Automobile company moves HC, challenges validity of regulations

The company fears it would have to disclose monetary statements.

Nissan Motor India (NMI) has filed a writ petition in the Madras High Court tough the constitutional validity of specific provisions of the Companies (Transfer of Pending Proceedings) Rules. The corporation has argued that the impugned provisions might “unnecessarily and unjustifiably” require the automaker to reveal its monetary statements, affairs and exclusive facts “with none justification and as a consequence divulge it to unforeseen liabilities affecting its enterprise operations.”

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Renault Nissan Automotive India has filed a similar petition.

On Friday, the first Division Bench of Chief Justice Indira Banerjee and Justice Abdul Quddhose ordered notices, returnable within three weeks, to the Union Ministry of Corporate Affairs on both the petitions. The judges stayed in additional court cases in a transferred company petition pending earlier than a Bench of the National Company Law Tribunal (NCLT). In its affidavit, NMI, registered in 2005 below the Companies Act of 1956 and performing from Oragadam close to right here, said that it becomes engaged inside the commercial enterprise of advertising and sale of Nissan and Datsun logo of cars. NMI said it had encountered a New Delhi-based company, SRL Advisors, for presenting financial, tax, and accounting services. It terminated the firm’s offerings on July 24, 2014, after noticing “full-size and severe frauds within the dealings.

The termination was carried out after reserving the proper to claim quantities paid in extra and people “fraudulently misappropriated by using the firm in connivance with former employees” of NMI.

The advisory firm did now not undertaking the letter of termination. Instead, it filed an employer petition in the High Court in 2015, searching for permission to land the company. NMI contested the petition by filing a counter-affidavit and made it amply clear that it had no outstanding dues to the company.

The company petition became transferred to NCLT’s Chennai Bench in compliance with a notification issued through the Centre for polishing off pleas from High Courts to tribunals. After being transferred to the tribunal, the polishing off petition become no longer treated as the only filed beneath the Companies Act but as a utility filed beneath the Insolvency and Bankruptcy Code (IBC) of 2016 for the reason that Rule 2(a) and Rule 5 of the Companies (Transfer of Pending Proceedings) Rules of 2016, as well as Rule 5 of the Companies (Transfer of Pending Proceedings) Rules of 2017, provide for treating completing petitions as the only filed under the IBC.

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