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IN THE HIGH COURT AT CALCUTTA
RAVI KRISHAN KAPUR
Shyam Sel and Power Limited – Appellant
Versus
Registrar of Companies, West Bengal – Respondent
| Table of Content |
|---|
| 1. challenging a notice under the companies act. (Para 1 , 2) |
| 2. arguments regarding the validity of notices. (Para 3 , 4) |
| 3. court observations on technical violations and limitations. (Para 5 , 7 , 8 , 9 , 10 , 12 , 13 , 14) |
| 4. ratio regarding limitation period for prosecutions. (Para 6 , 11) |
| 5. conclusion allowing the petitioners' application. (Para 15) |
JUDGMENT :
RAVI KRISHAN KAPUR, J.
1. This is an application under section 463(2) of the Companies Act, 2013 challenging a notice dated December 20, 2024 bearing reference No. ROC/TS/Inquiry-206/052962 issued by the Assistant Registrar of the Companies West Bengal, Ministry of Corporate Affairs (the impugned notice).
2. Briefly, the company namely, Shyam Sel and Power Limited is engaged in the business and sale of iron and steel. The petitioners are the present directors of the company. By a notice dated 8 April 2021, the respondent authorities had sought for financial information and explanations under section 206(1) of the Act. The company duly replied to the notice by a letter dated 25 June 2021 and provided a point wise reply. Subsequently, after a period of eighteen months, the company received a summons dated 14 Marc
The issuance of regulatory notices for technical violations under Company law must respect limitation periods and demonstrate substantive grounds for action rather than mechanical issuance of notices....
The notice for financial reporting violations was quashed due to it being time-barred and issued without sufficient consideration of the company's responses.
The court emphasized that minor technical violations of accounting regulations do not warrant prosecution when there is no evidence of malfeasance or bad faith by the directors.
The principle of audi alteram partem mandates that a company must be given a reasonable opportunity to respond to show cause notices before any penal action is taken under the Companies Act.
The importance of providing a reasonable opportunity of being heard and considering comprehensive detailed replies before taking further action under the Companies Act, 2013.
A notice issued beyond the statutory limitation period for enforcement actions is invalid and quashed.
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