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2018 Supreme(NCLAT) 389
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
A.I.S. CHEEMA, MEMBER (JUDICIAL), BALVINDER SINGH, MEMBER (TECHNICAL)
IN THE MATTER OF:
M/s. Sanchar Tele Systems Limited – Appellant
Versus
Registrar of Companies, NCT of Delhi & Haryana – Respondent
Company Appeal (AT) No.411, 412 of 2017
Decided on : 09-03-2018
For the Appellant :Shri Krishnendu Datta and Shri Rahul Malhotra, Advocates
For the Respondent: Ms. Aparna Mudiam, Adv
JUDGMENT :
A.I.S. Cheema, J. :
Both these appeals relate to same Appellant No.1 Company with regard to defaults committed, and separate compounding applications filed for the different defaults which have been disposed. The RoC has filed common affidavit in reply in both the appeals. Both the appeals have been heard together and are being taken up for disposal together.
2. Company Appeal (AT) No.411 of 2017
This appeal is against impugned order dated 18.08.2017 passed in CP 16/110/17 by National Company Law Tribunal, New Delhi (‘NCLT’ in short).
3. The Company Petition was filed by the Appellants under Section 441 of the Companies Act, 2013 (new Act) for offence punishable under Section 383A of the Companies Act, 1956 (Old Act – in short) read with Section 203 of the Companies Act, 2013 (New Act – in short). Appellants prayed to compound offence of the default in appointment of whole-time Secretary during the period from 01.04.2011 to 31.03.2017. The Appellants claimed that earlier they could not find suitable candidate but that they had now appointed a whole-time Secretary and sought compounding. The default Section attracted here is Section 203 of the New Act corresponding to old Section 383A(1A) of the Old Act. The default spanned the period when old Act was in force and continued even after the new Act came into force.
4. The NCLT considered the provisions and observed:
“In terms thereof, the RoC has recommended the fine as under section 383A (1A) of the 1956 for Rs.547500/- on the company and each of the applicants for 1095 days (being the period 01.04.2011 to 31.03.2014) and under Section 205(3) of the 2013 Act for Rs.5 Lakhs on the company and Rs.11,44,000/- on each of the other applicants for 1095 days (being the period 01.04.2014 to 31.03.2017).”
5. The NCLT recorded reasons and took a lenient view to impose one fifth of the maximum fine treating the same as just and equitable. Following fine was imposed on Appellants 1 to 5: -
| S. No.
| Name Defaulter | Fine Under Section 383A(1A) (Old Act) | Fine Under Section 203(5) (New Act) | Amount (in Rs.) |
| 1. | Sanchar Telesystems Limited | Rs.1,10,000/- | Rs.1,00,000/- | Rs.2,10,000/- |
| 2. | Mr. Chandra Kant Bhardwaj | Rs.1,10,000/- | Rs.2,25,000/- | Rs.3,35,000/- |
| 3. | Mr. Sanjay Gupta | Rs.1,10,000/- | Rs.2,25,000/- | Rs.3,35,000/- |
| 4. | Mr Suresh Chandra Gupta | Rs.1,10,000/-
| Rs.2,25,000/- | Rs.3,35,000/- |
| 5. | Ms. Priyanka Gupta | Rs.1,10,000/- | Rs.2,25,000/- | Rs.3,35,000/- |
NCLT directed that the Directors/Officers shall pay the fine from their personal accounts.
6. The learned counsel for the Appellants referred to copy of application being Company Petition 16/110/2017 to submit that the Appellants had mentioned in the Company Petition that the Appellant No.2 is the whole-time Director and Appellant Nos.3 to 5 were Directors. According to the learned counsel, only the Company and whole-time Director of the Company could have been held in default and not the other Directors. It has been argued that as per the provisions of the old and new Companies Acts, it is only the whole-time Director read with definition of “officer who is in default” could be responsible and not all the Directors. According to the learned counsel even if before NCLT, this legal question was not raised, the same can be raised in this appeal. Further submission is that the penal provisions have to be construed strictly and if the provisions are applied strictly, the Appellants 3 to 5 could not be held responsible. He submits that even if the Appellant committed mistake in making the application for compounding on behalf of all the Appellants, by that itself, liability cannot be imposed, and NCLT was bound to apply correctly.
7. Company App
