Court dismisses writ petitions seeking permission to file INC-22A without Company Secretary, emphasizes Companies Act compliance.

The Court dismissed the writ petitions filed by Companies seeking permission to file e-form ACTIVE, INC-22A without appointing a whole-time Company Secretary. While acknowledging the provisional permission granted for filing the form, the Court emphasized the non-compliance with Section 203 of the Companies Act and allowed the respondents to take legal action against the petitioners for violating the provision. The judgment highlighted the penalties for non-compliance with Section 203 and clarified that the interim relief did not determine the legality of the relevant rules, leaving room for further legal action.

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Issues:
Petitioners seeking permission to file e-form ACTIVE, INC-22A without appointing a whole-time Company Secretary; Challenge on the restriction imposed on filing e-form ACTIVE; Non-compliance with Section 203 of the Companies Act; Penalty provisions for non-compliance; Central Government's argument on the mandatory appointment of Company Secretaries for Companies with paid-up capital exceeding &8377; 5 Crores; Legal consequences of non-appointment of Company Secretary; Adherence to Companies Act provisions; Disposal of writ petitions with liberty for the respondents to take action against petitioner-Companies.

Analysis:
The petitioners, Companies incorporated in Kerala, filed writ petitions seeking permission to file e-form ACTIVE, INC-22A without mandating the appointment of a whole-time Company Secretary, challenging the restriction imposed. They argued that the Ministry of Corporate Affairs rejected their e-form ACTIVE submissions due to paid-up capital exceeding &8377; 5 Crores without a whole-time Company Secretary, deeming it arbitrary and illegal. The petitioners highlighted their compliance with the Act using part-time Company Secretaries and Auditors, avoiding penalty proceedings historically.

The Central Government Counsel contended that the petitioners must appoint whole-time Company Secretaries as per existing rules, emphasizing the mandatory nature for Companies with paid-up capital surpassing &8377; 5 Crores. Failure to appoint a Company Secretary constitutes an offense under Section 383A (1A) of the Companies Act, with potential fines for non-compliance. The Court acknowledged the provisional permission granted to file e-form ACTIVE but noted the petitioners' non-adherence to Section 203 of the Companies Act, empowering the respondents to take legal action against them.

The judgment emphasized the consequences of non-compliance with Section 203, highlighting penalties for Companies and Key Managerial Personnel. Despite the interim relief, the Court disposed of the writ petitions, allowing the respondents to proceed against the petitioner-Companies for violating Section 203. It clarified that the interim orders did not determine the legality of Section 203 or Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, leaving room for further legal action based on compliance issues.

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