Regional Director, Southern Region, ... vs Om Shakthy Agencies (Madras) Pvt. Ltd

Regional Director, Southern Region, Ministry of Corporate Affairs, RoC, Tamil Nadu ...Appellant

Versus

Om Shakthy Agencies (Madras) Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. T.P.S. Singh, Advocate and Mr. Rajaneesh Kr. Singh, Dy. Director.

For Respondent : Mr. Arun Kathpalia, Senior Advocate assisted by Mr. Goutham Shivshankar, Advocate

ORDER

06.08.2018 An application under Section 131 of the Companies Act, 2013

was filed by M/s. Om Shakthi Agencies (Madras) Pvt. Ltd. before the Tribunal for

rectification of the financial statement of return. In the said case, the Central

Government was not impleaded as party-respondent, but the appellant -

Regional Director, Southern Region of the Ministry of Corporate Affairs, Chennai

and Registrar of Companies, Tamil Nadu impleaded as respondent. The case

was heard and order under Section 131 was passed on 27th March, 2018 with

the following observations:

"Counsel for the Petitioner present. Counsel for IT

Department present. Counsel for RoC also present. As

seen from the Order dated 07.02.2018, the Registry was

directed to issue the notice to RD, RoC, IT Authorities and 2

the Counsel for the Petitioner was also directed to issue a

private notice to the said Authorities. Pursuant to which

the Counsel for the Petitioner has delivered the notice by

hand, the proof of which is placed on record. However,

till date no objection has been filed by the RD, RoC and

the IT Authorities. This fact has also been recorded in the

Order dated 15.03.2018. In spite of availing the

opportunities, the Counsel for the IT Department has not

filed the objections even after passing the conditional

order that the right of filing the objections shall stand

forfeited. It appears from the conduct of the RD, RoC and

IT Authorities that they are not interest to file the

objections. Therefore, their right of filing the objections

stands forfeited.

Heard the Counsel for the Petitioner and perused

the Application along with the record placed on file.

Keeping in view of the facts and circumstances of the case

and the submissions made by the Counsel for the

Petitioner, I in exercise of the powers conferred under

Section 131 of the Companies Act, 2013, permit the

Petitioner to replace the original financial statements

(Balance Sheets and Profit & Loss Account) for the year

ended 31.03.2016 as filed before the MCA-21 on

11.05.2017 with the revised financial statements as

approved. Accordingly, the approval is granted to the

Company Appeal (AT) No. 232 of 2018 3

revised financial statement as attached in Annexure-11

for the year ending 31.03.2016 as has been approved by

the Board of Directors of the Petitioner Company at its

Meeting on 15.12.2017.

Accordingly, the Application stands disposed of."

2. Learned counsel appearing on behalf of the appellant submitted that the

Tribunal without impleading the Central Government as party-respondent or

passed orders on the appellant, Regional Director, Southern Region who has not

been empowered to deal with the subject matter. When the matter was brought

to the notice of the Tribunal, right to file objection by appellant was forfeited.

3. Learned Senior Counsel appearing on behalf of the respondent submitted

that the Regional Director, Southern Region, Ministry of Corporate Affairs,

Chennai represents the Central Government but such submission cannot be

accepted as the Regional Director has not been empowered to pass any order on

behalf of the Central Government.

4. Section 131 relates to voluntary revision of financial statements or Board's

report, which reads as follows:

"131. (1) If it appears to the directors of a company that--

(a) the financial statement of the company; or

(b) the report of the Board,

do not comply with the provisions of section 129 or

section 134 they may prepare revised financial

statement or a revised report in respect of any of

Company Appeal (AT) No. 232 of 2018 4

the three preceding financial years after obtaining

approval of the Tribunal on an application made by

the company in such form and manner as may be

prescribed and a copy of the order passed by the

Tribunal shall be filed with the Registrar:

Provided that the Tribunal shall give notice to

the Central Government and the Income tax

authorities and shall take into consideration the

representations, if any, made by that Government

or the authorities before passing any order under

this section:

Provided further that such revised financial

statement or report shall not be prepared or filed

more than once in a financial year:

Provided also that the detailed reasons for

revision of such financial statement or report shall

also be disclosed in the Board's report in the

relevant financial year in which such revision is

being made.

(2) Where copies of the previous financial

statement or report have been sent out to members

or delivered to the Registrar or laid before the

company in general meeting, the revisions must be

confined to--

Company Appeal (AT) No. 232 of 2018 5

(a) the correction in respect of which the previous

financial statement or report do not comply

with the provisions of section 129 or section

134; and

(b) the making of any necessary consequential

alternation.

(3) The Central Government may make rules as

to the application of the provisions of this Act in

relation to revised financial statement or a revised

director's report and such rules may, in particular--

(a) make different provisions according to which

the previous financial statement or report are

replaced or are supplemented by a document

indicating the corrections to be made;

(b) make provisions with respect to the functions

of the company's auditor in relation to the

revised financial statement or report;

(c) require the directors to take such steps as may be

prescribed."

5. Proviso to clause (2) of Section 131 show that the Tribunal is to give notice

to the Central government and the Income-Tax Authority. Clause (3) therein

makes it clear that the Central Government is empowered to make rules as to

the application of the provisions of the Act in relation to revised financial

statement or a revised director's report and making different provisions

according to which previous financial statements or reports are replaced or are

Company Appeal (AT) No. 232 of 2018 6

supplemented by the documents and to make further provisions with respect to

the functions of the company's auditor. It is informed that no such Rule has

been framed empowering the Regional Director, Southern Region, Chennai and

decide such issue.

6. In the present case, we find that the Tribunal not only failed to notice the

aforesaid provision but on wrong presumption forfeited the right of the appellant

to file the reply, which was uncalled for. We hope and trust in future the Tribunal

will not act in such manner by forfeiting the right of a person to file reply.

7. For the aforesaid reason, we set aside the impugned order dated 27th

March, 2018 in CP/105/2018 and allow the respondent/applicant to implead

the Central Government, through its Secretary, Ministry of Corporate Affairs, 5th

Floor, 'A' Wing, Shastri Bhawan, Dr. R.P. Road, New Delhi, as party-respondent

in the petition. If such an application for impleadment is filed, the Tribunal will

allow prayer for impleadment it and after notice to the Central Government and

other necessary parties will pass appropriate order in accordance with law.

8. At this stage, we make it clear that we have not gone into the merit of the

case, which may be decided by the Tribunal.

The appeal is allowed with the aforesaid observations and directions. No

cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial) /ns/uk/

Company Appeal (AT) No. 232 of 2018