SC: Ss.130, 211/212 & 241/242 of Companies Act are to be read conjointly

The Hon’ble Supreme Court, on 4thJune 2019, in the matter of Hari Sankaran v. Union of India & Others pronounced that while passing an order in a particular provision of the Companies Act, 2013 , the endeavour should be to see that the order/orders passed under other provisions of the Companies Act are given effect to, and/or in furtherance of the order/orders passed under other Sections.

Section 130, Sections 211/212 and Sections 241/242 of the Companies Act, 2013  are required to be considered conjointly. (Para 12)

While passing an order in a particular provision of the Companies Act, 2013 , the endeavour should be to see that the order/orders passed under other provisions of the Companies Act are given effect to, and/or in furtherance of the order/orders passed under other Sections. (Para 12)

The observations made while passing order under Section 241/242 of the Companies Act can be said to be relevant observations for passing the order under Section 130 of the Companies Act. (Para 12)

while passing the order under Section 130 of the Act, there shall be reopening of the books of accounts and re­casting of the financial statements of the company and therefore the Board of Directors of the company may make a grievance. The erstwhile directors cannot represent the company as they are suspended pursuant to the earlier order passed under Section 242 of the Companies Act. (Para 13) 

Copy of judgement: Judgement_04-Jun-2019

Tushar Kaushik

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