2016 (11) TMI 126 - Tri - Companies Law

Offenses by directors - officers in default - compound of offence - Held that - It is not in dispute that the violation in question was made good by appointing a woman director however with a delay. The company was registered on 25.08.2004. The appointment of woman director was introduced in the Companies Act 2013 and relevant provision came into affect from 01.4.2014. So the delay of 180 days in complying with the said provision is justified on the part of the company. We also accept the delay in appointing the woman director did not cause any prejudice to any creditors of the company or public at large. Moreover it could not benefit the company in anyway. It is also not in dispute that the company has also informed the Registrar of Companies by filing Form GNL-2 though the Form required is GNL1. Since the offence in question is one committed by the company and all its 4 directors and we are permitting composition of the offence we thought fit and proper to permit compound of offence in respect of other two directors also i.e. Sri Sridhar Chandrasekaran Nivarthi and Sri Sabbineni Surendra. We are of the considered view that the instant case is a fit case to allow. Hence we have considered the delay of 180 days approximately with direction to all the applicants of the present application and also other 2 directors who are not impleaded to the present application namely Sri Sridhar Chandrasekaran Nivarthi and Sri Sabbineni Surendra to pay 50, 000/- each of them within a period of three weeks from the date of receipt copy of the present order. It is further directed that the company should file form GNL1 immediately. After the receipt of compounding fee the Registrar of Companies is directed to bring about the compounding of offence to the notice of the learned Special Judge for Economic offences-cum-VIII AMSJ Court Hyderabad for passing appropriate orders.

Summary

Issues:
Transfer of case to NCLT Hyderabad Bench, Application under Companies Act 2013 for compounding offence, Delay in appointing woman director, Liability of company and directors, Composition of offence for all directors, Payment of compounding fee.

Transfer of Case to NCLT Hyderabad Bench:
The case was initially filed before the Company Law Board, Chennai Bench but was transferred to NCLT, Hyderabad Bench due to jurisdictional reasons. The NCLT, Hyderabad Bench took the case on record and proceeded with the decision.

Application under Companies Act 2013 for Compounding Offence:
The application was filed under Section 149 of the Companies Act, 2013 seeking compounding of an offence committed by the company regarding the appointment of a woman director. The company admitted the offence, citing unavoidable circumstances and lack of deliberate intent to harm any stakeholders.

Delay in Appointing Woman Director:
The company, Jalpower Corporation Limited, appointed a woman director after a delay of six months from the prescribed date. The delay was justified based on the company's registration date and the introduction of the provision mandating a woman director in the Companies Act 2013.

Liability of Company and Directors:
As per the Companies Act 2013, the responsibility for appointing a woman director lies with the company and its Board of Directors. The Registrar of Companies rightly issued a show-cause notice to the company and all its directors for non-compliance with the provision.

Composition of Offence for All Directors:
Considering the offence was committed by the company and all its four directors, the Tribunal permitted the composition of the offence for the two directors not initially included in the application. The Tribunal waived the formal impleading of these directors to expedite the process.

Payment of Compounding Fee:
The Tribunal directed all applicants and the additional two directors to pay a compounding fee of ?50,000 each within three weeks. It also instructed the company to file the required form promptly. Once the compounding fee is received, the Registrar of Companies will inform the Special Judge for Economic Offences for further action.

This detailed analysis of the judgment covers the issues involved in the case, the legal provisions under the Companies Act, and the Tribunal's decision regarding the compounding of the offence committed by the company and its directors.