Tribunal Orders 4,88,000 Compounding Fee for Companies Act Violation

The Tribunal imposed a compounding fee of Rs. 4,88,000 on the applicant for violating Section 165 of the Companies Act, 2013 by holding directorship in more than 20 companies. The fee was calculated at Rs. 2,000 per day for 244 days. Despite the non-filing of Form DIR-12 by Yashoda Special Metals P. Ltd., the Tribunal acknowledged the applicant's good faith resignation and voluntary compliance, leading to a lenient view in compounding the offence. The applicant paid the fee, and the order was forwarded to the Registrar of Companies, Hyderabad for necessary action.

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Issues Involved:
1. Violation of Section 165 of the Companies Act, 2013.
2. Compounding of the violation under Section 441 of the Companies Act, 2013.
3. Calculation of the compounding fee and the period of violation.
4. Non-filing of Form DIR-12 by Yashoda Special Metals P. Ltd.

Issue-wise Detailed Analysis:

1. Violation of Section 165 of the Companies Act, 2013:
The applicant was a director in 27 companies as of March 31, 2014, exceeding the limit prescribed under Section 165 of the Companies Act, 2013, which restricts a person from holding directorship in more than 20 companies. The applicant was required to resign from at least seven companies within one year from the commencement of Section 165, i.e., by March 31, 2015. The applicant complied by resigning from eight companies on March 31, 2015, bringing the total number of directorships to 19, within the prescribed limit.

2. Compounding of the Violation under Section 441 of the Companies Act, 2013:
The applicant sought compounding for the violation of Section 165. The Registrar of Companies, Hyderabad, reported that the applicant was in violation of Section 165(3) as he was a director in more than 20 companies after the commencement of the Act. The applicant contended that the delay in compliance was due to Yashoda Special Metals P. Ltd. not filing Form DIR-12 to notify his resignation. The Tribunal considered the applicant's request for compounding the offence, noting that no prosecution was launched against him and the application was filed voluntarily.

3. Calculation of the Compounding Fee and the Period of Violation:
The period of violation was calculated from September 1, 2018, to April 12, 2019, as the company had time until September 1, 2018, to file Form DIR-12. The Tribunal decided to impose a compounding fee of Rs. 2,000 per day for 244 days, totaling Rs. 4,88,000. This decision was based on the precedent set by the National Company Law Tribunal, New Delhi, which imposed fines lesser than the minimum in similar cases.

4. Non-filing of Form DIR-12 by Yashoda Special Metals P. Ltd.:
The applicant resigned from Yashoda Special Metals P. Ltd. on August 1, 2018, but the company failed to file Form DIR-12 to notify the Registrar of Companies, Hyderabad. Consequently, the applicant was shown as a director in 21 companies, leading to his disqualification under Section 164. The applicant argued that the non-filing of Form DIR-12 was not his fault and that he had submitted his resignation in good faith. The Tribunal acknowledged this and noted that the delay in filing Form DIR-12 was not willful or wanton.

Conclusion:
The Tribunal compounded the offence by imposing a fee of Rs. 4,88,000, which the applicant paid. The order was sent to the Registrar of Companies, Hyderabad, for appropriate action. The Tribunal took a lenient view considering the circumstances and the applicant's voluntary compliance.

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