Disposed

Holiday Projects (Kerala) Pvt. Ltd. v. Union of India

Kerala HC1 Mar 2021WP(C)/789/2020

Case brief

AI extract

What is this about?

The High Court disposed of four writ petitions filed by private limited companies challenging restrictions on filing e-forms ACTIVE, INC-22A, and PAS-03/PAS-03 due to non-apPointment of a whole-time Company Secretary. The court granted liberty to respondents to penalize petitioners under the Companies Act.

What did the court decide?

Liberty granted to respondents to proceed against petitioners for violating Section 203 of the Companies Act, 2013. Interim orders served as tentative permission, not a merit decision.

Holiday Projects (Kerala) Pvt. Ltd. Vs Union of India — Company and Corporate | Kerala HC (2021)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942 WP(C).No.640 OF 2020(D)

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PETITIONER:

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HOLIDAY BEKAL RESORTS PVT.LTD., AGED 63 YEARS, HIG-5, PANAMPILLY NAGAR, KOCHI-682 036, REPRESENTED BY ITS DIRECTOR C.C.THAMPI.

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BY ADVS. SRI.DEEPU THANKAN SMT.UMMUL FIDA SMT.LAKSHMI SREEDHAR

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RESPONDENTS:

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1 UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF CORPORATE AFFAIRS, M RAJENDRA PRASAD ROAD, NEW DELHI-110 001.

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2 REGISTRAR OF COMPANIES, KERALA, COMPANY LAW BHAVAN, THRIKKAKARA P.O., ERNAKULAM, KOCHI-682 011. R1-2 BY SMT.SREEKALA K.L., CGC SRI.P.VIJAYAKUMAR, ASGI

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01.03.2021, ALONG WITH WP(C).789/2020(W), WP(C).850/2020(E), WP(C).1053/2020(F), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos.640/2020 & Connected Cases

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: 2 :

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942

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WP(C).No.789 OF 2020(W)

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PETITIONER:

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HOLIDAY PROJECTS (KERALA) PVT. LTD., 33/2379 B1 AND B2, N.H.BYEPASS, THAMMANAM.P.O, KOCHI-682032, REP.BY ITS DIRECTOR, C.C.THAMPI.

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BY ADVS. SRI.DEEPU THANKAN SMT.UMMUL FIDA SMT.LAKSHMI SREEDHAR

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RESPONDENTS:

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1 UNION OF INDIA, REP.BY ITS SECRETARY, MINISTRY OF CORPORATE AFFAIRS, RAJENDRA PRASAD ROAD, NEW DELHI-110001.

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2 REGISTRAR OF COMPANIES, KERALA, COMPANY LAW BHAVAN, THRIKKAKARA.P.O, ERNAKULAM, KOCHI-682011.

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R1-2 BY SRI.A.R.GANGADAS, CGC SRI P.VIJAYAKUMAR, ASGI

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01.03.2021, ALONG WITH WP(C).640/2020(D), WP(C).850/2020(E), WP(C).1053/2020(F), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos.640/2020 & Connected Cases

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: 3 :

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942

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WP(C).No.850 OF 2020(E)

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PETITIONER:

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EUROSTAR DISTILLERIES PVT. LTD., HIG 5, PANAMPILLY NAGAR, KOCHI-682036, REPRESENTED BY ITS DIRECTOR, C.C. THAMPI.

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BY ADVS. SRI.DEEPU THANKAN SMT.UMMUL FIDA SMT.LAKSHMI SREEDHAR

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RESPONDENTS:

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1 UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF CORPORATE AFFAIRS, RAJENDRA PRASAD ROAD, NEW DELHI-110001.

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2 REGISTRAR OF COMPANIES, KERALA COMPANY LAW BHAVAN, THRIKKAKARA P.O., ERNAKULAM, KOCHI-682011.

