Notice of Order of the Court or any Other Competent Authority [INC-28]

Introduction:

On February 17, 2020, The Ministry of Corporate Affairs (MCA), issued procedures regarding filing documents in the MCA-21 registry, where it emphasized that a Resolution Professional (RP), Insolvency Resolution Professional (IRP), or a liquidator has been appointed for a company under the Insolvency and Bankruptcy Code of 2016. This notification also widely covered the procedures to be followed while using form INC-28.[1]

On March 6, 2020, MCA further mandated the filing for an order of National Company Law Tribunal (NCLT) order for Corporate Insolvency Resolution Process (CIRP) or liquidation process under the Insolvency and Bankruptcy Code of 2016, which also further mandates the filing of form INC-28 with the Registrar of Companies (ROC)[2].

What is Form INC-28?

INC-28 is an e-form that has to be filed with the Registrar of Companies (ROC), informing about any order of the court or Tribunal or any other competent authority for which as per the form and MCA guidelines, the company or liquidator has to file an e-form INC-28 with ROC informing about that particular order which might or might not take the form of approval or extension of time or condonation of non-compliance[3].

This particular e-form has to be filed pursuant to Section 12(6), 13(7), 58(5), 87 and 111(5) of the Companies Act of 2013 and Section 81(4), 102(1), 167, 186, 391, 394, 396, 397, 398, 445, 481, 466, 518, 559 and 621A of the Companies Act of 1956[4]. As per the Companies Act, 2013 this form is known as e-form INC-28 and as per the old Companies Act, 1956 this form is known as Form 21.

If the user has not filed the form within the stipulated time period then they have to file for condonation of delay under Section 460 of the Companies Act, 2013.

Laws governing the e-form INC-28

Companies Act, 2013

• Section 12(6) – This Section says that confirmation by a regional director regarding registration of the company from one jurisdiction to another within a state is mandatory and should be made on behalf of the company and shall be communicated within a period of 30 days from the date of receipt of an application by the regional director to the company and within 60 days the company shall file a confirmation with the registrar regarding the date of confirmation, and this shall be registered by the same and certified within a period of 30 days from the date of filing of such confirmation[5].
•  Section 13 (7) – This section talks about the alteration of the memorandum. It further states that if a company’s registered office is transferred to any other state within the Indian territory, then it should file a certified copy that specifies the central government approving the said alteration with the ROC of both the states within a said period of time[6].   
• Section 58(5) – This section talks about the refusal of registration and appeal against a refusal, regarding the said registration. The sub-section of the said section specifies that the tribunal has the power to dismiss the said appeal made under Section(3) and (4), or can direct the company relating to matters of transfer or transmission and the company has to comply with the said order of the tribunal relating to transfer or transmission of the company within a period of ten days. If any party has sustained any damages then the said tribunal order the company to pay damages[7].  
• Section 87 – This section talks about rectification by the central government in the register of charges. This section further specifies that the central government may direct rectification if seemed justified related to the registration of charges as mentioned in section(1). The order of the central government should not be prejudiced regarding any rights relating to the property concerned before the actual registration of the charge[8].
• Section 111(5) – This section talks about the resolution relating to the circulation of members. The sub-section(5) further specifies that the defaulters (company and every officer) are liable if they violate any provision laid under this section and have to pay a penalty of twenty-five thousand rupees[9].

