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2019 (6) TMI 574 - HC - Companies LawMaintainability of Complaint - no specific averments in the complaint that the accused was in charge and was responsible for conduct of the business of the company - HELD THAT - It is seen from the entire complaint there is no specific averments and allegations as against the company as well as other directors. The allegations are also very vague and not clear whether the petitioners are responsible for non compliance as the directors of the company. Further it is also seen that there is no specific averments as that the officer who is in default to attract within the meaning of Section (2) (60) (vi) of the Companies Act, 2013. The complainant failed to state specific averments. As such, complaint cannot be sustained as against the petitioners. Though the dictum laid down under the Negotiable Instruments Act, the legal position is clear that there should be specific averments in the complaint that the accused was in charge and was responsible for the conduct of the business of the company. Therefore, the complaint cannot be sustained as against the petitioners - When there is no specific averments as to officer who is in default to satisfy the provision under Section 2 (60) (vi) of the Companies Act, 2013, no specific averments in the complaint. Therefore, the complaint is not at all sustainable as against the petitioners. Petition allowed.
Issues:
Quashing of E.O.C.C.No.570 of 2017 under the Companies Act, 2013. Analysis: The petitioners, accused in E.O.C.C.No.570 of 2017, filed a petition seeking to quash the proceedings. The first petitioner was a company, and petitioners 2 to 6 were its directors. The complaint alleged non-compliance with the Companies Act by failing to furnish information or documents. The petitioners argued that there were no specific averments in the complaint to establish their responsibility for non-compliance. They contended that they had provided information and explanations as required by the Act. The counsel for the petitioners relied on relevant judgments to support their case, emphasizing the necessity of specific averments to implicate individuals in such cases. The Special Public Prosecutor for the respondent argued that the petitioners were liable under the Companies Act for not responding to notices seeking clarification. However, the court noted that the complaint lacked specific averments against the company and its directors. It highlighted the importance of clearly stating how a director is responsible for the company's conduct to sustain such allegations. The court referenced a Supreme Court decision emphasizing the need for specific averments regarding the accused's role in the company's business. Citing the legal position established by previous judgments, the court emphasized the necessity of specific averments in complaints to implicate individuals in company-related offenses. Without clear allegations establishing the accused's responsibility for the company's conduct, the complaint could not be sustained. Consequently, the court decided to quash the proceedings in E.O.C.C.No.570 of 2017, as the complaint did not meet the required legal standards. The judgment was in favor of the petitioners, leading to the closure of the connected miscellaneous petitions.
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