2019 (12) TMI 1024 - Tri - Companies Law

Permission to revise Board's Report - Section 131(1) of the Companies Act, 2013, R/w Rule 77 of the NCLT Rules, 2016 - HELD THAT - By perusal of inadequacies of the Board Report dated 6th September, 2016 as noticed and pointed supra, are not serious in nature and happened due to inadvertence and if permitted to revise as sought for, would not prejudice interests of Company, its shareholders, or stake holders or violate any provisions of Companies Act, 2013. They have also declared that the Petitioner Company has been prompt in all annual filings with the RoC and all statutory Registers and records are maintained in accordance with the provisions of the Companies Act, 2013. It is satisfying that the instant Application/Petition is filed duly following extant provisions of Companies Act, 2013, and the Rules made thereunder and thus, by following principle of ease of doing business, we are inclined to dispose the Company Petition subject to compliance of provisions of Rule 77 of NCLT Rules, 2016. The Petitioner Company is permitted to revise its Board's Report for the Financial Year 2015-16 in terms of Section 131(1) of the Companies Act, 2013 R/w Rule 77 of NCLT Rules, 2016 - The Petitioner Company is directed strictly to follow all the prescribed procedure/conditions as laid down under Rule 77 of NCLT Rules, 2016.

Issues Involved:
1. Petition to revise the Board's Report for Financial Year 2015-16.
2. Compliance with Section 131(1) of the Companies Act, 2013 and Rule 77 of NCLT Rules, 2016.
3. Adequacy and inadvertence of omissions in the original Board's Report.
4. Impact on stakeholders and statutory compliance.

Issue-wise Detailed Analysis:

1. Petition to revise the Board's Report for Financial Year 2015-16:
The petitioner, M/s. Indiavidual Learning Private Limited, sought permission to revise its Board's Report dated 06th September, 2016, for the Financial Year 2015-16. The revision was necessitated due to certain omissions and inadequacies identified in the original report, which were discovered during a review for a proposed Reduction of Share Capital.

2. Compliance with Section 131(1) of the Companies Act, 2013 and Rule 77 of NCLT Rules, 2016:
The petition was filed under Section 131(1) of the Companies Act, 2013, and Rule 77 of the NCLT Rules, 2016. The petitioner complied with procedural requirements, including filing the petition within 14 days of the Board's resolution and undertaking to advertise the application as per Rule 77(4). The petition was advertised in newspapers and posted on the company's website.

3. Adequacy and inadvertence of omissions in the original Board's Report:
The omissions in the original Board's Report included:
- Financial highlights of the company's performance.
- Details of subsidiaries, joint ventures, or associate companies.
- Information on deposits, frauds reported by auditors, and Employee Stock Option Scheme disclosures.
- Explanations for qualifications made by the auditors and compliance with the Sexual Harassment of Women at Workplace Act.
- Correct wording for the Directors' Responsibility Statement.
These omissions were deemed inadvertent and not prejudicial to stakeholders.

4. Impact on stakeholders and statutory compliance:
The tribunal found that the omissions were not serious and permitting the revision would not prejudice the interests of the company, its shareholders, or stakeholders. The petitioner had been prompt in annual filings and maintained statutory records as per the Companies Act, 2013. The tribunal noted the absence of any representation from the Registrar of Companies (RoC) against the petition, implying no objections.

Final Judgment:
The tribunal allowed the petitioner to revise its Board's Report for the Financial Year 2015-16, subject to compliance with Rule 77 of NCLT Rules, 2016. The tribunal emphasized that this order does not absolve the company of any other violations, and statutory authorities may take appropriate action as per the law.

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