Under Section 441 of the Companies

Act, 2013

In the matter of

Smooth Line Writing Instruments

Private Limited

607, 6^th Floor, Neelkanth Corporate Park Kirol Road, Vidyavihar (W),

Mumbai 400 086

… Petitioner No. 1

Mr. Manish Babulal Shah,

Managing Director of Petitioner

No. 1

B/1107, Shankheshwar Tower, Shanti Sudha Path, Jain Temple, Garodia Nagar, Ghatkopar (E),

Mumbai – 400 077 … Petitioner No. 2

v/s

Registrar of Companies, Mumbai,

Maharashtra

Everest Building, 100, Marine Drive,

Mumbai 400 002

... Respondent

Order delivered on 19/04/2024

__________________________________________________________________________________________

Coram:

Hon’ble Member (Judicial), SH. Justice V.G. Bisht Hon’ble Member (Technical) SH. Prabhat Kumar Appearances (via videoconferencing):

For the Petitioner : Mr. Avinash Khanolkar, Advocate a/w Ms. Surekha Yadav, Advocate For the RoC : Mr. Shivraj Ranjeri, AROC, Mumbai

O R D E R

1) Both sides present and the Report filed by the Respondent is also available on record. In that view of the matter, we have perused the Company Petition.

2) This is a Company Petition filed on 10.10.2023 under Section 441 of Companies Act, 2013 by Petitioners for compounding the default u/s Section 135 r/w 134(3)(o) committed by the Company and its Directors.

Applicants in Default:

1. Smooth Line Writing Instruments Private Limited - Company

2. Falgun Babulal Shah - Director

3. Manish Babulal Shah - Managing Director

4. Swetal Manish Shah - Director __________________________________________________________________________________________

Section Violated:

Section 135(2) and 135(5) r/w 134(3)(o) of the Companies Act, 2013.

Nature of Violation:

3) As per the submission made in the Report of Registrar of Companies, Mumbai and from the submissions made in the Compounding Application, it is observed that the object of the Company is to carry on business of buying, selling, importing, exporting, manufacturing stockiest and dealings in pen, Pencils, Ball Pen, Refill all types of ink and other writing instruments of whatsoever nature.

4) Further, the Companies Act, 2013 introduced Section 135 on Corporate Social Responsibility (hereinafter referred to as "CSR") wherein every Company having Net Worth of Rupees Five Hundred Crore or more' or turnover of Rupees One Thousand Crore or more or a Net Profit of Rupees Five Crore or more during any Financial Year shall constitute a CSR Committee and that shall ensure that the Company spends, in every Financial Year, at least two per cent of the Average Net profits of the Company made during the three immediately preceding Financial Years, in pursuance of its CSR Policy.

5) It is further submitted that the Applicant had received notice u/s 206(1) of the Companies Act, 2013 dt. 23.05.2016 stating the eligibility of the __________________________________________________________________________________________

Applicant Company for not carrying out Corporate Social Responsibility for the Financial Year 2014-2015 and calling for information for the same.

6) Pursuant to Section 135 of the Companies Act, 2013 r/w Rules thereon, the Company was required to spend an amount to the tune of Rs. 14,44,180.28, which is 2% of average net profit before tax for the year 2011-12, 2012-13 and 2013-14 towards CSR activities in the F.Y. 2014- 15. However, since, the CSR activity projects were yet to be identified by the management, no CSR expenditure was incurred by the Company during the F.Y. 2014-15. Further, pursuant to Section 134(3)(o) r/w the second proviso of Section 135(5) of the Companies Act, 2013, the Company had also failed to provide the disclosures in the Directors Report for the Financial Years 2014-15 and 2015-16.

7) It is submitted that the Company has spent amount of Rs. 63,66,788/- on CSR in the Financial Year 2016-2017 and an amount to the tune of Rs.

41,25,000/- on CSR in the Financial Year 2017-18.

8) The Petitioners submit that they have not intentionally, deliberately and willfully violated their obligations under Section 135