9911796707
TMI Blog2022 (8) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... proper system to ensure the compliance with all applicable laws and that such systems are adequate and operating effectively, the violation of which will drag the company and every officer in default to penal consequences including penalty up to Rs. 24 lakhs for the company and imprisonment to the officer in default for a term up to three years or with a fine up to Rs. 5 lakhs or with both - The company secretary in the instant situation has acted diligently and promptly to ensure compliance with the mandatory provisions by moving this Tribunal. To answer the question put forward whether the company secretary has the locus standi to file such application, the same is answered in affirmative by virtue of the above position of law, it is fairly clear that the company can be represented by the company secretary since he is a key managerial person under section 2(51) of the Companies Act, 2013, officer in default as per section 2(60) as per Companies Act, 2013 and as per the power given under section 205(1)(c) read with rule 10 clause 4 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 it is abundantly clear that the company secretary can represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of declaration in form No. BEN-1, the company has to file form No. BEN-2 with the Registrar of Companies, RoC within thirty days of receipt of such declaration. 4.2 Sub-section (4A) of section 90 of the Companies Act compels the companies to identify the individual and further requires him to comply with the provisions of the said section. It is the duty of the shareholders to show as to who is the real owner of the shares if they are not holding the shares in their individual capacity as per sub-section (5) of section 90 which mandates this prescription is reproduced here-below. 4.3 And further as per sub-section (5) of section 90 of the Act reproduced as below : (5) A company shall give notice, in the prescribed manner, to any person (whether or not a member of the company) whom the company knows or has reasonable cause to believe- (a) to be a significant beneficial owner of the company ; (b) to be having knowledge of the identity of a significant beneficial owner or another person likely to have such knowledge ; or (c) to have been a significant beneficial owner of the company at any time during the three years immediately preceding the date on which the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Delhi) and State Bank of Travancore v. Kingston Computers (I) P. Ltd. [2011] 163 C-C 37 (SC) ; [2011] 11 SCC 524, where in as per counsel it is a settled position of law that any suit or any other legal proceedings can be instituted by a director of officer of the company such as a company secretary only on the strength of valid board resolution duly passed authorizing them to do so and in the absence of such a board resolution, if a suit or legal proceedings is instituted, then necessarily there has to be a resolution by the board of directors of the company ratifying the defect, failing which the suit or legal proceedings cannot be maintained. 10. It was further argued that the company secretary has no locus standi to file a petition under section 90. It was propounded that the company secretary is not empowered by section 205 or any other provision of the Companies Act, 2013 to bypass or supersede the board of directors of a company and substitute the authority and powers of the board of directors in company secretary's own wisdom. 11. The applicant further alleges certain aspect on professional misconduct on the part of the company secretary. 12. Per contra the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d about compliance with the provisions of this Act, the rules made thereunder and other laws applicable to the company ; (b) to ensure that the company complies with the applicable secretarial standards ; (c) to discharge such other duties as may be prescribed. Read with rule 10(4) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 : 10. Duties of company secretary.-. . . (4) to represent before various regulators, and other authorities under the Act in connection with discharge of various duties under the Act ; 15. Heard both the sides, perused the documents filed on record ; the relief sought for is for the purpose of dismissing the main application on account of maintainability ; to answer this question for the locus standi of the respondent/petitioner in the main application and maintainability, we refer to the following provisions of the Companies Act, 2013. The aspect of officer in default is first dealt with in order to understand the position of the company secretary in the sequence of events which are followed herein. The definition under section 2(60) of the Companies Act, 2013 is reproduced below : 2. In this Act, u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Registrar of Companies, so as to ensure statutory compliances failing which he is the only officer who receives the show-cause notice from the Registrar of Companies so also the company. He would be required to face the penal consequences in the event of failure of compliances. He is answerable to the violations of the compliance requirement. Needless to mention that he is the watchdog of protecting the principles of corporate governance as well as the collective interest of all the stakeholders so also the company ; of course he is not a blood hound. The era in which the company secretary occupied the position of a glorified clerk in companies has expired consequent upon evolution of corporate governance and the various compliance requirement in a complex regime so as to protect the interest of the company as well as its various stakeholders. 17. There is no idealistic overstatement in holding that company secretary is required to act not only with adequate diligence but with proper and necessary diligence while discharging his duties by sounding the knell in order to alert all concerned including the board of directors on occasions where he apprehends deviations from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is an artificial person and functions on the basis of the board of directors and key managerial personnel. The law has categorically given clear framework in so far as ensuring the compliances and following good corporate governance practice is concerned to the company secretary by virtue of section 205 of the Companies Act, 2013. 21. To answer the question put forward whether the company secretary has the locus standi to file such application we answer the same in affirmative by virtue of the above position of law, it is fairly clear that the company can be represented by the company secretary since he is a key managerial person under section 2(51) of the Companies Act, 2013, officer in default as per section 2(60) as per Companies Act, 2013 and as per the power given under section 205(1)(c) read with rule 10 clause 4 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 it is abundantly clear that the company secretary can represent before various regulators and other authorities under the Act in connection with discharge of various duties under the Act. The National Company Law Tribunal being a quasi-judicial authority the company secreta ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
