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TMI Blog2016 (10) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 297 of the Companies Act, 1956 before the Hyderabad Bench of NCLT, praying the Tribunal to take a lenient view in compounding the offences committed under the Companies Act, 1956. 2. The brief facts of the case as averred in the Application are as follows: a. The Applicant Company is a Company which was incorporated on 16th December, 2002 in the name and style of Deccan Chronicle Holdings Limited under the provisions of the Companies Act, 1956 and registered as a Limited Company with the Registrar of Companies, Hyderabad (ROC) having CIN L22122AP2002PLC040110. b. The present Authorised Share Capital of the Company is Rs. 70,00,00,000/- (Rupees Seventy Crore only) divided into 35,00,00,000 Crore (Thirty Five Crore) Equity Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Director of the Company or his relatives(s) or a firm in which such Director or his relative is a partner or any other partner in such a firm or a private Company of which the Director is a member or Director. e. The Applicants submitted that the Applicant Company had carried out transactions like obtaining services/made payments from/to M/s Flyington Freighters Private Limited and the Company has transferred fund from time to time to M/s Flyington Freighters Private Limited towards maintenance charges of aircraft of an amount of Rs. 99,45,98,392.03/- during the period 16.10.2007 to 31.03.2011. f. The Applicants submitted that they did not obtain necessary prior approval of the Central Government for carrying out the above-men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the understanding and therefore called back its money and in compliance of which, Flyington Freighters Private Limited repaid the entire advance of Rs. Rs. 99,45,98,392.03/- h. Subsequently, a show cause notice RAP/209A/DROC (SRD)/CK/DCHL/Sec297/ 2014/ 1148/15 dated 05.08. 2014 was issued by the Deputy Registrar of Companies, Hyderabad for the states of Andhra Pradesh and Telangana. Accordingly, the Applicants stated that they have filed the present application suo-motu for compounding of offence under Section 621A of the Companies act, 1956. i. It is also submitted that the defaults committed by the Applicants are of technical nature, which were committed inadvertently and without any malafide intentions on the part of the Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is more than Rs. 1 crore. The matter was taken to the DCHL vide letter dated 17.05.2013 but the reply of the Company was not satisfactory. Therefore, the Inspecting Officer opinioned that DCHL and its Board of Directors have violated Section 297(1) and are liable for penal action under Section 629A of the Companies Act, 1956. 5. In the show-cause notice dated 05.08.2014, it was stated that when the matter regarding various violations/issues was taken up with the Company vide letter dated 17.05.2013, the Applicant Company wilfully did not reply to the above issue in their reply dated 04.06.2013. Although there was a reply by the Applicant Company on 04.07.2013, it did not seem satisfactory to the ROC as they failed to comply wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly known, Related Party transactions are gaining importance/prominence since a couple of decades. Related Party transaction may create potential conflict of interest which can result in benefit of the other party than the Company itself or its shareholders and thus which needs to be regulated. 8. The Applicants have submitted a ledger statement for the period of 1st April, 2008 to 31st March, 2012. Upon perusal of the same, it is observed that substantial amount of approx. Rs. 75 crores out ofRs. 99.45 crores advanced was received only in the month of March, 2011. 9. With regards to the averments made in the Application that it is not likely to cause any prejudice to the Applicant Company, its members or creditors is totally n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicants have not mentioned clearly as to how the offences were made good, and in the interest of justice, the prayer as sought by the applicants is premature and we are not inclined to consider the same at this stage. Therefore, the applicants are directed to approach the Central Government for approval of each of the related party transactions, which were entered with Flyington Frighters Private Limited, in accordance with section 297 of the Companies Act, 1956 and they are at liberty to approach this Tribunal subsequently in accordance with law. Further, we also direct the Registry to forward a certified copy of this Order to the Chairman, SEBI, Mumbai for appropriate action as deem fit in view of the facts of the case and quantum of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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