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R1-2 BY SRI.M.A.VINOD, CGC BY SRI.VIJAYAKUMAR, ASGI

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01.03.2021, ALONG WITH WP(C).640/2020(D), WP(C).789/2020(W), WP(C).1053/2020(F), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos.640/2020 & Connected Cases

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: 4 :

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942

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WP(C).No.1053 OF 2020(F)

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PETITIONER:

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SILVIOUS PROJECTS AND DEVELOPERS (INDIA) PVT. LTD., BYPASS, THAMMANAM P.O., KOCHI-682032, REP. BY ITS DIRECTOR GEEVER VADAKKETHALA CHERU.

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BY ADVS. SRI.DEEPU THANKAN SMT.UMMUL FIDA SMT.LAKSHMI SREEDHAR

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RESPONDENTS:

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1 UNION OF INDIA, REP. BY ITS SECRETARY, MINISTRY OF CORPORATE AFFAIRS, RAJENDRA PRASAD ROAD, NEW DELHI-110001.

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2 REGISTRAR OF COMPANIES, KERALA COMPANY LAW BHAVAN, THRIKKAKARA P.O., ERNAKULAM, KOCHI-682011.

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R1-2 BY SMT.C.G.PREETHA, CGC BY SRI.P.VIJAYAKUMAR, ASGI

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01.03.2021, ALONG WITH WP(C).640/2020(D), WP(C).789/2020(W), WP(C).850/2020(E), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos.640/2020 & Connected Cases

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J U D G M E N T

~ ~ ~ ~ ~ ~ ~ ~ ~

Dated this the 1^st day of March, 2021

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[W.P.(C) Nos.640, 789, 850 & 1053 of 2020]

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The petitioners, who are Companies incorporated

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with the Registrar of Companies, Kerala, have filed these writ petitions seeking to direct the respondents to permit the petitioners to file e-form ACTIVE, INC-22A without insisting on appointment of a whole-time Company Secretary. The petitioners have also sought to declare that the restriction imposed in filing e-form ACTIVE, INC-22A with regard to noncompliance of Section 203 of a whole-time Company Secretary or Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is arbitrary and illegal.

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The petitioners submit that the 1^st respondentUnion of India, in exercise of its powers under Section 469 of

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WP(C) Nos.640/2020 & Connected Cases : 6 :

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the Companies Act, 2013 amended the Companies (Incorporation) Rules, 2014 as per Notification dated 21.02.2019. As per the new added Rule 25A, every Company incorporated on or before 31.12.2017 shall file the particulars of the Company and its registered office in e-form ACTIVE (Active Company Tagging Identities and Verification) on or before 25.04.2019. It is the contention of the petitioners that the website of the Ministry of Corporate Affairs is not accepting e-form ACTIVE submitted by the petitioners for the reason that the paid up capital is more than ₹5 Crores and still the petitioners-Companies have not appointed whole-time Company Secretary.

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It is the case of the petitioners that as per Section 203(5), if any Company makes any default in complying with the provisions, such Company shall be liable for a penalty of ₹5 lakhs and Directors and Key Managerial Personnel are personally liable for a penalty of ₹50,000/- and if the default is a continuing one, with a further penalty of ₹1,000/- for each day.

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WP(C) Nos.640/2020 & Connected Cases : 7 :

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The petitioners contend that they have part-time

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Company Secretaries and Auditors to properly look after the affairs of their Companies and for the last so many years, they have been functioning well within the provisions of the Act without giving any room for initiating any penalty proceedings. On these premises, the petitioners contend that they should not be forced to appoint a whole-time Company Secretary and should be permitted to file e-form ACTIVE, INC-22A without insisting on the appointment of a whole-time Company Secretary.

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When these writ petitions came up for admission, interim orders were passed by this Court permitting the petitioners to file e-form ACTIVE, INC-22A, Form PAS-03 (change in paid up capital) and Form DIR-12 (change in Director except cessation) without insisting on appointment of a whole-time Company Secretary provisionally, pending further orders in these writ petitions.

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When these writ petitions came up for hearing today, the Central Government Counsel representing the

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WP(C) Nos.640/2020 & Connected Cases

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: 8 :

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respondents argued that as per the existing rules, the petitioners are bound to appoint whole-time Company Secretaries, as their paid up capital is more than ₹5 Crores. The petitioners cannot be granted any exemption from the Rules.

