Kanniah Anandh & Ors vs Union Of India

NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI (APPELLATE JURISDICTION) Company Appeal (AT) (CH) No. 64 / 2025 (IA Nos. 661 & 662 / 2025) In the matter of: 1) Kanniah Anandh S/o. Kannaiah Naidu AL 150, 2nd Street, Anna Nagar, Chennai 600 040 2) Sakthi Ferro Alloys (India) Private Limited Rep. by its Director Kannaiah Anandh No.18/26, Loganathan Nagar, Second Street, Choolaimedu, Chennai 600 094 3) Sakthi Steel Industries Private Limited Rep. by its Director Kannaiah Anandh No. 18/26, 1st Floor, 2nd Street, Loganathan Nagar, Choolaimedu, Chennai - 600 094 ... Appellants V Union of India, Through Serious Fraud Investigation Office (SFIO), Ministry of Corporate Affairs, Represented by Shri. N.M. Mahesh Kumar, Senior Asst Director, Serious Fraud Investigation Office, No 29, Rajaji Salai, Ground Floor, Corporate Bhawan, Chennai - 600 001 ...Respondent Present : For Appellant : Mr. E. Om Prakash, Senior Advocate For Mr. Dhanaram Ramachandran, Advocate

For Respondent : Mr. Gokulesh, Advocate For Mr. B. Mohan, Advocate

ORDER

(Hybrid Mode) 09.01.2026:

Comp App (AT) (CH) No.64/2025 Page 1 of 4

Oral Judgment : Justice Sharad Kumar Sharma, Member (Judicial):

1. Under the Companies Act, the provisions as specifically contained under

Section 221 have conferred the power upon NCLT to freeze the Assets of a

Company for a period not exceeding 3 years, on a reference from

Central Government, during any inquiry or investigation into the affairs of the

Company under Chapter 14 of Companies Act, or on a complaint by Members or

Creditors, in case it has reasons to believe that the Assets are likely to be utilized

in a manner prejudicial to the interests of the Company and its Stakeholders and

/ or to the public interest. Sub-section (1) of Section 221 is extracted hereunder:

``(1). Where it appears to the Tribunal, on a reference made to it by the Central Government or in connection with any inquiry or investigation into the affairs of a company under this Chapter or on any complaint made by such number of members as specified under sub-section (1) of section 244 or a creditor having one lakh amount outstanding against the company or any other person having a reasonable ground to believe that the removal, transfer or disposal of funds, assets, properties of the company is likely to take place in a manner that is prejudicial to the interests of the company or its shareholders or creditors or in public interest, it may by order direct that such transfer, removal or disposal shall not take place during such period not exceeding three years as may be specified in the order or may take place subject to such conditions and restrictions as the Tribunal may deem fit.''

2. In the instant Company Appeal, the Appellant has invoked the provisions

contained under Section 421 of the Companies Act, to challenge the impugned

order of 24.01.2025, as it was passed by the Ld. NCLT, Chennai, in IA (CA) / 62

Comp App (AT) (CH) No.64/2025 Page 2 of 4 (CHE) / 2023 as preferred in CP / 125 (CHE) / 2022, by virtue of which, Ld.

NCLT rejected the aforesaid application seeking certain modifications in the

order dated 17.11.2022 passed in CP / 125 (CHE) / 2022.

3. The facts of the case are that in CP / 125 (CHE) / 2022 being a Petition

filed by the Respondent SFIO, Ld. NCLT had ordered freezing the accounts of

Appellant No. 1 and Sakthi Group of Companies vide its order dated 17.11.2022.

The Appellant filed an application IA (CA) / 102 (CHE) / 2022 praying for

defreezing of the said Accounts and Ld. NCLT by its order dated 07.03.2023

defreezed the Accounts on the condition that Fixed Deposit be made for a sum

equal to the sum existing in each Account as on the date of attachment. The

Appellant once again filed another application IA (CA) / 62 (CHE) / 2023 praying

for a clarification that the attachment will not apply to Accounts other than

Current and Savings Accounts. This prayer was rejected by the impugned order

against which the instant Appeal has been filed.

4. We note that the attachment order was passed on 17.11.2022 and the said

time period of 3 years as provided under Section 221(1) of the Companies Act

has already lapsed as on date. As a consequence thereto, the very purpose of filing

of the Interlocutory Application for seeking clarification has lost its purpose as

on today, owing to the implications flowing from the provisions contained under

Section 221 of the Companies Act.

Comp App (AT) (CH) No.64/2025 Page 3 of 4

5. Hence, for all practical purposes, owing to the legal implications flowing

from Section 221, the instant Company Appeal, challenging the order of rejection

of IA (CA) / 62 (CHE) / 2023, which had sought clarification in the order, which

was passed on IA (CA) / 102 (CHE) / 2022, as preferred in CP / 125 (CHE) /

2022, has lost its significance and with the efflux of time the Company Appeal

(AT) (CH) No. 64 / 2025 has been rendered infructuous and hence, it is

accordingly closed. The connected pending Interlocutory Applications, if any,

would stand closed.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical)

SR/MS/AK

Comp App (AT) (CH) No.64/2025 Page 4 of 4