2014 (7) TMI 142 - Board - Companies Law

Registration u/s 125 - mortgage and creation of charge - Execution of Form 8 - Held that - respondent No 1 Company authorised one of its director to execute the documents and sign the necessary forms in respect of mortgage and creation of charge. The director who was authored to sign Form 8 is also stated to have appended his digital signature on the Form 8 creating the charge. Thus, the R1 Company has fulfilled its obligations and has not made any default which requires the Bench s indulgence to direct the R1 Company and any of its officers to make good the default. The director who was authorised by the R1 Company to execute the documents is stated to be a director of another company which is a defaulting company. In the said circumstances, it is for the petitioner company to ventilate its grievances against the R1 Company. Seeking directions from the Bench by invoking jurisdiction as vested under section 614 is my view is completely misplaced. As stated supra the company and its officers who has been authorised to file Form 8 for creation of charge has complied in creation of charge and in filing of Form 8 with ROC. On the other hand, from the pleadings it is seen that the company s inability to file Form 8 is due to MCA online services not accepting the digital signature of the director who has signed the Form 8 due to his default in some other company. In such a situation no directions can be issued against R2 as Section 614 of the Act envisages issue of directions by Company Law Board only against the company and its officers who are in default and not against anyone else. In view of the reasons as stated above the petition has miserably failed both on facts and on law and the petitioner company is not entitled for any reliefs as prayed for - Decided against assessee.

Summary

Issues:
1. Registration of mortgage under section 125 of the Companies Act.
2. Compliance with filing Form 8 for registration of charge.
3. Invocation of jurisdiction under section 614 of the Companies Act.

Analysis:
1. The petitioner sought direction to register a mortgage created in its favor by the respondent company under section 125 of the Companies Act. The respondent company had guaranteed repayment of loans and mortgaged its property. Despite fulfilling formalities, the petitioner faced challenges in registering the charge due to the director's association with a defaulting company. The court found the respondent had not defaulted and dismissed the petition as the company had complied with obligations.

2. The petitioner invoked section 614 of the Companies Act, seeking direction for compliance with filing Form 8 for registration of the charge. The court noted the respondent company had authorized its director to execute necessary documents, including Form 8. However, the director's digital signature faced rejection due to his involvement with a defaulting company, leading to the inability to upload the form. The court held that as the company and its authorized officers had fulfilled their obligations, no directions could be issued against them.

3. The court analyzed the jurisdiction invoked under section 614 and concluded that the petitioner's grievances against the respondent company were misplaced. It emphasized that the provision allows the Company Law Board to issue directions only against defaulting companies and their officers. As the respondent had not defaulted in fulfilling the requirements for registering the charge, the court dismissed the petition, stating it had failed on both factual and legal grounds. No costs were awarded in the matter.