2023 (5) TMI 202 - HC - Companies Law

Prosecution proceedings against the Director - Non-submission of financial statement within the stipulated time with registrar of companies - not having registered office capable of receiving and acknowledging the communication - AGM has not been held and its proceedings has not been forwarded to Registrar - non-submission of 3 copies of Balance Sheet and Profit and Loss A/c with the Registrar - non-submission of annual return and holding of annual general meeting in the relevant year. HELD THAT - This is a case where admittedly petitioners worked as Directors of the Company between the period 30th September, 1992 till 19.04.1995 and 05.05.1998 and then resigned. In 2015, under the mistaken belief, complaint was filed against present petitioners also for alleged non-compliance of Section 12 of Act, 2013 for which penalty is provided under Section 12 (8) of the Act, 2013 - Admittedly, alleged non-compliance is for the period 2014 where some defaults on the part of the Company are made. Admittedly, petitioners resigned w.e.f. 19.04.1995 and 05.05.1998. Much thereafter, alleged defaults have been committed. Considering the submission and going through the documents appended thereto as well as the reply filed by the respondent, it appears that petitioners made out their case for interference. Once, t hey resigned in the years 1995 and 1998, then they cannot be fastened with any liability for a period of 2014. Petition allowed.

Summary

Issues involved:
The judgment involves the alleged violations of different provisions of the Companies Act, 1956 and Companies Act, 2013 by the petitioners, leading to complaints filed by the Registrar of Companies.

Violation of Section 12 (1) of Companies Act, 2013:
The petitioners, former Directors of a company, were accused of non-compliance with Section 12 (1) of the Companies Act, 2013, regarding the absence of a registered office capable of receiving communications. The petitioners resigned from their directorship in 1995 and 1998, and subsequent proceedings against them were deemed baseless due to their earlier resignation and lack of involvement in the company's affairs.

Legal Proceedings and Defense:
The petitioners, through their counsel, argued that the allegations against them were unfounded as they had resigned from their directorship well before the alleged violations occurred. They presented evidence of their resignation acceptance by the Registrar of Companies and referenced previous exoneration by the Securities and Exchange Board of India (S.E.B.I.). The defense highlighted the lack of involvement of the petitioners in the company's affairs post-resignation.

Court's Analysis and Decision:
The court examined the facts and considered the previous findings of S.E.B.I. that had exonerated the petitioners. It was noted that the alleged violations occurred after the petitioners' resignation, making them not liable for the offenses under Section 12 (1) of the Companies Act, 2013. Citing legal precedents, the court invoked its power under Section 482 of the Cr.P.C. to quash the complaints and proceedings against the petitioners. Consequently, the petitions were allowed, and the complaints and related proceedings were quashed specifically for the petitioners, while the trial was directed to proceed for the other accused individuals in accordance with the law.