Peregrine Guarding Pvt Ltd & Ors vs Registrar Of Companies

Peregrine Guarding Pvt. Ltd. & Ors. ...Appellants

Versus

Registrar of Companies ...Respondent

Present:

For Appellant : Mr. Rakesh Kumar, Mrs. Preeti Kashyap and Mr. Aashish Khattar, Advocates

ORDER

31.01.2019 The appellant Company and its Directors filed a petition under

Section 441 of the Companies Act, 1956 praying for compounding of offence

under Section 134(3)(o) read with Section 135(2) of the Companies Act, 2013. As

per the statutory requirement, the company was required to disclose its

Director's Report, the details of the CSR Policy developed and implemented

during the year. A CSR Committee was also required to be constituted for the

said purpose. The appellant Company and its Directors defaulted in adhering

to this statutory requirement for the Financial Year 2014-15, 2015-16 and

2016-17. Finally, the Board of Directors of the Company in its meeting held on

16th April, 2018 cured the defects and thereby all the defects stood cured with

effect from the year ending 31st March, 2018.

2. After filing of the application under Section 441 of the Companies Act, the

report was called for from the Registrar of Companies, NCT Delhi and Haryana. 2

The penal provision for offence under Section 434 (3) is prescribed under Section

134(8), which reads as follows:

"(8) If a company contravenes the provisions of this

section, the company shall be punishable with

fine which shall not be less than fifty thousand

rupees but which may extend to twenty-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

three years or with fine which shall not be less

than fifty thousand rupees but which may

extend to five lakh rupees, or with both."

3. For offence under Section 135(5), general penal provision of Section 450 is

applicable and reads as follows:

"450. Punishment where no specific penalty or punishment is Provided -

If a company or any officer of a company or any

other person contravenes any of the provisions of this

Act or the rules made thereunder, or any condition,

limitation or restriction subject to which any approval,

sanction, consent, confirmation, recognition, direction or

exemption in relation to any matter has been accorded,

given or granted, and for which no penalty or

Company Appeal (AT) No. 28 of 2019 3

punishment is provided elsewhere in this Act, the

company and every officer of the company who is in

default or such other person shall be punishable with

fine which may extend to ten thousand rupees, and

where the contravention is continuing one, with a further

fine which may extend to one thousand rupees for every

day after the first during which the contravention

continues.

4. In terms of the said provision, the Registrar of Companies recommended

imposition of compounding fees as follows:

Company Appeal (AT) No. 28 of 2019 4

Company Appeal (AT) No. 28 of 2019 5

5. The Tribunal on hearing the parties and taking into consideration the

fact that the provision of law being newly introduced under 2013 Act and that

the appellants had not much clarity on it and the default had been

subsequently made good, deemed it fit, just and equitable to impose the fine

for compounding the offence for three years i.e. 2014-15, 2015-16 and 2016-

17 as under :

Company Appeal (AT) No. 28 of 2019 6

6. Learned counsel appearing on behalf of the appellant referred to Item No.

4 of the Chart supplied by the Registrar of Companies which had not

recommended any amount for the offence under Section 134(3) but in spite of

the same, the Tribunal imposed fine of Rs. Two Lakhs. With regard to Mr.

Kartar Singh, it was submitted that he had left the post on 5th December, 2015.

In Item No. 5, the Registrar of Companies had not calculated the delay and

recommended to impose penalty of Rs. Five Lakhs.

7. It is accepted that Mr. Bodh Raj Sharma joined from 15th March, 2018

and the Board of Directors in its meeting held on 18th April, 2018 cleared the

defects of 2014-15, 2015-16 and 2016-17. Thus, it is clear that for about 16

days i.e. from 16th March, 2018 to 31st March, 2018, Mr. Bodh Raj Sharma was

also a party but had not taken steps to correct and bring to the notice of the

Board of Directors. Insofar as Section 134(3) is concerned, it cannot be stated

that he had taken steps to correct it because of the corrections simultaneously

approved by the Board of Directors on 16th April, 2018. If nothing has been

shown by the Registrar of Companies, it is a typographic error and mistake.

Company Appeal (AT) No. 28 of 2019 7

Mr. Bodh Raj Sharma had joined on 15th Mach, 2018 and with regard to

anything shown for correction has taken place by the year ending 31st March,

2018. Thus we hold that Mr. Bodh Raj Sharma was also liable for penal action

under Section 134(8) for 16 days for violating the provisions of Section 134(3)

of the Companies Act. Insofar as Mr. Kartar Singh is concerned, as admittedly,

he was there in the year 2014-15 and had taken 240 days in removing the

defects committed during his tenure. The said period is also applicable for the

offence under Section 134(3) for which maximum punishment of Rs. Five Lakhs

is prescribed. Thereby, we find no error except typographical error has been

made by the Registrar of Companies. If the total amount is calculated, we find

that penal amount is less than 33% of the total maximum penal amount

payable. The Tribunal having taken lenient view on the ground that new Act

has been introduced, we are not inclined to accept the same though we are of

the view that the provisions of Act of 2013 are practically similar to the

provisions as were there already in Companies Act, 1956. Hence, we find no

merit in the appeal. The appeal is dismissed. No cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/uk/

Company Appeal (AT) No. 28 of 2019