S.D. Bio-Tech Ltd. & Ors vs Roc
- CitationCompany Appeal (AT) No. 35 of 2018
Ratio decidendi
The rule this decision rests on
The appellants' plea of inability to pay a compounding penalty, made orally without supporting material, is not accepted where they decline to disclose their financial position; in the absence of such disclosure the court will not believe that the appellants are unable to pay or are bankrupt. Where the Tribunal has already reduced a compounding penalty to less than one-third of the amount proposed by the Registrar of Companies, the reduced penalty is just and fair, and the appellate forum will not interfere with the order in the absence of any merit in the appeal.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
S. D. Bio-Tech Ltd. & Ors. ...Appellants
Vs
Registrar of Companies ....Respondent
Present: For Appellants: Ms. Ritu Goyal and Mr. Awanish Kumar, Advocates. Mr. Mohd. Nazim Khan, PCS. For Respondent: None.
ORDER
30.01.2018 . This appeal has been preferred by the Appellant Company and three Directors against order dated 12th December, 2017 passed by National Company Law Tribunal (hereinafter referred to as Tribunal), New Delhi in CP No. 16/203/ND/2017, whereby and whereunder the Tribunal in their application under Section 441 of Companies Act, 2013 for compounding of the offences under section 92 and 137 of Companies Act, 2013 reduced the penalty amount from Rs.10,64,000/- (for Company) and Rs.10 Lakh (for rest of the Directors) respectively to Rs.3 lakhs each for the Company and each of the three Directors.
The fact of the case is that the Appellants defaulted in filing the Annual Return in time and attracted punishment under section 92(5) of the Companies Act, 2013. For violation of Section 137 and as the Financial Statement adopted in the AGM was not filed with Registrar of Companies, punishment under Section 137(3) was attracted. The Company was liable to pay fine which may be extent to Rs.10 lakh and the Directors were liable for imprisonment upto 6 months or fine upto Rs.5 lakhs each.
Company Appeal (AT) No. 35 of 2018 -2-
For the aforesaid offences punishable under Section 92(5) and 137(3) of the Companies Act, the ROC recommended the fine as under:
U/s 92 of the Companies Act, 2013 S. Name of Fine U/s Default Period Amount No. Applicant 92()
1. S. D. Bio-Tech 92(5) 30.11.2015 to 5,00,000/-
Limited 15.07.2017 2. Mr. Dharam Pal 92(5) 30.11.2015 to 5,00,000/- Malhotra 15.07.2017 3. Ms. Ashima 92(5) 30.11.2015 to 5,00,000/- Malhotra 15.07.2017 4. Mr. Sulabh 92(5) 30.11.2015 to 5,00,000/- Malhotra 15.07.2017
U/s 137 of the Companies Act, 2013 S. Name of Fine U/s Default Period Amount No. Applicant 137 1. S. D. Bio-Tech 137 30.10.2015 to 5,64,000/- Limited 15.05.2017 2. Mr. Dharam Pal 137 30.10.2015 to 5,00,000/- Malhotra 15.05.2017 3. Ms. Ashima 137 30.10.2015 to 5,00,000/- Malhotra 15.05.2017 4. Mr. Sulabh 137 30.10.2015 to 5,00,000/- Malhotra 15.05.2017
Company Appeal (AT) No. 35 of 2018 -3-
The Tribunal taking into consideration the facts that the default has been made good after two years, reduced the fine as under:
S. Name of Fine U/s Fine U/s Total No. Applicant 92(5) 137 1. S. D. Bio-Tech 1.5 Lakhs 1.5 Lakhs 3 Lakhs Limited 2. Mr. Dharam Pal 1.5 Lakhs 1.5 Lakhs 3 Lakhs Malhotra 3. Ms. Ashima 1.5 Lakhs 1.5 Lakhs 3 Lakhs Malhotra 4. Mr. Sulabh 1.5 Lakhs 1.5 Lakhs 3 Lakhs Malhotra
Learned Counsel appearing on behalf of the Appellants submits that the Company and the Directors are not in position to pay Rs.3 Lakhs as their financial condition is not correct. In view of such oral submission, this Appellate Tribunal asked the Learned Company Secretary to file the statement of accounts of the Directors in support of such plea. However, the appellants do not want to disclose their respective amount as lying in their account. In such circumstances, it cannot be believed that the Appellants are not in a position to pay the amount or that they are bankrupt. This apart, as we find that the Tribunal has already reduced the penalty which is less than 1/3rd of the amount of the penalty proposed by the R.O.C, which is just and fair, we are not inclined to interfere with the impugned order. In absence of any merit, the appeal is dismissed.
(Justice S. J. Mukhopadhaya) Chairperson
(Justice Bansi Lal Bhat) Member (Judicial) am/uk Company Appeal (AT) No. 35 of 2018
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