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NCLT Empowered To Decide Issues Relating To Share Capital & Register Of Members

In SAS HOSPITALITY PVT LTD & ANR. vs SURYA CONSTRUCTIONS PVT LTD, a suit for declaration was filed before the Delhi High Court by SAS Hospitality Pvt. Ltd seeking a declaration that the allotment of shares to some defendants is null and void. The defendants had contended that suit is not maintainable before the High court in view of the bar contained in Section 430 and Section 434(1)(c) of the Companies Act, 2013.

The Delhi High Court has held that National Company Law Tribunal (NCLT) is empowered to decide the issues relating to allotment of share capital, alteration and rectification of the register of members and a civil suit before the High court would not be maintainable.

The court, referring to provisions of Company Act, 2013, observed that the NCLT is not merely exercising the jurisdiction of a company court under the new Act, but is also vested with inherent powers and powers to punish for contempt. It said that the NCLT having being vested with all the trappings of a civil court, with the amendments of the Companies Act which have now been carried out, the bar to Civil Courts under Section 430, is definitely triggered.

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