Manjeera Construction Limited vs Manjeera Hospitality (Rajahmundry) Pvt. Ltd.

(Hybrid Mode)

Oral: Justice Sharad Kumar Sharma, Member (Judicial)

A very peculiar and distinct issue that engages consideration in these two company appeals is that the Appellant, who happens to be the petitioner of the company petitions, questions the propriety of the impugned order rendered by the Ld. NCLT (Single Member) in the appeals that were preferred by the Appellants, by invoking the provisions contained under Rule 63 of the NCLT Rules, 2016, as against the objection raised by the Registry of the Ld. NCLT at the stage of scrutiny of the respective company petitions.

The provisions of Rule 63 of the NCLT Rules, 2016 reads as under: -

Rule 63 of the NCLT Rules, 2016, in itself contemplates that when upon scrutiny of a company petition presented before the Ld. Tribunal for its registration, as per the provisions of Part III of the NCLT Rules, 2016, if any defect is pointed out, the power has been vested with the “Registrar” or “other officer officiating as Registrar of the Benches”, to consider the objection on scrutiny and pass an order of either accepting to take the company petition to be registered or decline to register the same but only after assigning reasons for such decision at scrutiny level, which would be ministerial exercise of powers. The law contemplates that, as against such order passed by the Registrar or such other officer officiating the powers of the Registrar, an appeal is contemplated under Rule 63 of the NCLT Rules, 2016, and that the said appeal is to be considered by “any Member of the Bench designated by the President” to deal with such appeals under Rule 63 of the NCLT Rules, 2016, which would constitute to be single member, as it doesn’t engage any judicial determination of any right or liabilities of parties to the proceedings.

The procedure of the scrutiny as per Part III, as contained under Rule 63 of the NCLT Rules, 2016, particularly, the law specifies only the endorsement of the “scrutiny” of a petition, appeal or documents, as contemplated under Rule 28 (3) of the NCLT Rules, 2016, wherein it provides that, when there is a failure on part of the Appellant to rectify the defects raised on scrutiny, the Registrar for sufficient cause may return the said document for rectification or amendment to the party filing the same, granting him reasonable time thereof to rectify such defects, and that in case, the party fails to take steps to remove the defects within the time fixed for the same, the Registrar may, for reasons to be recorded in writing, decline to register the said pleading or document.

The “Registrar” has been defined under Rule 2 (21) of the NCLT Rules, 2016, as “Registrar of the Tribunal and includes such other officer of the Tribunal or Bench to whom the powers and functions of the Registrar is delegated ” . The functions and powers of the Registrar is included under Rule 17 of the NCLT Rules, 2016, which is extracted hereunder: -

It is pertinent to note that, as per Rule 17 of the NCLT Rules, 2016, there is no such power vested with the Registrar of NCLT to decide a question of law affecting merits of a company petition filed before the concerned NCLT. Further, it doesn’t contemplate or confer the power on the Registrar to adjudicate upon any issue, which is legal in nature dealing with the question of maintainability or any question as regards to that of rights of the parties, while passing an order of either registering or refusing to register a petition / appeal.

This could be further elaborated that, since the power of adjudication has not been contained under Rule 17 of the NCLT Rules, 2016, it cannot be self-ordained, and accordingly the Registrar cannot take a call of deciding the issue of maintainability of a petition / appeal, which is exclusively a legal issue, to be decided on a judicial side by the Ld. Tribunal, which under its normal course of business has to exercise its powers by constitution of a Division Bench. The power of Registry of scrutiny under Rule 17 and appeal under Rule 63 of the NCLT Rules, 2016, would be confined with regards to pointing out the administrative, clerical or other procedural mistakes in the petitions / documents filed and to asking for rectification of the same and to refuse to register the pleading / documents in case rectification is not done within the time fixed. A defect pointed out by the Registry which is not within the ambit of powers of the Registrar under Rule 17 of the NCLT Rules, 2016, and which deals with the question of maintainability will absolutely be a legal question which has to be dealt with by a regularly constituted Bench on a judicial side.

In that eventuality, the declining of registering a company petition holding it to be non-maintainable on the grounds of failure to submit proof of membership and non-compliance of statutory requirements will not fall to be under the purview of scrutiny or non-rectification of a defect, to be falling under Rule 28(3) to be read with Rule 63 of the NCLT Rules, 2016. This is a question that ought to have been decided by the Division Bench of NCLT based on whatever documents the Appellants had filed in their petitions. Further, non-holding of the requisite percentage of shares by the shareholder who intends to file a petition, i.e., the Appellants herein, would not be an absolute bar under the statute, for the reason being that, the law itself carves out an exception, in the light of the provisions and exceptions contained under Section 244 of the Companies Act, 2013, where any aspect of maintainability of a petition, requires a judicial interpretation and it entails adjudication based upon the stipulations contained under Section 244 of the Companies Act, 2013, and the circumstances of the case as the case at hand is. It couldn’t have been decided by the Registrar, who in accordance with the powers vested with him under Rule 17 of the NCLT Rules, 2016, was not competent to deal with the question of maintainability and to decline a petition on that pretext.

Besides that, as already observed by us, the issue of non-maintainability will not be falling within an ambit of “non-rectification of a defect”, due to which the company petition was declined to be accepted. The Registry should have numbered the petition, raised its objection and placed the petition before the judicial side to be considered on its own merits by the regular bench competent to decide the issue under Section 244 of the Companies Act, 2013.

This facet was considered by the Hon’ble Apex Court in SLP (CRL.) No.1832 of 2019, in the matters of P. Surendran Vs. State by Inspector of Police. In that case the question of maintainability of an anticipatory bail was remarked to be non-maintainable by the Registry of the High Court. The said issue was decided and answered by the Hon’ble High Court in para. 10 & 11 of the judgment, which reads as under: -

In view of what has been observed by us above, the company appeal is ‘allowed’, the impugned order dated 27.02.2026, would stand ‘quashed’ and the matter is remitted back to the Registry of Ld. NCLT with the following observations: -

Subject to the above, the company appeals stands ‘allowed’ and the impugned order stands ‘quashed’.