1968 (1) TMI 33 - HC - Companies Law

Summary

Issues:
- Non-compliance with filing requirements under section 303 of the Companies Act
- Imposition of penalty for delay in filing
- Validity of additional fee under section 611(2) of the Companies Act
- Interpretation of constitutional provisions regarding penalties

Non-Compliance with Filing Requirements:
The case involved a complaint under section 303 of the Companies Act due to a delay in submitting Form No. 33 regarding a change in directorship. The prosecution alleged that the form was filed after a significant delay, leading to the imposition of an additional fee by the Registrar. The accused directors were found guilty of non-compliance, as section 303(2) mandates companies to notify any directorial changes within twenty-eight days. The court emphasized that even if the change was included in the annual return under section 159, separate notification under section 303(3) was necessary, making the accused liable for penalties.

Imposition of Penalty for Delay:
The accused directors were initially fined by the City Magistrate for the delay in filing the required form. Upon appeal, the fine was reduced but upheld by the Additional District and Sessions Judge. The court justified the penalty, stating that the imposition of fines was reasonable given the non-compliance with statutory requirements under the Companies Act.

Validity of Additional Fee under Section 611(2):
A key contention raised was regarding the demand for an additional fee of Rs. 112.50 under section 611(2) for the delayed registration of the directorial change. The defense argued that this demand was invalid as the section was introduced after the default occurred. However, the court clarified that section 611 primarily pertains to revenue charges and does not constitute a penalty under constitutional provisions.

Interpretation of Constitutional Provisions Regarding Penalties:
The defense invoked Article 20(1) of the Indian Constitution, which prohibits the imposition of penalties greater than those existing at the time of the offense. The court differentiated between revenue demands and penalties, highlighting that the additional fee under section 611(2) was a legitimate charge for delayed filings, not a punitive measure. Consequently, the court dismissed the revision, upholding the validity of the additional fee and the penalties imposed for non-compliance with filing requirements.