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TMI Blog2022 (8) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case. 2. The respondent in this matter is the company secretary of M/s. Technology Frontier India P. Ltd. 3. In Company Petition No. 75(CHE) of 2021 (referred to as main application hereinafter) filed by the company secretary Mr. Sriram S. Mayank Agarwal has been referred as respondent No. 5. Respondent No. 5 is the nominee director appointed by Crest Investment Holdings Pte Ltd., on the board of directors of the petitioning company. 4. Background to the main petition C. P. No. 75/CHE/2021 4.1 The main petition is pertaining to ensuring compliance with mandatory requirements in the Companies Act, 2013 under the provisions of section 90 of the Companies Act, 2013 which prescribes that every individual who holds beneficial interest over the company shall make a declaration specifying the nature of the interest in form No. BEN-1 within a period of 90 days of commencement ; also every individual, who subsequently becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change shall file a declaration in form No. BEN-1 to the reporting company, within thirty days of acquiring such significant beneficial ownership or any chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sub-section (5) shall be given by the concerned person within a period not exceeding thirty days of the date of the notice." 6. The present application I. A. No. 2 of 2021 in C. P. No. 75/CHE/2021 was filed to adjudicate on record the maintainability of the main petition. 7. It is alleged by the applicant that the company alone is empowered to apply to this Bench under section 90(7) of the Companies Act, 2013. It is submitted that the company acts through its board of directors and that in the present case the company secretary has not taken any approval from the board of directors to file the present petition. The applicant further goes on to state that there is no board resolution nor has any delegated authority to present the present petition. 8. It is further the submission of senior counsel representing the applicant that company acts through the board of directors and section 179 of the Companies Act, 2013 empowers the board of directors to exercise all such powers and to do all such acts and things that a company is authorized to exercise and do. 9. In support of the arguments put forward, senior counsel relied upon the judgment of Nibro Ltd. v. National Insurance Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the facts of the case." It is the version of the respondent that the case of United Bank of India v. Naresh Kumar O. A. No. 463 of 2014 wherein paragraph 10 that even in the absence of any formal letter of authority or power of attorney having been executed, a person referred to in rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the Corporation. This therefore implies that, the company secretary, being an officer under rule 29 have the authority to enter into pleadings on behalf of the company in the absence of a formal authorization from the board of the company more significantly to ensure compliance by or on behalf of the company in which he has been appointed in that capacity. 14. The respondent-company secretary goes on to refer the provisions of the Companies Act, 2013 and the rule wherein he submits that by virtue of section 205 of the Companies Act, 2013 he is authorized to represent and that it is his duty to do so. Section 205 of the Companies Act, 2013 along with rules are quoted as under : "205. Function of company secretary.-(1) The functions of the company secretary shall include,- (a) to report to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sional capacity ; (vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board of participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance ; (vii) in respect of the issue or transfer or any shares of a company, the share transfer agents, Registrars and merchant bankers to the issue of transfer." Now coming to the definition of who is the key managerial personnel under the Companies Act, 2013. The definition is reproduced below : "(51) 'key managerial personnel', in relation to a company, means- (i) the Chief Executive Officer or the managing director or the manager ; (ii) the company secretary ; (iii) the whole-time director ;" 16. The company secretary is the secretary of the company ; the secretary of the company is the secretary of the company ; he is not the secretary of shareholders. He is appointed under the Companies Act pursuant to a board resolution in respect of which the appointment is given effect by filing the prescribed form with the Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upees but which may extend to five lakh rupees, or with both." 18. Therefore, clause (f) of sub-section (5) of section 134 read with sub-section (5) makes it a mandatory prescription to devise and put in place 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. 19. Accordingly, we hold that the company secretary in the instant situation has acted diligently and promptly to ensure compliance with the mandatory provisions by moving this Tribunal. 20. It is important to distinguish that in the present case the main application C. P. No. 75/CHE/2021 has been filed by the company secretary in employment and from the above it clearly envisages the role of a company secretary to be a key managerial personnel who shall also be responsible for all the action against the company if there is any default on its side ; further the company is an artificial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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