Ramesh Dayal who also got placement offer, denied to employment there and returned to India as per plan.

To support studies of his son, the father of Manish remit him USD 64,000 during 2021-22 and USD 17,800 during 2022-23, while his tuition fee at such Higher Educational Institutions (HEI) is only USD 27,500 (including all).

Canada chapter of alumni association of Narsee Monjee organised a re-union function. Narsee Monjee’s alumni club (constituted internally as part of university organisation structure) remit sponsorship (100000 Canadian dollars approximately equal to USD 75, 000) of cultural evening as part of such re-union function.

Narsee Monjee’s faculty of management also offers consultancy and Ministry of Defence Polices (MDPs). Recently (11th May to 20th May 2022) it delivered one such professional development in UAE to train the professionals their prior to roll out of Direct Tax. The invoice raised by MDP department on 22nd May for USD 10,000.      (8 Marks)

CASE STUDY

Amol Open University of Languages, is a private university established under a State Act. The objective behind the establishment of university was to provide degree/ diploma/ certificate course to the students, an online leaning platform to learn all the prominent languages, which are being spoken in the major part of the This will generate to the employability of the students in different part of the world, since they are familiar with the language of that country. Since this being an online lea rning platform, the students can pursue the programme simultaneously with doing their regular academic / professional course. The examination will also be held online, by sitting at home, through their PC/ Laptop in a protected environment, after completing certain hours of learning modules.

The University has made a tie up arrangements with experts in the foreign languages. They guide the students online and also through the pre-recorded videos.

Several Foreign Governments intend to offer donations / contributions for the development of their language. The respective countries have offered to give foreign currency contribution for the promotion of these languages.

Based on the above scenario, answer the following questions:

CASE STUDY

Amol Open University of Languages, is a private university established under a State Act. The objective behind the establishment of university was to provide degree/ diploma/ certificate course to the students, an online leaning platform to learn all the prominent languages, which are being spoken in the major part of the This will generate to the employability of the students in different part of the world, since they are familiar with the language of that country. Since this being an online lea rning platform, the students can pursue the programme simultaneously with doing their regular academic / professional course. The examination will also be held online, by sitting at home, through their PC/ Laptop in a protected environment, after completing certain hours of learning modules.

The University has made a tie up arrangements with experts in the foreign languages. They guide the students online and also through the pre-recorded videos.

Several Foreign Governments intend to offer donations / contributions for the development of their language. The respective countries have offered to give foreign currency contribution for the promotion of these languages.

Based on the above scenario, answer the following questions:

CASE STUDY

Hangout Casa was a very prominent chain of Chinese restaurant with presence all around the Most of its outlets/restaurants are operating on franchise model, but some are company owned as well and operating at lease-hold premises. Hangout Casa had a great reputation, its outlets have award- winning chefs and tastefully designed interiors. Much of its business came from weekend parties and get-to-gathers.

Due to health–related-awareness among the people at large, the consumption level of fast food is declining. Covid also jolted the liquidity position badly. The competition from low price alternative options also dented the sales revenue of almost all the retail outlets. It tried to widen the range of item offered, likewise recently it started selling ice creams of Rim Jim Brand. Effort to negotiate with lessor to reduce the rent were largly unsuccessful. Eventually the business became insolvent.

Suppliers of food, beverages and utilities were unpaid for supplies provided in the previous 45 -60 days, amounting to around Rs. 9,50,000. There were lease rental arrears that included the rent for one month amounting to Rs. 50,000 towards landlord, Mr. Deepak (the landlord had received advance rent for three months, lease deed provided for one-month rent as security and one-month rent as advance). Amount of Rs. 78,000 is also due towards Rim Jim Limited, whose ice-cream it sells. Though somehow it managed to pay bank dues to avoid any legal actions.

Hangout Casa also had a secured creditor, ‘Punji Bank’. The bank indicated that it did not wish to appoint a receiver/ file for insolvency as the accounts were regularly maintained. For most of its own outlets the salaries due to employees (chef, assistant chef, waiters and house-keeping staff) were paid in half since the past three months.

Hangout Casa went insolvent and CIRP was initiated. Ms. Naziya Khatoon was appointed as interim resolution professional and later as resolution professional. Ms. Naziya while forming committee of creditor was not sure about inclusion and exclusion of certain creditors who own both operational and financial debt.

Rim Jim Limited a cash rich outlet chain of Ice-cream Parlors is currently looking for expansion of their business and diversification thereof. Board of Rim Jim, decided to submit a resolution plan and being resolution applicant it submitted a resolution plan along with an affidavit stating that he is eligible under section 29A of the IBC, to the resolution plan prepared on the basis of the information memorandum. Some resolution plans also received by Resolution Professional.

A meeting of committee of creditor was convened a week later, wherein the selected resolution plans that confirm the conditions referred to in sub-section (2) to section 30 were to be considered. Rim Jim Limited is of view that it can through its representative attend such meeting of committee of creditor and is allowed to vote as well.

