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TMI Blog2020 (9) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... ts subsidiary company DBFS Derivatives and Commodities Ltd., on April 21, 2007 is hit by section 42(1) of the Companies Act, 1956. Therefore, by each officer in default as members of the board of directors is subjected to a fine of ₹ 5,000 (rupees five thousand only), that too as a deterrent for not repeating the impugned default in future. The imposed remittance shall be made by the petitioner in favour of Pay and Accounts Officer, Ministry of Corporate Affairs, Chennai within three weeks from the date of receipt of this order. Application disposed off. - C. P. No. 13/KOB/2020 - - - Dated:- 16-6-2020 - Ashok Kumar Borah (Judicial Member) And Veera Brahma Rao Arekapudi (Technical Member) For the Petitioner : Jayan (K.) , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany to its subsidiary company is hit by section 42(1) of the Act, 1956. 3. According to the provisions of section 42 of the Companies Act 1956 : 42. Membership of holding company.-(1) Except in the cases mentioned in this section, a body corporate cannot be a member of a company which is its holding company and any allotment or transfer of shares in a company to its subsidiary shall be void. (2) Nothing in this section shall apply- (a) where the subsidiary is concerned as the legal representative of a deceased member of the holding company ; or (b) where the subsidiary is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isory service and manage portfolio of securities. 5. It is further stated that the petitioner issued and allotted 1,00,000 fully paid equity shares of ₹ 10 each aggregating to ₹ 10,00,000 at a premium of ₹ 30 per share, to its subsidiary company DBFS Derivatives and Commodities Ltd. (previously known as Select Derivatives and Commodities (India) Ltd.). Certified copies of the special resolution passed under section 81(1A) of the Companies Act, 1956 at the extraordinary general meeting of the members of the company held on December 11, 2006 and board resolution dated April 21, 2007 for allotment of shares, list of allottees, return of allotment filed with the Registrar of Companies in Form 2 and its receipt are annexed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner to compound the violation of section 42(1) of the Companies Act, 1956. Findings : 8. The Bench has gone through the pleadings on record and the submissions made by learned counsel for the petitioner herein and accordingly came to the conclusion that the petitioners/defaulters herein had violated the provisions of section 42(1) of the Act. For such violation the punishment is provided under section 629A of the Companies Act, 1956 : 629A. Penalty where no specific penalty is provided elsewhere in the Act.-If a company or any other person contravenes any provision of this Act for which no punishment is provided elsewhere in this Act or any condition, limitation or restriction subject to which any approval, sanction, consent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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