Sections under the Companies Act of 1956

• Section 81(4) – This section talks about the further issuance of capital. The sub-section(4) states that the central government has the authority to direct any debentures, loans, etc that was obtained before or after the commencement of the Companies (Amendment) Act, 1963 to be converted into shares in the company, as the government finds it reasonable and accordance with the public interest[10].
• Section 102(1) – This section talks aboutthe powers of the tribunal on making an order and also about orders confirming reduction. The sub-section(1) of this particular section specifies that The tribunal if deems fit can make orders confirming reduction if the creditor u/s 101 was entitled to object to the reduction, his consent, debt, etc was taken into consideration then the court can proceed with confirming the reduction[11].  
• Section 167 – This section talks about the powers of the central government to call annual general meetings if found defaulting any measures as mentioned in the said section[12].
• Section 186 – This section talks in detail about the powers of a tribunal to call a meeting, if it seems necessary[13].
• Section 391 – This section talks about the powers to compromise or make arrangements with creditors and members. It further states that a tribunal can order a meeting, as specified in the said section(1)(b), if the company, creditor, or member gives an application, or if the company is being wound up. This section further states that the tribunal can sanction if the said provisions as stated in Section(391)(2) are met, and this sanction would be binding to all the creditors, members, and the company, etc. It also states that the tribunal will not order sanctions unless the tribunal is satisfied as per the said provision in this section. This section also directs what the tribunal and the law can do if the company does not comply with the said provisions of the section by also imposing penalties for the same[14].     
• Section  394 – This section talks about in detail all the provisions, for facilitating, reconstructing, and for amalgamation of the companies[15].  
• Section 396 – This section emphasizes the central government’s powers that provide for the amalgamation of companies in the national interest[16].  
• Section  397 – This section talks about the application to the tribunal for relief in cases of oppression. It further states that any member of a company can file a complaint in the tribunal for misconduct, against the public interest, etc, as Section 399 emphasis the right to do so. Members can also file a complaint if they think winding up of a company is unfairly prejudiced etc[17].  
• Section 398 – This section talks in detail about filing an application to the tribunal in cases of mismanagement for relief[18].
• Section  445 – This section talks about the necessity and the duty of the petitioner for filing a copy of the order relating to winding up with the RoC, if failed to comply with the said provisions in the section then the petitioner, company, etc are liable for punishments as specified in the section[19].   
• Section 481 – This section talks about the dissolution of a company. It further specifies that the order of dissolution of the company should be made by the tribunal if the liquidator cannot proceed in the winding up of the company based on different reasons as specified in the section. It also specifies a time period of thirty days to forward the copy of the order to the RoC, and if he fails to forward it then he is punishable with a fine as specified in the said section[20].   
• Section 466 – This section talks about the power of a tribunal to stay winding up proceedings, if deems fit, either altogether or for a limited period of time as per the terms and conditions according to the tribunal[21].    
• Section 518 – This section talks in detail about the powers a liquidator, creditor, etc have to apply to the tribunal regarding the questions determined or powers exercised[22].   
• Section 559 – This section talks about the powers a Tribunal has to declare any dissolution of the company void, as per the said section with different terms and conditions[23].  
• Section 621A – This section talks in detail regarding the composition of certain offenses[24].

The procedure of filing for INC-28

1. Download the e-form from the MCA portal.
2. Fill Corporate Identity Number (CIN) or Foreign Company Registration Number (FCRN), and users also get an additional pre-fill option which is given in the form thereafter.
3. The next step is selecting the authority passing the order. The user has to enter the name, location of the court, or competent authority of which the order is being filed, If in case the same is not applicable then the user has to enter ‘Not Applicable’.
4. Select the date on which the order is passed.
5. In the case of amalgamation, as per the form, the user has to mention whether the company filing the form is a transferor or transferee.
6. The user should then enter the number of days within which the order is to be filed with the Registrar of Companies (RoC).
7. Then the user has to enter the dates, as mentioned in the e-form regarding the date of application to court or tribunal, the due date by which order is to be filed with the registrar.
8. Then the user has to enter the Service Request Number (SRN) of Form 61, and this has to be filed only in case of compounding offense, as per the instructions given in the e-form.
9. Then the user has to digitally sign the declaration and then submit the form.

Things to note while filing Form INC-28:-

• Users should read all the details and instructions which are mentioned in the instruction kit of e-form INC-28, and fill in correct details as stated in the e-form.
• Section 466 of the Companies Act, 1956 states about the powers that a court has in respect to staying the winding-up proceedings[25], and if in case the specific e-form INC-28 is being filed in respect of an order of the court stating the above-said section, then the user should enter the date from which winding-up proceedings have stayed. If the company’s status is changed to active, then the user has to give details of active authorized signatories of the company existing in the system which shall be deactivated, and in this specific matter, as per the instructions provided in Form INC-28, the Registrar of Companies (RoC) will give the details of authorized signatories of the company and for getting this specific detail the following company has to approach the ROC.        
• Section 481 of the Companies Act, 1956 states about the dissolution of a company[26], and if in case the specific e-form is being filed for dissolution order as per above-mentioned section then, the user has to enter and ensure the date of the dissolution and other details regarding the same is appropriate.
• If in case the specific e-form is being filed under Section 559 of the Companies Act, 1956, which talks about the power of the courts to declare dissolution as void[27], then the user has to enter the date with effect from which dissolution has been declared void.
• If the court order is regarding the company which has been dissolved under Section 394 of the Companies Act, 1956 that stipulates the provisions that can be facilitated in reconstruction and amalgamation of the companies[28], then the user has to enter the Corporate Identity Number (CIN) or Foreign Company Registration Number (FCRN) of the transferor company whose dissolution has been declared as void.  
• If the court order is regarding a company that has been dissolved other than Section 394, then the status of the company filing the form upon approval of the specific e-form will be changed to ‘Active’, as per the instructions given in the instruction kit for Form INC-28.

Attachments Required in the form

As per the MCA guidelines and instructions given in the e-Form INC-28, the attachments required regarding INC-28 is the copy of the court order or NCLT or any other competent authority is a mandatory attachment.