CASE STUDY

Hangout Casa was a very prominent chain of Chinese restaurant with presence all around the Most of its outlets/restaurants are operating on franchise model, but some are company owned as well and operating at lease-hold premises. Hangout Casa had a great reputation, its outlets have award- winning chefs and tastefully designed interiors. Much of its business came from weekend parties and get-to-gathers.

Due to health–related-awareness among the people at large, the consumption level of fast food is declining. Covid also jolted the liquidity position badly. The competition from low price alternative options also dented the sales revenue of almost all the retail outlets. It tried to widen the range of item offered, likewise recently it started selling ice creams of Rim Jim Brand. Effort to negotiate with lessor to reduce the rent were largly unsuccessful. Eventually the business became insolvent.

Suppliers of food, beverages and utilities were unpaid for supplies provided in the previous 45 -60 days, amounting to around Rs. 9,50,000. There were lease rental arrears that included the rent for one month amounting to Rs. 50,000 towards landlord, Mr. Deepak (the landlord had received advance rent for three months, lease deed provided for one-month rent as security and one-month rent as advance). Amount of Rs. 78,000 is also due towards Rim Jim Limited, whose ice-cream it sells. Though somehow it managed to pay bank dues to avoid any legal actions.

Hangout Casa also had a secured creditor, ‘Punji Bank’. The bank indicated that it did not wish to appoint a receiver/ file for insolvency as the accounts were regularly maintained. For most of its own outlets the salaries due to employees (chef, assistant chef, waiters and house-keeping staff) were paid in half since the past three months.

Hangout Casa went insolvent and CIRP was initiated. Ms. Naziya Khatoon was appointed as interim resolution professional and later as resolution professional. Ms. Naziya while forming committee of creditor was not sure about inclusion and exclusion of certain creditors who own both operational and financial debt.

Rim Jim Limited a cash rich outlet chain of Ice-cream Parlors is currently looking for expansion of their business and diversification thereof. Board of Rim Jim, decided to submit a resolution plan and being resolution applicant it submitted a resolution plan along with an affidavit stating that he is eligible under section 29A of the IBC, to the resolution plan prepared on the basis of the information memorandum. Some resolution plans also received by Resolution Professional.

A meeting of committee of creditor was convened a week later, wherein the selected resolution plans that confirm the conditions referred to in sub-section (2) to section 30 were to be considered. Rim Jim Limited is of view that it can through its representative attend such meeting of committee of creditor and is allowed to vote as well.

CASE STUDY

Hangout Casa was a very prominent chain of Chinese restaurant with presence all around the Most of its outlets/restaurants are operating on franchise model, but some are company owned as well and operating at lease-hold premises. Hangout Casa had a great reputation, its outlets have award- winning chefs and tastefully designed interiors. Much of its business came from weekend parties and get-to-gathers.

Due to health–related-awareness among the people at large, the consumption level of fast food is declining. Covid also jolted the liquidity position badly. The competition from low price alternative options also dented the sales revenue of almost all the retail outlets. It tried to widen the range of item offered, likewise recently it started selling ice creams of Rim Jim Brand. Effort to negotiate with lessor to reduce the rent were largly unsuccessful. Eventually the business became insolvent.

Suppliers of food, beverages and utilities were unpaid for supplies provided in the previous 45 -60 days, amounting to around Rs. 9,50,000. There were lease rental arrears that included the rent for one month amounting to Rs. 50,000 towards landlord, Mr. Deepak (the landlord had received advance rent for three months, lease deed provided for one-month rent as security and one-month rent as advance). Amount of Rs. 78,000 is also due towards Rim Jim Limited, whose ice-cream it sells. Though somehow it managed to pay bank dues to avoid any legal actions.

Hangout Casa also had a secured creditor, ‘Punji Bank’. The bank indicated that it did not wish to appoint a receiver/ file for insolvency as the accounts were regularly maintained. For most of its own outlets the salaries due to employees (chef, assistant chef, waiters and house-keeping staff) were paid in half since the past three months.

Hangout Casa went insolvent and CIRP was initiated. Ms. Naziya Khatoon was appointed as interim resolution professional and later as resolution professional. Ms. Naziya while forming committee of creditor was not sure about inclusion and exclusion of certain creditors who own both operational and financial debt.

Rim Jim Limited a cash rich outlet chain of Ice-cream Parlors is currently looking for expansion of their business and diversification thereof. Board of Rim Jim, decided to submit a resolution plan and being resolution applicant it submitted a resolution plan along with an affidavit stating that he is eligible under section 29A of the IBC, to the resolution plan prepared on the basis of the information memorandum. Some resolution plans also received by Resolution Professional.

A meeting of committee of creditor was convened a week later, wherein the selected resolution plans that confirm the conditions referred to in sub-section (2) to section 30 were to be considered. Rim Jim Limited is of view that it can through its representative attend such meeting of committee of creditor and is allowed to vote as well.

