Kozhikode Coconut Farmers ... vs Moolath Mannil Sreenivasam on 1 August, 2019

Saptaparni Raha
Sep 16, 2022
2 min read

Written by Saptaparni Raha, Lawyer

Introduction:

The application taken out by the respondents in main CP 38/2017 under Rule 11 of the National Corporate Law Tribunal rules prays to decide the maintainability of the company petition 38/2017 as the preliminary issue.

Facts:

The company is a producer company registered under part IXA of the Companies Act,1956. It is referred to as a company under section 465(1) of the Companies Act, 2013.
According to Section 465(1), the provisions of part IXA would be applicable to a producer company in a manner as if the Companies Act, 1956 has not been repealed until a special act pertaining to the producer company is enacted.
The alleged mismanagement and operations of the petitioner's company come under the term "dispute". It is mentioned in Section 581ZO of the 1956 Act.
In the company's petition, NCLAT observed that the subject matter shall be settled by arbitration under the Arbitration and Conciliation Act.

Judgment:

The company petition has been filed by the respondents against the company praying. There will be an investigation under Section 213 since the company is guilty of fraud and other misconduct in its affairs. The company would be penalized under section 450 of the Act for non-compliance with the provisions of the Act.

This matter is sought to be adjudicated in the company petition in rem, not in personam. The allegations regarding mismanagement, operation and fabrication of documents involve a mix of questions of law and cannot be the subject matter of the Arbitration and Conciliation Act.

Conclusion:

In view of the above discussions, the company petition filed by the respondents is maintainable before the tribunal. The present application is disposed of and not allowed. There is no order and no cost.

Reference:

Kozhikode Coconut Farmers ... vs Moolath Mannil Sreenivasam 2019, retrieved from https://www.casemine.com/judgement/in/5e0fc0c46571b20d7cb14cd