C.A. No.-003747 / 2019. HARI SANKARAN vs UNION OF INDIA. Supreme Court, 04-06-2019

Party Name:C.A. No.-003747 / 2019. HARI SANKARAN vs UNION OF INDIA. Supreme Court, 04-06-2019
Judgement Date:June 04, 2019
Court:Supreme Court
 
FREE EXCERPT
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3747 OF 2019
Hari Sankaran ... Appellant
Versus
Union of India & Others ... Respondents
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned Order
dated 31.01.2019 passed by the National Company Law Appellate
Tribunal, New Delhi in Company Appeal (AT) No. 29 of 2019 by
which the learned Appellate Tribunal has dismissed the said
appeal preferred by the appellant herein Ex-Director of
respondent No. 2 Infrastructure Leasing & Financial Services
Limited (hereinafter referred to as ‘the IL&FS’) and has confirmed
the order passed by the National Company Law Tribunal,
Mumbai Bench (hereinafter referred to as ‘the learned Tribunal’)
dated 01.01.2019 by which the learned Tribunal allowed the said
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application preferred by the Central Government under Section
130(1) & (2) of the Companies Act, 2013 (hereinafter referred to
as the ‘Companies Act’) and has permitted re-casting and re-
opening of the accounts of IL&FS, IL&FS Financial Services
Limited (hereinafter referred to as the “IFIN”) and IL&FS
Transportation Networks Limited (hereinafter referred as the
“ITNL”) for the last five years, the original appellant has preferred
the present appeal.
2. The facts leading to the present appeal in nutshell are as
under:
That respondent No. 2 IL&FS is a company incorporated
under the provisions of the Companies Act, 1956. That the said
company IL&FS has 348 group companies, including IFIN and
ITNL. That the said IL&FS is a core investment company and
systemically important Non-Banking Finance Company duly
approved under the Reserve Bank of India Act, 1931. The said
company was promoted by the Central Bank of India, HDFC Ltd.,
the Union Trust of India. That the said company is holding
prominent infrastructure development and finance companies.
Over the years, it had inducted institutional shareholders. That
the said IL&FS, during the financial year 2017-18 had 169
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companies, out of which, 24 companies are direct subsidiaries,
135 companies are indirect subsidiaries, 6 companies are joint
ventures and 4 companies are associate companies. That the
appellant herein claims to be the Vice-President/Director of
IL&FS who has been suspended as the Director of IL&FS and its
group companies.
2.1 That on 01.10.2018, the Central Government through the
Ministry of Corporate Affairs filed a petition before the learned
Appellate Tribunal under Sections 241 and 242 of the Companies
Act alleging inter alia, mismanagement by the Board of IL&FS
and that the affairs of IL&FS were being conducted in a manner
prejudicial to public interest. That the Central Government
prayed for the following reliefs:
1. That the existing Board of Directors of Respondent No. 1
company, comprising of R2 to R8, be suspended with
immediate effect and 10 (Ten) persons be appointed as
directors in terms of provisions of Section 242(2)(k) of the
Act, to manage the affairs of R1 company and its group
companies through their nominees, and such directors
any report and function under the Hon’ble Tribunal on
such matters as it may direct:

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