NCLT Confirms Maintainability of SFIO’s Winding Up Petition Under Sections 271–272

Background of the Dispute

The matter arose from an interlocutory application filed in C.P 309/KB/2022 before the National Company Law Tribunal, Kolkata Bench, in the case titled Union of India Through Serious Fraud Investigation Office Vs MPS Greenery Developers Limited.

The underlying company petition had been instituted by the Union of India through Serious Fraud Investigation Office (SFIO) under Sections 271 and 272 of the Companies Act, 2013 seeking winding up of MPS Greenery Developers Limited.

In response, the company (applicant in the interlocutory application) sought:

  • Dismissal of C.P 309/KB/2022 at the threshold, and
  • A stay on all further proceedings in the company petition pending disposal of the interlocutory application.

The core challenge was directed at the maintainability of the winding up petition filed by the Union of India through SFIO.

Reliefs Sought in the Interlocutory Application

The interlocutory application (I.A No. 204/KB/2023) prayed for:

  1. Summary dismissal of the main company petition C.P 309/KB/2022 at the outset; and
  2. Stay of all proceedings in the said company petition until the interlocutory application was adjudicated.

The maintainability objections were focused on alleged lack of proper authorisation, limitation, and competence of SFIO to initiate winding up proceedings under the Companies Act, 2013.

Brief Facts of the Main Company Petition

  • The Union of India through Serious Fraud Investigation Office had instituted a petition under Section 271–272 of the Companies Act, 2013 against **MPS Greenery Developers Limited`.
  • The petition was registered as C.P 309/KB/2022.
  • The petition was based on an investigation carried out under the Companies Act regime, leading to a recommendation to wind up the company.

Applicant’s Objections to Maintainability

Grounds Raised by MPS Greenery Developers Limited

The applicant company, MPS Greenery Developers Limited, challenged the maintainability of the winding up petition on the following principal grounds:

  1. Absence of Central Government Authorisation

    • It was argued that the petition under Sections 271–272 was not backed by any authority letter issued by the Central Government.
    • According to the applicant, in the absence of such authorisation, the petition could not have been competently presented.

  2. Bar of Limitation

    • The applicant contended that the winding up petition had been filed beyond the prescribed period of limitation, and was therefore liable to be dismissed as time-barred.

  3. Lack of Power With SFIO to File Winding Up Petition

    • The applicant further asserted that the Serious Fraud Investigation Office had no statutory power to initiate a petition for winding up under Sections 271–272 of the Companies Act, 2013.
    • It was argued that SFIO is merely an investigative body and cannot, on its own, act as a petitioner in a winding up proceeding.

On this basis, the applicant sought dismissal of the main petition and a halt on all further proceedings.

Response of Union of India Through SFIO

Submissions on Authorisation and Limitation

The Union of India through Serious Fraud Investigation Office refuted each of the objections raised by the applicant and placed the following points on record:

  1. Existence of Central Government Authority Letter
    • SFIO pointed out that an authority letter issued by the Central Government had in fact been annexed to the company petition at page 53 of C.P 309/KB/2022.
    • This letter authorised the filing of the petition under Sections 271–272.