CASE STUDY

Hangout Casa was a very prominent chain of Chinese restaurant with presence all around the Most of its outlets/restaurants are operating on franchise model, but some are company owned as well and operating at lease-hold premises. Hangout Casa had a great reputation, its outlets have award- winning chefs and tastefully designed interiors. Much of its business came from weekend parties and get-to-gathers.

Due to health–related-awareness among the people at large, the consumption level of fast food is declining. Covid also jolted the liquidity position badly. The competition from low price alternative options also dented the sales revenue of almost all the retail outlets. It tried to widen the range of item offered, likewise recently it started selling ice creams of Rim Jim Brand. Effort to negotiate with lessor to reduce the rent were largly unsuccessful. Eventually the business became insolvent.

Suppliers of food, beverages and utilities were unpaid for supplies provided in the previous 45 -60 days, amounting to around Rs. 9,50,000. There were lease rental arrears that included the rent for one month amounting to Rs. 50,000 towards landlord, Mr. Deepak (the landlord had received advance rent for three months, lease deed provided for one-month rent as security and one-month rent as advance). Amount of Rs. 78,000 is also due towards Rim Jim Limited, whose ice-cream it sells. Though somehow it managed to pay bank dues to avoid any legal actions.

Hangout Casa also had a secured creditor, ‘Punji Bank’. The bank indicated that it did not wish to appoint a receiver/ file for insolvency as the accounts were regularly maintained. For most of its own outlets the salaries due to employees (chef, assistant chef, waiters and house-keeping staff) were paid in half since the past three months.

Hangout Casa went insolvent and CIRP was initiated. Ms. Naziya Khatoon was appointed as interim resolution professional and later as resolution professional. Ms. Naziya while forming committee of creditor was not sure about inclusion and exclusion of certain creditors who own both operational and financial debt.

Rim Jim Limited a cash rich outlet chain of Ice-cream Parlors is currently looking for expansion of their business and diversification thereof. Board of Rim Jim, decided to submit a resolution plan and being resolution applicant it submitted a resolution plan along with an affidavit stating that he is eligible under section 29A of the IBC, to the resolution plan prepared on the basis of the information memorandum. Some resolution plans also received by Resolution Professional.

A meeting of committee of creditor was convened a week later, wherein the selected resolution plans that confirm the conditions referred to in sub-section (2) to section 30 were to be considered. Rim Jim Limited is of view that it can through its representative attend such meeting of committee of creditor and is allowed to vote as well.

CASE STUDY

Hangout Casa was a very prominent chain of Chinese restaurant with presence all around the Most of its outlets/restaurants are operating on franchise model, but some are company owned as well and operating at lease-hold premises. Hangout Casa had a great reputation, its outlets have award- winning chefs and tastefully designed interiors. Much of its business came from weekend parties and get-to-gathers.

Due to health–related-awareness among the people at large, the consumption level of fast food is declining. Covid also jolted the liquidity position badly. The competition from low price alternative options also dented the sales revenue of almost all the retail outlets. It tried to widen the range of item offered, likewise recently it started selling ice creams of Rim Jim Brand. Effort to negotiate with lessor to reduce the rent were largly unsuccessful. Eventually the business became insolvent.

Suppliers of food, beverages and utilities were unpaid for supplies provided in the previous 45 -60 days, amounting to around Rs. 9,50,000. There were lease rental arrears that included the rent for one month amounting to Rs. 50,000 towards landlord, Mr. Deepak (the landlord had received advance rent for three months, lease deed provided for one-month rent as security and one-month rent as advance). Amount of Rs. 78,000 is also due towards Rim Jim Limited, whose ice-cream it sells. Though somehow it managed to pay bank dues to avoid any legal actions.

Hangout Casa also had a secured creditor, ‘Punji Bank’. The bank indicated that it did not wish to appoint a receiver/ file for insolvency as the accounts were regularly maintained. For most of its own outlets the salaries due to employees (chef, assistant chef, waiters and house-keeping staff) were paid in half since the past three months.

Hangout Casa went insolvent and CIRP was initiated. Ms. Naziya Khatoon was appointed as interim resolution professional and later as resolution professional. Ms. Naziya while forming committee of creditor was not sure about inclusion and exclusion of certain creditors who own both operational and financial debt.

Rim Jim Limited a cash rich outlet chain of Ice-cream Parlors is currently looking for expansion of their business and diversification thereof. Board of Rim Jim, decided to submit a resolution plan and being resolution applicant it submitted a resolution plan along with an affidavit stating that he is eligible under section 29A of the IBC, to the resolution plan prepared on the basis of the information memorandum. Some resolution plans also received by Resolution Professional.

A meeting of committee of creditor was convened a week later, wherein the selected resolution plans that confirm the conditions referred to in sub-section (2) to section 30 were to be considered. Rim Jim Limited is of view that it can through its representative attend such meeting of committee of creditor and is allowed to vote as well.