IA (C/Act)/110/KOB/2024

IN

CP (C/Act)/07/KOB/2024

(Under Section 277(4) of the

Companies Act, 2013)

In the matter of

M/s Hug Digital Private Limited v The Registrar of Companies, Kerala

MEMO OF PARTIES:

Adv G Rajesh Kurup Company Liquidator,

M/s Hug Digital Private Limited

Office at Pallavi, Pattanakkad P O,

Cherthala, Alappuzha,

Kerala- 688531

… Applicant

In

M/s Hug Digital : Petitioner

Private Limited

Vs

The Registrar of : Respondent

Companies, Kerala

Order delivered on: 06.09.2024

Coram:

Hon’ble Member (Judicial) : TMT. Justice (Retd.) T Krishna Valli

Hon’ble Member (Technical) : Shri. D Arvind Appearances:

For the Petitioner : Mr. G Rajesh Kurup, Company Liquidator

O R D E R

Per Coram

1. This application is filed by Mr. G. Rajesh Kurup, the Company Liquidator of M/s. Hug Digital Private Limited (in Liquidation), following the Tribunal’s winding-up order dated 27.05.2024 in CP(C/ACT)/07/KOB/2024. The order, issued under Sections 271-272 of the Companies Act, 2013, appointed the Applicant as the Company Liquidator, with the responsibility to carry out the liquidation process in accordance with the provisions of the Companies Act, 2013 (hereinafter referred to as "the Act").

2. It is stated that as per section 277(4) of the Companies Act, 2013 with three weeks from the date of passing of the winding up order, the Company Liquidator shall file an application seeking appointment of a winding up committee. Accordingly, this application is filed seeking the constitution of winding-up committee. The Applicant stated that since the company has no secured creditors, the committee cannot include a representative for them. The only liabilities are to the statutory auditor and the holding company, namely AKQA-FZ LLC, Dubai and there is no liability to secured creditors.

3. Given these circumstances, the Applicant requests that the Winding-

up Committee be limited to the Official Liquidator as the sole member. Alternatively, to have three members, the Applicant suggests including the Official Liquidator, the Director representing the holding company, and a Practicing Company Secretary & Registered Valuer, Mr. Anil Xavier, whose consent is provided with this application.

4. Heard the Counsel for the Applicant and perused the documents on record. Section 277 (4) of the Act mandates the formation of a winding-up committee comprising the Official Liquidator, a nominee of the secured creditors, and a professional nominated by the Tribunal. In this case, it has been stated that M/s. Hug Digital Private Limited has no secured creditors. Therefore, the requirement to include a nominee from secured creditors cannot be met, creating a discrepancy between the statutory mandate and the actual circumstances.

5. Although Section 277(4) uses "shall," indicating a mandatory inclusion of specific members, statutory provisions must be interpreted in light of the company’s actual circumstances. The should be construed to advance the legislative purpose and adapt to Hon’ble Supreme Court has emphasized that statutory provisions the realities of each case. Given the absence of secured creditors, a strict interpretation would be impractical. The Tribunal finds that a Winding-up Committee should include representatives with a legitimate interest in the liquidation process to fulfil the purpose of the section, ensuring effective oversight.

6. Considering the absence of secured creditors, it is hereby ordered that the Winding-up Committee for M/s. Hug Digital Private Limited (in Liquidation) shall be constituted in respect of the alternative prayer with the following members:

Official Liquidator, High Court of Kerala, Company Law Bhawan, 3rd Floor, Thrikkakara P.O., Kochi-682021 Mr. Ramkumar Kala Mohan, Director, representing the interest of the holding company, AKQA-FZ LLC, Dubai.

Mr. Anil Xavier, Practicing Company Secretary and Registered Valuer (IBBI Reg No. IBBI/RV/05/2020/12804) as proposed by the Applicant. The consent letter from the Practicing Company Secretary appointed is filed alon