In Regional Director, Southern Region, MCA & Anr. Vs. Real Image LLP & Anr., NCLAT played the role of big Brother and created extra-ordinary hurdle for Domestic Businesses. It is a known fact that many MSMEs in India initially operate as Proprietorship or LLP and subsequently, for securing investments, they cover themselves under the Companies Act, 2013 either by merging or converting their firms into Limited Companies. But with this Judgement of NCLAT, the path has become much more tenuous. It is no wonder that the Domestic Industry is up in arms and is strenuously lobbying the Ministry of Corporate Affairs to make appropriate amendments in the Companies Act, 2013.
The uniqueness of this matter is that both the NCLT and the NCLAT have based the ratio of their respective judgements in the underlying rule of interpretation being “principle of casus omissus”. Such is unprecedented in the nascent history of the Tribunal.
This paper analysis such matter by extrapolating the rationale behind both the NCLT and the NCLAT’s decision. The Author begins by providing the context in which the matter came up before the NCLAT and thereafter analysis the principle of Casus Omissus by providing a historical background and its current application. This is followed by analysis of the facts and merits of the case and it correlation with the Casus Omissus. The Paper concludes by highlighting the shortfall in the NCLATs decision and provides the road ahead for respective Litigants and the Domestic Industry.