In case of Condonation of Delay

In layman terms, condonation of delay is applied when there has been a delay in filing an application or suit in courts. According to the e-form, INC-28 condonation of delay is applied when an application is required to be filed with the central government or with the Registrar of Companies within a stipulated period and has not been filed as per that particular time period as specified under the Companies Act of 2013 then in that scenario, a separate procedure for condonation of delay is followed[29].

Condonation of delay in certain cases[30] as per Section 460 of the Companies Act, 2013 states that certain documents have to be mandatorily filed within a stipulated period with the RoC or the central government, and if these are not filed within that time period then the company has to give in writing to the government regarding the reasons for the delay and condone the delay[31]. Section 637B of the old Companies Act of 1956 also states the same regarding condonation of delay as Section 460 of the new Companies Act, 2013.

The application CG-1 has to be filed regarding condonation of delay, with the supporting documents. Supporting documents mostly include a detailed petition of the NCLT order regarding the facts of the order and the reason for the delay[32].

Case: Halwasiya Agro Industries Ltd. Vs. Eldeco Housing and Industries Ltd

In Halwasiya Agro Industries Ltd. Vs. Eldeco Housing and Industries Ltd[33], the transferor company failed to file Form INC-28 with the RoC even after intimation from the court. In this case, it was also mentioned and emphasized that any order of the court should be mandatorily filed with regard to Form INC-28 with the RoC. But with listening to all the facts the judgment was that the applicant was not at its fault, as Form INC-28 can only be filed after obtaining formal order, and thereafter the condonation of delay was applied and accepted. In case, M/S Plyworth Marketing India Pvt vs. The Official Liquidator[34], The condonation of delay was accepted and the applicant was permitted to file a fresh E-Form INC-28 even after 406 days delay.  

Conclusion

The central government has made provisions and laws with regard to filing INC-28, these are in my opinion cost-effective and efficient. Even though the procedures may be time-consuming but these procedures and provisions etc if followed properly by the companies, then it would be efficient for the companies as well as the central government to govern any mismanagement or faulty practices in the Corporate sphere. 

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References:

[1] Notices and Circulars, Ministry of Corporate Affairs, (August. 1, 2021, 8:00 AM), https://www.mca.gov.in/content/mca/global/en/notifications-tender/notices-circulars.html.

[2] Ibid.

[3] Instruction kit for e-form INC-28, Ministry of Corporate Affairs, (August. 7, 2021, 9:50 AM),  https://www.mca.gov.in/MCA21/dca/help/instructionkit/NCA/Form_INC-28_help.pdf.

[4] Ibid.

[5] Companies Act, S.12(6) (2013).

[6] Companies Act, S.13(7) (2013).

[7] Companies Act, S.58(5) (2013).

[8] Companies Act, S.87 (2013).

[9] Companies Act, S.111(5) (2013).

[10] Companies Act, S.81(4) (1956).

[11] Companies Act, S.102(1) (1956).

[12] Companies Act, S.167 (1956).

[13] Companies Act, S.186 (1956).

[14] Companies Act, S.391 (1956).

[15] Companies Act, S.394 (1956).

[16] Companies Act, S.396 (1956).

[17] Companies Act, S.397 (1956).

[18] Companies Act, S.398 (1956).

[19] Companies Act, S.445 (1956).

[20] Companies Act, S.481 (1956).

[21] Companies Act, S.466 (1956).

[22] Companies Act, S.518 (1956).

[23] Companies Act, S.559 (1956).

[24] Companies Act, S.621A (1956).

[25] Companies Act, S. 466 (1956).

[26] Companies Act, S. 481 (1956).

[27] Companies Act, S. 559 (1956).

[28] Companies Act, S. 394 (1956).

[29] Sandeep Chauhan, Condonation of Delay by central government| Section 460, Tax Guru, (August. 7, 2021, 11:00 AM), https://taxguru.in/company-law/condonation-delay-central-government-section-460.html.

[30] Companies Act, S. 460 (2013).

[31] Ibid.

[32] Varun Aggarwal, Condonation of INC-28 for NCLT order under IBC, Tax Guru, (August. 1, 2021, 10:00 AM), https://taxguru.in/corporate-law/condonation-inc-28-nclt-order-ibc.html.

[33] Halwasiya Agro Industries Ltd. Vs. Eldeco Housing and Industries Ltd., Indian Kanoon, (August. 13, 2021, 5:00 PM), https://indiankanoon.org/doc/69665498/.

[34] M/S Plyworth Marketing India Pvt vs. The Official Liquidator, Indian Kanoon, (August. 13, 2021, 5:00 PM), https://indiankanoon.org/doc/40500267/.