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2020 (4) TMI 473 - DSC - Companies LawHolding of Directorship in more than the maximum number of companies - continuation in holding such directorship even after one year from commencement of the Companies Act, 2013 - contravention of Section 165(3) which is punishable under 165(6) of the Companies Act, 2013. Whether the complainant has proved the documents filed with the complaint? - HELD THAT - The complainant has filed Ex. CW-1/1 which is computer printout dt. 24.08.17 downloaded from the MCA portal showing the details of DIN application. This document bears stamp of the ROC alongwith signatures of Dy./AROC - This document satisfied the requirement of admissibility of document as evidence U/s 397 of the Act. The document CW-1/2 also bears stamp of certification of the Registrar of Companies as provided under the Act. There is due compliance of section 397 of the Act to prove the evidence of documents kept by Registrar. Hence, the complainant has proved the documents as admissible evidence for the present prosecution. Whether CW-1 Ms. Shefali Gupta AROC is competent to depose in the present case? - HELD THAT - The complaint was filed by a public servant in his official capacity and admittedly, he was transferred during the pendency of the present case. Witness CW-1 Ms. Shefali Gupta is presently posted as Assistant Registrar of Companies and derives her knowledge on the basis of official record. The argument of CW-1 being an incompetent witness is rejected. Whether the complaint is barred by limitation? - HELD THAT - The offence U/s 165 of Companies Act is continuing in nature till the directorship of accused remains in more than 20 companies after 01.04.15 . As per Ex. CW-1/2 the accused was shown as director in more than 20 companies as on 26.07.17 i.e. the date when Ex. CW-1/2 was downloaded from MCA portal. However, complainant themselves have filed copy of letter dt. 23.02.17 of the accused which is Ex. CW-1/4 wherein accused has detailed that his directorship is within the permissible limit as provided U/s 165 of Companies Act - The resignation of accused has not been filed with the complainant office. Moreover, offence U/s 165 is punishable with fine only for each day during which the default continues. The present complaint is within limitation as offence U/s 165 of the Companies Act, 2013 is a continuing offence - the argument of Ld. Counsel that complaint is barred by limitation is humbly rejected. Whether the accused Roop Kishore Madan is/was Director in more than 20 companies on the date of filing of the complaint? - HELD THAT - The onus is upon the complainant to prove that accused Roop Kishore Madan was Director in more than the number of companies which is permissible under Section 165 of Companies Act, 2013. CW-1 has proved Ex. CW-1/1 Ex. CW-1/2 to show the Directorship of accused - The Ex. CW-1/1 was taken from the MCA portal which reflects name and address details of the accused along with DIN No. 00656697. Ex. CW-1/2 shows a list of companies in which the DIN number of accused is used for his appointment as Director. No evidence has been led to show submission of resignation before 01.04.15 by the accused - the complainant has proved the allegations against the accused beyond reasonable doubt. Accordingly, accused Roop Kishore Madan is convicted for the offence under Section 165(6) for contravention of Section 165(3) of the Companies Act, 2013 - decided against accused - application disposed off.
Issues Involved:
1. Whether the accused contravened Section 165(3) of the Companies Act, 2013. 2. Whether the documents filed by the complainant were duly proved. 3. Competency of CW-1 Ms. Shefali Gupta to depose in the present case. 4. Whether the complaint is barred by limitation. 5. Whether the accused was Director in more than 20 companies on the date of filing of the complaint. Issue-wise Detailed Analysis: 1. Contravention of Section 165(3) of the Companies Act, 2013: The accused was alleged to have been a Director in more than the maximum number of companies as stipulated under Section 165 of the Companies Act, 2013 as of 01.04.2015. Despite holding directorships exceeding the specified limit, the accused continued to hold such positions knowingly and willfully, thus contravening Section 165(3), which is punishable under Section 165(6) of the Act. The court found that the accused was indeed a Director in more than 20 companies as reflected in Ex. CW-1/2 and had not filed the requisite Form DIR-11 for resignation within the stipulated time. 2. Proof of Documents Filed by the Complainant: The complainant provided documents such as Ex. CW-1/1 (DIN application details) and Ex. CW-1/2 (proof of directorship), which were downloaded from the MCA portal and bore the stamp of the ROC along with signatures of Dy./AROC. The court held that these documents satisfied the requirements of admissibility under Section 397 of the Companies Act, 2013, and were thus deemed admissible evidence. 3. Competency of CW-1 Ms. Shefali Gupta to Depose: The defense argued that CW-1 Ms. Shefali Gupta was an incompetent witness as she had not filed the complaint and was not aware of the documents. However, the court rejected this argument, stating that as per Section 2(75) of the Companies Act 2013, an Assistant Registrar or Deputy Registrar is included in the definition of Registrar and can function on behalf of the Registrar of Companies. Ms. Shefali Gupta, being an Assistant Registrar, was competent to depose based on official records. 4. Limitation of the Complaint: The defense argued that the complaint was barred by limitation as the accused had resigned from the excess directorships by 01.08.2015, and the complaint was filed on 19.09.2017. The court, however, held that the offense under Section 165 of the Companies Act is a continuing offense, as the accused continued to hold directorships beyond the permissible limit until 31.07.2015. The court cited various judgments, including State of Bihar Vs. Deokaran Nenshi and Gokak Patel Volkart Ltd. Vs. Dundayya Gurushiddaiah Hiremath, to support the view that a continuing offense keeps the contravention alive day by day. Thus, the complaint was deemed within the limitation period. 5. Directorship in More Than 20 Companies: The court examined the evidence, including Ex. CW-1/1 and Ex. CW-1/2, which showed the accused's directorships. The accused failed to submit any resignation proof before 01.04.2015. As per Rule 16 of The Companies (Appointment and Qualification of Directors) Rules 2014, the accused had the responsibility to forward his resignation to the Registrar in Form DIR-11, which he did not fulfill. Consequently, the court found that the accused was indeed a Director in more than 20 companies, violating Section 165 of the Companies Act. Conclusion: The court concluded that the complainant had proved the allegations against the accused beyond reasonable doubt. The accused was convicted for the offense under Section 165(6) for contravention of Section 165(3) of the Companies Act, 2013. The judgment was ordered to be uploaded on the server with digital signatures.
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