Director convicted for holding positions in excess of legal limit under Companies Act, 2013. Witness testimony deemed admissible.

The accused was found guilty of contravening Section 165(3) of the Companies Act, 2013 by continuing to hold directorships in more than 20 companies beyond the permissible limit. The court deemed the documents filed by the complainant as admissible evidence, upheld the competency of the witness, rejected the limitation argument, and concluded that the accused's actions constituted a continuing offense. Consequently, the accused was convicted under Section 165(6) of the Companies Act, 2013 for the said contravention.

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Issues Involved:
1. Whether the accused contravened Section 165(3) of the Companies Act, 2013.
2. Whether the documents filed by the complainant were duly proved.
3. Competency of CW-1 Ms. Shefali Gupta to depose in the present case.
4. Whether the complaint is barred by limitation.
5. Whether the accused was Director in more than 20 companies on the date of filing of the complaint.

Issue-wise Detailed Analysis:

1. Contravention of Section 165(3) of the Companies Act, 2013:
The accused was alleged to have been a Director in more than the maximum number of companies as stipulated under Section 165 of the Companies Act, 2013 as of 01.04.2015. Despite holding directorships exceeding the specified limit, the accused continued to hold such positions knowingly and willfully, thus contravening Section 165(3), which is punishable under Section 165(6) of the Act. The court found that the accused was indeed a Director in more than 20 companies as reflected in Ex. CW-1/2 and had not filed the requisite Form DIR-11 for resignation within the stipulated time.

2. Proof of Documents Filed by the Complainant:
The complainant provided documents such as Ex. CW-1/1 (DIN application details) and Ex. CW-1/2 (proof of directorship), which were downloaded from the MCA portal and bore the stamp of the ROC along with signatures of Dy./AROC. The court held that these documents satisfied the requirements of admissibility under Section 397 of the Companies Act, 2013, and were thus deemed admissible evidence.

3. Competency of CW-1 Ms. Shefali Gupta to Depose:
The defense argued that CW-1 Ms. Shefali Gupta was an incompetent witness as she had not filed the complaint and was not aware of the documents. However, the court rejected this argument, stating that as per Section 2(75) of the Companies Act 2013, an Assistant Registrar or Deputy Registrar is included in the definition of Registrar and can function on behalf of the Registrar of Companies. Ms. Shefali Gupta, being an Assistant Registrar, was competent to depose based on official records.

4. Limitation of the Complaint:
The defense argued that the complaint was barred by limitation as the accused had resigned from the excess directorships by 01.08.2015, and the complaint was filed on 19.09.2017. The court, however, held that the offense under Section 165 of the Companies Act is a continuing offense, as the accused continued to hold directorships beyond the permissible limit until 31.07.2015. The court cited various judgments, including State of Bihar Vs. Deokaran Nenshi and Gokak Patel Volkart Ltd. Vs. Dundayya Gurushiddaiah Hiremath, to support the view that a continuing offense keeps the contravention alive day by day. Thus, the complaint was deemed within the limitation period.

5. Directorship in More Than 20 Companies:
The court examined the evidence, including Ex. CW-1/1 and Ex. CW-1/2, which showed the accused's directorships. The accused failed to submit any resignation proof before 01.04.2015. As per Rule 16 of The Companies (Appointment and Qualification of Directors) Rules 2014, the accused had the responsibility to forward his resignation to the Registrar in Form DIR-11, which he did not fulfill. Consequently, the court found that the accused was indeed a Director in more than 20 companies, violating Section 165 of the Companies Act.

Conclusion:
The court concluded that the complainant had proved the allegations against the accused beyond reasonable doubt. The accused was convicted for the offense under Section 165(6) for contravention of Section 165(3) of the Companies Act, 2013. The judgment was ordered to be uploaded on the server with digital signatures.

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