9911796707
TMI Blog2014 (11) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act. 2. I have heard the arguments of learned counsel for the petitioner. The respondent's counsel remained absent. 3. On perusal of the complaint averments, it is noticed that the Registrar of Companies lodged a complaint making allegations that accused No.3 at the relevant point of time was a director of Accused No.1- public company. It is contended that the financial year of the company of accused No.1 ends on 31st of August every year and relevant financial year was 01.09.2004 to 31.08.2005 and for which year, the balance sheet and profit and loss accounts for the financial year ending 31.08.2005 of the company were required to be filed by accused No.1 within 30 days from the day when the balance sheet and profit and loss ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with a copy of all documents which are required by this Act to be annexed or attended to such balance-sheet or profit and loss account: Provided that in the case of a private company, copy of the balance-sheet and copy of the profit and loss account shall be filed with the Registrar separately: Provided further that,- (i) in the case of a private company which is not a subsidiary of a public company, or (ii) in the case of a private company of which the entire paid- up share capital is held by one or more bodies corporate incorporated outside India, or (iii) in the case of a company which becomes a public company by virtue of section 43A, if the Central Government directs that it is not in the public interest that any person other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , extend to five hundred rupees for every day during which the default continues. Sub-section (2) says that, for the purposes of this section and sections 159, 160 and 161, the expressions "officer" and "director" shall include any person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act. This provision also makes it clear that the officer and the director, who in accordance with the instructions issued by Board of directors is defaulted in complying with the provisions, they are liable for punishment. 6. So far as Section 220(3) is concerned, specifically it does not say anything about the director, however, it goes without saying, if the director of the company is the complyi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e act or the directions or instructions are not there to the directors from the Board of directors, they cannot be called as 'officer in default'. Therefore, there must be specific allegation in the complaint that a director who is made as an accused in the complaint is either a managing director or whole time director or manager or secretary or the director who is having accustomed to the act or directed by the Board of directors as compliance officer. 8. In the absence of such specific allegations in the complaint, it cannot be said that the petitioner who is a director of the company is liable and can be prosecuted. Section 220(3) has to be established by means of facts in the complaint averments. In the absence of such averments in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to Managing Director/Manager/Board of Directors as the case may be. 10. If by reading the circular as per paragraphs 5 and 6, it goes without saying that only on the basis of person being the director of the company, he should not be fasten with the liability but there should be specific responsibility entrusted to him by the company that if he commits any default in making such compliance, then only the said person is liable under the said provision. In my opinion, the said provisions and circular equally applicable to Section 220 also. Even otherwise, Section 220(3) is very much clear that the director should be accustomed with the act that means to say that he should be the complying officer or he should be fastened with such responsi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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