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The Central Government Counsel further argued that non-appointment of Company Secretary by petitionersCompanies is an offence under Section 383A (1A) vide Companies (Amendment) Act, 1988 with effect from 01.12.1988. If a Company fails to comply with the requirement regarding the appointment of Company Secretary, the Company and every officer of the Company who is in default shall be punishable with fine which may extend to ₹500/- per every day during which the default continues.

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Heard learned counsel for the petitioners and learned Central Government Counsel appearing for the respondents.

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WP(C) Nos.640/2020 & Connected Cases : 9 :

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As things stand now, the petitioners have been permitted to file e-form ACTIVE, INC-22A without insisting the appointment of a whole-time Company Secretary, on a provisional basis. Section 203(5) of the Companies Act provides that if any Company makes any default in complying with the provisions of Section 203 relating to appointment of Key Managerial Personnel, such Company shall be liable to a penalty of ₹5 lakhs and every Directors and Key Managerial Personnel of the Company, who is in default, shall be liable to a penalty of ₹50,000/- and where the default is a continuing one, with further penalty of ₹1,000/- for each day after the first during which such default continues but not exceeding ₹5 lakhs.

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It is evident that the petitioner-Companies have not adhered to the provisions of the Companies Act, especially Section 203 thereof. In such circumstances, the respondents are empowered to proceed against the petitioner-Companies, in accordance with law.

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WP(C) Nos.640/2020 & Connected Cases

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In the circumstances, the writ petitions are disposed

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of granting liberty to the respondents to proceed against the petitioner-Companies for violating Section 203 of the Companies Act, if they are so advised. It is made clear that the interim orders passed in these writ petitions shall not be taken as pronouncement on merits on the legality of Section 203 of the Companies Act, 2013 or Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

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Sd/- N. NAGARESH, JUDGE

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aks/01.03.2021

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WP(C) Nos.640/2020 & Connected Cases

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: 11 :

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APPENDIX OF WP(C) 640/2020

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 11.02.2004. EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPORATE AFFAIRS. EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21.02.2019. EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED BY THE FIRST RESPONDENT DATED 21.02.2019. EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED 31.03.2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERONNEL) RULES, 2014 WITH ITS AMENDMENTS.

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EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WPC NO.27/2020 DATED 07.01.2020.

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WP(C) Nos.640/2020 & Connected Cases

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: 12 :

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APPENDIX OF WP(C) 789/2020

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 01/03/2007 EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPPORATE AFFAIRS. EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21/2/2019. EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED BY THE FIRST RESPONDENT DATED 21/02/2019 EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DT.31/3/2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULES,2014 WITH ITS AMENDMENTS EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WP(C)NO.27/2020 DATED O7/01/2020.

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WP(C) Nos.640/2020 & Connected Cases

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APPENDIX OF WP(C) 850/2020

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 30/12/1998. EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPORATE AFFAIRS. EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21/02/2019. EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED BY THE FIRST RESPONDENT DATED 21/02/2019. EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED 31/03/2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 WITH ITS AMENDMENTS.

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EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER DATED 07/01/2020 PASSED BY THIS HON'BLE COURT IN WPC NO.27/2020.

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WP(C) Nos.640/2020 & Connected Cases

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: 14 :

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APPENDIX OF WP(C) 1053/2020

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 30.09.2008. EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPORATE AFFAIRS. EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21.2.2019. EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED BY THE FIRST RESPONDENT DATED 21.02.2019. EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED 31.3.2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 WITH ITS AMENDMENTS. EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER DATED 07.01.2020 PASSED BY THIS HON'BLE COURT IN WPC NO.27/2020.

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Holiday Projects (Kerala) Pvt. Ltd. v. Union of India

Case brief

What is this about?

What did the court decide?

Holiday Projects (Kerala) Pvt. Ltd. v. Union of India

Case brief

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