Goyal Proteins Ltd. & Ors vs Registrar Of Companies, Jaipur

[Arising out of Order dated 19th November, 2018 passed by National Company Law Tribunal, New Delhi Bench, New Delhi in C.P. No.21/441/2018]

IN THE MATTER OF: Before NCLT Before NCLAT

1. M/s Goyal Proteins Original Petitioner No.1 Appellant No.1 Limited N.H. 12, Village Kesar, Tehsil Ladpura, Kota, Rajasthan, India

2. Mr. Nirmal Goyal Original Petitioner No.2 Appellant No.2 Managing Director R/o 90/91B, Talwandi Kota

3. Mr. Dinesh Goyal Original Petitioner No.3 Appellant No.3 Whole Time Director R/o 90-B, UTI, Scheme, Ward No.18, Tehsil-Ladpura, Kota

4. Smt. Rashi Goyal Original Petitioner No.4 Appellant No.4 Whole Time Director 10, Mali Mahualla, Khanpur, Ditt, Jhalawar

5. Smt. Kalpana Jain Original Petitioner No.5 Appellant No.5 Company Secretary 21-D, New Colony Guman Pura, Kota

Versus

Registrar of Companies, Original Respondent Respondent Jaipur 2

For Appellants: Shri Ankit Totuka, Advocate

For Respondent: Dr. Amol Shinde, DROC

JUDGEMENT

(19th March, 2019)

A.I.S. Cheema, J. :

1. This Appeal arises out of Impugned Order dated 19 th November,

2018 passed by National Company Law Tribunal, New Delhi Bench, New

Delhi (NCLT - in short) in CP No.21/441/2018.

2. It is stated that Cost Audit Report for 2013 - 2014 could not be

prepared and filed in due time at the MCA portal, although the Company

had appointed Cost Auditors. There was delay in filing of Cost Audit Report

for financial years 2014 - 2015 and 2015 - 2016 also. ROC initiated

prosecution under Section 233B(11) of the Companies Act, 1956 (old Act -

in short) before the Metropolitan Magistrate Court for Economic Offences,

Jaipur for the financial year 2013 - 2014. The Company moved application

for compounding and the matter was then filed with NCLT. Permission

from prosecuting Court under Section 441(6) of the Companies Act, 2013

(new Act - in short) was also obtained.

3. NCLT considered the Petition which was filed and comments of ROC.

It took note of Section 233B of the old Act for the financial year 2013 -

2014 and Section 148(8)(a) read with Section 147(1) of the new Act for

violation of Section 148(6) of the new Act. The NCLT considered the number

Company Appeal (AT) No.420 of 2018 3

of days' delay with regard to the default for the years 2013 - 2014 and the

delays with regard to 2014 - 2015 and 2015 - 2016 and it was deemed

sufficient to impose aggregate fine on the company and defaulting

Directors/Officers as under:-

S.No. Name of the Fine U/s Fine U/s Total Company 233 for F.Y 148(8) for 2013-14 F.Y 2014- 15 and 2015-16 1. M/s Goyal 5,000/- 2,00,000/- Rs.2,05,000/- Proteins Limited

2. Nirmal Goyal 10,000/- 2,00,000/- Rs.2,10,000/-

3. Dinesh Goyal 10,000/- 2,00,000/- Rs.2,10,000/-

4. Rashi Goyal 10,000/- 2,00,000/- Rs.2,10,000/-

5. Kalpana Jain 10,000/- 2,00,000/- Rs.2,10,000/-

It is argued that Appellant No.5 - Kalpana Jain was the Company

Secretary and the penalty should not have been imposed on her. However,

no such case appears to have been put up before the NCLT where the

present Appellants 2 to 5 represented themselves to be the Directors and

Officers concerned of the Company.

4. We have perused the Appeal and Reply filed by ROC and heard

Counsel for both sides.

Company Appeal (AT) No.420 of 2018 4

5. It is argued by the learned Counsel for the Appellants that the NCLT

imposed maximum fine of Rs.1 Lakh as prescribed under Section 148(8)

read with Section 147(1) on each of the Directors/Officers for each of the

two financial years 2014 - 2015 and 2015 - 2016, when in contrast the

fine imposed on the Appellant Company is Rs.1 Lakh for 2014 - 2015 and

Rs.1 Lakh for 2015 - 2016 as against the maximum fine prescribed of Rs.5

Lakhs for each financial year with regard to applicable provision relating

to the Company. Thus, it is submitted that the fine imposed on the

Company for each financial year is only 20% of the maximum fine of Rs.5

Lakhs while for the Directors/Officers, it is the maximum amount

i.e. - Rs.1 Lakh. The counsel prayed for leniency for the Directors/Officers

and parity.

6. The relevant provision relied on by the Counsel for Appellants is Sub-

Section (1) of Section 147 of the new Act which is as follows:-

"If any of the provisions of Sections 139 to 146 (both inclusive) is contravened, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees, or with both."

Considering the above provision and the fine as imposed, we find

substance in the argument of the learned Counsel for the Appellants that

Company Appeal (AT) No.420 of 2018 5

the Company and the Directors/Officers have not been treated equally.

Thus, we proceed to pass the following Order:-

ORDER

The Appeal is allowed. In the Impugned Order,

we modify the same with regard to imposing of fine

under Section 148(8) for FY 2014 - 2015 and 2015 -

2016 and substitute "40,000" in place of "2,00,000"

with regard to the Directors, i.e. present Appellants

No.2 to 5. Rest of the Order is maintained.

No orders as to costs.

[Justice S.J. Mukhopadhaya] Chairperson

[Justice A.I.S. Cheema] Member (Judicial)

/rs/sk

Company Appeal (AT) No.420 of 2018