–CS. Sandeep J, ACS, B. Com
Belated annual filing of return allowed u/s 17 of FCRA where no foreign funds were received till opening of FCRA a/c: HC
Shree Swaminarayan Mandir v. Union of India –  (HC – Delhi)
– A Charitable Trust filed a petition asking the Ministry of Home Affairs to let them submit their annual returns for the financial year 2019-20 by filling out Form FC-4 on the ministry’s website.
– The FCRA, 2010 was changed by the Foreign Contribution Regulation (Amendment) Act, 2020, which brought significant changes.
– A notification from the ministry stated that the designated branch for opening FCRA accounts would be the State Bank of India (SBI) branch on Sansad Marg. It also required organizations to provide account details and foreign contribution receipts as of March 31 in Form FC-4 (Annual Returns).
– The petitioner couldn’t provide the SBI account details as of March 31, 2020, because the FCRA amendment came into effect in September 2020, and they were given a six-month extension to open the SBI account.
– The High Court referred to the case of WNS Cares Foundation v. Union of India  146 taxmann.com 386 (Delhi), which stated that if a petitioner company registered under FCRA didn’t receive any foreign funds until opening their FCRA account, they should be allowed to file belated annual returns.
– The petitioner company had already opened an SBI account, so they were allowed to upload their annual returns for 2019-20, including the subsequently opened SBI account number.
– The High Court ruled that if the annual returns are uploaded within one month from the ruling date, no penalty would be charged against the petitioners.
– As a result, the petitions were disposed of (settled).
NCLT rightly invokes inherent jurisdiction to replace RP for failure to adhere to timelines and to convene CoC meeting: NCLAT
Srigopal Choudary Resolution Professional of Shree Ram Urban Infrastructure Ltd. v. SREI Equipment Finance Ltd. –  (NCLAT- New Delhi)
-Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor.
– The appellant was appointed as the Resolution Professional (RP) by the Adjudicating Authority (NCLT).
– The first meeting of the Committee of Creditors (CoC) was delayed for one and a half years.
– The respondent, a financial creditor, requested the RP to schedule a subsequent CoC meeting due to previous cancellations.
– The respondent and other financial creditors filed applications alleging that the RP’s inaction breached mandatory timelines of the CIRP.
– They sought the removal of the RP and appointment of a new RP to reconstitute the CoC.
– The NCLT ordered the removal of the RP and transfer of records to the new RP.
– An appeal was made to the National Company Law Appellate Tribunal (NCLAT) against the NCLT order.
– The appellant argued that the NCLT did not have the authority to remove the RP, as that power is vested in the CoC.
– The NCLAT observed that the appellant had been avoiding convening the CoC meeting with the agenda of removing the appellant as the RP.
– The NCLAT held that while the CoC alone has the power to replace the RP, in this case, the RP was not convening the CoC meeting.
– To avoid delay in the CIRP proceedings, the NCLT invoked its inherent jurisdiction and ordered the replacement of the RP.
– The NCLAT determined that the impugned order was justified, and the appeal was to be dismissed.