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2017 (1) TMI 828 - Tri - Companies LawCompounding for violation of provisions of section 75 of the Companies Act, 1956 - Held that - We have seen the certified extract copy of the Board Resolution dated 31st March 2015 wherein the Board has passed a resolution to file necessary Compounding Application. We have seen the Memorandum and Articles of Association of the company, copy of Balance Sheet for the year ended 31/03/2012 and copy of the Return of Allotment filed in Form PAS-3, Challan, Board Resolution for allotment and List of Allottees and after going through the Company Petition under section 621A of the Companies Act, 1956 and further submissions made by the Practicing Company Secretary for the Applicant and the observations of the Registrar of Companies, we hereby levy the compounding fee on the Applicant as set out in the table. As the compounding fee has been remitted by the Applicants, the offence stated in the petition is compounded. A copy of this Order be sent to Registrar of Companies, Karnataka, Bengaluru for appropriate action.
Issues:
Violation of provisions of Section 75 of the Companies Act, 1956 - Compounding application for delay in filing Return of Allotment. Analysis: The case involved a petition filed before the National Company Law Tribunal, Bengaluru, under Section 621A of the Companies Act, 1956, regarding the compounding for violation of provisions of Section 75 of the Companies Act, 1956. The Managing Director of the company sought compounding for a delay in filing the Return of Allotment, which led to a violation of Clause (a) of Sub-section (1) of Section 75. The company was incorporated as a Private Limited Company in 1993 and became a Public Limited Company in 2007, with specific objectives related to various services in the field of drug discovery, biotechnology, pharmaceuticals, and more. The petition detailed that the company conducted an Extra Ordinary General Meeting in 2011 to issue Bonus Shares, but due to an inadvertent error in filing Form 2 for allotment of bonus shares, a defective list of allottees was attached. This error led to a delay of 1168 days in filing the Return of Allotment, resulting in a violation of Section 75. The Practicing Company Secretary representing the company explained that the default in filing was beyond the company's control, and the subsequent corrected filing was done with the intention to rectify the mistake. The Tribunal considered the submissions, reviewed relevant documents including Board Resolutions, Balance Sheets, and the corrected Return of Allotment. After assessing the case, the Tribunal levied a compounding fee on the Managing Director for the violation. The compounding fee was calculated based on the number of days of delay and the specified amount per day, resulting in a total fee of Rs. 2,33,600. The Managing Director complied with the order by paying the compounding fee through a Demand Draft, leading to the compounding of the offence as per the Tribunal's decision. In conclusion, the Tribunal accepted the compounding fee payment and directed that a copy of the order be sent to the Registrar of Companies, Karnataka, Bengaluru for necessary action. The case highlighted the importance of timely compliance with statutory requirements under the Companies Act, emphasizing the need for diligence in filing necessary documents to avoid violations and subsequent penalties.
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