TaxTMI 
TaxTMI 
2018 (3) TMI 26
X X X X Extracts X X X X
X X X X Extracts X X X X
....KHAND PARVATIYA AAJEEVIKA SANVERDHAN COMPANY (hereinafter referred as "the Company" for the sake of brevity) was incorporated as a Non-profit company under Section 25 of Companies Act 1956 (previous company Act) on 29/03/2006, in the State of Uttarakhand having its registered office Uttarakhand shilp emporium near IT Park Sahastradhara Road, Dehradun 248013. II. The petitioner Nos. l, 2 and 3 all are Government officials and in addition their regular official duty they also serve the society through this Company. III. The Petitioner Company is primarily engaged in upliftment of the weaker sections of society through generation of self-employment, primarily development of agriculture sector in Uttarakhand and it is assisting and Implementing the project aided by international funds for Agriculture Development (IFAD). All of its directors arc nominated by the Uttarakhand State Government; who are mainly IAS officers. They are given some additional responsibility to run the company on behalf of Uttarakhand State Government and manage its affair. 3. The Petitioner company is a company limited by guarantee and thus having no capital. The company is primarily involve....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd mechanism by actively searching for investment opportunities. 5. To rotate and utilize the resources of the company for ongoing building up of new enterprises by exiting the enterprises that have achieved the sustainable scale and viability, through appropriate mechanism. 6. To act as catalyst in mobilizing financial resources of the hanks and financial institutions to Micro, Small and Medium Scale Enterprises to benefit the poor. 4. As, it is stated that the Annual General Meeting of the Company for the financial year ending 31st March, 2015 was required to be convened and held on or before 30th September. 2015, which could not be held. 5. Thus, the company committed default under Section 96 of the Companies Act, 2013, which attracts criminal liability against the applicants under the provision of Companies Act, 2013. 6. It is contended that the company or its officers/directors have not deliberately and wilfully made such offence and contravened the provisions of and Section 96 of the Companies Act, 2013. It is explained that the Annual General meeting was due in 30th September 2015, but it could not be convened due to such reason that earlier consul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shable Act/offence under Section 99 of the Companies Act. It further contended that all the Directors of the Company are nominated by the State Govt. of Uttrakhand and they are Govt. Officers who are assigned additional responsibility of managing the affair of the Company on behalf of the Uttrakhand State. It is matter of record that the petitioner Company itself suo motu submitted the present petition/application before this Tribunal for making the default condoned and regularised and for compounding the alleged offence. 11. As per the report of the ROC, Kanpur, the applicants Company and its Officer arc liable to pay fine for compounding such offence, which is imposable up to Rs. 1 lakh and for committing recurring offence a fine can be imposed 5,000/- per day. 12. We have gone through the contents of the pleadings of both parties. It is matter of record that the petitioner company is wholly owned subsidiary by the State Govt. Its Directors are full time Govt. Servant, who had been assigned additional charge/responsibility to conduct the activities and to manage the affairs of the Company. 13. During the course of hearing and on being enquired from this court, the Direct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eeting of the Company to be within 9 months from the closing date of its First Financial Year and it should not elapsed more than 15 months between the date of Annual General Meeting to be convened and actually convened, failing which, such violation attract punishment for default in complying with the provision of Sections 96 and 98 which is punishable with fine, which may extend to Rs. 1 Lakh and in case of continuing default with further fine, which may extend Rs. 5000/for every day. 17. We have duly considered such submissions made by the learned PCS for the petitioner Company that the petitioner Company properly explained the causes and circumstances for not being able to convene the meeting of AGM, as a bona fide omission on the pan of Company. Hence, it cannot be construed as a deliberate attempt or sheer negligence for not convening such meeting. Hence, such needs to be condoned by this court and alleged offence can be compounded because the petitioner company being the State Govt. subsidiary took suo motu step for filing this petition and adopted corrective measures by convening the AGM at the earliest. 18. The relevant provision of Section 441 of the Companies Act r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eing an offence punishable with imprisonment only or with imprisonment and line may be compounded by the Company Law Board either before or after institution of the prosecution. The relevant portion of the above mentioned direction of the Hon'ble Supreme Court may be reproduced herein below; "From the conspectus of what we have observed above, it is more than clear that an offence committed by an accused under the Act, not being an offence punishable with imprisonment only or imprisonment and also with fine, is permissible to be compounded by the Company Law Board either before or after the institution of any prosecution. In view of sub-Section (7) of Section 621A, the criminal court also possesses similar power to compound an offence after institution of the prosecution. Now the question is whether in the aforesaid circumstances, the Company Law Board can compound offence punishable with fine or imprisonment or both without permission of the court. It is pointed out that when the prosecution has been laid, it is the criminal court which is in seisin of the matter and it is only the magistrate or the court in seisin of the matter who can accord permission t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the power under sub-section (1) and sub-section (7) of Section 621A are parallel powers to be exercised by the Company Law Board or the authorities mentioned therein and prior permission of court is not necessary for compounding the offence, when power of compounding is exercised by the Company Law Board. In view of what we observed above, the order impugned does not require any interference by this court." 20. In the Light of above stated legal proposition, we find that this court possesses necessary jurisdiction to grant permission for compounding of such offence in those cases wherein no punishment of imprisonment or punishment with fine alone. Which is not the case of present petitioner as the contravention of the provision of Sections 96 and 99 of the Companies Act are not attracting punishment of imprisonment and imprisonment with fine. It is a is statutory violation in technical nature attracting penalty of fine simplicitor. 21. Therefore, we find that the ground made for and submission put forth before us for compounding the alleged offence of contravention of Sections 96 and 99 of the Companies Act, 2013 appears to be reasonable and the court in exercise of its p....