Organosyn Life Sciences Pvt. Ltd. & Ors vs Registrar Of Companies, Nct Of Delhi & ...
- CitationCompany Appeal (AT) No. 367 of 2017
Ratio decidendi
The rule this decision rests on
The Tribunal holds that a company's failure to hold its Annual General Meeting within the period mandated by Section 96(1) of the Companies Act, 2013 is a default for which the company and its officers are liable to fine under Section 99, and that a commercial explanation for the delay (such as devaluation-driven discounting in dealings with foreign companies) does not, without more, furnish a reason for the default. Where the Tribunal has already reduced a compounding fine from the statutory maximum to a lower sum, an appeal challenging the quantum of that compounded fine discloses no ground for interference where the default itself is unexplained, and the appeal is accordingly dismissed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Organosyn Life Sciences Pvt. Ltd. & Ors. ...Appellants
Vs.
Registrar of Companies, NCT of Delhi & Haryana ...Respondent
Present: For Appellants: - Shri Arun Saxena and Ms. Nalini, Advocates
ORDER
02.11.2017 ─ For violating the provisions of Section 96(1) of the
Companies Act, 2013, the Company and Directors are liable to punish
under Section 99 of the Companies Act. As per the said provision, the
company and every officer, who is in default, is punishable with fine
which may extend to Rupees one lakh and in the case of continued
default with a further fine which may extend to five thousand rupees for
every day during which such default continues.
2. The appellant company and its officers filed an application
under Section 441 of the Companies Act, 2013 for compounding of the
offence, the Registrar of Companies proposed compounding the offence
on payment of fine of Rs. 14,65,000 each on the company and other
appellants which is the maximum fine prescribed under the Act. The
National Company Law Tribunal (hereinafter referred to as the
'Tribunal'), Delhi Bench on hearing the counsel for the appellant - M/s.
Organosyn Life Science Private Limited & Ors., and relying on the decision of this Appellate Tribunal for compounded the offence as
payment of fine of Rs. 3 Lakhs on each of the appellants.
3. Learned counsel for the appellants submits that the
company was doing business with the other companies in Ukraine and
because of devaluation therein, it had to give discount. Therefore, fine
is excessive. However, no reason has been given as to why Annual
General Meeting, which was mandatory to be held within fifteen months
in terms of Section 96(1) of the Companies Act, 2013 had not been held
between 1st October, 2015 to 1st July, 2016. This apart the Tribunal
having imposed reduced fine from Rs. 14,65,000 to Rs. 3 Lakhs on each
of the appellant, we find no ground to interfere with the impugned order.
There is no merit in the appeal, it is accordingly dismissed. However, in
the facts and circumstances of the case, there shall be no order as to
costs.
(Justice S.J. Mukhopadhaya) Chairperson
(Justice Bansi Lal Bhat) Member(Judicial) ns/uk
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